{"id":43971,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/underwriting-agreement-safeway-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"underwriting-agreement-safeway-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/securities\/underwriting-agreement-safeway-inc.html","title":{"rendered":"Underwriting Agreement – Safeway Inc."},"content":{"rendered":"

SAFEWAY INC.<\/p>\n

$800,000,000<\/p>\n

$400,000,000 3.400% NOTES DUE 2016<\/p>\n

$400,000,000 4.750% NOTES DUE 2021<\/p>\n

UNDERWRITING AGREEMENT<\/p>\n

November 30, 2011<\/p>\n

\n

November 30, 2011<\/p>\n

Goldman, Sachs & Co.<\/p>\n

J.P. Morgan Securities LLC<\/p>\n

Merrill Lynch, Pierce, Fenner & Smith<\/p>\n

Incorporated<\/p>\n

as Representatives of the several Underwriters<\/p>\n

named in Schedule I hereto<\/p>\n

Dear Sirs and Mesdames:<\/p>\n

Safeway Inc., a Delaware corporation (the “Company”), proposes to issue and
\nsell to the several Underwriters named in Schedule I hereto (the
\n“Underwriters”), for whom Goldman, Sachs & Co., J.P. Morgan Securities LLC
\nand Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as
\nrepresentatives (together, the “Representatives”), $400,000,000 in aggregate
\nprincipal amount of its 3.400% Notes Due 2016 (the “Notes Due 2016”) and
\n$400,000,000 aggregate principal amount of its 4.750% Notes Due 2021 (the “Notes
\nDue 2021,” and together with the Notes Due 2016, the “Securities”) to be issued
\npursuant to the provisions of an Indenture dated as of September 10, 1997 (the
\n“Indenture”) between the Company and The Bank of New York Mellon Trust Company,
\nN.A., formerly known as The Bank of New York Trust Company, N.A., as successor
\nin interest to The Bank of New York, as Trustee (the “Trustee”).<\/p>\n

The Company has filed with the Securities and Exchange Commission (the
\n“Commission”) a registration statement (Registration No. 333-177489), including
\na prospectus, relating to the Securities and has filed with, or transmitted for
\nfiling to, or shall promptly hereafter file with or transmit for filing to, the
\nCommission (i) a prospectus supplement (the “Prospectus Supplement”)
\nspecifically relating to the Securities pursuant to Rule 430B and Rule 424 under
\nthe Securities Act of 1933, as amended (the “Securities Act”), and (ii) a
\nrelated prospectus dated October 24, 2011 (the “Base Prospectus”). The term
\n“Registration Statement” means the registration statement (Registration No.
\n333-177489), as amended to the date of this Underwriting Agreement (this
\n“Agreement”), including the information (if any) deemed to be part of such
\nregistration statement at the time it became effective including, if applicable,
\nthe Rule 430B Information. The term “Rule 430B Information” means any
\ninformation in the Prospectus Supplement that was omitted from the Registration
\nStatement at the time it was declared effective but is deemed to be a part of
\nand included in such registration statement. The term “Prospectus” means the
\nBase Prospectus together with the Prospectus Supplement. The term “preliminary
\nprospectus” means a preliminary prospectus supplement specifically relating to
\nthe Securities that omitted the Rule 430B Information or that was captioned
\n“Subject to Completion” and that was used after the Registration Statement
\nbecame effective and prior to the execution and delivery of this Agreement,
\ntogether with the Base Prospectus. As used herein, the terms “Base Prospectus,”
\n“Prospectus,” and “preliminary prospectus” shall include in each case the
\ndocuments incorporated by reference therein, and the term “Registration
\nStatement” shall include the documents incorporated or deemed to be incorporated
\nby reference therein or<\/p>\n

1<\/p>\n

\n

otherwise deemed by the rules and regulations of the Commission under the
\nSecurities Act (the “Securities Act Regulations”) to be a part of or included
\ntherein. The terms “supplement,” “amendment” and “amend” as used herein with
\nrespect to the Registration Statement, any preliminary prospectus or the
\nProspectus shall include all documents deemed to be incorporated by reference in
\nthe Registration Statement, such preliminary prospectus or the Prospectus that
\nare filed subsequent to the date of the Base Prospectus by the Company with the
\nCommission pursuant to the Securities Exchange Act of 1934, as amended (the
\n“Exchange Act”) and all documents otherwise deemed by the Securities Act
\nRegulations to be a part of or included therein.<\/p>\n

1. Representations and Warranties<\/u><\/strong>. The Company
\nrepresents and warrants to and agrees with each of the Underwriters that:<\/p>\n

(a) The Registration Statement has become effective; no stop order suspending
\nthe effectiveness of the Registration Statement is in effect, and no proceedings
\nfor such purpose are pending before or threatened by the Commission.<\/p>\n

(b) (i) The Registration Statement, when it became effective, did not
\ncontain, and such Registration Statement, as amended or supplemented, if
\napplicable, at each deemed effective date with respect to the Underwriters
\npursuant to Rule 430(B)(f)(2) of the Securities Act Regulations, will not
\ncontain, any untrue statement of a material fact or omit to state a material
\nfact required to be stated therein or necessary to make the statements therein
\nnot misleading, (ii) the Registration Statement when the Registration Statement
\nbecame effective and at each deemed effective date with respect to the
\nUnderwriters pursuant to Rule 430B(f)(2) of the Securities Act Regulations and
\nthe Prospectus comply and, as amended or supplemented, if applicable, will
\ncomply in all material respects with the Securities Act and the Securities Act
\nRegulations, (iii) the Prospectus does not contain and, as amended or
\nsupplemented, if applicable, will not contain any untrue statement of a material
\nfact or omit to state a material fact necessary to make the statements therein,
\nin the light of the circumstances under which they were made, not misleading and
\n(iv) as of the Applicable Time (as defined below), neither any Issuer Free
\nWriting Prospectus (as defined below) issued at or prior to the Applicable Time,
\nthe Statutory Prospectus (as defined below) and the information included on
\nSchedule II hereto, all considered together (collectively, the “General
\nDisclosure Package”), included any untrue statement of a material fact or
\nomitted to state any material fact necessary in order to make the statements
\ntherein, in the light of the circumstances under which they were made, not
\nmisleading, except that the representations and warranties set forth in this
\nSection 1(b) do not apply (A) to statements or omissions in the Registration
\nStatement, the General Disclosure Package or the Prospectus based upon
\ninformation relating to any Underwriter furnished to the Company in writing by
\nsuch Underwriter through you expressly for use therein or (B) to that part of
\nthe Registration Statement that constitutes the Statement of Eligibility (Form
\nT-1) (the “Form T-1”) under the Trust Indenture Act of 1939, as amended (the
\n“Trust Indenture Act”), of the Trustee.<\/p>\n

2<\/p>\n

\n

As used in this subsection and elsewhere in this Agreement:<\/p>\n

“Applicable Time” means 5:30 p.m. (Eastern time) on November 30, 2011 or such
\nother time as agreed by the Company and the Representatives.<\/p>\n

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,”
\nas defined in Rule 433 of the Securities Act Regulations (“Rule 433”),
\nidentified in Schedule III hereto, and any other free writing prospectus that
\nthe parties hereto shall hereafter expressly agree in writing to treat as part
\nof the General Disclosure Package.<\/p>\n

“Statutory Prospectus” as of any time means the prospectus relating to the
\nSecurities that is included in the Registration Statement immediately prior to
\nthat time, including any document incorporated by reference therein and any
\npreliminary or other prospectus deemed to be a part thereof.<\/p>\n

Each Issuer Free Writing Prospectus, as of its issue date and at all
\nsubsequent times through the completion of the public offer and sale of the
\nSecurities or until any earlier date that the Company notified or notifies the
\nRepresentatives as described in Section 6(c), did not, does not and will not
\ninclude any information that conflicted, conflicts or will conflict with the
\ninformation contained in the Registration Statement or the Prospectus, including
\nany document incorporated by reference therein and any preliminary or other
\nprospectus deemed to be a part thereof that has not been superseded or modified.\n<\/p>\n

(c) The documents incorporated by reference in the Registration Statement,
\nthe General Disclosure Package and the Prospectus, when they became effective or
\nwere filed with the Commission, as the case may be, conformed in all material
\nrespects to the requirements of the Securities Act or the Exchange Act, as
\napplicable, and the rules and regulations of the Commission thereunder; and any
\nfurther documents so filed and incorporated by reference in the Registration
\nStatement, the General Disclosure Package and the Prospectus or any further
\namendment or supplement thereto, when such documents become effective or are
\nfiled with the Commission, as the case may be, will conform in all material
\nrespects to the requirements of the Securities Act or the Exchange Act, as
\napplicable, and the rules and regulations of the Commission thereunder.<\/p>\n

(d) The Company has not distributed and will not distribute, prior to the
\nlater of the Closing Date and the completion of the Underwriters153 distribution
\nof the Securities, any offering material in connection with the offering and
\nsale of the Securities other than a preliminary prospectus, the Prospectus, any
\nIssuer Free Writing Prospectus reviewed and consented to by the Representatives
\nand included in Schedule III hereto or the Registration Statement.<\/p>\n

