<PAGE>

                            Interim Supply Agreement

THE GRAND UNION COMPANY ("GU") AND C&S WHOLESALE GROCERS, INC. ("C&S") intending
to be legally bound, agree as follows:

1.       Term. Without further action of the parties or the Bankruptcy Court,
         the term of this Interim Supply Agreement (the "Agreement") shall
         expire on January 15, 2001; provided that if the DIP Loan should
         terminate or if GU is unable to continue to borrow under the DIP loan,
         then, the Term shall expire unless within 24 hours of such event, GU
         pays all accrued but unpaid amounts to C&S and provides C&S with
         adequate assurances that it will be able to continue to pay all amounts
         under this agreement as such amounts become due. This Agreement shall
         constitute a legally binding agreement between the parties hereto.

2.       Surcharge. The Upcharges set forth in this Agreement shall be adjusted
         by adding a Surcharge equal to 1% of purchases, such surcharge to be
         increased to 1.5% if C&S is not the purchaser of substantially all of
         the assets of GU; provided that, with respect to any such surcharge,
         C&S makes a good faith offer to purchase such assets on terms similar
         to C&S's expression of interest dated September 12, 2000. The surcharge
         shall be noted at the bottom of each GU weekly statement with respect
         to all amounts set forth therein. The surcharge shall accrue within two
         business days of each week and be paid within two business days of
         termination of this Agreement. All amounts due C&S under this
         Agreement, including without limitation the surcharge shall be entitled
         to administrative expense priority in GU's Chapter 11 case (the
         "Case").

3.       PACA Claim. GU acknowledges that C&S holds a valid perfected and
         enforceable PACA trust claim with priority over all other liens,
         claims, and encumbrances for all amounts due for unpaid delivery of
         perishable agricultural commodities.

4.       GMHBC. GU hereby certifies to C&S that C&S has no less than $10 million
         of inventory at the Montgomery warehouse free and clear of any other
         claims or liens. Over the next week, GU will identify all slow moving
         product at Montgomery and use its best efforts to dispose of such
         slow-moving product over the next succeeding four weeks. GU will use
         its best efforts not to procure slow-moving or unique items into
         Montgomery and will work diligently to reduce the amount of inventory
         on hand.
                                                             10
5.       Merchandise. Entire requirements for grocery, bakery, candy, store
         supplies and all Perishables. Perishables means items in the following
         categories: meat (other than frozen), deli, seafood (other than
         frozen), produce, dairy and floral; provided that GU may continue to
         purchase bakery items that it currently procures from Bakemark
         Ingredients East, Inc. Entire requirements for frozen (mainline),
         frozen bakery, ice cream, frozen meat, frozen seafood and ice for the
         Northern division, and commencing upon 60 days written notice by C&S to
         GU but no later than March 31, 2001, for the Southern and Eastern
         divisions. Absent a service level deficiency, GU will not purchase from
         a


                                       1
<PAGE>


         secondary supplier product carried by C&S.

6.       Base Price

         1.   General. Except as stated below, the Base Price shall be the
              manufacturer's published price in the best bracket in which C&S
              normally purchases such item (including all inbound transportation
              charges), less any published retail off-invoice allowances.
              Logistics initiatives over and above the truckload bracket that
              require C&S to perform services and/or to incur a cost shall not
              be reflected in Base Price. Base Price will not include any C&S
              upcharges or other fees set forth herein.

         2.   Reserve Price. The "Reserve Price," shall be the price established
              at the time product is booked into the Forward Buy Reserve.

         3.   Perishable Direct Bookings. Direct Bookings will have a Base Price
              equal to GU's designated pricing on such Merchandise, as invoiced
              to C&S by the vendor, including all in-bound transportation
              charges.

         4.   Produce, Meat and Store Supplies The Base Price for items in the
              produce, floral, store supplies, deli, meat, seafood, frozen
              seafood and frozen meat categories, other than Direct Bookings,
              will be quoted weekly by C&S based upon market conditions and
              availability. The Base Price shall be reviewed with and reasonably
              acceptable to GU.

7.       Other Pricing Provisions.

         1.   Deal Extension. C&S will reflect in the Base Price all
              manufacturers' published allowances from first ship date to last
              ship date.

