- 14 -
requirements; (4) a mediation/arbitration agreement that required
petitioner and SUPERVALU to resolve any controversy, claim, or
dispute by mediation or arbitration; and (5) a reimbursement
agreement that required petitioner to pay annually to SUPERVALU
10 percent of the petitioner’s lease value. In addition, as was
customary for SUPERVALU when it guaranteed one of its customer’s
lease obligations, SUPERVALU required petitioner to enter into an
option agreement with SUPERVALU that gave SUPERVALU the right to
take over petitioner’s lease in the event that petitioner de-
faulted under it.13
On January 26, 2000, petitioner’s officers, who were also
stockholders of petitioner, executed an agreement in which they
guaranteed various obligations that petitioner had to SUPERVALU
and/or its subsidiaries. Such obligations included petitioner’s
obligations under the April 16, 1999 supply agreement and the
corresponding April 15, 1999 note.
Petitioner satisfied the annual purchase requirement set
forth in the April 16, 1999 supply agreement for each of the
periods ended April 16, 2000, and April 16, 2001, and otherwise
complied with, did not materially breach, and was not in uncured
13It has been SUPERVALU’s practice to take over customer
leases that it guaranteed where its customers were in default
under them.
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