(e) The Company has been duly incorporated, is validly existing as a
\ncorporation in good standing under the laws of the State of Delaware, has the
\ncorporate power and authority to own its properties and to conduct its business
\nas described in the Registration Statement, the General Disclosure Package and
\nthe Prospectus and is duly<\/p>\n

3<\/p>\n

\n

qualified to transact business and is in good standing in the State of
\nCalifornia and in each other jurisdiction in which such qualification is
\nrequired, except to the extent that the failure to be so qualified or be in good
\nstanding would not have a material adverse effect on the Company and its
\nsubsidiaries, taken as a whole.<\/p>\n

(f) Each subsidiary, if any, of the Company which is a “significant
\nsubsidiary” as defined in Rule 405 of Regulation C of the Securities Act (each a
\n“Significant Subsidiary”) has been duly incorporated and is validly existing as
\na corporation and in good standing under the laws of the jurisdiction of its
\nincorporation.<\/p>\n

(g) This Agreement has been duly authorized, executed and delivered by the
\nCompany.<\/p>\n

(h) The Indenture has been duly qualified under the Trust Indenture Act and
\nhas been duly authorized, executed and delivered by the Company and is a valid
\nand binding agreement of the Company, enforceable in accordance with its terms
\nexcept as (i) the enforceability thereof may be limited by bankruptcy,
\ninsolvency, reorganization, moratorium or other similar laws relating to or
\naffecting creditors153 rights generally and (ii) rights of acceleration, if any,
\nand the availability of equitable remedies may be limited by equitable
\nprinciples of general applicability.<\/p>\n

(i) The Securities have been duly authorized by the Company and, when
\nexecuted and authenticated in accordance with the provisions of the Indenture
\nand delivered to and paid for by the Underwriters in accordance with the terms
\nof this Agreement, will be entitled to the benefits of the Indenture and will be
\nvalid and legally binding obligations of the Company, enforceable in accordance
\nwith their terms except as (i) the enforceability thereof may be limited by
\nbankruptcy, insolvency, reorganization, moratorium or other similar laws
\naffecting creditors153 rights generally and (ii) rights of acceleration, if any,
\nand the availability of equitable remedies may be limited by equitable
\nprinciples of general applicability.<\/p>\n

(j) The execution and delivery by the Company of, and the performance by the
\nCompany of its obligations under, this Agreement, the Indenture and the
\nSecurities will not result in any violation of the Restated Certificate of
\nIncorporation, as amended, or the Amended and Restated By-Laws of the Company or
\nany agreement or other instrument binding upon the Company or any of its
\nsubsidiaries that is material to the Company and its subsidiaries, taken as a
\nwhole, or any statute or any order, rule or regulation of any governmental body,
\nagency or court having jurisdiction over the Company or any subsidiaries, and no
\nconsent, approval, authorization or order of, or qualification with, any
\ngovernmental body or agency having jurisdiction over the Company is required for
\nthe performance by the Company of its obligations under this Agreement, the
\nIndenture and the Securities, except such as may be required under the
\nSecurities Act and the Securities Act Regulations, and the Exchange Act and the
\nrules and regulations thereunder, the Trust Indenture Act and the securities or
\nBlue Sky laws of the various states in connection with the offer and sale of the
\nSecurities.<\/p>\n

4<\/p>\n

\n

(k) The financial statements (together with the related notes thereto)
\nincorporated by reference in the Registration Statement, the General Disclosure
\nPackage and the Prospectus present fairly the financial position of the Company
\nand its consolidated subsidiaries as of and at the dates indicated and the
\nresults of their operations for the periods specified, except as otherwise
\ndisclosed therein; and except as otherwise stated therein or in the Registration
\nStatement, the General Disclosure Package and the Prospectus, said financial
\nstatements have been prepared in conformity with generally accepted accounting
\nprinciples in the United States (“GAAP”) applied on a consistent basis. The
\ninteractive data in eXtensible Business Reporting Language incorporated by
\nreference in the Registration Statement, the General Disclosure Package and the
\nProspectus fairly presents the information called for in all material respects
\nand has been prepared in accordance with the Commission153s rules and guidelines
\napplicable thereto.<\/p>\n

(l) There has not occurred any material adverse change, or any development
\ninvolving a prospective material adverse change, in the condition, financial or
\notherwise, or in the earnings, business or operations of the Company and its
\nsubsidiaries, taken as a whole, from that set forth in the Registration
\nStatement, the General Disclosure Package and the Prospectus.<\/p>\n

(m) Other than as set forth in the Registration Statement, the General
\nDisclosure Package and the Prospectus, there are no legal or governmental
\nproceedings pending or, to the Company153s knowledge, threatened, to which the
\nCompany or any of its subsidiaries is a party or to which any of the properties
\nof the Company or any of its subsidiaries is subject that are required to be
\ndescribed in the Registration Statement, the General Disclosure Package or the
\nProspectus and are not so described or any statutes, regulations, contracts or
\nother documents that are required to be described in the Registration Statement,
\nthe General Disclosure Package or the Prospectus or to be filed as exhibits to
\nthe Registration Statement that are not described or filed as required.<\/p>\n

(n) The Company is not required to be registered as an “investment company”
\nas such term is defined in the Investment Company Act of 1940, as amended.<\/p>\n

(o) The Company and each of its subsidiaries maintain a system of internal
\naccounting controls sufficient to provide reasonable assurances (1) that the
\nmaintenance of records is in reasonable detail and accurately and fairly reflect
\nthe transactions and disposition of assets of the Company; (2) that transactions
\nare recorded as necessary to permit preparation of financial statements in
\nconformity with GAAP; (3) that receipts and expenditures are made only in
\naccordance with authorizations of management and directors of the Company; and
\n(4) regarding prevention or timely detection of unauthorized acquisition, use or
\ndisposition of the Company153s assets that could have a material effect on
\nfinancial statements. Except as described in the Prospectus and the Statutory
\nProspectus that forms a part of the General Disclosure Package, since the end of
\nthe Company153s most recent audited fiscal year, there has been (I) no material
\nweakness in the Company153s internal control over financial reporting (whether or
\nnot remediated) and<\/p>\n

5<\/p>\n

\n

(II) no change in the Company153s internal control over financial reporting
\nthat has materially affected, or is reasonably likely to materially affect, the
\nCompany153s internal control over financial reporting.<\/p>\n

(p) The Company and its consolidated subsidiaries employ disclosure controls
\nand procedures that are designed to ensure that information required to be
\ndisclosed by the Company in the reports that it files or submits under the
\nExchange Act is recorded, processed, summarized and reported, within the time
\nperiods specified in the Commission153s rules and forms, and is accumulated and
\ncommunicated to the Company153s management, including its principal executive
\nofficer or officers and principal financial officer or officers, as appropriate,
\nto allow timely decisions regarding disclosure.<\/p>\n

(q) There is and has been no failure on the part of the Company or any of the
\nCompany153s directors or officers, in their capacities as such, to comply in all
\nmaterial respects with any provision of the Sarbanes-Oxley Act of 2002 and the
\nrules and regulations promulgated in connection therewith (the “Sarbanes-Oxley
\nAct”), including Section 402 related to loans and Sections 302 and 906 related
\nto certifications.<\/p>\n

(r) The Registration Statement is not the subject of a pending proceeding or
\nexamination under Section 8(d) or 8(e) of the Securities Act, and the Company is
\nnot the subject of a pending proceeding under Section 8A of the Securities Act
\nin connection with the offering of the Securities.<\/p>\n

2. Agreement to Sell and Purchase<\/u><\/strong>. The Company hereby
\nagrees to sell to the several Underwriters, and each Underwriter, upon the basis
\nof the representations and warranties herein contained, but subject to the
\nconditions hereinafter stated, agrees, severally and not jointly, to purchase
\nfrom the Company the respective principal amounts of Securities set forth in
\nSchedule I hereto opposite its name at a purchase price of 99.346% of the
\nprincipal amount of the Notes Due 2016 and 99.099% of the principal amount of
\nthe Notes Due 2021.<\/p>\n

3. Terms of Public Offering<\/u><\/strong>. The Company is advised
\nby you that the Underwriters propose to make a public offering of their
\nrespective portions of the Securities as soon after this Agreement has become
\neffective as in your judgment is advisable. The Company is further advised by
\nyou that the Securities are to be offered to the public initially at 99.946% of
\nthe principal amount of the Notes Due 2016 and 99.749% of the principal amount
\nof the Notes Due 2021 (the “Public Offering Prices”) plus accrued interest, if
\nany, from December 5, 2011 to the date of payment and delivery, and may be sold
\nto certain dealers selected by you at a price that represents a concession not
\nin excess of 0.350%, in the case of the Notes Due 2016, and 0.400%, in the case
\nof the Notes Due 2021, of their respective principal amounts under the
\napplicable Public Offering Price, and that any Underwriter may allow, and such
\ndealers may reallow, a concession, not in excess of 0.200%, in the case of the
\nNotes Due 2016, and 0.250%, in the case of the Notes Due 2021, of their
\nrespective principal amounts, to any Underwriter or to certain other dealers.\n<\/p>\n