         2.   Cash Discount. C&S will retain all cash discounts. C&S will
              equalize cash discounts to 1.5% on ice cream and 2% on dairy items
              for which there is no cash discount. In addition, if a vendor, in
              any product category, selling product to C&S for GU subsequently
              reduces its cash discount and reduces the cost of such product,
              then C&S may equalize its Base Price for such product by adding to
              the Base Price an amount equal to the reduced cash discount, but
              will not add an amount in excess of the then reduction in the cost
              of the product. Upcharges on items subject to cash equalization
              shall be on the Base Price of such items without taking into
              account any cash equalization.

         3.   Private Label. C&S has no obligation to carry GU's private label.
              Nevertheless, C&S and GU will work to identify fast-moving private
              label items and C&S will work to supply GU with such items. GU
              shall promptly establish a program to sell through all private
              label items on hand and on order on the date hereof and shall use



                                       2
<PAGE>

              its reasonable best efforts to minimize the amount of on hand
              private label inventory.

4.        Ad Quantities.

         1.   Non-Perishables. On the day immediately following the end of the
              ad period, C&S will add all leftover ad product to the Forward Buy
              Reserve. GU will use its best efforts to work with C&S to minimize
              the amount of leftover ad product. Such efforts will include (i)
              providing to C&S the retail billbacks so as to exclude such items
              from the Forward Buy Reserve, and (ii) the current method whereby
              C&S receives approximately 70% of a projected ad booking prior to
              the ad period with the remaining 30% to be received through the ad
              period, all in an effort to minimize the amount of potential
              excess inventory in the warehouse.

         2.   Perishables. As noted below, GU will no longer make direct
              bookings. GU will still make leftover ad predictions and C&S will
              procure appropriate quantities to meet such predictions. To the
              extent that C&S is not able to ship leftover GU ad product to
              other customers, GU will promptly establish a store distribution
              for such items to avoid any code dating or quality issues,
              provided that any mis-picks related thereto shall be the
              responsibility of C&S. C&S shall continue to ship dairy items with
              the same minimum receipt and ship dates as exist on the date
              hereof.

5.       Certain Perishable Procurement. GU will no longer make direct bookings.
         Instead, GU will provide specifications to C&S and C&S will procure
         such product according to GU's specifications. Absent compelling
         circumstances, no unique items will be purchased by C&S. Thus, C&S will
         not purchase Argentine beef but will purchase the appropriate
         quantities of prime beef. To the extent that unique items are purchased
         or with respect to direct bookings currently in the warehouse, GU must
         purchase from C&S all such items before spoilage. If any such items
         spoil before they are distributed to GU, then GU will pay the Base
         Price for such product, all applicable upcharges, cash discount
         equalizations, the applicable fees set forth in Section 10 hereof, any
         other fees payable as agreed to by the parties (such as outside
         storage) and C&S's disposal costs for such items. If GU is able to find
         a Perishable item of the same quality but at a lower cost then C&S's
         cost, then it shall communicate such lower price to C&S. If C&S can, it
         will either purchase such product at the lower cost, match the price or
         instruct GU to purchase such item. Regardless of the price or sourcing
         of any product, C&S will cut all purchase orders and control all
         inbound freight.

6.       Outbound Diverting. GU may outbound divert product to a reasonable
         extent; provided, that GU will use its reasonable best efforts to
         provide C&S a right of first refusal on 50% of the amount and quantity
         of outbound loads.

                                       3
<PAGE>

7.       Cross-roads. C&S is entitled to share movement reports with cross-road
         vendors.

8.       Cost Changes

         1.   General Non-Perishables. C&S will provide GU with two weeks price
              protection on vendor price advances subject to allocation, product
              availability and vendor notification.

         2.   Non-Floorstocked Price Declines (Non-Perishables). C&S will use
              its reasonable best efforts to minimize the in-house inventories
              for all effected items at the time of the price decline. GU shall
              be responsible for any leftover ad product on items booked in
              excess of 500 cases that is still physically in the inventory, or
              any previously reserved quantities. C&S will agree to move to the
              new pricing no later than the date on which GU has purchased from
              C&S four weeks of normal turn movement at the prior higher price,
              such four weeks commencing from the first ship date of the new
              costing, exclusive of the above noted leftover ad or reserve
              product that has not depleted after the four weeks. It would be
              our intent to move to the lower pricing expeditiously and we would
              work to move to the pricing before the maximum time frames. The
              above listed parameters are necessary due to the various vendor
              brackets and palleting order requirements.

