Exhibit 1.1
 
 
 21,660,649 Shares,
 
 
 SMITHFIELD FOODS, INC.
 
 COMMON STOCK WITH $.50 PAR VALUE
 
   
 UNDERWRITING AGREEMENT
 
   
 September 16, 2009
  
  September 16, 2009
 
 Morgan Stanley & Co. Incorporated
 Goldman, Sachs & Co.
 Barclays Capital Inc.
 J.P. Morgan Securities Inc.
 
 c/o
Morgan Stanley & Co. Incorporated
 1585 Broadway
 New York, New York 10036
 
 Goldman, Sachs & Co.
 85 Broad Street
 New York, New York 10004
 
 Barclays Capital Inc.
 745 Seventh Avenue
 New York, New York 10019
 
 J.P. Morgan Securities Inc.
 270 Park Avenue
 5th floor
 New York, New York 10017
 
 Ladies and Gentlemen:
 
 Smithfield Foods, Inc., a Virginia corporation (the “Company”), proposes to issue and sell to the several Underwriters named in Schedule I hereto (the “Underwriters”)
21,660,649 shares of its common stock, $.50 par value (the “Firm Shares”).  The Company also proposes to issue and sell to the several Underwriters not more than an additional 3,249,097 shares of its common stock, $.50 par value (the “Additional Shares”), if, and to the extent that, you, as Managers of the offering, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such Additional Shares granted to the Underwriters in Section 2 hereof. The Firm Shares and the Additional Shares are hereinafter collectively referred to as the “Shares.” The shares of common stock, $.50 par value, of the Company to be outstanding after giving effect to the sales contemplated hereby are hereinafter referred to as the “Common Stock.”  Each
Share has an associated right to purchase one two-thousandth of a share of the Company’s Series A Junior Participating Preferred Stock in accordance with the terms of the Rights Agreement, dated as of May 30, 2001, between the Company and Computershare Investor Services, LLC, as rights agent.
 
 The Company has filed with the Securities and Exchange Commission (the “Commission”) an “automatic shelf registration statement” on Form S-3 (File No. 333-143727), including a prospectus, relating to, among other securities, the Shares, and the offering thereof
from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”).  The registration statement, as amended at the time it becomes effective, including the information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Securities Act, is hereinafter referred to as the “Registration
Statement.”  The prospectus in the form first used to confirm sales of Shares (or in the form first made available to the Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act), including any prospectus supplement thereto relating to the Shares, as filed with the Commission pursuant to Section 424(b) under the Securities Act, is hereinafter referred to as the “Prospectus.”  If
the Company has filed an abbreviated registration statement to register additional shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the term “Registration Statement” shall be deemed to include such Rule 462 Registration Statement.
  
  For purposes of this Agreement, (a) “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act, (b) “Time of Sale Prospectus” means (i) any preliminary prospectus relating to
the Shares that has been included in the Registration Statement or filed with the Commission pursuant to Rule 424(b) under the Securities Act, including any preliminary prospectus supplement thereto relating to the Shares, as identified in Schedule II hereto, and (ii) any free writing prospectus prepared by or on behalf of the Company or used or referred to by the Company in connection with the offering of the Shares, as identified in Schedule
II hereto, and (c) “broadly available road show” means a “bona fide electronic road show” as defined in Rule 433(h)(5) under the Securities Act that has been made available without restriction to any person.  As used herein, the terms “Registration Statement,” “preliminary prospectus,” “Time of Sale Prospectus” and “Prospectus” shall include the documents, if any, incorporated
by reference therein.  The terms “supplement,” “amendment” and “amend” as used herein with respect to the Registration Statement, the Prospectus, the Time of Sale Prospectus or any free writing prospectus shall include all documents subsequently filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are deemed to be incorporated by reference therein.
 
 1.            Representations and Warranties.  The Company represents and warrants to and agrees with each of the Underwriters on and as of the date hereof and as of the Closing Date, as set forth below in this Section
1.  Any reference to persons acting on behalf of the Company, or on behalf of any of the Company’s affiliates, does not include the Underwriters, with respect to whom the Company makes no representation.
 
 (a)           The Registration Statement is an “automatic shelf registration statement” (as defined in Rule 405 under the Securities Act) that has been filed with the Commission not earlier than three years prior to the date hereof; and no notice of objection of the Commission
to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act has been received by the Company; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or, to the knowledge of the Company, threatened by the Commission.
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  (b)           The Company is a “well-known seasoned issuer” (as defined in Rule 405 under the Securities Act) that is eligible to use the Registration Statement as an automatic shelf registration statement.
 
 (c)           (i) Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in the Time of Sale Prospectus or the Prospectus complied or will comply when so filed in all material respects with the Exchange Act and the applicable rules and regulations
of the Commission thereunder, (ii) the Registration Statement, when it became effective, did not contain and, as amended or supplemented, if applicable, will not contain, any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) the Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder, (iv) the Time of Sale Prospectus does not, and at the time of each sale of the Shares in connection with the offering when the Prospectus is not yet available to prospective purchasers and at the Closing Date (as defined in Section  4), the Time of Sale Prospectus, as then amended or supplemented by the Company, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, (v) each broadly available road show, if any, when considered together with the Time of Sale Prospectus, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (vi) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties with respect to any statements or omissions in the Registration Statement, the Time of Sale Prospectus or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by you expressly for use therein.
 
