<PAGE>
                                                                   EXHIBIT 10aab

                                SUPPLY AGREEMENT

         THIS SUPPLY AGREEMENT ("Agreement") is made and entered into as of the
15th day of August, 2001, by and between ASSOCIATED WHOLESALE GROCERS, INC., a
Missouri corporation ("AWG") and HOMELAND STORES, INC., a Delaware corporation
("HOMELAND"), Chapter 11 debtor-in-possession.

                                    RECITALS:

         THE FOLLOWING RECITALS ARE A MATERIAL PART OF THIS AGREEMENT:

         A. AWG is a wholesaler of grocery and supermarket products operating in
a cooperative manner. In entering into this Agreement, AWG is seeking to enhance
the interests of its retail members.

         B. Homeland is a retail grocery store operator, and is currently a
member of AWG. Homeland currently owns and operates Stores. As used in this
Agreement, the term "STORES" shall mean those seventy-eight (78) stores set
forth on EXHIBIT "A" attached hereto and incorporated herein by this reference,
together with any and all additional, substitute, replacement or other retail
grocery stores leased, operated or owned by Homeland at any time during the term
of this Agreement. For purposes hereof, "RETAIL GROCERY STORE" shall mean all
retail stores selling grocery items, including, without limitation, conventional
stores, convenience stores or limited assortment stores. It is the express
intent of the parties that at no time during the term of this Agreement shall
there be any retail grocery store leased, operated or owned, directly or
indirectly, by Homeland which is not to be included as a Store under this
Agreement.

         C. Homeland and its parent, Homeland Holding Corporation ("HOLDING"),
have filed petitions under Chapter 11 of the Bankruptcy Code ("BANKRUPTCY
CASES").

         D. AWG and Homeland entered into that certain Supply Agreement dated as
of April 21, 1995, as amended pursuant to that certain First Amendment to Supply
Agreement dated as of August 2, 1996 and that certain Second Amendment to Supply
Agreement dated as of August 12, 1997 (as so amended, the "1995 SUPPLY
AGREEMENT").

         E. In connection with and as certain consideration for the sale to
Homeland of nine (9) retail grocery stores by AWG, which were previously owned
by Horner Foods Inc., AWG and Homeland entered into, among other things, that
certain Supply Agreement dated as of April 23, 1999 (the "HORNER SUPPLY
AGREEMENT").

<PAGE>


         F. In connection with and as certain consideration for the sale to
Homeland of four (4) retail grocery stores previously owned by Brattain Foods,
Inc., AWG and Homeland entered into, among other things, that certain Supply
Agreement dated as of November 2, 1999 (the "BRATTAIN SUPPLY AGREEMENT").

         G. In connection with and as certain consideration for the sale to
Homeland of three (3) retail grocery stores previously owned by Belton Food
Center, Inc., AWG and Homeland entered into that certain Supply Agreement dated
as of February 29, 2000 (the "BELTON SUPPLY AGREEMENT; the 1995 Supply
Agreement, the Horner Supply Agreement, the Brattain Supply Agreement and the
Belton Supply Agreement are collectively referred to as the "EXISTING SUPPLY
AGREEMENTS").

         H. Homeland desires to continue to be supplied under the Existing
Supply Agreements by AWG after the filing of the Bankruptcy Cases and will seek
bankruptcy court approval to do so by way of first day orders in the Bankruptcy
Cases. To the extent any of the Existing Supply Agreements are deemed an
executory contract, Homeland intends to assume such Existing Supply Agreements
by way of first day orders in the Bankruptcy Cases. In addition, Homeland and
Holding have requested that AWG provide debtor-in-possession financing which the
parties intend to have approved by way of first day orders in the Bankruptcy
Cases.

         I. Upon the conclusion of the Bankruptcy Cases and after the expiration
of the Existing Supply Agreements, Homeland intends that the Stores will
continue to be supplied by AWG pursuant to the terms of this Agreement,

         J. AWG and Homeland have entered into certain loan documents dated of
even date herewith including, without limitation, that certain Credit Agreement
dated of even date herewith (collectively, the "LOAN DOCUMENTS") to provide
certain debtor-in-possession financing to allow Homeland, to the extent
possible, to continue to operate the Stores, the consummation of which is
conditioned upon, among other things, the parties entering into this Agreement
and this Agreement receiving Bankruptcy Court approval as part of the
debtor-in-possession financing being provided by AWG pursuant to the Loan
Documents.

         K. Homeland has advised AWG that Homeland intends to concentrate with
AWG an agreed upon percentage of all of its ordering of inventory (including but
not limited to all grocery, meat and produce products and all health and beauty
products and general merchandise) and supplies (excluding pharmacy purchases) to
be held for sale to the public at or to be used in connection with the Stores
(hereinafter collectively referred to as the "PURCHASED GOODS").


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<PAGE>

         L. To provide assurances of its intentions to make such minimum
purchases and to induce AWG to execute and perform under the Loan Documents,
Homeland has agreed to enter into this Agreement.

         M. Homeland desires to provide adequate assurance to AWG that the
Stores will continue to be supplied by AWG in the future by granting or taking
subject to certain rights with respect to the Stores under (i) a Right of First
Refusal Agreement between Homeland and AWG (the "RIGHT OF FIRST REFUSAL
AGREEMENT") as set forth on EXHIBIT "B" attached hereto; (ii) a Non-Competition
Agreement as set forth on EXHIBIT "C" attached hereto and (iii) Use Restrictions
as set forth on EXHIBIT "D-l" and EXHIBIT "D-2" attached hereto (collectively
referred to as "SUPPLY PROTECTION AGREEMENTS"), each entered into
contemporaneously with this Agreement or as otherwise agreed pursuant to the
Loan Documents. It is the parties intent that the implementation and operation
of the Supply Protection Agreements will be independent of each other and will
not be executory.

         N. AWG is unwilling to enter into the Credit Agreement and associated
Loan Documents unless it receives the Supply Protection Agreements and adequate
assurances that the Stores will be supplied by AWG during the pendency of the
Bankruptcy Cases and will continue to be supplied by AWG pursuant to the terms
of the Existing Supply Agreements and this Agreement after the conclusion of the
Bankruptcy Cases.

         O. AWG is willing to supply to Homeland and the Stores the Purchased
Goods based on the terms, conditions and financial assurances contained herein.

         P. The parties understand and acknowledge that in addition to the
consideration set forth specifically herein, AWG will be required to make a
substantial current and continuing commitment of its resources in reliance upon
Homeland's commitment to purchase products and services as set forth herein, and
that AWG and its retail members will not realize the full benefit of their
anticipated bargain hereunder unless Homeland materially fulfills its
obligations hereunder for the full term of this Agreement.

         NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:

                               TERMS OF AGREEMENT:

         1. TERM. Except for the Stores on EXHIBIT "E", the term of this
Agreement shall be for a period of ten (10) years commencing on August 1, 2001
("COMMENCEMENT DATE") and ending on August 1, 2011. The Stores on EXHIBIT "E"
shall be subject to a term of the longer of: (i) ten (10) years commencing on
the Commencement Date and ending on


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<PAGE>

August 1, 2011, or (ii) the remaining term (as extended) of any lease or
sublease between AWG and Homeland in connection with any of the Stores described
on EXHIBIT "E".