8.       Payments.

         1.   General. With respect to all categories of Merchandise except
              produce, Grand Union will pay C&S each business day before 1 p.m.
              by wire transfer an amount equivalent to 20% of its purchases
              during the current week of all such Merchandise (including all
              fees and charges payable under this Agreement), as estimated on a
              weekly basis and all other amounts due and payable hereunder. C&S
              will not be exposed to any credit risk under the terms and
              conditions of this section, except as may result from the express
              provisions of this Agreement. If there is an overage or shortfall,
              it will be adjusted on the first Tuesday following the Saturday
              weekly statement, provided -------- that both parties will use
              their best efforts to insure that any overage or shortfall is
              minimal and does not negatively impact either party. If the
              relevant banks are not open for business on any Monday, Tuesday,
              Wednesday, Thursday or Friday during a week, GU's wire transfers
              during the remaining days of the week shall be in an amount
              equivalent to 25% of the amount otherwise due. 1.

         2.   Produce. On the third Wednesday following each weekly statement,
              and continuing through the next succeeding Tuesday, Grand Union
              shall pay C&S each business day by wire transfer an amount equal
              to 20% of Grand Union's produce purchases (including all fees and
              charges payable under this Agreement) as set forth on the


                                       4
<PAGE>

              applicable weekly statement; provided, that the total amount owing
              from GU to C&S with respect to produce purchases shall at no time
              exceed $13 million.

         3.   Time is of the essence. If GU fails to make any payment when due
              under the Agreement, C&S shall both give notice to GU of such
              failure to receive payment and shall have the right to stop
              shipping product under this Agreement. If all payments due and
              owing are not received within 72 hours from receipt by GU of such
              notice, C&S shall have the right to terminate this Agreement.
              Notwithstanding the foregoing, GU shall have the right to dispute
              price, quantities and whether such amount is due and owing, and GU
              will notify C&S promptly if it believes there is an error. The
              parties agree to use their best efforts to resolve such dispute
              within 2 weeks after delivery of such notice.

         4.   Notice. Any notice under this Agreement shall be provided to the
              President, Chief Financial Officer and General Counsel of the
              party receiving the notice.

         5.   Letter of Credit. GU shall maintain the existing letter of credit.

9.       Standard Credit. The parties have established an overage/shortage
         program with respect to all Merchandise categories, including meat and
         deli, attached hereto (the "Standard Credit Policy"). The Standard
         Credit Policy also provides for store delivery documentation and remedy
         procedures in the event of a "missing pallet." Product shortages that
         exceed the standard credit program cap will be investigated to
         determine the whereabouts of the product. A credit will not be issued
         under the following circumstances:

         a.       the product is located at the store,
         b.       the product is located at another site and reshipped,
         c.       the load has been audited, witnessed and verified as complete
                  without error,
         d.       the delivery receipt and load documentation indicate that the
                  product was received at the store.

         If a store disagrees with the outcome of the investigation, it may
         immediately appeal its claim through GU's operations liaison, who in
         turn may contact the C&S customer service manager (Janet Gauthier). The
         parties will work to provide further information and reach an agreeable
         solution within 5 working days. If an agreement cannot be reached, the
         GU Vice President of Operations may contact the C&S Vice President of
         Sales (Marilyn Tillinghast) for final resolution. Through this process,
         the parties will resolve any and all disputes involving amounts in
         excess of the standard credit within fourteen days of one party
         notifying the other that a dispute exists. Both parties shall authorize
         and empower their respective designees to resolve such disputes.

10.      Review Rights. C&S will transmit to GU all cost information on a weekly
         basis. GU will match the C&S cost file to GU's cost file and transmit
         an exception report back to C&S the next day. The parties will then
         meet to resolve any cost discrepancies prior to billing. GU may also
         review C&S's Base Price information at the end of the week with respect
         to such



                                       5
<PAGE>

         billing. Any and all alleged price discrepancies must be noticed to C&S
         (attention: Mark Gross and Greg Raven) within seven days of the billing
         of such goods. C&S will reimburse GU for any actual findings that C&S
         over-billed GU (including any upcharges or other fees under this
         Agreement related to such over-billed amount), and correspondingly GU
         will pay C&S for any actual findings that C&S under-billed GU
         (including any upcharges or other fees under this Agreement related to
         such under-billed amount). It is the intent of the parties that the
         weekly data transmittal and GU's review of such information shall be
         the primary mechanism to ensure pricing accuracy.