 (d)           The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the Commonwealth of Virginia, with power and authority (corporate and other) to own its properties and conduct its business as described in the Time of Sale
Prospectus and the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, or is subject to no material liability or disability by reason of the failure to be so qualified in any such jurisdiction; and each of its Subsidiaries (as defined below) has been duly formed and is validly existing as a legal entity
in good standing under the laws of its jurisdiction of formation and has been duly qualified as a foreign legal entity for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, or is subject to no material liability or disability by reason of the failure to be so qualified in any such jurisdiction, except to the extent the failure to so qualify as a foreign legal entity
could not reasonably be expected to have a Material Adverse Effect (as defined below).  The Company does not own more than 50% of the voting interest in or control, directly or indirectly, any corporation, association or other entity, other than the Subsidiaries.  As used in this Agreement, “Subsidiary” of the Company, means any corporation, association, limited liability company, partnership or other business entity of which more than 50% of the total voting power of shares of
capital stock or other interests (including partnership or joint venture interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) the Company, or (ii) one or more Subsidiaries of the Company.
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  (e)           The Company has an authorized capitalization as set forth in the Time of Sale Prospectus and the Prospectus under the heading “Capitalization,” and all the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully
paid and non-assessable; and all of the issued shares of capital stock of each of the Subsidiaries have been duly and validly authorized and issued, are fully paid and non-assessable and other than as set forth or contemplated in the Time of Sale Prospectus and the Prospectus are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims.
 
 (f)            The Company has full corporate power and authority to execute and deliver this Agreement, and to perform its obligations hereunder; and all corporate action required to be taken for the due and proper authorization, execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly taken.
 
 (g)           This Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, and other similar laws relating to or affecting creditors’ rights generally and to general equitable principles (whether considered in a proceeding in equity or at law) and considerations of public policy as they relate to the enforcement of the indemnification provisions hereof (the “Enforceability Exceptions”).
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  (h)           The Shares have been duly authorized and, when issued and delivered against payment therefor in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable, and the issuance of such Shares will not be subject to any preemptive or similar
rights.
 
 (i)            This Agreement conforms in all material respects to the description thereof contained in the Time of Sale Prospectus and the Prospectus.
 
 (j)            The execution, delivery and performance by the Company of its obligations under this Agreement and the issue and sale of the Shares by the Company and the compliance by the Company with all of the provisions of this Agreement and the consummation of the transactions contemplated
herein will not (i) conflict with or result in a breach or violation of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the property or assets of the Company or any of its Subsidiaries is subject, (ii)  result in any violations of the provisions of the charter or by-laws
(or other comparable organizational documents) of the Company or any of its Subsidiaries, or (iii) result in any violation of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its Subsidiaries or any of their properties, except in the case of clauses (i) and (iii) above, for any such conflict, breach, violation or default that would not have a Material Adverse Effect (as defined below);
 
 (k)           No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the execution, delivery and performance by the Company of its obligations under this Agreement and the issue, sale, authentication
and delivery of the Shares or the consummation by the Company of the transactions contemplated by this Agreement, except for such consents, approvals, authorizations, registrations or qualifications (i) which shall have been obtained or made prior to the Closing Date and as may be required to be obtained or made under applicable state securities laws, or (ii) the failure of which to be obtained or made would not have a Material Adverse Effect (as defined below).
 
 (l)             Ernst & Young LLP (“Ernst & Young”), which has certified certain financial statements of the Company and its Subsidiaries, is an independent registered public accounting firm with respect
to the Company and its Subsidiaries as required by the Securities Act and the rules and regulations adopted by the Commission thereunder and the Public Company Accounting Oversight Board (United States) as required by the Securities Act.  The historical financial statements of the Company (including the related notes) contained in, and incorporated by reference into, the Time of Sale Prospectus and the Prospectus comply as to form in all material respects with the applicable accounting requirements
of the Securities Act and the related published rules and regulations; such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods covered thereby and fairly present the financial position of the entities purported to be covered thereby at the respective dates indicated and the results of their operations and their cash flows for the respective periods indicated; and the financial information contained in the Time of Sale
Prospectus and the Prospectus, are derived from the accounting records of the Company and its Subsidiaries and fairly present the information purported to be shown thereby.  The other historical financial information and statistical information and data included in, and incorporated by reference into, the Time of Sale Prospectus and the Prospectus are, in all material respects, fairly presented.
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  (m)          Other than as set forth or contemplated in the Time of Sale Prospectus and the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its Subsidiaries is a party or of which any property of the Company or any of its Subsidiaries is the
subject which, if determined adversely to the Company or any of its Subsidiaries, individually or in the aggregate would have a material adverse effect on the condition (financial or otherwise), results of operations, business or prospects of the Company and its Subsidiaries taken as a whole (“Material Adverse Effect”); and, to the knowledge of the Company, no such proceedings are threatened or contemplated by governmental authorities or threatened
by others.
 
 (n)           No injunction, restraining order or order of any nature by any federal or state court of competent jurisdiction has been issued with respect to the Company or any of its Subsidiaries which would prevent or suspend the issuance or sale of the Shares or the use of the Time
of Sale Prospectus or the Prospectus in any jurisdiction; no action, suit or proceeding is pending against or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries before any court or arbitrator or any governmental agency, body or official, domestic or foreign, which could reasonably be expected to interfere with or adversely affect the issuance of the Shares or in any manner draw into question the validity or enforceability of this Agreement or any action taken
or to be taken pursuant thereto; and the Company has complied with any and all known requests, or any and all requests that should have been reasonably known, by any securities authority in any jurisdiction for additional information to be included in the Time of Sale Prospectus and the Prospectus.
 
 (o)           Neither the Company nor any of its Subsidiaries is (i) in violation of its charter or by-laws (or other comparable organizational documents), (ii) in default, and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject or (iii) in violation in any respect of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject, which default under clause (ii) or violation under clause (iii) could reasonably be expected
to have a Material Adverse Effect.
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  (p)           The statements set forth in the Time of Sale Prospectus and the Prospectus under the captions “Description of Common Stock” and “Description of Capital Stock” insofar as such statements purport to constitute a summary of the Shares, are accurate,
complete and fair; and the statements set forth in the Time of Sale Prospectus and the Prospectus under the captions “United States Federal Income Tax Consequences to Non-U.S. Holders” and “Underwriting,” insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair.
 