         2. SUPPLY. Subject to the terms and conditions of this Agreement and
except as otherwise provided herein, the following obligations of the parties
shall begin on the Commencement Date and shall continue for the full term
hereof:

                  (a) Products to be Supplied by AWG. AWG agrees to sell, supply
         and deliver or cause any of its affiliates to sell, supply and deliver
         Purchased Goods to the Stores. Subject to agreement by AWG as to
         reasonable minimum volume and slotting requirements for each category,
         AWG agrees to carry (or cause any of its affiliates to carry) in its or
         their warehouses and include in Purchased Goods any products requested
         by Homeland.

                  (b) Products to be Purchased by Homeland. Except as provided
         in Section 2(e) hereof, Homeland agrees to operate the Stores as retail
         grocery stores or supermarkets for the entire term of this Agreement.
         Homeland agrees that with respect to all purchases of Purchased Goods
         for each Store and for all Stores in the aggregate, Homeland shall
         concentrate such purchases with AWG such that all purchases of
         Purchased Goods from AWG and/or its affiliates (valued at wholesale
         cost), measured quarterly, shall represent at least sixty-five percent
         (65%) of the value of all Purchased Goods (excluding pharmacy)
         purchased during the same time period by Homeland (using Homeland's
         applicable cost of goods sold for purposes of measurement) for each
         Store individually and for all Stores in the aggregate.

                  (c) Cost of Goods. AWG and/or its affiliates will supply
         Purchased Goods to Homeland and Homeland shall pay for Purchased Goods
         at the lowest prices and best terms as are available to AWG's other
         retail members similarly situated from time to time (based on volumes
         and elections to participate in special programs). Homeland shall have
         available to it all cost saving mechanisms available to other AWG
         retail members, including AWG's Concentrated Purchase Allowance Program
         ("CPA"). Homeland acknowledges that AWG's prices of goods, terms and
         CPA (i) are affected by and/or are a direct function of the volume of
         purchases by Homeland and (ii) are amended periodically by AWG.

                  (d) Certain Assurances to Homeland. Where applicable and as
         appropriate for Homeland's level of purchases from AWG, AWG agrees
         that: (i) AWG will pass through promotional and advertising allowances
         and rebates from manufacturers and vendors to Homeland on the same
         basis as any other similarly situated AWG member, (ii) Homeland will
         receive seasonal, special promotions and advertising programs on the
         best terms available to other AWG members similarly situated and (iii)
         AWG shall supply and offer to Homeland all advantages,


                                        4
<PAGE>

         opportunities and services that AWG offers to other similarly situated
         retail members. AWG further agrees that: (i) Homeland will be given
         credit for unsalable products and pricing adjustments on the best terms
         available to other similarly situated AWG members or retailers, (ii)
         the quality of the Purchased Goods will be consistent with other
         wholesalers within Homeland's market area, which shall include the area
         in which the Stores are located, (iii) the activities of AWG will meet
         all applicable legal and regulatory requirements, (iv) AWG will provide
         to Homeland a service level commensurate with all other members
         similarly situated, (v) AWG will make timely deliveries, (vi) AWG will
         provide quality Purchased Goods within acceptable fresh code dating and
         in a clean and healthy manner and (vii) AWG shall provide to Homeland
         from time to time during the term of this Agreement, in the same manner
         as provided to AWG's other similarly situated retail members,
         information regarding the availability of all promotional and
         advertising allowances and rebates.

                  (e) Until the Stores are closed or sold, Homeland intends to
         continue to own and/or operate such Stores as retail grocery stores.
         Subject to AWG's Supply Protection Agreements, Homeland has the right
         to decide whether or not to sell or close one or more of any of the
         Stores. Homeland has informed AWG and AWG hereby acknowledges that
         Homeland's current business plan includes the sale of the thirty-four
         (34) Stores described on EXHIBIT "F".

         3. TERMS OF PAYMENT. Homeland acknowledges and agrees that the credit
terms for the Stores will be as set forth on EXHIBIT "G" attached hereto and
incorporated herein by this reference.

         4. SECURITY FOR PERFORMANCE OF AGREEMENT. Contemporaneously with the
execution of this Agreement or as soon thereafter as possible, Homeland shall
deliver the following to AWG, which shall be security for all of Homeland's
obligations under this Agreement, the Supply Protection Agreements, Homeland's
open account arrangement with AWG and all of the other Obligations (as defined
in Section 12(a)(viii)):

                  (a) Membership Documents. Homeland and each subsidiary, to the
         extent any of them have not already done so, that now or hereafter
         operates a Store agrees to execute and deliver to AWG all member
         sign-up documents which AWG currently requires to be executed by retail
         members.

                  (b) Security Agreement. Homeland shall execute and deliver to
         AWG a Security Agreement in the form of EXHIBIT "H" attached hereto
         (the "SECURITY AGREEMENT"), together with all UCC-1 financing
         statements relating thereto which AWG may require.


                                        5
<PAGE>

         In addition, as further security for all of Homeland's obligations
under this Agreement, the Supply Protection Agreements, Homeland's open account
arrangement with AWG and all of the other Obligations:

                  (i) Homeland shall and does hereby grant, bargain, sell,
         convey and mortgage to AWG a mortgage and security interest in all of
         Homeland's right, title, interest or estate now owned or hereafter
         acquired in or to (A) the Stores, or any part thereof, and their
         locations, (B) any entity which owns an interest or estate in any
         Store, (C) all associated rights in connection with the foregoing, (D)
         any new location to which any Store or its operations are moved, (E)
         any name under which any Store, or any part thereof, is operated;
         including, without limitation, any and all (a) ownership interest in
         the business owned or operated in, at or from any such location, (b)
         real estate owned or leased at or in connection with any such location,
         (c) furniture, fixtures and equipment or inventory used or located at
         or in connection with any such location, (d) coupon rights, (e)
         contract(s) or franchise(s) that are in any way used or associated with
         any Store or business owned or operated in, at or from any such
         location, or (f) other tangible or intangible assets of Homeland owned,
         located or used at or in connection with any such Store or business
         owned, operated in, at or from any such location and

                  (ii) Homeland shall and does hereby pledge and deliver to AWG,
         all AWG equity ("AWG EQUITY") owned by Homeland. For purposes of this
         Agreement, AWG Equity shall be defined as all equity, deposits,
         credits, sums and indebtedness of any kind or description, whatsoever,
         at any time owed by AWG to Homeland or at any time standing in the name
         of or to the credit of Homeland on the books and/or records of AWG,
         including without limitation, Capital Stock, Members Deposit
         Certificates, Patronage Refund Certificates, Members Savings, Direct
         Patronage or Year-End Patronage.

                  (iii) In the event Homeland undertakes future secured
         financing and upon request from Homeland to do so, AWG will consider
         subordinating its security interest with respect to the Supply
         Protection Agreements; provided (A) such subordination is upon terms
         and conditions acceptable to AWG, and (B) such subordination does not
         include collateral relating to AWG Equity or any then existing loans
         outstanding with AWG.

         Nothing contained in this Section 4 is intended to limit in any way the
security interest or lien granted by Homeland pursuant to the Security
Agreement.

         Homeland agrees to and shall execute such other and further
documentation, including mortgages, deeds of trust, security agreements and


                                       6
<PAGE>
         UCC-1 financing statements, and perform such further acts as AWG may
         from time to time request in connection with the foregoing.