11.      Quality control. C&S will not substitute any item without GU's prior
         authorization. If C&S substitutes an item of lower cost and quality
         without GU's prior authorization, then (i) if GU returns the item, (a)
         but does not purchase it from a third party, then GU will be entitled
         to a full Base Price and upcharge credit, or (b) and buys the ordered
         item from a third party at a higher price, then C&S will pay to GU the
         difference between the cost charged by C&S for the substituted item and
         the cost of the item purchased by GU from a third party, or (ii) if GU
         does not return such item, then GU will be entitled to a credit equal
         to the difference between the cost of the ordered item and the cost of
         the substituted item.

12.      Delivery Schedule.

         1.   Delivery Requirements. C&S shall use its best efforts to meet the
              delivery schedule (as currently agreed to by the parties and as
              amended from time to time by the parties' mutual agreement, the
              "Delivery Schedule"), and GU shall order product (i) in full
              truckloads and (ii) so that each store will receive a minimum of
              1600 cubic feet of product per stop for grocery Merchandise, 10
              pallets per stop for Perishable Merchandise and 5 pallets per stop
              for frozen food Merchandise; provided, that such minimum pallet
              requirements shall not apply to the extent that GU cannot comply
              due to store space constraints as set forth on the Delivery
              Schedule. To help maintain the upcharges and other pricing set
              forth in the Agreement, the parties shall adjust the delivery
              schedules to maintain full truckloads including, without
              limitation, if C&S consolidates slow-moving Merchandise (i.e.,
              store-ready cross-dock pallets of slow-movers) and/or C&S uses the
              largest trucks allowable by law. GU will reasonably permit skipped
              deliveries on slow-moving Merchandise. C&S will provide GU with
              weekend deliveries as set forth on the agreed upon Delivery
              Schedule without additional premium. The Delivery Schedule shall
              incorporate two (2) hour windows. C&S and GU will mutually adjust
              such schedules in response to store Sales.

         2.   Delivery Service Level. "Delivery Service Level" means a
              percentage reflecting the ratio of (i) the number of orders
              delivered on-time by C&S to GU in any week per the Delivery
              Schedule, to (ii) the total number of orders scheduled for
              delivery by C&S to GU during such week, per the Delivery Schedule.
              Delivery Service Level percentages will not be adversely affected
              by any event of force majeure or any nonperformance or error by GU
              including, without limitation, delivery delays caused


                                       6
<PAGE>

              by GU. For example, if a truck arrives at a store but no receiving
              crew is present, then C&S will not be responsible for the delay
              delivering at subsequent stops due to such GU mistake. C&S will
              provide GU a weekly Delivery Service Level Reconciliation Report
              showing the times of all deliveries during such week.

         3.   Delivery Service Level Deficiency. If, for any reason other than a
              breach, nonperformance or error by GU or an event of force
              majeure, C&S fails to achieve a 95% Delivery Service Level (the
              "Targeted Service Level") for any three consecutive weeks during
              the Term (the "Measurement Period") and GU gives notice of such
              alleged delivery service level deficiency to C&S, then such
              failure shall constitute a "Delivery Service Level Deficiency". In
              the event of a Delivery Service Level Deficiency, C&S shall use
              its reasonable best efforts to immediately restore the Delivery
              Service Level to at least 95%.

         4.   Cure of Delivery Schedule Breach. If, during the week following
              the occurrence of a Delivery Service Level Deficiency (the
              "Delivery Penalty Week"), the Delivery Service Level is restored
              to at least 95%, then the Delivery Service Level Deficiency shall
              be cured and a new Measurement Period shall begin.

         5.   Delivery Service Level Deficiency Penalty. If C&S fails to restore
              the Delivery Service Level to 95% during the Delivery Penalty
              Week, then C&S will rebate to GU 25% of the load fees and stop
              charges with respect to those deliveries that were not timely
              delivered during such week and each subsequent week until the
              Delivery Service Level is restored to 95%.

         6.   Delivery Service Level Termination. If the Delivery Service Level
              is below 90% for six consecutive weeks, and prior to the end of
              the fifth week, GU has provided C&S with notice that it intends to
              terminate the agreement, and prior to the end of the sixth week,
              C&S has not restored the Delivery Service Level to at least 95%,
              then GU may terminate the agreement within seven days following
              the end of the sixth week.