 (q)           The Company is not an “ineligible issuer” in connection with the offering pursuant to Rules 164, 405 and 433 under the Securities Act.  Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act
has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder.  Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or behalf of or used or referred to by the Company complies or will comply in all material respects with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder.  Except for the free writing prospectuses, if any, identified in Schedule II hereto, and the electronic road shows, if any, each furnished to you before first use, the Company has not prepared, used or referred to, and will not, without your prior consent, prepare, use or refer to, any free writing prospectus.
 
 (r)            The Company is not, and after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described in the Prospectus will not be, required to register as an “investment company” as such term is defined in the Investment
Company Act of 1940, as amended.
 
 (s)           The Company and each of its Subsidiaries possess all material licenses, certificates, authorizations and permits issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign regulatory agencies or bodies which are necessary
or desirable for the ownership of their respective properties or the conduct of their respective businesses as described in the Time of Sale Prospectus and the Prospectus, except where the failure to possess or make the same would not have, individually or in the aggregate, a Material Adverse Effect, and neither the Company nor any of its Subsidiaries has received notification of any revocation or modification of any such license, certificate, authorization or permit or has any reason to believe that any such
license, certificate, authorization or permit will not be renewed in the ordinary course.
 
 (t)            The Company and each of its Subsidiaries have good and marketable title in fee simple to all real property, and good and marketable title to all personal property, in each case owned by them, except where the failure to have the same would not have, individually or in the
aggregate, a Material Adverse Effect, and in each case free and clear of all liens, encumbrances and defects except for those that are described in the Time of Sale Prospectus and the Prospectus or those that do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries; and any real property and buildings held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.
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  (u)           The Company and each of its Subsidiaries own or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses; and the conduct of their respective businesses will not conflict in any material respect with any such rights of others, and the Company and each of its Subsidiaries have not received any notice of any claim of infringement of or conflict with any such rights of others, which notice could reasonably be expected to result in a Material Adverse Effect.
 
 (v)           Other than as set forth in the Time of Sale Prospectus and the Prospectus, no material labor disturbance by or dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company, is contemplated or threatened, except as would not individually
or in the aggregate have a Material Adverse Effect.
 
 (w)          The Company and each of its Subsidiaries have paid all federal, state, local and foreign taxes and filed all tax returns required to be paid or filed through the date hereof (except for such taxes that are not yet delinquent or that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in accordance with generally accepted accounting principles); and except as otherwise disclosed in the Time of Sale Prospectus and the Prospectus, there is no material tax deficiency, which individually or in the aggregate could have a Material Adverse Effect, that has been, or could reasonably be expected to be, asserted against the Company or any of its Subsidiaries or any of their respective properties or assets.
 
 (x)            Other than as set forth in the Time of Sale Prospectus and the Prospectus, there has been no storage, generation, transportation, handling, treatment, presence, disposal, discharge, emission or other release of any kind of toxic or other wastes or other hazardous substances
by, due to or caused by the Company or any of its Subsidiaries or any of their predecessors (or, to the knowledge of the Company, any other entity for whose acts or omissions the Company or any of its Subsidiaries is or could reasonably be expected to be liable) at any of the property now or previously owned or leased by the Company or any of its Subsidiaries, or at any other property (i) in violation of any statute or any ordinance, rule (including rule of common law), regulation, order, judgment, decree or
permit or (ii) which would, under any statute or any ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability, except in the case of both clauses (i) and (ii), for any violation or liability which could not reasonably be expected to have, individually or in the aggregate with all such violations and liabilities, a Material Adverse Effect; and there has been no presence, disposal, discharge, emission or other release of any kind at any of the property
now or previously owned or leased by the Company or any of its Subsidiaries, or into the environment surrounding such property of any toxic or other wastes or other hazardous substances with respect to which the Company or any of its Subsidiaries has any knowledge, except for any such presence, disposal, discharge, emission or other release of any kind which could not reasonably be expected to have, individually or in the aggregate with all such discharges and other releases, a Material Adverse Effect.
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  (y)           Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is maintained, administered or contributed to by the Company,
any of its Subsidiaries or any member of their respective “controlled groups” (defined as entities which are treated as a single employer under Section 414 of the Internal Revenue Code of 1986, as amended) for employees or former employees of the Company, any of its Subsidiaries or any member of their respective controlled groups have been maintained in all material respects in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not
limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; and for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding
deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived, and, except as otherwise disclosed in the Time of Sale Prospectus and the Prospectus, the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions.
 
 (z)           Except as otherwise disclosed in the Time of Sale Prospectus and the Prospectus, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Securities
Act with respect to any securities of the Company or to require the Company to include such securities with the Shares registered pursuant to the Registration Statement.
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  (aa)         Each preliminary prospectus filed as part of the registration statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder.
 
 (bb)        The Company and its Subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in reports that it files or submits under
the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure.  The Company and its Subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15
of the Exchange Act.
 
 (cc)         The Company and its Subsidiaries maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective
principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  The Company and its Subsidiaries maintain systems of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general
or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as
disclosed in each of the Time of Prospectus and the Prospectus, there are no material weaknesses or significant deficiencies in the Company’s internal controls.
 
 (dd)         Neither the Company nor any of its Subsidiaries nor, any director, officer, or employee nor, to the knowledge of the Company, any agent or other person associated with or acting on behalf of the Company or any of its Subsidiaries has taken or will take any action in furtherance of
an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any “government official” (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to influence
official action or secure an improper advantage; and the Company and its Subsidiaries have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintain and will continue to maintain policies and procedures designed to promote and achieve compliance with such laws and with the representation and warranty contained herein.
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  (ee)         The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with all applicable financial recordkeeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of jurisdictions where the Company and its Subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”), and no
action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
 
 (ff)           Excluding any activities of the Company (x) in accordance with applicable law, rule or regulation, (y) specifically licensed by the United States Department of Commerce or (z) pursuant to an exemption from the license requirements of the United States Department of Commerce,
none of the Company, any of its Subsidiaries, director, officer, or, to the knowledge of the Company, any agent (as defined below), employee or affiliate of the Company or any of its Subsidiaries is (i) the subject of any sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), nor (ii) located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, North Korea,
Sudan and Syria); and the Company will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of or with any person or entity, or in an country or territory that, at the time of such financing, is the subject of any sanctions administered by OFAC.  An “agent” means a person or entity, who
by mutually consensual relationship created by contract or law acts on behalf of and/or under the control or authorization of the Company.
 