         5. RIGHT OF FIRST REFUSAL. Contemporaneously herewith, Homeland shall
grant AWG a right of first refusal (the "RIGHT OF FIRST REFUSAL") to purchase
the Stores pursuant to the terms and conditions of a Right of First Refusal
Agreement in substantially the form attached hereto as EXHIBIT "B" and
incorporated herein.

         6. EXISTING SUPPLY AGREEMENTS AND THIS AGREEMENT. In connection with
conflicts and controlling terms, conditions and provisions between the Existing
Supply Agreements and this Agreement, the parties agree as follows:

                  (a) The Stores shall be considered Supplied Stores for
         purposes of Section 3(b) under the 1995 Supply Agreement and the
         Quarterly Payments described therein for the term therein. The credit
         terms set forth in this Agreement shall supersede, replace and amend
         any and all credit terms provided in any of the Existing Supply
         Agreements.

                  (b) Except as provided in Section 6(a) above, all terms,
         conditions and provisions relating to the Stores pursuant to this
         Agreement, the Supply Protection Agreements and/or the documents
         relating to this Agreement and/or the Supply Protection Agreements,
         shall be deemed to be in addition to, and not in lieu of, the terms,
         conditions and provisions of the Existing Supply Agreements and any
         supply protection agreements executed in connection therewith,
         including, without limitation, any right of first refusal agreement,
         use restriction or non-competition agreements (all such documents,
         together with the Existing Supply Agreements, being the "EXISTING
         SUPPLY PROTECTION AGREEMENTS"). Except as provided in Section 6(a)
         above, this Agreement does not amend or alter the terms, provisions or
         conditions of any of the Existing Supply Protection Agreements. Should
         there be any direct conflict between the terms of this Agreement and
         terms of any of the Existing Supply Agreements, then provided this
         Agreement is in effect, the terms, conditions and provisions of this
         Agreement shall control.

                  (c) The parties agree that, except as specifically amended and
         modified herein pursuant to Section 6(a) hereof, all of the terms,
         conditions, provisions and covenants contained in the Existing Supply
         Protection Agreements remain unchanged and in full force and effect.

         7. NON-COMPETITION AGREEMENT AND USE RESTRICTION. The parties agree as
follows:

                  (a) Homeland agrees to and shall execute a Non-Competition
         Agreement in the form of EXHIBIT "C" attached hereto and incorporated
         herein.


                                       7
<PAGE>

                  (b) Homeland acknowledges and agrees that the Stores are
         subject to Use Restrictions in the form of EXHIBIT "D-1" and EXHIBIT
         "D-2" attached hereto and incorporated herein and further agrees
         hereunder for the benefit of AWG that, to the extent of Homeland's
         interest therein, the real estate comprising the Stores and the
         improvements thereon (including any leasehold or subleasehold interests
         therein) shall be dedicated to the exclusive use of a retail grocery
         facility (including all activities which from time to time are commonly
         associated with the operation of a grocery facility) which is operated
         by a retail member of AWG, which utilizes AWG as its primary supplier
         of grocery products. Homeland acknowledges and agrees that (i) no other
         use shall be permitted without the prior written consent of AWG, and
         (ii) such Use Restrictions run with the land.

                  (c) If Homeland shall breach the foregoing agreements in this
         Section 7 by way of its actions, omissions or operation of law,
         Homeland agrees that AWG will have no adequate remedy at law and that
         immediate injunctive relief will be appropriate. In addition, AWG shall
         be free to pursue any and all other remedies, including remedies at
         law, which may be available to such party.

         8. REPRESENTATIONS AND WARRANTIES OF HOMELAND. In addition to any
representations and warranties contained elsewhere in this Agreement, Homeland
hereby makes the following representations and warranties to and for the benefit
of AWG, its successors and permitted assigns, in connection with Homeland and/or
the Stores, each of which warranties and representations (i) is material and
being relied upon by AWG and (ii) is true in all respects as of the date hereof
(or such other date as may be indicated).

                  (a) Organization of Homeland. Homeland is a corporation duly
         organized, validly existing and in good standing under the laws of the
         State of Delaware and has full corporate power and authority to own,
         lease and operate its business. Homeland is duly licensed and qualified
         to do business and is in good standing in the states where the Stores
         are located.

                  (b) Authorization. Homeland has all necessary corporate power
         and authority and has taken all corporate action necessary to enter
         into this Agreement, to consummate the transactions contemplated hereby
         and to perform its obligations hereunder, including approval of its
         Board of Directors. This Agreement has been duly executed and delivered
         by Homeland and is a valid and binding obligation of Homeland.

                  (c) Compliance with Law. Homeland has received no written
         notification alleging any existing material violation of and to the
         best of Homeland's knowledge; and except for material violations the
         consequences of which are stayed by the automatic stay due to the
         Bankruptcy Cases, Homeland is not in material violation


                                        8
<PAGE>

         of any applicable statutes, rules, regulations, ordinances, codes,
         orders, licenses, permits or authorizations.

                  (d) No Conflict or Violation. Neither the execution and
         delivery of this Agreement nor the consummation of the transactions
         contemplated hereby will result in (i) a violation of or a conflict
         with any provision of the Certificate of Incorporation or Bylaws of
         Homeland, (ii) except for material violations the consequences of which
         are stayed by the automatic stay due to the Bankruptcy Cases, a breach
         of, or a default under, any term or provision of any contract,
         agreement, lease, commitment, license, franchise, permit, authorization
         or concession to which Homeland is a party or an event which, with
         notice, lapse of time, or both, would result in any such breach or
         default, or (iii) except for material violations the consequences of
         which are stayed by the automatic stay due to the Bankruptcy Cases, a
         violation by Homeland of any statute, rule, regulation, ordinance,
         code, order, judgment, writ, injunction, decree or award, or an event
         which with notice, lapse of time, or both, would result in any such
         violation, which in cases (ii) and (iii) would have a material adverse
         effect on Homeland's ability to perform its obligations hereunder or
         consummate the transactions contemplated hereby.

                  (e) Consents and Approvals. Except for any required bankruptcy
         court consent, no consent, approval or authorization of, or
         declaration, filing or registration with, any governmental or
         regulatory authority, any consenting party (including lessors) or any
         other person or entity is required to be made or obtained by Homeland
         in connection with the execution, delivery and performance of this
         Agreement and the consummation of the transactions contemplated hereby.

                  (f) The Existing Supply Protection Agreements. Each of the
         Existing Supply Protection Agreements are in full force and effect, and
         Homeland represents, warrants and covenants to AWG that it has no
         defenses, causes of action, rights of set off or rights of recoupment
         with respect to its obligations under the Existing Supply Protection
         Agreements and that AWG, to date, has performed its obligations under
         the Existing Supply Protection Agreements and that at no time during
         the respective terms thereof has AWG been in default under any of the
         Existing Supply Protection Agreements.

