PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT , dated as of June 22, 2009, is
entered into by and between COBANK, ACB a federally chartered
instrumentality of the United States (“ CoBank
”), acting in its capacity as Agent (defined below) on behalf
of the Syndication Parties (as defined below) and a Syndication
Party, and U.S. PREMIUM BEEF, LLC, a Delaware limited liability
company (the “Pledgor” ).
RECITALS:
Pursuant to an Amended and Restated Credit Agreement and Security
Agreement made as of June 22, 2009 (as amended, modified,
supplemented, renewed or restated from time to time, the
“Credit Agreement” ), made among the Pledgor,
the Syndication Parties (as defined in the Credit Agreement), and
CoBank, as agent for the Syndication Parties (in such capacity, the
“ Agent ”), the Syndication Parties have agreed
to extend certain loans to the Pledgor in aggregate amounts equal
to the U.S. Dollar amounts specified in the Credit Agreement
(collectively, the “Loans” ) on the terms and
conditions set out in the Credit Agreement.
In order to induce the Agent and the Syndication Parties to enter
into the Credit Agreement, the Pledgor has agreed to enter into
this Pledge Agreement.
NOW THEREFORE, for and in consideration of the Loans under
the Credit Agreement and any other loan or advance (including any
other loan or advance by renewal or extension) or other financial
accommodation made or granted to the Pledgor by the Agent or the
Syndication Parties, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1.
Definitions and Interpretation of Agreement . In
addition to the terms defined elsewhere in this Agreement, the
following terms shall have the meanings indicated for purposes of
this Agreement (such meanings to be equally applicable to both the
singular and plural forms of the terms defined). Capitalized
terms not otherwise defined herein shall have the meaning ascribed
thereto in the Credit Agreement.
“ Agreement ” means this Pledge Agreement, as it
may be amended, modified or supplemented from time to time, which
shall be a Security Document (as defined in the Credit
Agreement).
“ Default ” means the occurrence of an
“Event of Default” as defined in the Credit
Agreement.
“ Uniform Commercial Code ” means the
Uniform Commercial Code as in effect in the State of Colorado from
time to time.
A Section is, unless otherwise stated, a reference to a section
hereof, as the case may be. Section captions used in this
Agreement are for convenience only, and shall not affect the
construction of this Agreement. The words
“hereof,” “herein,” “hereto”
and “hereunder” and words of similar purport when used
in this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement. Unless
otherwise defined therein, all terms defined in this Agreement
shall have the defined meanings when used in any certificate or
other documents made or delivered pursuant hereto.
2. Pledge
. To secure the prompt and complete payment and
performance of the Bank Debt (as defined in the Credit Agreement),
the Pledgor pledges, hypothecates, assigns, transfers, sets over
and delivers unto the Agent, for the benefit of the Syndication
Parties, and grants to the Agent, for the benefit of the
Syndication Parties, a continuing security interest in the
following (hereinafter collectively called the
“Collateral” ):
(a) All of the ownership
interests held by Pledgor in National Beef Packing Company, LLC, a
Delaware limited liability company, (“ National Beef
”) at any time, and any certificates representing such
ownership interests, all of the right, title and interest of the
Pledgor in, to and under its respective percentage interest, shares
or units as an owner of National Beef, and all investment property
in respect of such ownership interests, including, without
limitation, the Pledgor’s interest in (or allocation of) the
profits, losses, income, gains, deductions, credits or similar
items of National Beef, and the right to receive dividends or
distributions of National Beef and all options and warrants for the
purchase of ownership interests, all of Pledgor’s right,
title and interest to receive payments of principal and interest on
any loans and/or other extensions of credit made by the Pledgor
National Beef, whether now existing or hereafter arising, whether
arising under the terms of the articles, bylaws, certificate of
formation, limited liability company agreement or any of the other
organization documents of National Beef, or at law or in equity, or
otherwise and any and all of the proceeds thereof (all of said
ownership interests, certificates and warrants being hereinafter
collectively referred to as the “ Pledged Interests
”), and all distributions, cash, instruments, investment
property and other property from time to time received, receivable
or otherwise distributed in respect of, or in exchange for, any or
all of the Pledged Interests;
(b) all other property
hereafter delivered to the Agent by the Pledgor in substitution for
or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
and
(c) all proceeds of all
of the foregoing;
TO HAVE AND TO HOLD the Collateral, together with all rights,
titles, interests, privileges and preferences appertaining or
incidental thereto, unto the Agent forever, subject, however, to
the terms, covenants and conditions hereafter set forth.
3.
Representations, Warranties and Covenants .