 (gg)         Other than this Agreement, neither the Company nor any of its Subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim against the Company or the Underwriters for a brokerage commission, finder’s fee or like payment
in connection with the offering and sale of the Shares.
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  (hh)         The Company has not taken or will not take, directly or indirectly, any action prohibited by Regulation M under the Exchange Act in connection with the offering of the Shares (other than actions taken by the Underwriters, as to which the Company makes no representation).
 
 (ii)            Since the respective dates as of which information is disclosed in the Time of Sale Prospectus and the Prospectus (excluding any subsequent amendment or supplement thereto), except as otherwise stated or contemplated therein, (i) there has not been any change in the capital
stock or long-term debt of the Company or any of its Subsidiaries, other than pursuant to exercises, conversions, redemptions or similar actions taken with respect to securities issued under Board-approved equity compensation plans, or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital stock, or any material adverse change, or any development involving a prospective material adverse change, in or affecting the business, properties, management,
financial position, results of operations or prospects of the Company and its Subsidiaries taken as a whole; (ii) neither the Company nor any of its Subsidiaries has entered into any transaction, incurred any liability or obligation, direct or contingent, where such transaction, liability or obligation is material, either individually or in the aggregate, to the Company and its Subsidiaries taken as a whole; and (iii) except as would not have a Material Adverse Effect, neither the Company nor any of its Subsidiaries
has sustained any loss or interference with its business from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority.
 
 (jj)           Nothing has come to the attention of the Company that has caused the Company to believe that the market-related data included in, or incorporated by reference into, the Time of Sale Prospectus and the Prospectus is not based on or derived from sources that are reliable
and accurate in all material respects.
 
 (kk)         No relationship, direct or indirect, exists between or among the Company or any of its Subsidiaries, on the one hand, and the directors, officers, stockholders or other affiliates of the Company or any of its Subsidiaries, on the other hand, that would be required by Item 404 of Regulation
S-K of the Securities Act to be described in a registration statement to be filed with the Commission and that is not so described in each of the Time of Sale Prospectus and the Prospectus.
 
 (ll)            The Company has complied with the applicable provisions of the Sarbanes-Oxley Act of 2002, and, to the knowledge of the Company, the Company’s directors and officers, in their capacities as such, have complied with the applicable provisions of the Sarbanes-Oxley
Act of 2002 in all material respects.
 
 2.             Agreements to Sell and Purchase.
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  (a)           The Company hereby agrees to sell to the several Underwriters, and each Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to purchase from the Company the
respective numbers of Firm Shares set forth in Schedule I hereto opposite its name at a purchase price of $13.2458 per share (the “Purchase Price”).  The Company shall not be obligated to deliver any of the Firm Shares except upon payment for all of the Firm Shares to be purchased as provided herein.
 
 (b)           On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, the Company agrees to sell to the Underwriters the Additional Shares, and the Underwriters shall have the right to purchase, severally and not jointly,
up to 3,249,097 Additional Shares at the Purchase Price; provided, however, that the amount paid by the Underwriters for any Additional Shares shall be reduced by an amount per share equal to any dividends declared by the Company and payable on the Firm Shares but not payable on such Additional Shares.  You may exercise this right on behalf of the Underwriters in whole or,
from time to time, in part by giving written notice not later than 30 days after the date of this Agreement.  Any exercise notice shall specify the number of Additional Shares to be purchased by the Underwriters and the date on which such Additional Shares are to be purchased.  Each purchase date must be at least one business day after the written notice is given and may not be earlier than the closing date for the Firm Shares nor later than seven business days after the date of such notice.  Additional
Shares may be purchased pursuant to this Section 2(b) and Section 4 hereof solely for the purpose of covering over-allotments made in connection with the offering of the Firm Shares.  On each day, if any, that Additional Shares are to be purchased (each, an “Option Closing Date”), each Underwriter agrees, severally and not jointly, to purchase the number of Additional Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the total number of Additional Shares to be purchased on such Option Closing Date as the number of Firm Shares set forth in Schedule I hereto opposite the name of such Underwriter bears to the total number of Firm Shares.
 
 3.             Terms of Public Offering.  The Company is advised by you that the Underwriters propose to make a public offering of their respective portions of the Shares as soon after the execution of this Agreement
as in your judgment is advisable.  The Company is further advised by you that the Shares are to be offered to the public initially at a price of $13.8500 per share (the “Public Offering Price”) and to certain dealers selected by you at a price that represents a concession not in excess of approximately $0.3530 per share under the Public Offering Price.
 
 4.             Payment and Delivery.Payment for the Firm Shares shall be made to the Company in Federal or other funds immediately available in New York City against delivery of such Firm Shares for the respective
accounts of the several Underwriters at 10:00 a.m., New York City time, on September 22, 2009, or at such other time on the same or such other date, not later than September 29, 2009, as shall be designated in writing by you.  The time and date of such payment are hereinafter referred to as the “Closing Date.”
  13
  Payment for any Additional Shares shall be made to the Company in Federal or other funds immediately available in New York City against delivery of such Additional Shares for the respective accounts of the several Underwriters at 10:00 a.m., New York City time, on the date specified in the corresponding notice described in Section 2
or at such other time on the same or on such other date, in any event not later than October 30, 2009, as shall be designated in writing by you.
 
 The Firm Shares and Additional Shares shall be registered in such names and in such denominations as you shall request in writing not later than one full business day prior to the Closing Date or the applicable Option Closing Date, as the case may be.  The Firm Shares and Additional Shares shall be delivered to you on the Closing
Date or an Option Closing Date, as the case may be, for the respective accounts of the several Underwriters, with any transfer taxes payable in connection with the transfer of the Shares to the Underwriters duly paid, against payment of the Purchase Price therefor.
 
