ASSET PURCHASE AGREEMENT

AGREEMENT, dated this 31^ST day of July, 2006, by and between CONAGRA FOODS PACKAGED FOODS COMPANY, INC., a Delaware corporation (Seller), and SMITHFIELD FOODS, INC., a Virginia corporation (Buyer).

RECITALS:

AGREEMENT:

In consideration of the foregoing recitals and in further consideration of the mutual covenants and agreements hereinafter contained, the parties hereto agree as follows:

1.1 Certain Defined Terms. As used in this Agreement, the following terms shall have the following respective meanings:

Affiliate shall mean, with respect to any specified Person, any other Person that, at the time of determination, directly or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person.

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Agreement shall mean this Agreement.

Buyer Common Stock shall mean that number of shares of common stock, $.50 par value (and associated rights to purchase shares of Series A junior participating preferred stock) equal to the quotient of $100,000,000 divided by the average of the per share last sales prices, regular way (rounded to four decimal points), of Buyer common stock as reported on the NYSE composite transactions reporting system (as reported in the New York City edition of The Wall Street Journal or, if not reported thereby, another authoritative source) for the five consecutive trading days immediately prior to the third business day before the Closing Date, such quotient to be rounded to the closest whole number of shares.

Closing Working Capital Amount shall mean the value of the Current Assets, less the amount of all accrued expenses which relate to the Business, all as of the Effective Time, determined and calculated in accordance with Section 7 hereof.

ConAgra shall mean ConAgra Foods, Inc.

Confidentiality Agreement shall mean the Confidentiality Agreement dated June 13, 2006, between ConAgra and Buyer.

Control (including the terms Controlled by and under common Control with), with respect to the relationship between or among two or more Persons, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, by contract or otherwise, including, without limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person.

CPI shall mean ConAgra Panama, Inc., a Kentucky corporation.

Crated Equipment shall mean that certain equipment of Seller listed on Exhibit F.

Crated Equipment Proceeds shall mean the net after-tax proceeds received by Seller from the sale of any or all of the Crated Equipment prior to Closing.

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Current Assets shall mean the Inventory and the Prepaids.

Dedicated Leased Locations shall mean the locations leased by Seller and listed on Exhibit B.

Dedicated Locations shall mean, collectively, the Dedicated Leased Locations and the Dedicated Owned Locations.

Dedicated Owned Locations shall mean the locations owned by Seller and listed on Exhibit C.

Exchange Act shall mean the Securities Exchange Act of 1934, as amended.

Facility shall mean (i) any facility located on any Owned Real Property or (ii) any facility (which, for the avoidance of doubt, shall include farms and other leased property and real estate) subject to a lease set forth on Exhibit 2.13.

GAAP shall mean United States generally accepted accounting principles applied in a manner consistent with the accounting principles used in the preparation of, and reflected in, the Financial Information.

NYSE shall mean The New York Stock Exchange.

Person shall mean any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization, other entity or Governmental Authority.

Pilgrims Pride Supply Agreement shall mean the ConAgra Supply Agreement, dated November 23, 2003, between ConAgra and Pilgrims Pride Corporation, as amended through the date hereof.

Quincy Plant shall mean the non-kosher production plant located at Quincy, Michigan more particularly described on Exhibit D.

R&D Equipment shall mean that equipment listed on Exhibit G.

Restricted Activity shall mean (i) the growing or slaughtering of chickens, (ii) an

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integrated chicken operation that grows, slaughters and processes chickens, (iii) the sale of fresh chicken, or (iv) the sale of fresh frozen chicken (whole or parts) that has not been further processed.

SEC shall mean the United States Securities and Exchange Commission.

Securities Act shall mean the Securities Act of 1933, as amended.

Shared Locations shall mean the locations listed on Exhibit E.

Swift Preferred Supplier Agreement shall mean the Preferred Supplier Agreement, dated September 19, 2002, between ConAgra and Swift & Company.