4. Payment and Delivery<\/u><\/strong>. Payment for the Securities
\nshall be made in Federal or other immediately available funds to an account
\ndesignated by the Company at 7:00 a.m.,<\/p>\n

6<\/p>\n

\n

California time, on December 5, 2011, or at such other time on the same or
\nsuch other date, not later than December 12, 2011, as shall be designated in
\nwriting by you. The time and date of such payment are hereinafter referred to as
\nthe “Closing Date.”<\/p>\n

Payment for the Securities shall be made against delivery to you for the
\nrespective accounts of the several Underwriters of global certificates
\nrepresenting the Securities registered in the name of Cede & Co. with any
\ntransfer taxes payable in connection with the transfer of the Securities to the
\nUnderwriters duly paid.<\/p>\n

5. Conditions to the Underwriters153 Obligations<\/u><\/strong>. The
\nobligation of the Company to sell the Securities to the Underwriters and the
\nseveral obligations of the Underwriters to purchase and pay for the Securities
\nare subject to the following conditions:<\/p>\n

(a) Subsequent to the execution and delivery of this Agreement and prior to
\nthe Closing Date:<\/p>\n

(i) there shall not have occurred any downgrading, nor shall any notice have
\nbeen given of any intended or potential downgrading, in the rating accorded any
\nof the Company153s securities by any “nationally recognized statistical rating
\norganization,” as such term is defined for purposes of Rule 15c3-1(c)(2)(vi)(F)
\nunder the Exchange Act; provided that any downgrade of one notch by Moody153s
\nInvestors Service (“Moody153s) from the Moody153s rating set forth in the Final Term
\nSheet as filed pursuant to Rule 433(d) with the Commission that is consistent
\nwith the announced review for potential downgrade announced by Moody153s on
\nNovember 30, 2011 shall not cause a violation of this Section 5(a)(i);<\/p>\n

(ii) there shall not have occurred any change, or any development involving a
\nprospective change, in the condition, financial or otherwise, or in the
\nearnings, business or operations of the Company and its subsidiaries, taken as a
\nwhole, from that set forth in the Registration Statement, the Prospectus or the
\nGeneral Disclosure Package that, in your judgment, is material and adverse and
\nthat makes it, in your judgment, impracticable to market the Securities on the
\nterms and in the manner contemplated in the Prospectus; and<\/p>\n

(iii) the Registration Statement shall have become effective under the
\nSecurities Act and no stop order suspending the effectiveness of the
\nRegistration Statement shall have been issued under the Securities Act and no
\nproceedings therefor shall have been initiated or threatened by the Commission.\n<\/p>\n

(b) The Underwriters shall have received on the Closing Date a certificate,
\ndated the Closing Date and signed by an executive officer of the Company, to the
\neffect set forth in clause (a)(i) above and to the effect that the
\nrepresentations and warranties of the Company contained in this Agreement are
\ntrue and correct as of the Closing Date and that the Company has complied in all
\nmaterial respects with all of the agreements and satisfied in all material
\nrespects all of the conditions on its part to be performed or<\/p>\n

7<\/p>\n

\n

satisfied hereunder on or before the Closing Date (the officer signing and
\ndelivering such certificate may rely upon his or her knowledge as to proceedings
\nthreatened).<\/p>\n

(c) Latham & Watkins LLP, special counsel for the Company, shall have
\nfurnished to you their written opinion dated the Closing Date, in form and
\nsubstance satisfactory to you, to the effect that:<\/p>\n

(i) The Company has been duly incorporated under the General Corporation Law
\nof the State of Delaware, with corporate power and authority to own, lease and
\noperate its properties and to conduct its business as described in the
\nRegistration Statement, the General Disclosure Package and the Prospectus. Based
\nsolely on certificates from public officials, such firm shall confirm that the
\nCompany is validly existing and in good standing under the laws of the State of
\nDelaware.<\/p>\n

(ii) The execution, delivery and performance of this Agreement have been duly
\nauthorized by all necessary corporate action of the Company, and this Agreement
\nhas been duly executed and delivered by the Company.<\/p>\n

(iii) The Indenture (a) has been qualified under the Trust Indenture Act, (b)
\nhas been duly authorized by all necessary corporate action of the Company and
\nduly executed and delivered by the Company and (c) is the legally valid and
\nbinding agreement of the Company, enforceable against the Company in accordance
\nwith its terms.<\/p>\n

(iv) The Securities have been duly authorized by all necessary corporate
\naction of the Company, have been duly executed by the Company, and when duly
\nissued and authenticated in accordance with the terms of the Indenture and
\ndelivered to and paid for by you in accordance with the terms of this Agreement,
\nthe Securities will be legally valid and binding obligations of the Company,
\nenforceable against the Company in accordance with their terms.<\/p>\n

(v) The Registration Statement has become effective under the Securities Act.
\nWith the consent of the Representatives, based solely on a telephonic
\nconfirmation by a member of the staff of the Commission and review of a
\ncertificate of an officer of the Company as to factual matters, no stop order
\nsuspending the effectiveness of the Registration Statement has been issued under
\nthe Securities Act and no proceedings therefor have been initiated by the
\nCommission. The preliminary prospectus has been filed in accordance with Rule
\n424(b) under the Securities Act (without reference to Rule 424(b)(8)), the
\nProspectus has been filed in accordance with Rule 424(b) under the Securities
\nAct (without reference to Rule 424(b)(8)) and Rule 430B under the Securities
\nAct, and each Issuer Free Writing Prospectus has been filed in accordance with
\nRule 433(d) under the Securities Act.<\/p>\n

8<\/p>\n

\n

(vi) The Registration Statement at November 30, 2011, including the
\ninformation deemed to be a part thereof pursuant to Rule 430B under the
\nSecurities Act, and the Prospectus, as of the date of the Prospectus Supplement,
\neach appeared on its face to be appropriately responsive in all material
\nrespects to the applicable form requirements for registration statements on Form
\nS-3 under the Securities Act and the Securities Act Regulations; it being
\nunderstood, however, that such firm need express no view with respect to
\nRegulation S-T or the financial statements, schedules or other financial data,
\nincluded in, incorporated by reference in or omitted from the Registration
\nStatement or the Prospectus or with respect to the Form T-1. For purposes of
\nthis paragraph, such firm may have assumed that the statements made in the
\nRegistration Statement and the Prospectus, are correct and complete.<\/p>\n

(vii) The statements in the General Disclosure Package and the Prospectus
\nunder the captions “Description of the Notes” and “Description of Debt
\nSecurities,” insofar as they purport to describe or summarize certain provisions
\nof the documents referred to therein, are accurate descriptions or summaries in
\nall material respects.<\/p>\n

(viii) The issue and sale of the Securities being delivered on the date
\nhereof by the Company to you and the other Underwriters pursuant to this
\nAgreement and the compliance by the Company with the provisions of this
\nAgreement and the Indenture do not on the date hereof:<\/p>\n

(1) violate the Company153s Governing Documents (as defined therein); or<\/p>\n

(2) result in the breach of or a default under any of the indentures relating
\nto, or Officers153 Certificates establishing the terms of, the Company153s 5.80%
\nNotes due 2012, 7.25% Debentures due 2031, 5.625% Notes due 2014, 6.35% Notes
\ndue 2017, 7.45% Senior Debentures due 2027, 6.25% Notes due 2014, 5.00% Notes
\ndue 2019 or 3.95% Notes due 2020, the Credit Agreement dated as of June 1, 2011
\namong the Company and Canada Safeway Limited, as borrowers, and a consortium of
\nbanks led by Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P.
\nMorgan Securities LLC, as joint bookrunners and joint lead arrangers, as amended
\nor the Company153s planned delayed draw term loan facility, as contemplated by the
\nProspectus Supplement, to the extent executed subsequent to the execution and
\ndelivery of this Agreement and prior to the Closing Date; or<\/p>\n

(3) violate any federal, New York or California statute, rule or regulation
\napplicable to the Company; or<\/p>\n

(4) require any consents, approvals or authorizations to be obtained by the
\nCompany from, or any registrations, declarations or filings<\/p>\n

9<\/p>\n

\n

to be made by the Company with, any governmental authority under any federal,
\nNew York or California statute, rule or regulation applicable to the Company
\nthat have not been obtained or made.<\/p>\n