 5.         Conditions to the Underwriters’ Obligations.  The obligations of the Company to sell the Shares to the Underwriters and the several obligations of the Underwriters to purchase and pay for the Shares on the Closing
Date are subject to the following conditions:
 
 (a)           Subsequent to the execution and delivery of this Agreement and prior to the Closing Date:
 
 (i)        (A) no downgrading shall have occurred in the rating accorded the Company’s debt securities or preferred stock by any “nationally recognized statistical rating organization”, as such term is defined by the Commission for purposes of Rule 436(g)(2) of the rules and regulations
of the Commission under the Securities Act, and (B) no such organization shall have publicly announced or notified the Company that it has under surveillance or review, or has changed its outlook with respect to, its rating of the Company’s debt securities or preferred stock (other than an announcement with positive implications of a possible upgrading); and
 
 (ii)       there shall not have been any material adverse change, or any development involving a prospective material adverse change, in or affecting the business, properties, management, financial position, results of operations or prospects of the Company and its Subsidiaries taken as a whole, except
as otherwise disclosed in the Time of Sale Prospectus and the Prospectus (exclusive of any amendment or supplement thereto), the effect of which, in the judgment of the Managers, makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the terms and in the manner contemplated by this Agreement, the Time of Sale Prospectus and the Prospectus (exclusive of any amendment or supplement thereto).
  14
  (b)           The Underwriters shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of the Company, to the effect set forth in Section 5(a)(i) above and to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date.
 
 The officer signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened.
 
 (c)           The Underwriters shall have received on the Closing Date (i) an opinion, dated as of the Closing Date, of Hogan & Hartson LLP, outside counsel to the Company, in form and substance satisfactory to the Underwriters, substantially to the effect set forth in Exhibit
B, and (ii) a negative assurance letter, dated as of the Closing Date, from Hogan & Hartson LLP, outside counsel to the Company, in form and substance satisfactory to the Underwriters.
 
 (d)           The Underwriters shall have received on the Closing Date an opinion, dated as of the Closing Date, of McGuireWoods LLP, outside counsel to the Company, in form and substance satisfactory to the Underwriters, substantially to the effect set forth in Exhibit
C.
 
 (e)            The Underwriters shall have received on the Closing Date an opinion of Simpson Thacher & Bartlett LLP, counsel for the Underwriters, dated the Closing Date, in form and substance satisfactory to the Underwriters, with respect to such matters as the Underwriters may
request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.  In rendering such opinion, Simpson Thacher & Bartlett LLP will not express any opinion with respect to Virginia law and will rely on the opinion of Hogan & Hartson LLP with respect to all matters pertaining to Virginia law.
 
 The opinion of Simpson Thacher & Bartlett LLP described in Section 5(c) above shall be rendered to the Underwriters at the request of the Company and shall so state therein.
 
 (f)            The Underwriters shall have received, on each of the date hereof and the Closing Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to the Underwriters, from Ernst & Young, independent public accountants,
containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus; provided that the letter delivered on the Closing Date shall use a “cut-off date” not earlier than the date hereof.
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  (g)           The “lock-up” agreements, each substantially in the form of Exhibit A hereto from each director, executive officer and shareholder of the Company listed on Schedule
III hereof, relating to sales and certain other dispositions of shares of Common Stock or certain other securities, delivered to you on or before the date hereof, shall be in full force and effect on the Closing Date.
 
 The several obligations of the Underwriters to purchase Additional Shares hereunder are subject to the delivery to you on the applicable Option Closing Date of such documents as you may reasonably request with respect to the good standing of the Company, the due authorization and issuance of the Additional Shares to be sold on such Option
Closing Date and other matters related to the issuance of such Additional Shares.
 
 6.             Covenants of the Company.  The Company covenants with each Underwriter as follows:
 
 (a)           to furnish to you, without charge, a conformed copy of the Registration Statement as originally filed with the Commission (including exhibits thereto and documents incorporated by reference) and to furnish to you in New York City, without charge, prior to 10:00 a.m.
New York City time on the business day next succeeding the date of this Agreement and during the period mentioned in Sections 6(e) or 6(f) below, as many copies of the Time of Sale Prospectus, the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto or to the Registration Statement as you may reasonably request.  The Company will pay the registration fee for this offering within the time period required by Rule 456(b)(1) under the Securities Act
(without giving effect to the proviso therein) and in any event prior to the Closing Date;
 
 (b)           before amending or supplementing the Registration Statement, the Time of Sale Prospectus or the Prospectus, to furnish to you a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which you reasonably object, and
to file with the Commission within the applicable period specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to such rule;
 
 (c)           to furnish to you a copy of each proposed free writing prospectus to be prepared by or on behalf of, used by, or referred to by the Company in connection with the offering of the Shares and not to use or refer to any proposed free writing prospectus to which you reasonably
object;
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  (d)           not to take any action that would result in an Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would
not have been required to file thereunder;
 
 (e)           if the Time of Sale Prospectus is being used to solicit offers to buy the Shares at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Time
of Sale Prospectus in order to make the statements therein, in the light of the circumstances, not misleading, or if any event shall occur or condition exist as a result of which the Time of Sale Prospectus conflicts with the information contained in the Registration Statement then on file, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Time of Sale Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to any dealer upon request, either amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so amended or supplemented will not, in the light of the circumstances when the Time of Sale Prospectus is delivered to a prospective purchaser, be misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no longer conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended
or supplemented, will comply with applicable law;
 
 (f)            if, during such period after the first date of the public offering of the Shares, as in the opinion of counsel for the Underwriters, the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is required by law to be delivered in connection
with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses you will furnish to the Company) to which Shares may have been sold by you on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred
to in Rule 173(a) of the Securities Act) is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with applicable law;
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  (g)           to endeavor to qualify (or exempt from such qualification) the Shares for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request;
 
 (h)           to make generally available to the Company’s security holders and to you as soon as practicable an earnings statement covering a twelve-month period beginning with the first fiscal quarter of the Company occurring after the date of this Agreement which shall satisfy
the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder;
 