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2. Sale of Assets and Assignment of Contracts. Subject to the terms and conditions contained herein, at Closing Seller shall sell, convey, transfer and deliver to Buyer, and Buyer shall purchase and accept from Seller, free and clear of any and all mortgages, liens, encumbrances, charges, claims, restrictions, pledges or security interests (Liens), except for those mortgages, liens, encumbrances, charges, claims, restrictions, pledges or security interests listed on Exhibit 2 (collectively, the Permitted Liens), all of Sellers right, title and interest in and to the following assets (the assets identified in subsections 2.1 through 2.12, inclusive, being collectively the Assets):

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part of the Intellectual Property of which Seller, or an Affiliate thereof, is the exclusive owner, identifying the related registration (Trademarks).

3. Excluded Assets and Operations. Buyer shall not purchase those assets set forth on Exhibit 3 or any other assets or rights of Seller or its Affiliates other than the Assets and

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Contracts (the Excluded Assets), nor shall Buyer assume any contract or agreement other than the Contracts. For purposes of clarity, Buyer acknowledges that:

(i) all product quality and development facilities and assets located outside of a Dedicated Location or a Shared Location, including, without limitation, Sellers Omaha, Nebraska research and development facility; provided, however, that the research and development employees listed on Exhibit 3(e)(i) and the R&D Equipment are included as Assets and Business Employees;

(ii) Sellers sales force; provided, however, that the sales employees listed on Exhibit 3(e)(ii) are included as Business Employees; and

(iii) Sellers Omaha, Nebraska enterprise customer service operations, financial service center operations and information technology service center.

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4. Excluded Liabilities. Except as specifically set forth in this Agreement or in other documents or instruments required hereby, and except as specifically set forth herein with respect to the performance by Buyer of its obligations arising hereunder or under the Contracts and relating to periods from and after the Effective Time, Buyer does not and will not assume (i) trade accounts payable, and debt for borrowed money existing as of the Effective Time (Retained Payables), (ii) accrued expenses existing as of the Effective Time but not reflected in the Closing Working Capital Amount (Retained Accrued Expenses); (iii) liability for Taxes (as defined below) except for (A) Taxes, if any, reflected in the Closing Working Capital Amount, (B) Taxes, if any, governed by the Contracts assumed by Buyer and relating to periods from and after the Effective Time, and (C) Buyers obligations under Section 17, with respect to prorated property taxes and similar items, and Section 18, with respect to payment of one-half of the Transfer Taxes (as defined in such section) (Retained Taxes); (iv) liabilities specifically retained by Seller or Sellers employee benefit plans pursuant to Section 8 below (Retained Employee Liabilities); (iv) any liability or obligation of any kind of Seller arising from the matters listed on Exhibit 4(a) (Retained Known Liabilities); and (v) any liability or obligation of any kind arising from the pre-Closing (A) operation of the Business, (B) use of the Assets, or (C) performance by Seller under the Contracts, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, whether due or to become due, or otherwise (Pre-Closing Contingent Liabilities), other than those matters listed on Exhibit 4(b) and other than as set forth in Section 5.1.

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5. Consideration Payable to Seller by Buyer. Subject to the terms and conditions of this Agreement, Buyer agrees as follows:

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perpetually licenses the Butterball mark in Canada to Parrish & Heimbecker or any Affiliate or assignee thereof, Buyer shall pay to Seller an amount equal to one-half of the net after-tax proceeds of such transaction.

6. Closing. Subject to the terms and conditions contained herein, the closing of the transactions contemplated hereby (the Closing) will take place on the tenth day after the condition set forth in Section 12.1 has been satisfied, or as soon thereafter as the other conditions to Closing set forth in Sections 12, 13 and 14 are satisfied (the Closing Date), at the offices of McGrath North Mullin & Kratz, PC LLO, First National Tower, 1601 Dodge Street, Suite 3700, Omaha, Nebraska 68102. The Closing shall be effective as of 12:01 a.m. Central Time on the Closing Date (the Effective Time).

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