(ix) Each of the Incorporated Documents, as of its respective filing or
\neffective date, appeared on its face to be appropriately responsive in all
\nmaterial respects to the applicable form requirements for reports on Forms 10-K,
\n10-Q and 8-K and proxy statements under Regulation 14A, as the case may be,
\nunder the Exchange Act, and the rules and regulations of the Commission
\nthereunder, and for registration statements on Form 8-A under the Exchange Act
\nand the rules and regulations of the Commission thereunder applicable to the
\nportion incorporated; it being understood, however, that such firm need express
\nno view with respect to Regulation S-T or the financial statements, schedules or
\nother financial data, included in, incorporated by reference in, or omitted from
\nsuch reports, proxy statements and registration statements or with respect to
\nthe Form T-1. In passing upon the compliance as to form of the Incorporated
\nDocuments, such firm may assume that the statements made therein are correct and
\ncomplete. “Incorporated Documents” means the reports and proxy and registration
\nstatements filed by the Company with the Commission and incorporated by
\nreference in the Registration Statement, the preliminary prospectus or the
\nProspectus.<\/p>\n

(x) The Company is not, and immediately after giving effect to the sale of
\nthe Securities in accordance with the Underwriting Agreement and the application
\nof the proceeds as described in the Prospectus Supplement under the caption “Use
\nof Proceeds,” will not be required to be, registered as an “investment company”
\nwithin the meaning of the Investment Company Act of 1940, as amended.<\/p>\n

In rendering such opinion, such counsel may state that they express an
\nopinion only as to federal laws, New York and California law and the General
\nCorporation Law of the State of Delaware. Such opinion may also be subject to
\ncustomary assumptions and limitations, including that opinions on enforceability
\nmay be subject to the following exceptions, limitations and qualifications: (i)
\nthe effect of bankruptcy, insolvency, reorganization, preference, fraudulent
\ntransfer, moratorium or other similar laws relating to or affecting the rights
\nand remedies of creditors; (ii) the effect of general principles of equity,
\nwhether considered in a proceeding in equity or at law (including the possible
\nunavailability of specific performance or injunctive relief), concepts of
\nmateriality, reasonableness, good faith and fair dealing, and the discretion of
\nthe court before which a proceeding is brought; (iii) the invalidity under
\ncertain circumstances under law or court decisions of provisions providing for
\nthe indemnification of or contribution to a party with respect to a liability
\nwhere such indemnification or contribution is contrary to public policy; and
\n(iv) such counsel need not express an opinion with respect to (a) the waiver of
\nrights or defenses contained in Section 4.4 of the Indenture, (b) Sections 10.15
\nand 10.16 of the Indenture, (c) whether acceleration of the Securities may
\naffect the collectibility of that portion of the stated principal amount thereof
\nwhich might be determined to<\/p>\n

10<\/p>\n

\n

constitute unearned interest thereon, (d) any provision requiring the payment
\nof attorneys153 fees, where such payment is contrary to law or public policy, (e)
\nconsents to or restrictions upon governing law (except for the validity under
\nthe laws of the State of New York, but subject to mandatory choice of law rules
\nand constitutional limitations, of provisions of the Indenture and the
\nSecurities which expressly choose New York as the governing law therefor),
\njurisdiction, venue, arbitration remedies or judicial relief, (f) any provision
\nfor liquidated damages, default interest, late charges, monetary penalties,
\nmake-whole premiums or other economic remedies to the extent such provisions are
\ndeemed to constitute a penalty, (g) whether the fourth paragraph of section 7.7
\nof the Indenture is sufficient to create a security interest in favor of the
\nTrustee on any of the assets or property referenced therein, and (h) the
\nseverability, if invalid, of provisions to the foregoing effect.<\/p>\n

In addition, such counsel shall state: The primary purpose of such counsel153s
\nprofessional engagement is not to establish or confirm factual matters or
\nfinancial or quantitative information and therefore such counsel is not passing
\nupon and does not assume any responsibility for the accuracy, completeness or
\nfairness of the statements contained in, or incorporated by reference in, the
\nRegistration Statement, the General Disclosure Package or the Prospectus (or the
\nIncorporated Documents) (except to the extent expressly set forth in (vii)
\nabove), and has not made an independent check or verification thereof (except as
\naforesaid). However, in the course of acting as special counsel to the Company
\nin connection with the preparation by the Company of the Registration Statement,
\nthe General Disclosure Package and the Prospectus, such counsel has reviewed the
\nRegistration Statement, the General Disclosure Package and Prospectus, and the
\nIncorporated Documents, and participated in conferences and, if applicable,
\ntelephone conversations with officers and other representatives of the Company,
\nthe independent public accountants for the Company, and representatives of the
\nUnderwriters and counsel to the Underwriters, during which conferences and, if
\napplicable, conversations, the contents of the Registration Statement, the
\nGeneral Disclosure Package and the Prospectus (and portions of certain of the
\nIncorporated Documents) and related matters were discussed, and reviewed and
\nrelied upon certain corporate records and documents, and oral and written
\nstatements of officers and other representatives of the Company and others as to
\nthe existence and consequence of certain factual and other matters. Based on
\nsuch counsel153s participation, review and reliance as described above, no facts
\ncame to such counsel153s attention that caused such counsel to believe that (a)
\nthe Registration Statement, at the time it became effective on November 30,
\n2011, including the information deemed to be a part of the Registration
\nStatement pursuant to Rule 430B under the Securities Act (together with the
\nIncorporated Documents at that time), contained an untrue statement of a
\nmaterial fact or omitted to state a material fact required to be stated therein
\nor necessary to make the statements therein not misleading; (b) the preliminary
\nprospectus, as of the Applicable Time (together with the Incorporated Documents
\nat that time), when taken together with the Final Term Sheet, contained an
\nuntrue statement of a material fact or omitted to state a material fact
\nnecessary to make the statements therein, in the light of the circumstances
\nunder which they were made, not misleading; or (c) the Prospectus, as of the
\ndate of the Prospectus Supplement or as of the<\/p>\n

11<\/p>\n

\n

Closing Date (together with the Incorporated Documents at those respective
\ndates), contained or contains an untrue statement of a material fact or omitted
\nor omits to state a material fact necessary to make the statements therein, in
\nthe light of the circumstances under which they were made, not misleading; it
\nbeing understood that such counsel need express no belief with respect to the
\nfinancial statements, schedules or other financial data included or incorporated
\nby reference in, or omitted from, the Registration Statement, the preliminary
\nprospectus, the Issuer Free Writing Prospectus(es), the Prospectus or the
\nIncorporated Documents, or the Form T-1.<\/p>\n

(d) Robert A. Gordon, Senior Vice President, Secretary and General Counsel of
\nthe Company, shall have furnished to you his written opinion, dated the Closing
\nDate, in form and substance satisfactory to you, to the effect that:<\/p>\n

(i) The Company has been duly qualified as a foreign corporation for the
\ntransaction of business and is in good standing under the laws of each
\njurisdiction in which its ownership or lease of substantial properties or the
\nconduct of its business requires such qualification, and in which the failure to
\nbe so qualified and in good standing would have a material adverse effect upon
\nthe Company and its subsidiaries considered as a whole;<\/p>\n

(ii) Based solely on certificates from public officials, each Significant
\nSubsidiary of the Company has been duly incorporated and is validly existing as
\na corporation in good standing under the laws of its jurisdiction of
\nincorporation; has corporate power and authority to own, lease and operate its
\nproperties and conduct its business as described in the Registration Statement,
\nthe General Disclosure Package and the Prospectus; to the best of such counsel153s
\nknowledge, has been duly qualified as a foreign corporation for the transaction
\nof business and is in good standing under the laws of each other jurisdiction in
\nwhich its ownership or lease of substantial properties or the conduct of its
\nbusiness requires such qualification and in which the failure to be so qualified
\nand in good standing would have a material adverse effect upon the Company and
\nits subsidiaries considered as a whole; and all of the issued and outstanding
\ncapital stock of each such Significant Subsidiary has been duly authorized and
\nvalidly issued and is fully paid and nonassessable, and the capital stock owned
\nby the Company in such Significant Subsidiary is owned by the Company free and
\nclear of any mortgage, pledge, lien, encumbrance, claim or equity;<\/p>\n

(iii) To the best of such counsel153s knowledge, there are no legal or
\ngovernmental proceedings pending or threatened to which the Company or any of
\nits subsidiaries is a party or of which any property of the Company or any of
\nits subsidiaries is the subject, required to be described in the General
\nDisclosure Package and the Prospectus, which are not described as required; and\n<\/p>\n

(iv) The issue and sale of the Securities being delivered on the Closing Date
\nby the Company and the application of the net proceeds therefrom as contemplated
\nunder “Use of Proceeds” in the General Disclosure Package and the<\/p>\n

12<\/p>\n

\n

Prospectus, and the compliance by the Company with all of the provisions of
\nthis Agreement will not conflict with or result in a material breach or
\nviolation of any of the terms or provisions of, or constitute a default under,
\nany indenture, mortgage, deed of trust, loan agreement or other written
\nagreement or instrument relating to indebtedness in excess of $25 million to
\nwhich the Company or any of its subsidiaries is a party or by which the Company
\nor any of its subsidiaries is bound or to which any of the property or assets of
\nthe Company or any of its subsidiaries is subject.<\/p>\n