 (i)            in connection with the offering of the Shares, to make its officers, employees, independent accountant and legal counsel reasonably available upon request by the Underwriters;
 
 (j)            to apply the net proceeds from the sale of the Share as described in the Time of Sale Prospectus under the heading “Use of Proceeds;”
 
 (k)           not to take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the prices of the Shares; and
 
 (l)            whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including: (i) the fees, disbursements and expenses
of the Company’s counsel and the Company’s accountants in connection with the registration and delivery of the Shares under the Securities Act and all other fees or expenses in connection with the preparation and filing of the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to the Underwriters and dealers, in the quantities hereinabove specified, (ii) all costs and expenses related to the transfer and delivery of the Shares to the Underwriters, including any transfer or other taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or Legal Investment memorandum in connection with the offer and sale of the Shares under state securities laws and all expenses in connection with the qualification
of the Shares for offer and sale under state securities laws as provided in Section 6(g) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky or Legal Investment memorandum, (iv) all filing fees and the reasonable fees and disbursements of counsel to the Underwriters incurred in connection with the review and qualification of the offering of the Shares by the Financial Industry Regulatory
Authority, (v) all costs and expenses incident to listing the Shares on the NYSE, (vi) the cost of printing certificates representing the Shares, (vii) the costs and charges of any transfer agent, registrar or depositary, (viii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Shares, including, without limitation, expenses associated with the preparation or dissemination of any electronic
road show, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of any aircraft chartered in connection with the road show, (ix) the document production charges and expenses associated with printing this Agreement, and (x) all other costs and
expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section.  It is understood, however, that, except as expressly provided in this Section 6, Section 8 entitled “Indemnity and Contribution” and the last paragraph of Section 10 below, the Underwriters shall pay all of their costs and expenses, including fees and disbursements of their counsel, stock transfer taxes payable on resale of any of the Shares
by them and any advertising expenses connected with any offers they may make.
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  The Company also covenants with each Underwriter that, without the prior written consent of Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co., on behalf of the Underwriters, it will not, during the period ending 60 days after the date of the Prospectus, (1) offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause 1 or 2 above
is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, or (3) file any registration statement with the Commission relating to the offering of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock.  The foregoing sentence shall not apply to (a) the Shares to be sold hereunder, (b) the issuance and sale by the Company of shares of common stock pursuant to any employee stock incentive plan, stock ownership
plan or dividend reinvestment plan of the Company in effect at the Closing Date and disclosed in the Time of Sale Prospectus and the Prospectus, (c) the issuance by the Company of shares of Common Stock upon the conversion of the Company’s 4.00% Convertible Senior Notes due 2013 or pursuant to the exercise of related warrants to purchase shares of Common Stock outstanding on the Closing Date, and (e) agreements, including any registration rights agreements, in effect at the Closing Date and disclosed in,
or filed as an exhibit to, the Time of Sale Prospectus and the Prospectus.
 
 7.             Covenants of the Underwriters.  Each Underwriter severally covenants with the Company not to take any action that would result in the Company being required to file with the Commission under Rule 433(d)
a free writing prospectus prepared by or on behalf of such Underwriter that otherwise would not be required to be filed by the Company thereunder, but for the action of the Underwriter.
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  8.             Indemnity and Contribution.  (a) The Company agrees to indemnify and hold harmless each Underwriter, each person, if any, who controls any Underwriter within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act and each affiliate of any Underwriter within the meaning of Rule 405 under the Securities Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus relating to the offering of the Shares, the Time of Sale Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act relating to the offering of the Shares, any Company information that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act, or the Prospectus or any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, (other than with respect to the Registration Statement or any amendment thereof) in light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities arise out of or are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through you expressly for use
therein.
 
 (b)           Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to such Underwriter, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter through you expressly for use in the Registration Statement, any preliminary prospectus relating to the offering of the Shares, the Time of Sale Prospectus, any issuer free writing prospectus relating to the offering of the Shares or the Prospectus or any amendment
or supplement thereto.
 
 (c)           The obligations of the Company and the Underwriters in this Section 8 and in Section 11 are in addition to any other liability that the Company or the Underwriters, as the case may be, may otherwise have, including in respect of any breaches of representations, warranties
and agreements made herein by any such party.
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  (d)           In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b), such person (the “indemnified
party”) shall promptly notify the person against whom such indemnity may be sought (the “indemnifying party”) in writing of the claim or the commencement of the action; provided however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this
Section 8 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and, provided further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 8.  Upon notice by the indemnified party
to the indemnifying party, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party.  After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 8 for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable costs of investigation; provided however, that an indemnified party shall have the right to retain its own counsel in any such action, but the fees and expenses of such counsel to the indemnified party shall be at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has
been authorized in writing by the indemnifying party,  (ii) the indemnified party has reasonably concluded (based upon advice of counsel to the indemnified party) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (iii) a conflict or potential conflict exists (based upon advice of counsel to the indemnified party) between the indemnified party and the indemnifying party or (iv) the indemnifying
party has not employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party.   It is understood that the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees
and expenses of more than one firm (in addition to any local counsel) for all indemnified parties.  Such firm shall be designated in writing by Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co., in the case of parties indemnified pursuant to Section 8(a), and by the Company, in the case of parties indemnified pursuant to Section 8(b).  Each indemnified party, as a condition of the indemnity agreements contained in Sections 8(a) and (b), shall use all reasonable efforts
to cooperate with the indemnifying party in the defense of any such action or claim.  The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent (which consent shall not be unreasonably withheld), but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment.  No
indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any indemnifying party.
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  (e)           To the extent the indemnification provided for in Section 8(a) or 8(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Shares or (ii) if the allocation provided by clause 8(d)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 8(d)(i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.  The relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, with respect to the offering of the Shares shall be deemed to be
in the same proportion as to the total net proceeds from the offering of the Shares (before deducting expenses) received by, or on behalf of, the Company, on the one hand, and the total underwriting discounts and commissions received by the Underwriters, on the other hand, bear to bear to the total gross proceeds from the sale of the Shares under this Agreement.  The relative fault of the Company, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or by the Underwriters, on the other hand, and the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statements or omissions.  The Underwriters’ respective obligations to contribute pursuant to this Section 8 are several in proportion
to the respective number of Shares they have purchased hereunder, and not joint.
 