                  (g) Litigation and Proceedings. There are no material actions,
         suits or proceedings pending or, to the best knowledge of Homeland,
         threatened against Homeland, at law or in equity or before or by any
         governmental authority or instrumentality or before any arbitrator of
         any kind, which would have a material adverse effect on Homeland's
         ability to perform its obligations hereunder. To the best of Homeland's
         knowledge, Homeland is not in default with respect to any judgment,
         order, writ, injunction or decree of any court or governmental agency,
         and


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<PAGE>

         there are no unsatisfied judgments against Homeland or its business or
         activities, in each case, which would materially adversely affect
         Homeland's ability to perform hereunder. To the best of Homeland's
         knowledge, there is not a reasonable likelihood of an adverse
         determination of any pending proceeding which would, individually or in
         the aggregate, have a material adverse effect on Homeland's ability to
         perform its obligations hereunder.

                  (h) Continuity. All representations and warranties contained
         in this Agreement, as set forth in the foregoing subsections or
         otherwise, or in any documents to be delivered pursuant to this
         Agreement or otherwise required to be executed by Homeland pursuant
         hereto, shall be true and correct at the time made and shall survive
         the execution of this Agreement and the performance of the obligations
         contemplated hereby.

         9. REPRESENTATIONS AND WARRANTIES OF AWG. In addition to any
representations and warranties contained elsewhere in this Agreement, AWG hereby
makes the following representations and warranties to and for the benefit of
Homeland, its successors and assigns, in connection with AWG and/or the Stores,
each of which warranties and representations (i) is material and being relied
upon by Homeland and (ii) is true in all respects as of the date hereof (or such
other date as may be indicated).

                  (a) Organization of AWG. AWG is duly organized, validly
         existing and in good standing under the laws of the State of Missouri
         and is qualified to do business in the State of Oklahoma.

                  (b) Authorization. AWG has all necessary corporate power and
         authority and has taken all corporate action necessary to enter into
         this Agreement, to consummate the transactions contemplated hereby and
         to perform its obligations hereunder. This Agreement has been duly
         executed and delivered by AWG and is a valid and binding obligation of
         AWG, enforceable against AWG in accordance with its terms.

                  (c) No Conflict or Violation. Neither the execution and
         delivery of this Agreement nor the consummation of the transactions
         contemplated hereby will result in (i) a material violation of or a
         conflict with any provision of the Articles of Incorporation or Bylaws
         of AWG, (ii) a material breach of, or a default under, any term or
         provision of any contract, agreement, lease, commitment, license,
         franchise, permit, authorization or concession to which AWG is a party
         or an event which with notice, lapse of time, or both, would result in
         any such breach or default, or (iii) a material violation by AWG of any
         statute, rule, regulation, ordinance, code, order, judgment, writ,
         injunction, decree, or award, or an event which in the case of (i),
         (ii) or (iii) above, with notice, lapse of time, or both, would result
         in any such violation,


                                       10
<PAGE>

         which breach, default or violation would have a materially adverse
         effect on AWG's ability to perform its obligations hereunder.

                  (d) Compliance with Law. To the best of AWG's knowledge, AWG
         has received no written notification alleging any existing material
         violation of any applicable statutes, rules, regulations, ordinances,
         codes, orders, licenses, permits or authorizations which would have a
         materially adverse impact on either party's ability to perform its
         obligations hereunder.

                  (e) Litigation, Proceedings and Applicable Law. To the best of
         AWG's knowledge, there are no material actions, suits or proceedings
         pending or, to the best knowledge of AWG, threatened against, or
         materially adversely affecting AWG's ability to perform its obligations
         hereunder, at law or in equity or before or by any governmental
         authority or instrumentality or before any arbitrator of any kind. To
         the best of AWG's knowledge, AWG is not in default with respect to any
         judgment, order, writ, injunction or decree of any court or
         governmental agency, and there are no unsatisfied judgments against AWG
         or its business or activities, in each case, which would have a
         material adverse effect on AWG's ability to perform hereunder. To the
         best of AWG's knowledge, there is not a reasonable likelihood of an
         adverse determination of any pending proceeding which would,
         individually or in the aggregate, have a material adverse effect on
         AWG's ability to perform its obligations hereunder.

         10. COVENANTS OF HOMELAND. Homeland agrees as follows:

                  (a) Homeland covenants to AWG that Homeland will use its best
         efforts to ensure that, in addition to being true in all respects as of
         the date hereof, the representations and warranties made by Homeland in
         Section 8 will also be true in all respects throughout the term of this
         Agreement. In the event of any event, occurrence or state of facts
         resulting in any of such representations or warranties not having been
         true when made or not being true as of any time during the term of this
         Agreement, which materially adversely affects Homeland's ability to
         perform its obligations hereunder, Homeland will notify AWG of such
         event, occurrence, or state of facts immediately upon Homeland's
         knowledge thereof.

                  (b) Homeland covenants not to attempt to circumvent AWG's
         rights under this Agreement or the underlying documents relating to the
         Supply Protection Agreements by asserting any invalidity of this
         Agreement, the Supply Protection Agreements or the Existing Supply
         Protection Agreements.

                  (c) Homeland covenants to provide copies to AWG of all of
         Homeland's and Homeland Holding Corporation's SEC filings and reports
         within ten (10) days after filing with or other delivery to the SEC.
         Homeland shall supply AWG with all


                                      11
<PAGE>

         audited, consolidated financial statements of Homeland Holding
         Corporation (which includes Homeland Stores, Inc.) within one hundred
         twenty (120) days after the end of each fiscal year of Homeland and
         unaudited consolidated quarterly financial statements of Homeland
         Holding Corporation (which include Homeland Stores, Inc.) within
         forty-five (45) days after the end of each of the first three (3)
         fiscal quarters of Homeland. Homeland shall give AWG prompt notice of
         any change in Homeland's financial condition which would have a
         materially adverse effect on Homeland's ability to perform its
         obligations hereunder.

         11. COVENANTS OF HOMELAND AND AWG. Homeland and AWG each covenant with
the other as follows:

                  (a) Consents and Best Efforts. As soon as practicable, AWG and
         Homeland, as applicable, will commence and diligently pursue all
         reasonable action required hereunder (i) to obtain all required
         documents, consents, approvals and agreements, (ii) to give all notices
         and make all filings with, any third parties as may be necessary to
         authorize, approve or permit full and complete compliance with the
         terms of the Agreement, (iii) to identify and/or obtain all collateral
         required hereunder and (iv) to cause all documentation contemplated
         hereunder to be executed and delivered.

                  (b) Evidence of Insurance. During the term hereof, AWG shall
         provide Homeland with current evidence of all product liability and
         comprehensive insurance carried by AWG in connection with its wholesale
         operation under this Agreement.

                  (c) Material Changes to Representations and Warranties. During
         the term hereof, each party hereby covenants that it will provide the
         other with written notice of any change to their respective
         representations and warranties contained herein which materially
         adversely affects either party's ability to perform its obligations
         hereunder.

                  (d) Necessary Resources. AWG has and will have during the term
         of the Agreement the necessary resources, equipment and personnel to
         sell, supply and deliver the Purchased Goods to the Supplied Stores and
         to otherwise fulfill its obligations hereunder.

         12. EVENTS OF DEFAULT. The following shall be events of default
("EVENTS OF DEFAULT"):

                  (a) Homeland Defaults. The following shall be Events of
         Default by Homeland hereunder:


                                      12
<PAGE>

                           (i) Failure to Meet Credit Requirements. Homeland's
                  failure to meet AWG's credit requirements as set forth on
                  EXHIBIT "G" attached hereto and incorporated herein.