(e) The Underwriters shall have received on the Closing Date an opinion of
\nSidley Austin LLP, counsel for the Underwriters, dated the Closing Date,
\ncovering the matters referred to in the first clause of subparagraph (i),
\nsubparagraphs (ii), (iii), (iv), (v), (vi) and (vii), and the last paragraph of
\nparagraph (c) above and such counsel shall have received such papers and
\ninformation as they may reasonably request to enable them to pass upon such
\nmatters.<\/p>\n

The opinions of Latham & Watkins LLP and Robert A. Gordon described in
\nparagraphs (c) and (d) above shall be rendered to the Underwriters at the
\nrequest of the Company and shall so state therein.<\/p>\n

(f) (i) The Underwriters shall have received a letter, at the time of
\nexecution of this Agreement, in form and substance satisfactory to the
\nUnderwriters, from Deloitte & Touche LLP, an independent registered public
\naccounting firm, containing statements and information of the type ordinarily
\nincluded in accountants153 “comfort letters” to underwriters with respect to the
\nfinancial statements and certain financial information contained in the
\nRegistration Statement, the Statutory Prospectus forming a part of the General
\nDisclosure Package and the Prospectus; and (ii) the Underwriters shall have
\nreceived, on the Closing Date, from Deloitte & Touche LLP a letter to the
\neffect that they reaffirm the statements made in the letter furnished pursuant
\nto clause (i) of this subsection (f) of this Section, provided that such letter
\nshall use a “cut-off date” not earlier than the date hereof.<\/p>\n

(g) At the date of this Agreement, the Company shall have furnished for
\nreview by the Underwriters copies of such further information, certificates and
\ndocuments as they may reasonably request.<\/p>\n

6. Covenants of the Company<\/u><\/strong>. In further consideration
\nof the agreements of the Underwriters herein contained, the Company covenants
\nwith each Underwriter as follows:<\/p>\n

(a) To furnish to you, without charge, a signed copy of the Registration
\nStatement (including exhibits thereto) and documents incorporated by reference
\nand to each Underwriter a copy of the Registration Statement (without exhibits
\nthereto but including documents incorporated by reference) and to furnish to you
\nin New York City without charge prior to 5:00 p.m. local time on the business
\nday next succeeding the date of this Agreement, and during the period mentioned
\nin paragraph (c) below, as many copies of the Prospectus, any documents
\nincorporated therein by reference, and any<\/p>\n

13<\/p>\n

\n

supplements and amendments thereto or to the Registration Statement as you
\nmay reasonably request.<\/p>\n

(b) Before amending or supplementing the Registration Statement or the
\nProspectus, to furnish to you a copy of each such proposed amendment or
\nsupplement and not to file any such proposed amendment or supplement to which
\nyou reasonably object, and to file with the Commission within the applicable
\nperiod specified in Rule 424(b) under the Securities Act any prospectus required
\nto be filed pursuant to such Rule. The Company has given the Representatives
\nnotice of any filings made pursuant to the Exchange Act or rules and regulations
\nof the Commission thereunder within 48 hours prior to the Applicable Time; the
\nCompany will give the Representatives notice of its intention to make any such
\nfiling from the Applicable Time to the Closing Date and will furnish the
\nRepresentatives with copies of any such documents a reasonable amount of time
\nprior to such proposed filing.<\/p>\n

(c) If, during such period after the first date of the public offering of the
\nSecurities as in the opinion of counsel for the Underwriters the Prospectus is
\nrequired by law to be delivered in connection with sales by an Underwriter or
\ndealer, any event shall occur or condition exist as a result of which it is
\nnecessary to amend the Registration Statement or amend or supplement the
\nProspectus in order to make the statements therein, in the light of the
\ncircumstances when the Prospectus is delivered to a purchaser, not misleading,
\nor if, in the opinion of counsel for the Underwriters, it is necessary to amend
\nthe Registration Statement or amend or supplement the Prospectus to comply with
\napplicable law, forthwith to prepare, file with the Commission and furnish, at
\nits own expense, to the Underwriters and to the dealers (whose names and
\naddresses you will furnish to the Company) to which Securities may have been
\nsold by you on behalf of the Underwriters and to any other dealers upon request,
\neither such amendment to the Registration Statement or amendments or supplements
\nto the Prospectus so that the statements in the Registration Statement and the
\nProspectus as so amended or supplemented will not, in the light of the
\ncircumstances when the Prospectus is delivered to a purchaser, be misleading or
\nso that the Registration Statement and the Prospectus, as amended or
\nsupplemented, will comply with law. If at any time following issuance of an
\nIssuer Free Writing Prospectus there occurred or occurs an event or development
\nas a result of which such Issuer Free Writing Prospectus conflicted or would
\nconflict with the information contained in the Registration Statement (or any
\nother registration statement relating to the Securities) or the Statutory
\nProspectus or any preliminary prospectus or included or would include an untrue
\nstatement of a material fact or omitted or would omit to state a material fact
\nnecessary in order to make the statements therein, in the light of the
\ncircumstances prevailing at that subsequent time, not misleading, the Company
\nwill promptly notify the Representatives and will promptly amend or supplement,
\nat its own expense, such Issuer Free Writing Prospectus to eliminate or correct
\nsuch conflict, untrue statement or omission.<\/p>\n

(d) To endeavor to qualify the Securities for offer and sale under the
\nsecurities or Blue Sky laws of such jurisdictions as you shall reasonably
\nrequest.<\/p>\n

14<\/p>\n

\n

(e) To make generally available to the Company153s security holders and to you
\nas soon as practicable an earnings statement that satisfies the provisions of
\nSection 11(a) of the Securities Act and the Securities Act Regulations.<\/p>\n

(f) During the period beginning on the date hereof and continuing to and
\nincluding the Closing Date, not to offer, sell, contract to sell or otherwise
\ndispose of any debt securities of the Company or warrants to purchase debt
\nsecurities of the Company substantially similar to the Securities (other than
\n(i) the Securities or (ii) commercial paper issued in the ordinary course of
\nbusiness), without the prior written consent of the Representatives.<\/p>\n

(g) The Company will prepare a final term sheet containing a description of
\nthe Securities, substantially in the form approved by the Representatives and
\ncontained in Schedule II, and will file such term sheet pursuant to Rule 433(d)
\nunder the Securities Act within the time required by such rule (such term sheet,
\nthe “Final Term Sheet”).<\/p>\n

(h) The Company represents that it has not made, and agrees that, unless it
\nobtains the prior written consent of the Representatives, it will not make, any
\noffer relating to the Securities that would constitute an Issuer Free Writing
\nProspectus or that would otherwise constitute a “free writing prospectus” (as
\ndefined in Rule 405 of the Securities Act) required to be filed by the Company
\nwith the Commission or retained by the Company under Rule 433 of the Securities
\nAct; provided that the prior written consent of the Representatives hereto shall
\nbe deemed to have been given in respect of the Issuer Free Writing
\nProspectus(es) included in Schedule III hereto. Any such free writing prospectus
\nconsented to by the Representatives is hereinafter referred to as a “Permitted
\nFree Writing Prospectus.” The Company agrees that (i) it has treated and will
\ntreat, as the case may be, each Permitted Free Writing Prospectus as an Issuer
\nFree Writing Prospectus, and (ii) has complied and will comply, as the case may
\nbe, with the requirements of Rules 164 and 433 of the Securities Act applicable
\nto any Permitted Free Writing Prospectus, including in respect of timely filing
\nwith the Commission, legending and record keeping. The Company consents to the
\nuse by any Underwriter of a free writing prospectus that (a) is not an “issuer
\nfree writing prospectus” as defined in Rule 433, and (b) contains only (i)
\ninformation describing the preliminary terms of the Securities, (ii) information
\npermitted by Rule 134 under the Securities Act or (iii) information that
\ndescribes the final terms of the Securities or their offering and that is
\nincluded in the Final Term Sheet of the Company contemplated above.<\/p>\n

(i) Whether or not the transactions contemplated in this Agreement are
\nconsummated or this Agreement is terminated, to pay or cause to be paid all
\nexpenses incident to the performance of its obligations under this Agreement,
\nincluding: (i) the fees, disbursements and expenses of the Company153s counsel and
\nCompany153s accountants in connection with the registration and delivery of the
\nSecurities under the Securities Act and all other fees or expenses in connection
\nwith the preparation and filing of the Registration Statement, any preliminary
\nprospectus, the Statutory Prospectus forming a part of the General Disclosure
\nPackage, any Permitted Free Writing Prospectus, the<\/p>\n