13.      Service Level.

         1.   Service Level Reporting. C&S will electronically transmit to GU a
              daily Service Level Reconciliation Report showing, with respect to
              each item, excluding private label and unique merchandise, the
              number of cases ordered, shipped, out of stock (including
              "warehouse scratches"), over-pulled, booked, unauthorized,
              discontinued and manufacturer out-of-stocks, provided that C&S
              placed orders for such cases within the normal lead time. C&S will
              supplement this daily report with a weekly spread sheet with
              adjustments as set forth in this Agreement so as to provide a
              weekly Service Level Report. A unique item is an item that is
              carried by C&S only for GU and not any other C&S customer.



                                       7
<PAGE>



         2.   Service Level. "Service Level" means a percentage reflecting (i)
              the number of cases shipped divided by (ii) the number of cases
              ordered, less cases not shipped in the following categories:
              unauthorized, discontinued, over-pulled, private label, unique,
              and manufacturers' out-of-stock cases. The term "manufacturer's
              out-of-stock cases" refers to commodity shortages and cases that
              are unavailable from the manufacturer or cut by the manufacturer.
              The Service Level will not be adversely affected by any
              nonperformance or error by GU, including without limitation errors
              in booking advertising and feature items (including sales levels
              of feature items in excess of projections made by GU and
              adjustments to pre-orders where applicable), GU's directions with
              respect to items procured by GU, or any event of force majeure.
              C&S will use its commercially reasonable best efforts to achieve a
              Service Level of 96%.

         3.   Service Level Deficiency. If, for any reason other than a breach,
              nonperformance or error by GU or an event of force majeure, C&S
              fails to maintain a 95% Service Level (the "Targeted Service
              Level") for any two consecutive weeks during the Term (the
              "Measurement Period") and GU gives notice of such alleged service
              level deficiency to C&S, then such failure shall constitute a
              Service Level Deficiency. In the event of a Service Level
              Deficiency, C&S shall use its reasonable best efforts to
              immediately restore the Targeted Service Level.

         4.   Cure of Delivery Schedule Breach. If, during the week following
              the occurrence of a Service Level Deficiency (the "Service Penalty
              Week"), the Service Level is restored to at least 95%, then the
              Service Level Deficiency shall be cured and a new Measurement
              Period shall begin.

         5.   Service Level Deficiency Penalty/Third Party Sourcing. If C&S
              fails to restore the Targeted Service Level during the Service
              Penalty Week, then GU will be entitled to either (i) the Penalty
              Payment during such week and each subsequent week until the the
              Targeted Service Level is restored ("Penalty Period") or (ii)
              source product from a third party supplier. The Penalty Payment
              shall be equal to: (i) the difference between 95% and the average
              actual service level percentage during the Penalty Period,
              multiplied by (ii) the number of cases delivered during the
              Penalty Period, multiplied by (iii) $.25. The Penalty Payment
              shall be paid within 15 days of the end of the Contract Quarter in
              which the Penalty Period occurs. Upon restoration of the Targeted
              Service Level, GU shall cease purchasing product from third-party
              suppliers (except with respect to product previously ordered), and
              C&S shall reimburse GU for any increased direct product cost
              incurred by GU as a result of its sourcing product from a third
              party supplier pursuant to this section.

         6.   Service Level Termination. If the Service Level is below 87.5% for
              four consecutive weeks in a Contract Year, and prior to the end of
              the third week, GU has provided C&S with notice that it intends to
              terminate the agreement, and prior to the end of the fourth week,
              C&S has not restored the Targeted Service Level to at least 95%,
              then


                                       8
<PAGE>

              GU may terminate the agreement within seven days following the end
              of the fourth week. Furthermore, if (a) there have been five or
              more separate Service Level Deficiencies in a Contract Year, (b)
              during such deficiencies the Service Level was below 87.5%, and
              (c) within seven days following the end of the fourth Service
              Level Deficiency, GU has provided C&S with notice that it intends
              to terminate the agreement, then GU may terminate the agreement
              within seven days following the end of the fifth Service Level
              Deficiency.