                           (ii) Transfer of Security. Homeland's transfer or
                  other failure to preserve any security pledged in connection
                  with any Obligation, as defined herein, and set forth in this
                  Agreement.

                           (iii) Non-Payment/Failure to Perform. Homeland's
                  failure to make any payment when due or breach, violation, or
                  failure to perform any of the other agreements, terms,
                  covenants, provisions or conditions contained herein in any
                  material respect; it being understood that the events of
                  default specified in this Section 10(a)(iii) are in addition
                  to, but are not in limitation of, the other events of default
                  specified in Section 12(a).

                           (iv) Breach of Warranty or Representation. Any breach
                  or failure to be true of any of the warranties or
                  representations given by Homeland to AWG herein, which
                  materially adversely affects Homeland's ability to perform its
                  obligations hereunder.

                           (v) Breach of Other Agreements. Breach, in any
                  material respect, by Homeland of any other agreement entered
                  into between Homeland and AWG, including but not limited to
                  the underlying documents relating to the Supply Protection
                  Agreements, or Existing Supply Protection Agreements, member
                  sign-up documents or any loan, lease or sublease documents.

                           (vi) Breach of the Use Restriction. Breach, in any
                  material respect, by Homeland of the provisions of the Use
                  Restrictions to which the Stores are subject.

                           (vii) Bankruptcy Matters. If Homeland, except in
                  connection with or pursuant to its Chapter 11 bankruptcy
                  filing on or about the date hereof: (A) files a petition under
                  the Federal Bankruptcy Code or any similar law, state or
                  federal, whether now or hereafter existing; or (B) files any
                  answer admitting insolvency or inability to pay its debts; or
                  (C) is the subject of any petition of involuntary bankruptcy
                  which is not dismissed within thirty (30) days after filing;
                  or (D) becomes the subject of an order for relief against it
                  in any bankruptcy proceeding; or (E) has a custodian or
                  trustee or receiver appointed for it or has any court take
                  jurisdiction of its property, or the major part thereof, in
                  any involuntary proceeding for the purpose of reorganization,
                  arrangement, dissolution or liquidation; or (F) makes an
                  assignment for the benefit of creditors; or (G) admits in
                  writing its inability to pay its debts generally as they
                  become due; or (H) is generally not paying its debts as


                                      13
<PAGE>

                  they become due; or (I) consents to an appointment of a
                  custodian, receiver or trustee of all its property, or the
                  major part thereof.

                           (viii) Default under any other Obligations. A default
                  by Homeland of any other Obligations owed to AWG. As used in
                  this Agreement, the term "OBLIGATIONS" shall collectively
                  mean, include and refer to all present and future loans and
                  advances made by AWG to Homeland, and all notes, debts,
                  liabilities, indebtedness, obligations, covenants and duties
                  of, or made or owed by Homeland, or any guarantor or surety of
                  any of the same (collectively, "GUARANTORS") to AWG,
                  including, without limitation, those under any agreement,
                  contract, lease or sublease of any of the same, of every kind,
                  nature and description, present or future, however evidenced,
                  created or incurred, whether primary or secondary, direct or
                  indirect (by guaranty or otherwise), absolute or contingent,
                  due or not due, now existing or hereafter arising and however
                  acquired or extended, matured or unmatured, voluntary or
                  involuntary, liquidated or unliquidated, monetary or
                  non-monetary, determined or undetermined, earned or unearned,
                  joint or several or otherwise, whether or not such notes,
                  loans, advances, debts, liabilities, indebtedness,
                  obligations, contracts, covenants and duties are of the same
                  kind or quality or relate to the same transactions or the same
                  series of transactions, all sums payable by Homeland, any
                  affiliate of Homeland or any Guarantor to AWG under this
                  Agreement or any promissory note, loan agreement, security
                  agreement or other loan document, contract, lease, sublease,
                  or under any open account arrangement between Homeland, any
                  affiliate of Homeland or any Guarantor and AWG and all costs
                  and expenses, including but not limited to attorneys' fees
                  incurred by AWG in preparing, reviewing, securing, collecting
                  (including, but not limited to, those arising in any
                  bankruptcy proceeding), enforcing or compromising any of said
                  notes, loans, advances, debts, liabilities, indebtedness,
                  obligations, contracts, covenants and duties.

                  (b) AWG Defaults. The following shall be Events of Default by
         AWG:

                           (i) Failure to Perform. AWG's breach, violation or
                  failure to perform any of the terms, covenants or conditions
                  contained herein in any material respect.

                           (ii) Breach of Other Agreements. Breach, in any
                  material respect, by AWG of any other agreement entered into
                  between Homeland and AWG.

                           (iii) Bankruptcy Matters. If AWG: (A) files a
                  petition under the Federal Bankruptcy Code or any similar law,
                  state or federal, whether now or hereafter existing; or (B)
                  files any answer admitting insolvency or inability


                                      14
<PAGE>

                  to pay its debts; or (C) is the subject of any petition of
                  involuntary bankruptcy which is not dismissed within thirty
                  (30) days after filing; or (D) becomes the subject of an order
                  for relief against it in any bankruptcy proceeding; or (E) has
                  a custodian or trustee or receiver appointed for it or has any
                  court take jurisdiction of its property, or the major part
                  thereof, in any involuntary bankruptcy proceeding for the
                  purpose of reorganization, arrangement, dissolution or
                  liquidation; or (F) makes an assignment for the benefit of
                  creditors; or (G) admits in writing its inability to pay its
                  debts generally as they become due; or (H) is generally not
                  paying its debts as they become due; or (I) consents to an
                  appointment of a custodian, receiver or trustee of all its
                  property, or the major part thereof.

         13. CROSS-DEFAULT. Homeland hereby agrees that a default under this
Agreement shall automatically constitute a default under each of the other
Obligations, and conversely, the occurrence of a default or an Event of Default
hereunder or under any of the other Obligations shall automatically constitute a
default or an Event of Default under this Agreement. All of the collateral
provided to AWG in connection with this Agreement (whether any of the collateral
has previously been provided to AWG, is being provided to AWG in connection with
this Agreement or is hereafter provided to AWG) shall secure repayment of all of
the Obligations (including principal, interest, expenses, costs, charges and
fees) so long as any portion of the Obligations remains outstanding and unpaid,
notwithstanding any intervening payment of the portion of the Obligations
originally secured by any particular part of the collateral.

         14. REMEDIES.

                  (a) General. Except for obligations to pay money which must be
         performed exactly when required without notice or cure, if any Event of
         Default shall remain uncured for ten (10) days after the defaulting
         party receives written notice thereof, the non-defaulting party may
         declare this Agreement to be in default. In such event, the
         non-defaulting party may terminate this Agreement and/or exercise all
         other remedies available to it at law or in equity, including but not
         limited to the rights set forth herein. AWG shall have the right to
         offset any monetary obligations of AWG to Homeland against amounts owed
         to AWG by Homeland. At any time that Homeland is in default hereunder,
         AWG shall be under no obligation to accept orders for or ship Purchased
         Goods. In the event of an Event of Default by Homeland or in the event
         this Agreement is terminated, then Homeland's membership in AWG may, at
         AWG's sole discretion, be terminated.