15<\/p>\n

\n

Prospectus and amendments and supplements to any of the foregoing, including
\nall printing costs associated therewith, and the mailing and delivering of
\ncopies thereof to the Underwriters and dealers in the quantities hereinabove
\nspecified; (ii) the preparation, issuance and delivery of the Securities; (iii)
\nthe fees and disbursements of the Trustee and its counsel; (iv) all expenses in
\nconnection with the qualification of the Securities for offer and sale under
\nstate securities laws as provided in Section 6(d) hereof, including filing fees
\nand the reasonable fees and disbursements of counsel for the Underwriters in
\nconnection with such qualification and in connection with any Blue Sky
\nmemorandum; (v) the printing and delivery to the Underwriters of copies of any
\nBlue Sky memorandum; (vi) any fees charged by rating agencies for the rating of
\nthe Securities; (vii) all other costs and expenses of the Company in connection
\nwith the performance of its obligations hereunder for which provision is not
\notherwise made in this Section; and (viii) any other costs and expenses of
\nothers in connection with the performance of the Company153s obligations hereunder
\nwhich have been previously approved by the Company. It is understood, however,
\nthat except as provided in this Section, Section 7 entitled “Indemnity and
\nContribution,” and the last paragraph of Section 9 below, the Underwriters will
\npay all of their costs and expenses, including fees and disbursements of their
\ncounsel, stock transfer taxes payable on resale of any of the Securities by them
\nand any advertising expenses connected with any offers they may make.<\/p>\n

7. Indemnity and Contribution<\/u><\/strong>.<\/p>\n

(a) The Company agrees to indemnify and hold harmless each Underwriter and
\neach person, if any, who controls any Underwriter within the meaning of either
\nSection 15 of the Securities Act or Section 20 of the Exchange Act, from and
\nagainst any and all losses, claims, damages and liabilities (including, without
\nlimitation, any legal or other expenses reasonably incurred by any Underwriter
\nor any such controlling person in connection with defending or investigating any
\nsuch action or claim) caused by any untrue statement or alleged untrue statement
\nof a material fact contained in the Registration Statement or any amendment
\nthereof (including the Rule 430B Information), any preliminary prospectus, any
\nIssuer Free Writing Prospectus, the Statutory Prospectus or the Prospectus (as
\namended or supplemented if the Company shall have furnished any amendments or
\nsupplements thereto), or caused by any omission or alleged omission to state
\ntherein a material fact required to be stated therein or necessary to make the
\nstatements therein not misleading, except insofar as such losses, claims,
\ndamages or liabilities are caused by any such untrue statement or omission or
\nalleged untrue statement or omission based upon information relating to any
\nUnderwriter furnished to the Company in writing by such Underwriter through you
\nexpressly for use therein.<\/p>\n

(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold
\nharmless the Company, its directors, its officers who sign the Registration
\nStatement and each person, if any, who controls the Company within the meaning
\nof either Section 15 of the Securities Act or Section 20 of the Exchange Act to
\nthe same extent as the foregoing indemnity from the Company to such Underwriter,
\nbut only with reference to information relating to such Underwriter furnished to
\nthe Company in writing by such<\/p>\n

16<\/p>\n

\n

Underwriter through you expressly for use in the Registration Statement
\n(including the Rule 430B Information), any preliminary prospectus, any Issuer
\nFree Writing Prospectus, the Statutory Prospectus, the Prospectus or any
\namendments or supplements thereto.<\/p>\n

(c) In case any proceeding (including any governmental investigation) shall
\nbe instituted involving any person in respect of which indemnity may be sought
\npursuant to either paragraph (a) or (b) of this Section 7, such person (the
\n“indemnified party”) shall promptly notify the person against whom such
\nindemnity may be sought (the “indemnifying party”) in writing and the
\nindemnifying party, upon request of the indemnified party, shall retain counsel
\nreasonably satisfactory to the indemnified party to represent the indemnified
\nparty and any others the indemnifying party may designate in such proceeding and
\nshall pay the fees and disbursements of such counsel related to such proceeding;
\nbut the omission so to notify the indemnifying party shall not relieve it from
\nany liability which it may have to any indemnified party otherwise than under
\nparagraph (a) or (b) of this Section 7. In any such proceeding, any indemnified
\nparty shall have the right to retain its own counsel, but the fees and expenses
\nof such counsel shall be at the expense of such indemnified party unless (i) the
\nindemnifying party and the indemnified party shall have mutually agreed to the
\nretention of such counsel or (ii) the named parties to any such proceeding
\n(including any impleaded parties) include both the indemnifying party and the
\nindemnified party and representation of both parties by the same counsel would
\nbe inappropriate due to actual or potential differing interests between them. It
\nis understood that the indemnifying party shall not, in respect of the legal
\nexpenses of any indemnified party in connection with any proceeding or related
\nproceedings in the same jurisdiction, be liable for the fees and expenses of
\nmore than one separate firm (in addition to any local counsel) for all such
\nindemnified parties and that all such fees and expenses shall be reimbursed as
\nthey are incurred. Such firm shall be designated in writing by the
\nRepresentatives, in the case of parties indemnified pursuant to paragraph (a)
\nabove, and by the Company, in the case of parties indemnified pursuant to
\nparagraph (b) above. The indemnifying party shall not be liable for any
\nsettlement of any proceeding effected without its written consent, but if
\nsettled with such consent or if there be a final judgment for the plaintiff, the
\nindemnifying party agrees to indemnify the indemnified party from and against
\nany loss or liability by reason of such settlement or judgment. Notwithstanding
\nthe foregoing sentence, if at any time an indemnified party shall have requested
\nan indemnifying party to reimburse the indemnified party for fees and expenses
\nof counsel as contemplated by the second and third sentences of this paragraph,
\nthe indemnifying party agrees that it shall be liable for any settlement of any
\nproceeding effected without its written consent if (i) such settlement is
\nentered into more than 30 days after receipt by such indemnifying party of the
\naforesaid request and (ii) such indemnifying party shall not have reimbursed the
\nindemnified party in accordance with such request prior to the date of such
\nsettlement. No indemnifying party shall, without the prior written consent of
\nthe indemnified party, effect any settlement of any pending or threatened
\nproceeding in respect of which any indemnified party is or could have been a
\nparty and indemnity could have been sought hereunder by such indemnified party,
\nunless such settlement (i) includes an unconditional release of such indemnified
\nparty from all liability on claims that are the subject matter of such<\/p>\n

17<\/p>\n

\n

proceeding and (ii) does not include a statement as to or an admission of
\nfault, culpability or a failure to act, by or on behalf of any indemnified
\nparty.<\/p>\n

(d) To the extent the indemnification provided for in paragraph (a) or (b) of
\nthis Section 7 is unavailable to an indemnified party or insufficient in respect
\nof any losses, claims, damages or liabilities referred to therein, then each
\nindemnifying party under such paragraph, in lieu of indemnifying such
\nindemnified party thereunder, shall contribute to the amount paid or payable by
\nsuch indemnified party as a result of such losses, claims, damages or
\nliabilities (i) in such proportion as is appropriate to reflect the relative
\nbenefits received by the Company on the one hand and the Underwriters on the
\nother hand from the offering of the Securities or (ii) if the allocation
\nprovided by clause (i) above is not permitted by applicable law, in such
\nproportion as is appropriate to reflect not only the relative benefits referred
\nto in clause (i) above but also the relative fault of the Company on the one
\nhand and of the Underwriters on the other hand in connection with the statements
\nor omissions that resulted in such losses, claims, damages or liabilities, as
\nwell as any other relevant equitable considerations. The relative benefits
\nreceived by the Company on the one hand and the Underwriters on the other hand
\nin connection with the offering of the Securities shall be deemed to be in the
\nsame respective proportions as the aggregate net proceeds from the offering of
\nthe Securities (before deducting expenses) received by the Company and the
\naggregate underwriting discounts and commissions received by the Underwriters,
\nin each case as set forth in the table on the cover of the Prospectus, bear to
\nthe aggregate Public Offering Prices of the Securities. The relative fault of
\nthe Company on the one hand and the Underwriters on the other hand shall be
\ndetermined by reference to, among other things, whether the untrue or alleged
\nuntrue statement of a material fact or the omission or alleged omission to state
\na material fact relates to information supplied by the Company or by the
\nUnderwriters and the parties153 relative intent, knowledge, access to information
\nand opportunity to correct or prevent such statement or omission. The
\nUnderwriters153 respective obligations to contribute pursuant to this Section 7
\nare several in proportion to the respective principal amounts of Securities they
\nhave purchased hereunder, and not joint.<\/p>\n

(e) The Company and the Underwriters agree that it would not be just or
\nequitable if contribution pursuant to this Section 7 were determined by
\npro<\/u> rata<\/u> allocation (even if the Underwriters were treated as one
\nentity for such purpose) or by any other method of allocation that does not take
\naccount of the equitable considerations referred to in paragraph (d) of this
\nSection 7. The amount paid or payable by an indemnified party as a result of the
\nlosses, claims, damages and liabilities referred to in the immediately preceding
\nparagraph shall be deemed to include, subject to the limitations set forth
\nabove, any legal or other expenses reasonably incurred by such indemnified party
\nin connection with investigating or defending any such action or claim.
\nNotwithstanding the provisions of this Section 7, no Underwriter shall be
\nrequired to contribute any amount in excess of the amount by which the total
\nprice at which the Securities underwritten by it and distributed to the public
\nwere offered to the public exceeds the amount of any damages that such
\nUnderwriter has otherwise been required to pay by reason of such untrue or<\/p>\n