14.      Fees. Upcharges are on Base Price and exclusive of ripening fees.
         Merchandise shall be placed in a category classification according to
         C&S's historical practices, subject to a list of grand-fathered items,
         if any, attached to the supply agreement). The following fees shall
         apply:

<TABLE>
<S>                                                                             <C>
         Grocery, supplies, candy (full case)                                   1.95%
                  Delivery Fee      - first stop                                $85
                                    - each additional                           $25

         Perishables

                  Meat and deli                                                 3.20%
                  Produce                                                       7.50%
                  Dairy upcharge                                                2.25%
                  Delivery Fee
                           All Perishables delivered on same truck
                                    - first stop                                $120
                                    - each additional                           $25
                  Banana ripening                                               $1.00/case
                  Stone Fruit ripening                                          $48/pallet

         Frozen and ice cream                                                   2.00%*
            * 1.95% when C&S starts supplying GU with all of GU's requirements
            for frozen food in the Southern and Eastern divisions.
                  Delivery          - first stop                                $120
                                    - each additional                           $25

         Label Charge                                                           $.02/case

         Restocking Fee (charged on Base Price)                                 8%

         Special Deliveries                                                     $75/stop
                  (extra delivery on already scheduled run)

         ASAP deliveries                                                        $1.20/mile
                  (additional run; cost adjustable for additional fuel/cost)
</TABLE>

                                       9
<PAGE>


         Trailer rental (pick-up and delivery involves a mileage charge of
         $1.20/mile, based upon current trip rates and fuel costs; trailer
         rental is subject to increase for increases in third party rental
         charges)

<TABLE>
<S>                                                        <C>
               dry                                            $100/week + pick-up and delivery
               refrigerated                                   $300/week + pick-up and delivery
               turkey (extended use with maintenance)         $500/week + pick-up and delivery
</TABLE>

15.      Bales/totes/cross-dock/reclamation pick-up. $22,000/week. To assist C&S
         in managing its own inventory and the Service Level requirements
         herein, GU shall inform C&S of when GU has purchased/received
         Merchandise into Montgomery and GU's intended distribution of such
         product.

16.      Frozen Holiday Turkeys/Shrimp. With respect to holiday turkeys and
         shrimp (including to the extent that GU wishes C&S to handle frozen
         holiday turkeys or shrimp for the Southern and Eastern divisions prior
         to such goods becoming Merchandise hereunder), GU will be responsible
         for all predistribution storage and handling. Commencing no sooner than
         October 1, of each year, C&S will receive such product two days prior
         to the agreed upon distribution or store order billing date for such
         goods. All such product must be distributed out of C&S's facilities (i)
         no later than the Sunday immediately following Thanksgiving for
         Thanksgiving holiday turkey and shrimp and (ii) by February 1 for all
         Christmas and New Year's holiday turkey and shrimp. It is the intent of
         this section that C&S shall not have to store in its facilities any
         holiday shrimp or turkeys for more than one week.

17.      Forward Buy Reserve. No product, other than left-over ad product will
         be added to the Reserve. Reserve charge as follows:

              0 - 300,000 cases                     No charge to GU.
              300,000 and above                     $.02/case/week

         GU shall promptly establish a program to sell through all reserve
items.

18.      Reduced Volume Surcharge. Payable on Monday for prior week sales. The
         surcharge will be reconciled on a quarterly basis.

<TABLE>
<CAPTION>
                       Weekly Purchases (Base Price)                                   Weekly Surcharge
                       -----------------------------                                   ----------------
<S>                                                                                  <C>
              If below $17.3 million - but equal to or above $16.35 million                  $57,692
              If below $16.35 million - but equal to or above $15.38 million                 $96,154
              If below $15.38 million - but equal to or above $14.42 million                 $173,077
              If below $14.42 million - but equal to or above $13.46 million                 $269,231
              If below $13.46 million                                                        $384,615
</TABLE>

19.      Reclamation. GU will participate in C&S' reclamation program for all
         Merchandise other than produce, floral, meat, seafood and private
         label. This product will be scanned at C&S' reclamation center within
         seven days after the product is picked up from Grand Union Stores, and
         Grand Union will receive credit, on a bi-weekly basis, for 82% of the
         cost of this


                                       10
<PAGE>

         product.