                  (b) Change of Control. In the event of the transfer of more
         than twenty percent (20%) of the stock of Homeland or Homeland Holding
         Corporation to an entity primarily engaged (including through any
         subsidiary, affiliate or otherwise) in the retail or wholesale grocery
         business, AWG shall have the right, but not the


                                      15
<PAGE>

         obligation, to terminate this Agreement and any one or more of the
         Existing Supply Protection Agreements. Nothing contained in this
         Section 14(b) is intended to, and shall not be interpreted to, limit in
         any way the 1995 Supply Agreement.

                  (c) Liquidated Damages. In the event that Homeland (i)
         breaches its obligations hereunder to purchase Products from AWG or
         (ii) discontinues using AWG as its primary supplier as described
         herein, in either case, with respect to any Store, AWG shall be
         entitled to receive from Homeland, and Homeland agrees to pay to AWG,
         within ten (10) business days after such breach or discontinuation an
         amount equal to (A) the average monthly wholesale purchases for such
         Store or Stores for the twelve (12) periods immediately preceding the
         four (4) week period in which the breach or discontinuation occurred
         (or if such Store has been in operation for less than twelve (12) four
         (4) week periods then the average monthly wholesale purchases for such
         shorter period) multiplied by (B) the number of four (4) week periods
         including and following the four (4) week period in which such breach
         or discontinuation occurred through the remaining term during which
         this Agreement would have remained effective, multiplied by (C) three
         percent (3%). For purposes of calculating the amount of liquidated
         damages under the preceding sentence, the amount of the average four
         (4) week wholesale purchases shall also include the average four (4)
         week wholesale purchases for any additional and replacement retail
         grocery stores opened or acquired, during the twelve (12) four (4) week
         periods following such breach or discontinuation, by Homeland for the
         first twelve (12) four (4) week periods following the opening or
         acquisition of such retail grocery store. The portion of the liquidated
         damages payable hereunder and calculated on the basis of the preceding
         sentence shall be payable by Homeland to AWG on or before ten (10)
         business days following the first date on which such calculation can be
         made. The foregoing manner of calculating damages is agreed upon as a
         manner of calculating liquidated damages and not penalties. The parties
         hereto have agreed to the foregoing manner of calculating damages in an
         attempt to make a reasonable forecast of probable actual loss because
         of the difficulty of estimating with exactness the actual damages that
         will result. Subject to Homeland complying with the Supply Protection
         Agreements and Sections 6 and 7 of the Intercreditor Agreement (as
         defined in the Credit Agreement), as applicable, the closing or selling
         of a Store or Stores, regardless of whether the Store or Stores is
         listed on EXHIBIT "F", pursuant to Section 2(e) or a liquidation of
         Homeland in the Bankruptcy Cases shall not give rise to liquidated
         damages under this Section 14(c).

         15. FORCE MAJEURE. In the event either party hereto shall be delayed or
hindered in or prevented from the performance of any act required under this
Agreement by reason of strikes, lockouts, labor troubles, inability to procure
materials, failure of power, restrictive governmental laws or regulations (this
does not include proceedings under any bankruptcy law), riots, insurrection, war
or other reason of a like nature not the fault of the party


                                      16
<PAGE>

delayed in performing work or doing acts required under the terms of this
Agreement, then, upon written notice of such force majeure event from the
affected party to the other party, performance of such act shall be excused for
the period of the delay, and the period for the performance of any such act
shall be extended for a period equivalent to the period of such delay. The
affected party shall resume performance as soon as practicable thereafter. The
mere inability to pay monetary amounts hereunder (no matter how caused) shall
not be considered force majeure event hereunder.

         16. NO ASSUMPTION OF LIABILITIES.

                  (a) By entering into this Agreement or performing any act or
         agreement hereunder, AWG does not assume or undertake any obligations
         or liabilities of Homeland and shall not be responsible for the payment
         of any liabilities or obligations of Homeland whatsoever, including,
         without limitation, the following:

                           (i) Claims by Homeland's employees, former employees
                  or others under any private or collective contract, agreement
                  or the like or any state, Federal, local or other laws,
                  statutes, executive order, regulations, ordinances, codes or
                  the like including, but not limited to, claims in connection
                  with employee wages, vacation pay, severance pay, holiday pay,
                  sick leave pay, other union claims, detrimental reliance
                  claims, implied contract claims, WARN notice claims, worker's
                  compensation claims, ERISA claims, COBRA claims, civil rights
                  laws claims, claims under the Fair Labor Standards Act or
                  Labor Management Relations Act, Americans with Disabilities
                  Act, employment discrimination claims of all types, claims
                  regarding health and welfare benefits or premiums, claims
                  regarding union collective bargaining agreements and/or
                  supplemental agreements, sexual harassment claims, disability
                  claims, Family and Medical Leave Act claims, pension fund
                  liability (whether for current or unfunded accrued
                  liabilities), claims or other problems arising under OSHA,
                  claims in connection with environmental problems, claims
                  arising out of Homeland's agreements with third parties or its
                  affiliates or any other obligations of Homeland of any kind or
                  character;

                           (ii) Demands, causes of action, obligations or
                  liabilities (including damages, costs and reasonable attorneys
                  fees) from any claim of any third party arising out of
                  Homeland's acts, omissions or agreements including, but not
                  limited to, those types of claims set forth above in Section
                  16(a)(i).

                  (b) Relationship. The relationship of AWG and Homeland under
         this Agreement is primarily that of wholesale supplier and retail
         customer and as otherwise specifically set forth herein and in the
         documents contemplated hereby. There is no agency relationship between
         Homeland and AWG; AWG is not a


                                      17
<PAGE>

         successor or assign or alter ego to Homeland; Homeland and AWG are not
         involved in a joint venture or partnership.

                  (c) By entering into this Agreement or performing any act or
         agreement hereunder, Homeland does not assume or undertake any
         obligations or liabilities of AWG, including, without limitation, the
         following:

                           (i) Claims by AWG's employees, former employees or
                  others under any private or collective contract, agreement or
                  the like or any state, Federal, local or other laws, statutes,
                  executive order, regulations, ordinances, codes or the like
                  including, but not limited to, claims in connection with
                  employee wages, vacation pay, severance pay, holiday pay, sick
                  leave pay, other union claims, detrimental reliance claims,
                  implied contract claims, WARN notice claims, worker's
                  compensation claims, ERISA claims, COBRA claims, Civil Rights
                  Laws claims, claims under the Fair Labor Standards Act or
                  Labor Management Relations Act, Americans with Disabilities
                  Act, employment discrimination claims of all types, claims
                  regarding health and welfare benefits or premiums, claims
                  regarding union collective bargaining agreements and/or
                  supplemental agreements, sexual harassment claims, disability
                  claims, Family and Medical Leave Act claims, pension fund
                  liability (whether for current or unfunded accrued
                  liabilities), claims or other problems arising under OSHA,
                  claims in connection with environmental problems, claims
                  arising out of AWG's agreements with third parties or its
                  affiliates or any other obligations of AWG of any kind or
                  character; and

                           (ii) Demands, causes of action, obligations or
                  liabilities (including damages, costs and reasonable attorneys
                  fees) from any claim of any third party arising out of AWG's
                  acts, omissions or agreements including, but not limited to,
                  those types of claims set forth above in Section 16(c)(i).