 (f)            The Company and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in Section 8(d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in Section 8(d) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  Notwithstanding
the provisions of this Section 8, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
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  (g)           The indemnity and contribution provisions contained in this Section 8 and the representations, warranties and other statements of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of any Underwriter, any person controlling any Underwriter or any affiliate of any Underwriter or by or on behalf of the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Shares.
 
 9.             Termination.  The Underwriters may terminate this Agreement by notice given together by Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co.to
the Company, if  after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on, or by, as the case may be, the New York Stock Exchange or the NASDAQ Global Market, (ii) trading of any securities of the Company shall have been suspended on the New  York Stock Exchange or any exchange on which securities issued by the Company are traded, (iii) a material disruption in securities settlement, payment or
clearance services in the United States or other relevant jurisdiction shall have occurred, (iv) any moratorium on commercial banking activities shall have been declared by Federal or New York State authorities or (v) there shall have occurred any outbreak or escalation of hostilities or any calamity or crisis the effect of which on financial markets is such that, in your judgment, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in your judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the Shares on the terms and in the manner contemplated in the Time of Sale Prospectus or the Prospectus.
 
 10.           Effectiveness; Defaulting Underwriters.  This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.
  23
  If, on the Closing Date or any Option Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Shares that it has or they have agreed to purchase hereunder on such date, and the aggregate number of Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of the Shares to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the number of Firm Shares set forth opposite their respective names in Schedule I bears to the aggregate number of Firm Shares set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as you may specify, to purchase the Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the number of Shares that any Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 10 by an amount in excess of one-ninth of such number of Shares without the written consent of such Underwriter.  If, on the Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Firm Shares and the aggregate number of Firm Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Firm Shares to be purchased on such date, and arrangements satisfactory to you and the Company for the purchase of such Firm Shares are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company, except that the provisions of Section 8 shall not terminate
and shall remain in full force and effect.  In any such case either you or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement, in the Time of Sale Prospectus, in the Prospectus or in any other documents or arrangements may be effected.  If, on an Option Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Additional Shares and the aggregate
number of Additional Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Additional Shares to be purchased on such Option Closing Date, the non-defaulting Underwriters shall have the option to (i) terminate their obligation hereunder to purchase the Additional Shares to be sold on such Option Closing Date, or (ii) purchase not less than the number of Additional Shares that such non-defaulting Underwriters would have been obligated to purchase in the absence of such
default.  Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.
 
 If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse
the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with this Agreement or the offering contemplated hereunder.
  24
  11.           Entire Agreement.  (a) This Agreement, together with any contemporaneous written agreements and any prior written agreements (to the extent not superseded by this Agreement) that relate to the offering of the
Shares, represents the entire agreement between the Company and the Underwriters with respect to the preparation of any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, the conduct of the offering, and the purchase and sale of the Shares.
 
 (b)           The Company acknowledges that in connection with the offering of the Shares: (i) the Underwriters have acted at arms length, are not agents of, and owe no fiduciary duties to, the Company or any other person, (ii) the Underwriters owe the Company only those duties and obligations
set forth in this Agreement and prior written agreements (to the extent not superseded by this Agreement), if any, and (iii) the Underwriters may have interests that differ from those of the Company.  The Company waives to the full extent permitted by applicable law any claims it may have against the Underwriters arising from an alleged breach of fiduciary duty in connection with the offering of the Shares.
 
 12.           Counterparts.  This Agreement may be signed in two or more counterparts (which may include counterparts delivered by facsimile or other electronic PDF transmission), each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same instrument.
 
 13.           Applicable Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.
 
 14.         Headings.  The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement.
 
 15.           Notices.All statements, agreements, notices, requests and communications hereunder shall be in writing and effective only upon receipt and (a) if to the Underwriters shall be delivered, mailed or sent to you
in care of Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention:  Equity Syndicate Desk, with a copy to the Legal Department; and (b) if to the Company shall be delivered, mailed or sent to the Attention of Mr. Robert W. Manley, IV, Executive Vice President and Chief Financial Officer, Smithfield Foods, Inc., 200 Commerce Street, Smithfield, VA 23430 (telecopier: 757-365-3025), with a copy to Warren J. Gorrell, Esq., Hogan & Hartson LLP, 555
Thirteenth Street, Washington, DC 20004 (telecopier no.: (202) 637-5910).
 
 16.           Amendments.  No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by
the parties hereto (it being understood that the successful delivery of and payment for the Shares shall constitute an effective waiver of any outstanding pre-closing condition contained in this Agreement, known to the Underwriters on the Closing Date).
 
 
 [Signature pages to follow]
  25
 
 Very truly yours,Smithfield Foods, Inc.,/s/ Carey J. DuboisCarey J. DuboisVice President, Finance
  
 
 Accepted as of the date hereofMorgan Stanley & Co. IncorporatedGoldman, Sachs & Co.Barclays Capital Inc.J.P. Morgan Securities Inc.By:
MORGAN STANLEY & CO. INCORPORATEDBy:
/s/ John D. TyreeName:
John D. TyreeTitle:
Managing DirectorBy:
GOLDMAN, SACHS & CO.By:
/s/ Goldman, Sachs & Co.Name:
(Goldman, Sachs & Co.)By:
BARCLAYS CAPITAL INC.By:
/s/ Victoria HaleName:
Victoria HaleTitle:
Vice PresidentBy:
J.P. MORGAN SECURITIES INC.By:
/s/ Will WoodworthName:
Will WoodworthTitle:
Executive DirectorActing severally on behalf of themselves and the several Underwriters named in Schedule I hereto.
  27
  SCHEDULE I
 
 Underwriter

Number of Firm Shares To Be PurchasedMorgan Stanley & Co. Incorporated

10,487,220Goldman, Sachs & Co.