20.      Third Party Deductions.

         1.   General. From time to time, GU may ask C&S to act as its agent to
              deduct amounts that are due from manufacturers to GU. C&S has the
              right, in its discretion, to refuse to honor any third party
              deduction request that GU may make. If C&S makes a deduction on
              GU's behalf and the manufacturer disputes the deduction made by
              C&S, GU agrees to indemnify and defend C&S against and hold C&S
              harmless from any claim by the manufacturer related to such
              deduction. If C&S repays any deduction that C&S makes on GU's
              behalf, GU will, upon notice from C&S, repay such amount to C&S.
              GU will insure that supply of Merchandise from manufacturers to
              C&S is not adversely affected by any third party deductions that
              C&S may take on GU's behalf. Service Level shall not be adversely
              affected by an interruption in the supply of Merchandise from a
              manufacturer to C&S if the interruption is caused by the refusal
              of the manufacturer to ship product to C&S and such refusal is
              attributable to a disputed deduction that C&S has taken on GU's
              behalf. C&S will add to each deduction from a vendor a fee of no
              less than $250 to process the deduction made by C&S on GU's
              behalf. Each Friday, C&S will reimburse GU for all deductions
              collected during the preceding seven day period, less C&S' fee.

         2.   Direct Booking Errors. If there is an error in vendor invoicing on
              a Perishable direct booking, GU may request C&S to collect any
              amounts GU is owed pursuant to the terms of paragraph (a) of this
              Section.

21.      Termination by C&S. C&S may terminate this Agreement for cause and
         without further order or approval of the Bankruptcy Court. Cause shall
         be
         1.   nonpayment of amounts owed hereunder uncured for 72 hours
              following receipt by GU of written notice;
         2.   if GU does not obtain court approval hereof within 5 days of the
              commencement of the Case;
         3.   other material breach uncured after 90 days following receipt by
              GU of written notice; and
         4.   the end of the Term.

22. Termination by GU. GU may terminate this Agreement for cause. Cause shall
    be:
         1.   nonpayment of amounts owed hereunder uncured for 72 hours
              following receipt by C&S of written notice;
         2.   material breach uncured after 90 days following receipt by C&S of
              written notice; and
         3.   As set forth in Sections 12 or 13.

                                       11
<PAGE>

23.      Transfer of Assets. GU will provide C&S with written notice of any GU
         plan to sell, transfer, assign, close, cease doing business or
         otherwise convey ownership (a "Sale") in one or more store. Such notice
         shall be given at the earliest practicable time and shall state, among
         other things, the name of the proposed purchaser, the location of the
         store to be sold, the approximate timetable for consummating the Sale
         and the purchaser's plans for supplying the store in the aftermath of
         the Sale, to the extent that such plan is known to GU.

24.      Binding Effect. This Agreement shall be binding upon and inure to the
         benefit of GU and C&S and their respective successors and assigns.

25.      Sale Incentive Fee.

<TABLE>
<CAPTION>
              Aggregate Consideration Paid        C&S Share Percent of Total Aggregate Consid.
              ----------------------------        --------------------------------------------
<S>                                               <C>
         1.   Below $275 million                                   0%
         2.   $275 million - 300 million                           1%
         3.   $300 million - 330 million                           1 & 1/3%
         4.   in excess of $330 million                            1 & 2/3%
</TABLE>

26.      Termination of Prior Agreements. C&S currently supplies GU pursuant to
         the Amended and Restated Term Sheet: Supply Agreement, dated as of
         September 24, 1999, between C&S and GU, dated October 15, 1999 (the
         "October 15 Supply Agreement") and the Supply Agreement between C&S and
         GU, dated as of September 24, 1999 and sent to GU on November 12, 1999
         (the "November 12 Supply Agreement" and together with the October 15
         Supply Agreement, the "Prior Supply Agreement"). This Interim Supply
         Agreement will set forth the parties' rights and obligations during the
         Term. Notwithstanding anything herein to the contrary, C&S shall be
         entitled to file a proof(s) of claim for any amounts owed or that may
         become due under the Prior Agreement, including, without limitation,
         any termination fee or prorated termination fee relating to the Prior
         Agreement, as if GU had rejected the Prior Agreement prior to the
         conclusion of the Case. GU reserves its right to contest the allowance,
         validity, priority, or amount of such claim(s) but cannot use the
         existence or any provision of this agreement as evidence or an
         admission. GU and C&S acknowledge and agree that objections to the
         allowance, validity, priority or amount of such claim(s) of C&S shall
         be decided as if this interim supply agreement did not exist.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first written above.

THE GRAND UNION COMPANY                   C&S WHOLESALE GROCERS, INC.


---------------------------------
Glenn J. Smith                            Mark Gross
Senior Vice President                     Senior Vice President