         17. GOVERNING LAW, VENUE. The laws of the State of Kansas shall govern
the interpretation, validity, performance and enforcement of this Agreement. Any
dispute or cause of action under this Agreement shall be resolved in a court of
competent jurisdiction in Johnson County, Kansas; provided, however, any dispute
or cause of action under this Agreement from the Commencement Date until a plan
of reorganization is consummated shall be resolved in the court with
jurisdiction over the Bankruptcy Cases.

         18. COUNTERPARTS. This Agreement may be executed in one or more
identical counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.


                                      18
<PAGE>

          19. HEADINGS; CONSTRUCTION. The headings which have been used
throughout this Agreement have been inserted for convenience of reference only
and do not constitute matters to be construed in interpreting this Agreement.
Words of any gender used in this Agreement shall be held and construed to
include any other gender and words in the singular numbers shall be held to
include the plural, and vice versa, unless the context requires otherwise. The
words "herein," "hereof," "hereunder" and other similar compounds of the word
"here" when used in this Agreement shall refer to the entire Agreement and not
any particular provision or section. If the last day of any time period stated
herein shall fall on a Saturday, Sunday or legal holiday, then the duration of
such time period shall be shortened so that it shall end on the next preceding
day which is not a Saturday, Sunday or legal holiday.

         20. BINDING AGREEMENT; ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the parties named herein and to the respective
permitted successors. Except as provided herein, neither this Agreement nor the
rights or obligations hereunder may be assigned or delegated by either party
without the prior written consent of the other party.

         21. RECITALS. The opening recitals are a material part of this
Agreement and are incorporated herein by reference.

         22. SEVERABILITY. In the event any of the provisions of this Agreement
shall for any reason be held invalid, illegal or unenforceable in any respect,
then, to the maximum extent permitted by law, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if the invalid, illegal or unenforceable provision had
never been contained herein. Furthermore, any such invalid, illegal or
unenforceable provision shall be deemed amended to reflect, and enforced to
carry out, to the greatest extent valid, legal, and enforceable, the intentions
of the parties, as determined by the original language of such invalid, illegal
or unenforceable provision. It is the intent of the parties that none of the
provisions hereof is severable for any purpose (including bankruptcy) other
than to avoid invalidity, illegality or unenforceability. For purposes hereof,
the Supply Protection Agreements shall not be considered provisions hereof but
shall be considered separate agreements delivered as part of the consideration
for this Agreement. In addition, while the execution of this Agreement and the
Supply Protection Agreements are conditions precedent to the execution and the
performance by AWG under the Loan Documents, once executed, this Agreement and
each of the Supply Protection Agreements are intended to be separate and
independent agreements, severable from the Loan Documents and each of the other
Supply Protection Agreements, and except as limited by the express terms
thereof, shall survive any expiration, termination or rejection of any other
document or agreement.

         23. AMENDMENTS. This Agreement, together with all exhibits attached
hereto, contains the entire agreement of the parties hereto with respect to the
subject matter


                                      19
<PAGE>

hereof, and no representations, inducements, promises or agreements, oral or
otherwise, between the parties not embodied herein shall be of any force or
effect unless contained in a written amendment. Any amendment to this Agreement
shall not be binding upon either of the parties hereto unless such amendment is
in writing and executed by the authorized representatives of all the parties
hereto.

         24. NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when presented personally or upon being deposited in a regularly
maintained receptacle for United States postal service, postage prepaid,
registered or certified, return receipt requested, or sent by a national
overnight courier service, and addressed as set forth below or such other
addresses as AWG or Homeland may from time to time designate by written notice
to the others as required herein:

                  If to Homeland:   Homeland Stores, Inc.
                                    Oil Center East
                                    2601 Northwest Expressway
                                    Oklahoma City, Oklahoma 73112
                                    Attention: Mr. David B. Clark, President

                  With copies to:   Crowe & Dunlevy
                                    1800 Mid-America Tower
                                    20 North Broadway
                                    Oklahoma City, Oklahoma 73102
                                    Attention: Roger A. Stong, Esq.

                  If to AWG:        Associated Wholesale Grocers, Inc.
                                    5000 Kansas Avenue
                                    P. O. Box 2932
                                    Kansas City, Kansas 66110-2932
                                    Attention: General Counsel

         25. WAIVER. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.

         26. INDEMNIFICATION. In addition to any specific indemnifications
contained herein (and not in derogation thereof) the following indemnifications
shall be applicable:

                  (a) By Homeland. Homeland shall indemnify, save and hold
         harmless AWG, its affiliates and subsidiaries, and its and their
         respective officers, directors, shareholders, principals, attorneys,
         agents, affiliates, employees or other representatives,
         ("REPRESENTATIVES"), from and against any and all costs, losses


                                      20
<PAGE>

         (including, without limitation, diminution in value), liabilities,
         damages, lawsuits, deficiencies, claims and expenses (whether or not
         arising out of third-party claims) including, without limitation,
         interest, penalties, reasonable attorneys' fees and all amounts paid in
         investigation, defense or settlement for any of the foregoing (herein,
         the "DAMAGES"), incurred in connection with or arising out of or
         resulting from (i) any breach of any covenant or warranty or the
         inaccuracy of any representation made by Homeland in or pursuant to
         this Agreement and the underlying documents of the Supply Protection
         Agreements, or (ii) any liability, obligation or commitment of any
         nature (absolute, accrued, contingent or otherwise) of Homeland which
         is due to or arises in connection with Homeland's acts or omissions
         prior to or after the date hereof.

                  (b) By AWG. AWG shall indemnify and save and hold harmless
         Homeland, its affiliates and subsidiaries, and its and their respective
         Representatives from and against any and all Damages incurred in
         connection with or arising out of or resulting from (i) any breach of
         any covenant or warranty, or the inaccuracy of any representation made
         by AWG in or pursuant to this Agreement or (ii) any liability,
         obligation or commitment of any nature (absolute, accrued, contingent
         or otherwise) of AWG which is due to or arises in connection with AWG's
         acts or omissions prior to or after the date hereof.

                  (c) Defense of Claims. If any lawsuit or enforcement action is
         filed against any party entitled to the benefit of indemnity under this
         Agreement, written notice thereof shall be given to the indemnifying
         party as promptly as practicable (and in any event within fifteen (15)
         days after the service of the citation or summons); provided, that the
         failure of any indemnified party to give timely notice shall not affect
         rights to indemnification hereunder except to the extent that the
         indemnifying party demonstrates actual damage caused by such failure.
         After such notice, if the indemnifying party shall acknowledge in
         writing to the indemnified party that the indemnifying party shall be
         obligated under the terms of its indemnity hereunder in connection with
         such lawsuit or action, then the indemnifying party shall be entitled,
         if it so elects, to take control of the defense and investigation of
         such lawsuit or action and to employ and engage attorneys of its own
         choice to handle and defend the same, at the indemnifying party's cost,
         risk and expense; and such indemnified party shall cooperate in all
         reasonable respects with the indemnifying party and such attorneys in
         the investigation, trial and defense of such lawsuit or action and any
         appeal arising therefrom; provided, however, that the indemnified party
         may, at its own cost, participate in the investigation, trial and
         defense of such lawsuit or action and any appeal arising therefrom. In
         the event the indemnifying party elects not to assume the defense or
         investigation of a lawsuit or an action, the indemnifying party shall
         not be obligated to pay the fees and expenses of more than one counsel
         or one firm of counsel for all parties indemnified by the indemnifying
         party in respect of such lawsuit or action, unless in the


                                      21
<PAGE>

         reasonable judgment of the indemnifying party a conflict of interest
         may exist between such indemnified party and any other of such
         indemnified parties in respect of such lawsuit or action.
         Notwithstanding the foregoing, no party may settle any matter in a
         manner which would have an adverse effect on the other party without
         the affected party's prior written consent.

