Karns Prime & Fancy Food, Ltd. - Page 13

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          petitioner’s obligations under the lease (petitioner’s lease) of            
          the new site for one of petitioner’s stores.  In return for                 
          SUPERVALU’s guaranty of petitioner’s lease, on January 26, 2000,            
          petitioner entered into several agreements with SUPERVALU,                  
          including:  (1) An agreement that granted to SUPERVALU a security           
          interest in certain of petitioner’s assets;11 (2) a first amend-            
          ment to the April 16, 1999 supply agreement that, inter alia,               
          amended the term of that supply agreement12 but that did not                
          alter petitioner’s annual purchase requirement under the April              
          16, 1999 supply agreement; (3) a retailer’s agreement that                  
          (a) required SUPERVALU to make its product lines available to               
          petitioner at certain prices and to provide petitioner with                 
          certain services, including field advisory, warehousing, and                
          marketing services, and (b) required petitioner to comply with              
          SUPERVALU’s payment, accounting, inventory, and confidentiality             


               11Around early February 2000, SUPERVALU filed financing                
          statements with Cumberland County, Pa., and the Pennsylvania                
          secretary of state in order to perfect the security interest in             
          certain of petitioner’s assets that petitioner granted to                   
          SUPERVALU on Jan. 26, 2000.                                                 
               12The first amendment to the April 16, 1999 supply agreement           
          provided in pertinent part:                                                 
               The term of the [April 16, 1999 supply] Agreement is                   
               hereby amended such that Retailer’s [petitioner’s]                     
               obligations under this Agreement shall continue in                     
               effect for the longer of (a) five (5) years from the                   
               Execution Date, or (b) as long as any Capital Commit-                  
               ment [i.e., any capital committed by SUPERVALU for the                 
               benefit of petitioner] remains outstanding.                            





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