18<\/p>\n

\n

alleged untrue statement or omission or alleged omission. No person guilty of
\nfraudulent misrepresentation (within the meaning of Section 11(f) of the
\nSecurities Act) shall be entitled to contribution from any person who was not
\nguilty of such fraudulent misrepresentation. The remedies provided for in this
\nSection 7 are not exclusive and shall not limit any rights or remedies which may
\notherwise be available to any indemnified party at law or in equity.<\/p>\n

(f) The indemnity and contribution provisions contained in this Section 7 and
\nthe representations, warranties and other statements of the Company contained in
\nthis Agreement shall remain operative and in full force and effect regardless of
\n(i) any termination of this Agreement, (ii) any investigation made by or on
\nbehalf of any Underwriter or any person controlling any Underwriter or by or on
\nbehalf of the Company, its officers or directors or any person controlling the
\nCompany and (iii) acceptance of and payment for any of the Securities.<\/p>\n

8. Termination<\/u><\/strong>. This Agreement shall be subject to
\ntermination by notice given by you to the Company, if (a) after the execution
\nand delivery of this Agreement and prior to the Closing Date (i) trading
\ngenerally shall have been suspended or materially limited on or by, as the case
\nmay be, either of the New York Stock Exchange or the National Association of
\nSecurities Dealers, Inc., (ii) trading of any securities of the Company shall
\nhave been suspended or materially limited on any exchange or in any
\nover-the-counter market, (iii) there has occurred a material disruption in
\nsecurities settlement or clearance services, (iv) a general moratorium on
\ncommercial banking activities in New York or California shall have been declared
\nby either Federal or New York State or California authorities or (v) there shall
\nhave occurred any outbreak or escalation of hostilities or any change in the
\nfinancial markets in the United States or in the international financial markets
\nor any calamity or crisis, that, in the judgment of the Representatives is
\nmaterial and adverse and (b) in the case of any of the events specified in
\nclauses (a)(i) through (v), such event, singly or together with any other such
\nevent, makes it, in the judgment of the Representatives impracticable to proceed
\nwith the offering, sale or delivery of the Securities on the terms and in the
\nmanner contemplated by this Agreement, the Prospectus and the General Disclosure
\nPackage.<\/p>\n

9. Effectiveness; Defaulting Underwriters<\/u><\/strong>. This
\nAgreement shall become effective upon the execution and delivery hereof by the
\nparties hereto.<\/p>\n

If, on the Closing Date, any one or more of the Underwriters shall fail or
\nrefuse to purchase Securities that it has or they have agreed to purchase
\nhereunder on such date, and the aggregate principal amount of Securities which
\nsuch defaulting Underwriter or Underwriters agreed but failed or refused to
\npurchase is not more than one-tenth of the aggregate principal amount of the
\nSecurities to be purchased on such date, the other Underwriters shall be
\nobligated severally in the proportions that the principal amount of Securities
\nset forth opposite their respective names in Schedule I bear to the principal
\namount of Securities set forth opposite the names of all such non-defaulting
\nUnderwriters, or in such other proportions as you may specify, to purchase the
\nSecurities which such defaulting Underwriter or Underwriters agreed but failed
\nor refused to purchase on such date; provided<\/u> that in no event shall the
\nprincipal amount of<\/p>\n

19<\/p>\n

\n

Securities that any Underwriter has agreed to purchase pursuant to this
\nAgreement be increased pursuant to this Section 9 by an amount in excess of
\none-ninth of such principal amount of Securities without the written consent of
\nsuch Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall
\nfail or refuse to purchase Securities and the aggregate principal amount of
\nSecurities with respect to which such default occurs is more than one-tenth of
\nthe aggregate principal amount of Securities to be purchased on such date, and
\narrangements satisfactory to you and the Company for the purchase of such
\nSecurities are not made within 36 hours after such default, this Agreement shall
\nterminate without liability on the part of any non-defaulting Underwriter or the
\nCompany. In any such case either you or the Company shall have the right to
\npostpone the Closing Date, but in no event for longer than seven days, in order
\nthat the required changes, if any, in the Registration Statement and in the
\nProspectus or in any other documents or arrangements may be effected. Any action
\ntaken under this paragraph shall not relieve any defaulting Underwriter from
\nliability in respect of any default of such Underwriter under this Agreement.\n<\/p>\n

If this Agreement shall be terminated by the Underwriters, or any of them,
\nbecause of any failure or refusal on the part of the Company to comply with the
\nterms or to fulfill any of the conditions of this Agreement, or if for any
\nreason the Company shall be unable to perform its obligations under this
\nAgreement, the Company will reimburse the Underwriters or such Underwriters as
\nhave so terminated this Agreement with respect to themselves, severally, for all
\nout-of-pocket expenses (including the fees and disbursements of their counsel)
\nreasonably incurred by such Underwriters in connection with this Agreement or
\nthe offering contemplated hereunder; provided, however<\/em>, that no such
\nreimbursement shall be required with respect to a termination of this Agreement
\nby the Underwriters pursuant to Section 8 or this Section 9.<\/p>\n

10. No Advisory or Fiduciary Relationship<\/u><\/strong>. The
\nCompany acknowledges and agrees that (a) the purchase and sale of the Securities
\npursuant to this Agreement, including the determination of the Public Offering
\nPrices of the Securities and any related discounts and commissions, is an
\narm153s-length commercial transaction between the Company, on the one hand, and
\nthe several Underwriters, on the other hand, and the Company is capable of
\nevaluating and understanding and understands and accepts the terms, risks and
\nconditions of the transactions contemplated by this Agreement, (b) in connection
\nwith each transaction contemplated hereby and the process leading to such
\ntransaction each Underwriter is and has been acting solely as a principal and is
\nnot the financial advisor, agent or fiduciary of the Company or its affiliates,
\nstockholders, creditors or employees or any other party, (c) no Underwriter has
\nassumed or will assume an advisory or fiduciary responsibility in favor of the
\nCompany with respect to the offering contemplated hereby or the process leading
\nthereto (irrespective of whether such Underwriter has advised or is currently
\nadvising the Company on other matters) and no Underwriter has any obligation to
\nthe Company with respect to the offering contemplated hereby except the
\nobligations expressly set forth in this Agreement, (d) the Underwriters and
\ntheir respective affiliates may be engaged in a broad range of transactions that
\ninvolve interests that differ from those of the Company and the several
\nUnderwriters have no obligation to disclose any of such interests by virtue of
\nany advisory, agency or fiduciary relationship, and (e) the Underwriters have
\nnot provided any legal, accounting, regulatory or tax advice with respect to\n<\/p>\n

20<\/p>\n

\n

the offering contemplated hereby and the Company has consulted its own legal,
\naccounting, regulatory and tax advisors to the extent it deemed appropriate.\n<\/p>\n

11. Notices<\/u><\/strong>.<\/p>\n

Unless otherwise provided herein, all notices required under the terms and
\nprovisions hereof shall be in writing, either delivered by hand, by mail or by
\ntelex, telecopier or telegram, and any such notice shall be effective when
\nreceived at the address specified below.<\/p>\n

If to the Company:<\/p>\n

Safeway Inc.<\/p>\n

5918 Stoneridge Mall Road<\/p>\n

Pleasanton, California 94588<\/p>\n

Attention: Legal Department<\/p>\n

Facsimile: (925) 467-3214<\/p>\n

With a copy to (which shall not constitute notice):<\/p>\n

Keith Benson, Esq.<\/p>\n

Latham & Watkins LLP<\/p>\n

505 Montgomery Street, Suite 2000<\/p>\n

San Francisco, California 94111<\/p>\n

Facsimile: (415) 395-8095<\/p>\n

If to the Representatives:<\/p>\n

Goldman, Sachs & Co.<\/p>\n

200 West Street<\/p>\n

New York, New York 10282<\/p>\n

Attention: Registration Department<\/p>\n

Facsimile: (212) 902-9316<\/p>\n

J.P. Morgan Securities LLC<\/p>\n

383 Madison Avenue<\/p>\n

New York, New York 10179<\/p>\n

Attention: High Grade Syndicate Desk, 3rd<\/sup> Floor<\/p>\n

Facsimile: (212) 834-6081<\/p>\n

Merrill Lynch, Pierce, Fenner & Smith<\/p>\n

Incorporated<\/p>\n

50 Rockefeller Plaza<\/p>\n

NY1-050-12-01<\/p>\n

New York, New York 10020<\/p>\n

Attention: High Grade Transaction Management\/Legal<\/p>\n

Facsimile: (646) 855-5943<\/p>\n

21<\/p>\n

\n

With a copy to (which shall not constitute notice):<\/p>\n

Sharon R. Flanagan, Esq.<\/p>\n

Sidley Austin LLP<\/p>\n

555 California Street, Suite 2000<\/p>\n

San Francisco, California 94104-1715<\/p>\n

Facsimile: (415) 772-7400<\/p>\n

or at such other address as such party may designate from time to time by
\nnotice duly given in accordance with the terms of this Section 11.<\/p>\n