4,063,105Barclays Capital Inc.

2,539,493J.P. Morgan Securities Inc.

1,523,610Rabo Securities USA Inc.

1,523,610BMO Capital Markets

457,040ING Financial Markets LLC

406,354SG Americas Securities, LLC

406,354Piper Jaffray & Co.

253,863Total:

21,660,649
  I-1
  SCHEDULE II
 
 Time of Sale Prospectus
 
 1.
Preliminary Prospectus issued September 14, 2009
 
 2.
Orally communicated pricing information:
 
 Shares offered:
21,660,649 sharesOverallotment option:
3,249,097 sharesPrice to public:
$13.8500
  II-1
  SCHEDULE III
 
 Persons Required
 to Sign Lock-up Letters
 
 C. Larry Pope
 Hon. Carol. T. Crawford
 Frank S. Royal
 George H. Richter
 Kenneth M. Sullivan
 James Sbarro
 Jerry H. Godwin
 John T. Schwieters
 Joseph B. Sebring
 Joseph W. Luter, III
 Joseph W. Luter, IV
 Melvin O. Wright
 Paul S. Trible
 Ray A. Goldberg
 Richard J.M. Poulson
 David C. Nelson
 Gaoning Ning
 Timothy O. Schellpeper
 Robert L. Burrus, Jr.
 Wendell H. Murphy
 Robert W. Manly, IV
 Starbase International Limited
  III-1
  EXHIBIT A
 
 LOCK-UP LETTER
 
 September 16, 2009
 
 Morgan Stanley & Co. Incorporated
 Goldman, Sachs & Co.
 
 c/o
Morgan Stanley & Co. Incorporated
 1585 Broadway
 New York, New York 10036
 
 Goldman, Sachs & Co.
 85 Broad Street
 New York, New York 10004
 
 Ladies and Gentlemen:
 
 This letter is being delivered to you in connection with the proposed Underwriting Agreement (the “Underwriting Agreement”), between Smithfield Foods, Inc., a Virginia corporation (the “Company”) and the
several Underwriters, including Morgan Stanley & Co. Incorporated (“Morgan Stanley”), providing for the public offering (the “Public Offering”) of 21,660,249 shares (the “Shares”) of the common stock, $.50 par value, of the Company (the “Common Stock”).
Terms not defined herein are used as defined in the Underwriting Agreement.
 
 To induce the Underwriters that may participate in the Public Offering to continue their efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of Morgan Stanley on behalf of the Underwriters, it will not, during the period commencing on the date hereof and ending 60 days (the
“Lock-Up Period”) after the date of the final prospectus relating to the Public Offering (the “Prospectus”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock
or any securities convertible into or exercisable or exchangeable for Common Stock, or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise.  In addition, the undersigned agrees that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, it will not, during the period commencing on the date hereof and ending 60 days after the date of the Prospectus, make any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock.
  A-1
  Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer any shares of Common Stock held of record or that may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission without the prior written consent of Morgan Stanley,
on behalf of the Underwriters: (a) as  bona fide gifts, (b) to any trust for the direct or indirect benefit of the undersigned or the immediate family member of the undersigned, (c) to any beneficiary of the undersigned pursuant to a will or other testamentary document or applicable laws of descent, (d) the sale of shares of Common Stock pursuant to the “cashless” exercise of stock options granted pursuant to existing employee benefit plans or director compensation plans of the Company described
in the Time of Sale Prospectus and the Prospectus (the term “cashless” exercise being intended to include sale of a portion of the option shares to the Company or in the open market to cover payment of the exercise price and tax withholding payment due from the optionee upon exercise and withholding by the Company of comparable numbers of shares from the shares otherwise deliverable to the optionee upon exercise), or (e) pledges of Common Stock pursuant to agreements that existed on the date hereof,
or re-pledges of Common Stock that was pledged pursuant to agreements that existed on the date hereof, to secure loans with broker-dealers and other financial institutions or that existed prior to the date hereof and sales or transfers of such Common Stock in accordance with the terms of such pledges; provided that (i) in the case of immediately preceding clauses (a), (b) and (c) above, Morgan Stanley, on behalf of the Underwriters,
shall have received a signed copy of this lock-up agreement from each donee, trustee, distributee or transferee, as the case may be, and any such transfer shall not involve a disposition for value, (ii) in the case of immediately preceding clause (d), there shall be no transfer of the underlying shares of Common Stock acquired in connection with such exercise of stock options except in accordance with this lock-up agreement, (iii) in the case of immediately preceding clauses (a), (b) and (c) above,
the undersigned is not required to, or does not otherwise voluntarily, effect during the Lock-Up Period any such public filing or report regarding such transfers, including, but not limited ,to reports pursuant to Rule 144 of the Securities Act of 1933, as amended, or pursuant to Section 16 of the Securities and Exchange Act of 1934, as amended, and (iv) in the case of immediately preceding clauses (d) and (e) above, the undersigned does not voluntarily effect any such public filing or report regarding
such transfers, including but not limited to reports pursuant to Rule 144 of the Securities Act of 1933, as amended, or pursuant to Section 16 of the Securities Exchange Act of 1934, as amended.
  A-2
  The undersigned hereby further agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up agreement during the period from the date of this lock-up agreement to and including the expiration date of the Lock-Up Period, it will give notice thereof to the Company and will not consummate
such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up Period has expired.
 
 In furtherance of the foregoing, the Company and any duly appointed transfer agent for the registration or transfer of the securities described herein are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this lock-up agreement.
 
 If for any reason the Underwriting Agreement does not become effective or shall be terminated prior to the Closing Date, this lock-up agreement shall likewise be terminated.
 
 This lock-up agreement shall be governed by and construed in accordance with the laws of the State of New York.
  
 [Signature Page follows]
  A-3
 
 Very truly yours,(Address)


A-4