On-going Safeway/Supplier Business Relationship

Communication with Safeway

It is understood that communication needs to exist on different levels for effective management of the Supplier / Safeway relationship. The Supplier will consult with their primary Safeway contact to establish points and means of contact with appropriate Safeway business units.

Once you have become an official Safeway supplier and have been assigned a supplier number, you are responsible for keeping yourself informed and most importantly notify and update your Corporate Sourcing Contact when needed regarding:

1. Safeway's Continuing Commodity Guaranty & Indemnity Agreement ("CCG")
2. Gift and Gratuity Policy
3. California Proposition 65 warranty
4. Diversity Information
5. Certificate of Liability Insurance
6. Cost Changes. Minimum 30 days advance notice required

Safeway's Continuing Commodity Guaranty

Safeway reserves the right to require any and all of its suppliers to sign the then-current version of the Continuing Commodity Guaranty even if the supplier has executed one in the past.

Gift and Gratuity Policy

Safeway's Code of Business Conduct ("Safeway's Code") contains strict provisions governing relations with suppliers.

Safeway employees generally may not accept gifts, discounts, loans, services or gratuities. The only exceptions to this policy are for gadgets, such as desk calendars, memo pads, paperweights and similar items of nominal value, which bear an advertising message or name of the supplier. Safeway's Code does not permit lavish or extravagant entertainment of our employees. Safeway employees may accept only moderate meals or entertainment from suppliers in the course of company business.

We ask that you do not put our employees in the position of having to refuse gifts, gratuities or entertainment. Safeway appreciates your cooperation.

California Proposition 65 warranty

California's Safe Drinking Water and Toxic Enforcement Act of 1986, Health and Safety Code Section 25249.5 et seq, commonly known as "Proposition 65", requires that anyone who, in the course of doing business in California, knowingly or intentionally exposes an individual to a chemical known to the State to cause cancer or reproductive toxicity, must first give clear and reasonable warning of the presence of such chemicals. Pursuant to this warranty agreement, responsibility for warning consumers (in the case of consumer products) is that of the manufacturer or packager, and not the retailer.

This letter, in conjunction with the terms and conditions of our purchase orders and the Continuing Commodity Guarantee (if any) which you have delivered or will deliver to us, as well as the implied warranty of merchantability covering all products we purchase from you, will serve to confirm and to put you on notice that Safeway Inc. will hold you fully responsible for compliance (both as to product content and notice requirement) with all of the requirements of Proposition 65, with respect to all products that Safeway Inc. may purchase from you. By signing this warranty agreement, you agree to assume such responsibility and to indemnify and hold Safeway Inc. harmless from and against all liability, costs and expenses (including reasonable attorneys' fees) that may be incurred by Safeway Inc. by reason of any claim brought against Safeway Inc. under, or in connection with, Proposition 65 with respect to any product(s) you supply to Safeway Inc.

In the event you supply Safeway Inc. with product that contains a chemical listed by the State of California pursuant to Proposition 65, which is not exempt from the warning requirement under Section 25249.10, you agree to advise Safeway Inc. in writing of the following: the product name; the listed chemical involved; and the warning statement that you are providing with the product.

Diversity Information

Navigating a large company can be daunting, especially when it comes to determining who handles buying decisions. Our supplier diversity initiative was created to make this process a little easier. Our program is designed to increase opportunity for qualified minority and women-owned suppliers and to assist in their development where need be.

At Safeway, we are open to giving minority and women-owned businesses an opportunity to join our large list of suppliers for both goods and services. Most of the purchasing of goods and services is handled at our corporate headquarters.

Safeway has been a long-standing supporter of minority communities. Safeway's Diversity Program's mission is to promote supplier participation reflective of the diverse communities in which Safeway does business, while encouraging economic development. In achieving this mission, Safeway supports the minority community in various ways including the development of minority manufacturers within the communities. We will continue to take great strides in making the playing field equal for all by creating more opportunities for growth and expansion throughout the Safeway system.

Defining Our Terms

When we say "minority", we mean those individuals who are citizens of the United States (or lawfully-admitted permanent residents) and are in the following racial/ethnic groups:

• African-American or Black: persons having origins in any of the black racial groups.
• Hispanic: all persons of Mexican, Puerto Rican, Cuban, Central American, or other Spanish cultures or origins, regardless of race.
• Asian or Pacific Islander: all persons having origins in any of the original peoples of the Far East, Southeast Asia, the Indian Subcontinent, or the Pacific Islands. This area includes, for example, China, India, Japan, Korea, the Philippine Islands and Samoa.
• American Indian or Alaskan Native: all persons having origins in any of the original peoples of North America, including those who maintain cultural identification through tribal affiliation or community recognition.

We define a minority-owned or women-owned business as one:

• That is at least 51% owned by minorities or women,
• Whose management and daily business operations are controlled by one or more women or members of minority groups, and
• That, if publicly owned, has one or more women and/or members of a minority group owning 51% (or a controlling share) of the stock.

If you feel that you meet the criteria to be considered a Minority and Women Business Enterprise ("M/WBE"), please go to our web site at http://www.safeway.com/Supplier_Diversity/question.html and complete the brief questionnaire/application.

Please note that your answers to this questionnaire will not affect your ability to do business with Safeway. We appreciate your time, and look forward to a mutually beneficial business relationship.

Diversity Supplier Contacts - U.S. Retail Operations

For additional information about Safeway and its supplier policies, or to e-mail us your information, please contact:
Tim Williams
Supplier Diversity Department / Public Affairs / Products and Services
5918 Stoneridge Mall Road
Pleasanton, CA 94588-3229
tim.williams@safeway.com or supplier.diversity@safeway.com
Phone: (925) 467-2688 - Fax: (925) 467-3323

Certificate of Liability Insurance and Broad Vendor's Endorsement

Suppliers are expected to submit an updated Certificate of Liability Insurance whenever coverage is renewed or materially altered and must maintain a current copy of the Certificate of Liability Insurance ("COI") and Broad Form Vendor's Endorsement (ISO CG 2015 or industry equivalent) on file with Safeway's Risk Management Department. These can be mailed to Safeway at the following address:

Safeway Inc.
ATTN: Risk Management
Mail Stop #A100
5918 Stoneridge Mall Road
Pleasanton, CA 94588-3229

Safeway will continuously monitor compliance with its insurance requirements as specified in the CCG, Section XV, Paragraph A. Failure to meet those requirements will result in serious consequences to our business relationship, including, at Safeway's sole discretion, discontinuation of purchase orders, discontinuation of warehouse receiving, and potentially, termination of our relationship.

Cost Changes

Suppliers may not increase cost prices charged to Safeway, unless expressly agreed in writing by Safeway in the applicable agreement between the parties. Provided that such changes are permitted, therein, suppliers must complete a Cost Change Form with a 30-day minimum advance notice to their appropriate Corporate Sourcing Contact. Appendix 6

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