In accordance with the requirements of the USA Patriot Act (Title III of Pub.
\nL. 107-56 (signed into law October 26, 2001)), the underwriters are required to
\nobtain, verify and record information that identifies their respective clients,
\nincluding the Company, which information may include the name and address of
\ntheir respective clients, as well as other information that will allow the
\nunderwriters to properly identify their respective clients.<\/p>\n

12. Counterparts<\/u><\/strong>. This Agreement may be signed in two
\nor more counterparts, each of which shall be an original, with the same effect
\nas if the signatures thereto and hereto were upon the same instrument.<\/p>\n

13. Applicable Law<\/u><\/strong>. This Agreement shall be governed
\nby and construed in accordance with the internal laws of the State of New York.\n<\/p>\n

14. Headings<\/u><\/strong>. The headings of the sections of this
\nAgreement have been inserted for convenience of reference only and shall not be
\ndeemed a part of this Agreement.<\/p>\n

[Signature Page Follows] <\/strong><\/p>\n

22<\/p>\n

\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Very truly yours,<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/tr>\n
\n

Safeway Inc.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n\n

\/s\/ Bradley S. Fox<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Name: Bradley S. Fox<\/p>\n

Title: Vice President & Treasurer<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

[Signature Page to Underwriting Agreement]<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Accepted as of the date hereof<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/tr>\n
\n

Goldman, Sachs & Co.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/tr>\n
\n

\/s\/ Goldman, Sachs & Co.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

(Goldman, Sachs & Co.)<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/tr>\n
\n

J.P. Morgan Securities LLC<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n\n

\/s\/ Robert Bottamedi<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Name: Robert Bottamedi<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Title: Vice President<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/tr>\n
\n

Merrill Lynch, Pierce, Fenner & Smith<\/p>\n

Incorporated<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n\n

\/s\/ Brendan Hanley<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Name: Brendan Hanley<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Title: Managing Director<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/tr>\n
\n

For themselves and as Representatives of the Underwriters named in Schedule I
\nhereto<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

[Signature Page to Underwriting Agreement]<\/p>\n

\n

SCHEDULE I<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Underwriter<\/p>\n<\/td>\n

<\/td>\n\n

Principal Amount of
\n3.400% Notes Due 2016 to
\nbe Purchased<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

Principal Amount of
\n4.750% Notes Due 2021 to
\nbe Purchased<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Goldman, Sachs & Co.<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

80,000,000<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

80,000,000<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

J.P. Morgan Securities LLC<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

80,000,000<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

80,000,000<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Merrill Lynch, Pierce, Fenner & Smith<\/p>\n

Incorporated<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

80,000,000<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

80,000,000<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Credit Suisse Securities (USA) LLC<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

40,000,000<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

40,000,000<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

RBS Securities Inc.<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

40,000,000<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

40,000,000<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

U.S. Bancorp Investments, Inc.<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

40,000,000<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

40,000,000<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Wells Fargo Securities, LLC<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

40,000,000<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

40,000,000<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Total<\/p>\n<\/td>\n

<\/td>\n\n

$<\/p>\n<\/td>\n

\n

400,000,000<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

$<\/p>\n<\/td>\n

\n

400,000,000<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

S-I-1<\/p>\n

\n

SCHEDULE II<\/p>\n

Free Writing Prospectus<\/p>\n

Filed Pursuant to Rule 433<\/p>\n

Registration Statement No. 333-177489<\/p>\n

FORM OF FINAL TERM SHEET <\/u><\/strong><\/p>\n

Dated: November 30, 2011<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Issuer:<\/p>\n<\/td>\n

<\/td>\n\n

Safeway Inc.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Offering Format:<\/p>\n<\/td>\n

<\/td>\n\n

SEC registered<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Trade Date:<\/p>\n<\/td>\n

<\/td>\n\n

November 30, 2011<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Settlement Date (T+3):<\/p>\n<\/td>\n

<\/td>\n\n

December 5, 2011<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

3.400% Notes Due 2016<\/u><\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
\n

Principal Amount:<\/p>\n<\/td>\n

<\/td>\n\n

$400,000,000<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Maturity:<\/p>\n<\/td>\n

<\/td>\n\n

December 1, 2016<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Coupon (Interest Rate):<\/p>\n<\/td>\n

<\/td>\n\n

3.400%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Underwriting Discount:<\/p>\n<\/td>\n

<\/td>\n\n

0.600%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Yield to Maturity:<\/p>\n<\/td>\n

<\/td>\n\n

3.412%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Spread to Benchmark Treasury:<\/p>\n<\/td>\n

<\/td>\n\n

+245 basis points<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Benchmark Treasury:<\/p>\n<\/td>\n

<\/td>\n\n

0.875% due November 30, 2016<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Benchmark Treasury Yield:<\/p>\n<\/td>\n

<\/td>\n\n

0.962%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Interest Payment Dates:<\/p>\n<\/td>\n

<\/td>\n\n

June 1 and December 1, commencing June 1, 2012<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Price to Public:<\/p>\n<\/td>\n

<\/td>\n\n

99.946%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Redemption Provisions:<\/p>\n<\/td>\n

<\/td>\n\n

In addition to the change of control triggering event as described in the
\nPreliminary Prospectus Supplement dated November 30, 2011, redeemable at any
\ntime in whole or from time to time in part at the greater of 100% of the
\nprincipal amount of the notes being redeemed or discounted present value at
\nTreasury Rate plus 40 basis points<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

CUSIP:<\/p>\n<\/td>\n

<\/td>\n\n

786514BT5<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

S-II-1<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
\n

4.750% Notes Due 2021<\/u><\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/tr>\n
\n

Principal Amount:<\/p>\n<\/td>\n

<\/td>\n\n

$400,000,000<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Maturity:<\/p>\n<\/td>\n

<\/td>\n\n

December 1, 2021<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Coupon (Interest Rate):<\/p>\n<\/td>\n

<\/td>\n\n

4.750%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Underwriting Discount:<\/p>\n<\/td>\n

<\/td>\n\n

0.650%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Yield to Maturity:<\/p>\n<\/td>\n

<\/td>\n\n

4.782%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Spread to Benchmark Treasury:<\/p>\n<\/td>\n

<\/td>\n\n

+270 basis points<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Benchmark Treasury:<\/p>\n<\/td>\n

<\/td>\n\n

2.000% due November 15, 2021<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Benchmark Treasury Yield:<\/p>\n<\/td>\n

<\/td>\n\n

2.082%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Interest Payment Dates:<\/p>\n<\/td>\n

<\/td>\n\n

June 1 and December 1, commencing June 1, 2012<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Price to Public:<\/p>\n<\/td>\n

<\/td>\n\n

99.749%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Redemption Provisions:<\/p>\n<\/td>\n

<\/td>\n\n

In addition to the change of control triggering event as described in the
\nPreliminary Prospectus Supplement dated November 30, 2011, redeemable at any
\ntime in whole or from time to time in part at the greater of 100% of the
\nprincipal amount of the notes being redeemed or discounted present value at
\nTreasury Rate plus 45 basis points<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

CUSIP:<\/p>\n<\/td>\n

<\/td>\n\n

786514BU2<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Joint Book-Running Managers:<\/p>\n<\/td>\n

<\/td>\n\n

Goldman, Sachs & Co.<\/p>\n

J.P. Morgan Securities LLC<\/p>\n

Merrill Lynch, Pierce, Fenner & Smith<\/p>\n

Incorporated<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Co-Managers:<\/p>\n<\/td>\n

<\/td>\n\n

Credit Suisse Securities (USA) LLC<\/p>\n

RBS Securities Inc.<\/p>\n

U.S. Bancorp Investments, Inc.<\/p>\n

Wells Fargo Securities, LLC<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The issuer has filed a registration statement (including a
\nprospectus) with the SEC for the offering to which this communication relates.
\nBefore you invest, you should read the prospectus in that registration statement
\nand other documents the issuer has filed with the SEC for more complete
\ninformation about the issuer and this offering. You may get these documents for
\nfree by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the
\nissuer, any underwriter or any dealer participating in the offering will arrange
\nto send you the prospectus if you request it by calling Goldman, Sachs & Co.
\nby telephone toll free at 1-866-471-2526, J.P. Morgan Securities LLC collect at
\n1-212-834-4533 or Merrill Lynch, <\/strong><\/p>\n

S-II-2<\/p>\n

\n

Pierce, Fenner & Smith Incorporated toll-free at 1-800-294-1322
\nor by email to dg.prospectus_requests@baml.com. <\/strong><\/p>\n

S-II-3<\/p>\n

\n

SCHEDULE III<\/p>\n

The Final Term Sheet dated November 30, 2011<\/p>\n

S-III-1<\/p><\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8740],"corporate_contracts_industries":[9499],"corporate_contracts_types":[9629,9634],"class_list":["post-43971","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-safeway-inc","corporate_contracts_industries-retail__food","corporate_contracts_types-securities","corporate_contracts_types-securities__underwriting"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43971","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43971"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43971"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43971"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43971"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}