(a) The Pledgor
represents and warrants to the Agent that: (i) the Agent
has, or when delivered to the Agent will have, a valid first
perfected security interest in the Collateral and the proceeds
thereof free of all liens, claims and rights of third parties
whatsoever; (ii) all documentary, stamp or other similar taxes
or fees owing in connection with the issuance, transfer and/or
pledge of the Pledged Interests have been paid and will hereafter
be paid by the Pledgor as such become due and payable;
(iii) the Pledgor is the lawful owner of the Collateral
pledged by it hereunder, with full right to deliver, pledge, assign
and transfer such Collateral to the Agent hereunder; (iv) the
Collateral represents all of the Pledgor’s interests in
National Beef; (v) neither (X) the members nor the managers of
National Beef have declared nor (Y) do any of National
Beef’s governance agreements expressly provide that any
ownership interest is a “security” under Section
8‑103(c) (or similar provision) of the Uniform Commercial
Code of the state of its organization, and (Z) all of such
interests are uncertificated; and (vi) the execution and
delivery of this Agreement and the performance by the Pledgor of
its obligations hereunder do not and will not contravene or
conflict with any provision of law or of any agreement binding upon
or applicable to it or the Collateral and this Agreement is its
legal, valid and binding obligation, enforceable against it in
accordance with its terms and except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to the enforcement of creditors’
or secured creditors’ rights generally and subject to the
qualification that general equitable principles may limit the
availability of enforcement of certain remedies, including the
remedy of specific performance.
(b) So long as any Bank
Debt remains outstanding, the Pledgor will, unless the Agent shall
otherwise consent in writing: (i) at its sole expense,
promptly deliver to the Agent, from time to time upon request of
the Agent, such documents, reasonably satisfactory in form and
substance to the Agent, with respect to the Collateral as the Agent
may reasonably request, to preserve and protect, and to enable the
Agent to enforce, its rights and remedies hereunder; (ii) (X) cause
National Beef to note in the books and records of National Beef the
security interest granted to Agent pursuant to this Agreement, (Y)
cause the members and the managers of National Beef to refrain from
declaring and not to allow any governance agreement of National
Beef to expressly provide that any such ownership interest is a
“security” under Section 8‑103(c) (or similar
provision) of the Uniform Commercial Code of the state of its
organization, and (Z) cause all of such interests to remain
uncertificated; (iii) not sell, assign, exchange or otherwise
transfer any of its rights to any of the Collateral; (iv) not
create or suffer to exist any lien, security interest or other
charge, claim, right or encumbrance against, in or with respect to
any of the Collateral except for the pledge hereunder and the lien
and security interest created hereby (v) not enter into any
agreement or permit to exist any restriction with respect to any of
its right, title and interest in or to the Collateral other than
pursuant hereto and (vi) not take or fail to take any action which
would in any manner impair the enforceability of the Agent’s
lien and security interest in any of the Collateral.
4. Certain
Permitted Activities .
(a) The Agent may, from
time to time, and in accordance with the Credit Agreement, without
notice to the Pledgor, take any or all of the following
actions: (i) retain or obtain a lien upon, or a security
interest in, any property to secure the Bank Debt or any obligation
hereunder; (ii) retain or obtain the primary or secondary
obligation of any obligor or obligors, with respect to any of the
Bank Debt or any obligation hereunder; (iii) extend or renew
for any period (whether or not longer than the original period) or
alter or exchange any of the Bank Debt, or release or compromise
any obligation of the Pledgor or any obligation of any nature of
any other obligor with respect to any of the Bank Debt;
(iv) release or fail to perfect its lien upon or security
interest in, or impair, surrender, release or permit any
substitution or exchange for, all or any part of any property
securing any of the Bank Debt or any obligation hereunder, or
create, extend or renew for any period (whether or not longer than
the original period) or release, compromise, alter or exchange any
obligations of any nature of any obligor with respect to any such
property; and (v) during the continuance of a Default
following reasonable prior written notice to the Pledgor, resort to
the Collateral (without any marshalling) for payment of any of the
Bank Debt, whether or not the Agent (A) shall have resorted to
any other property securing any of the Bank Debt or any obligation
hereunder or (B) shall have proceeded against any other
obligor primarily or secondarily obligated with respect to any of
the Bank Debt (all of the actions referred to in preceding
clauses (A) and (B) being hereby expressly waived by the
Pledgor).
(b) The Agent shall have
no right to vote the Pledged Interests or other Collateral or give
consents, waivers or ratifications in respect thereof prior to the
occurrence of a Default. During the continuance of a Default,
the Pledgor shall have the right to vote any and all of the Pledged
Interests and other Collateral pledged by it hereunder and give
consents, waivers and ratifications in respect thereof unless and
until it receives notice from the Agent that such right has been
terminated.
(c) Upon notice from the
Agent to the Pledgor, during the existence of a Default and so long
as that Default continues, all rights and powers that the Pledgor
is entitled to exercise pursuant to Section 4(b) of this Agreement,
and all rights of the Pledgor to receive and retain dividends,
interest and payments pursuant to Section 5 of this Agreement,
shall immediately cease, and all such rights and powers shall
automatically become vested in the Agent, which shall have, during
the continuance of the Default, the sole and exclus