         No individual representative of any party shall be personally liable
for any Damages under the provisions contained in this Section 26. Nothing
herein shall relieve either party of any obligation to make any payment
expressly required to be made by such party pursuant to this Agreement.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year last above written.

[Corporate Seal]
                                       ASSOCIATED WHOLESALE GROCERS, INC.,
ATTEST:                                a Missouri corporation


/s/ JOSEPH L. CAMPBELL                 By: /s/ GARY L. PHILLIPS
---------------------------------          -------------------------------
Joseph L. Campbell, II, Secretary              Gary L. Phillips, President
                                               and Chief Executive Officer

                                               "AWG"


[Corporate Seal]
                                       HOMELAND STORES, INC.
ATTEST:                                a Delaware corporation


/s/ WAYNE S. PETERSON                  By: /s/ DAVID B. CLARK
--------------------------------           -------------------------------
Wayne S. Peterson, Secretary                   David B. Clark, President
                                              and Chief Executive Officer

                                               "HOMELAND"


                                      22
<PAGE>

                                ACKNOWLEDGMENTS

STATE OF KANSAS       )
                      )   ss.
COUNTY OF WYANDOTTE   )

         On this 14th day of August, 2001, before me appeared Gary L. Phillips
and Joseph L. Campbell, II, to me personally known, who being by me duly sworn
did say that they are the President/Chief Executive Officer and Secretary,
respectively, of ASSOCIATED WHOLESALE GROCERS, INC., a Missouri corporation, and
that said instrument was signed and sealed in behalf of said corporation by
authority of its Board of Directors, and said officers acknowledged said
instrument to be the free act and deed of said corporation.

         In Witness Whereof, I have hereunto set my hand and affixed my official
seal the day and year last above written.


                                        /s/ ANYA R. BALLANCE
                                        ----------------------------------------
My appointment expires:                              Notary Public

     [NOTARY STAMP]



STATE OF OKLAHOMA     )
                      )   ss.
COUNTY OF OKLAHOMA    )

         On this 15th day of August, 2001, before me appeared David B. Clark and
Wayne S. Peterson, to me personally known, who being by me duly sworn did say.
that they are the President/Chief Executive Officer and Secretary of HOMELAND
STORES, INC., a Delaware corporation, and that said instrument was signed in
behalf of said corporation, and said officers acknowledged said instrument to be
the free act and deed of said corporation.

         In Witness Whereof, I have hereunto set my hand and affixed my official
seal the day and year last above written.


                                        /s/ RHONDA L. RACE
                                        ----------------------------------------
My appointment expires:                              Notary Public

04-17-2004
------------------------


                                      23
<PAGE>

                                   EXHIBIT "A"

                                     STORES

<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
1.   26      520 Minnesota                   Chickasha         Grady          OK

2.   101     1100 W. Main                    Norman            Cleveland      OK

3.   102     8922 S. Memorial                Tulsa             Tulsa          OK

4.   105     1315 N. Eastern Ave.            Moore             Cleveland      OK

5.   122     6473 N. MacArthur               Oklahoma City     Oklahoma       OK

6.   125     3828 W. Owen K. Garriott        Enid              Garfield       OK

7.   127     759 Grand Avenue                Chickasha         Grady          OK

8.   141     1402 N. Main St.                Guymon            Texas          OK

9.   145     1800 Central                    Dodge City        Ford           KS

10.  146     1701 N. Milt Phillips           Seminole          Seminole       OK

11.  148     1212 Choctaw                    Clinton           Custer         OK

12.  153     1108 N.W. 18th                  Oklahoma City     Oklahoma       OK

13.  154     2016 N.W. 39th St.              Oklahoma City     Oklahoma       OK

14.  161     510 N. Commerce                 Ardmore           Carter         OK

15.  163     4308 S.E. 44th                  Oklahoma City     Oklahoma       OK

16.  164     706 Flynn                       Alva              Woods          OK

17.  167     1310 Oklahoma Ave.              Woodward          Woodward       OK

18.  170     412 W. Third                    Elk City          Beckham        OK

19.  178     505 S. Chickasaw                Pauls Valley      Garvin         OK

20.  181     12508 N. May Ave.               Oklahoma City     Oklahoma       OK

21.  182     1401 Beech Ave.                 Duncan            Stephens       OK

22.  183     3020 N.W. 16th St.              Oklahoma City     Oklahoma       OK

23.  188     220 E. Cleveland                Guthrie           Logan          OK
</Table>


<PAGE>


<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
24.  192     415 S.W. 59th                   Oklahoma City     Oklahoma       OK

25.  193     301 N.W. 67th                   Lawton            Comanche       OK

26.  195     4301 S. May Ave.                Oklahoma City     Oklahoma       OK

27.  196     2705 N. Harrison                Shawnee           Pottawatomie   OK

28.  197     11241 W. Reno                   Yukon             Canadian       OK

29.  200     1724 W. Lindsey Rd.             Norman            Cleveland      OK

30.  204     115 E. Hiway 152                Mustang           Canadian       OK

31.  206     11120 N. Rockwell               Oklahoma City     Oklahoma       OK

32.  207     9320 N. Penn                    Oklahoma City     Oklahoma       OK

33.  208     2205 W. Edmond Rd.              Edmond            Oklahoma       OK

34.  457     3948 S. Peoria                  Tulsa             Tulsa          OK

35.  495     310 W. Trudgeon                 Henryetta         Okmulgee       OK

36.  502     2235 E. 61st St.                Tulsa             Tulsa          OK

37.  503     1110 S. Denver                  Tulsa             Tulsa          OK

38.  515     915 S. Madison                  Bartlesville      Washington     OK

39.  528     12011 S. Memorial               Bixby             Tulsa          OK

40.  529     3405 S. Georgia                 Amarillo          Randall        TX

41.  538     504 E. Graham                   Pryor             Mayes          OK

42.  545     12572 East 21st St.             Tulsa             Tulsa          OK

43.  549     400 Plaza Court                 Sand Springs      Tulsa          OK

44.  550     6402 E. Pine                    Tulsa             Tulsa          OK

45.  553     575 N. Gilcrease Museum         Tulsa             Osage          OK
             Road
             [a/k/a 575 N. 26th W. Ave.]

46.  561     708 S. Aspen                    Broken Arrow      Tulsa          OK

47.  563     811 E. Frank Phillips Blvd.     Bartlesville      Washington     OK

48.  567     3139 S. Harvard                 Tulsa             Tulsa          OK
</Table>

<PAGE>

<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
49.  573     19302 E. Admiral Blvd.          Tulsa             Wagoner        OK

50.  574     2351 E. Kenosha                 Broken Arrow      Tulsa          OK

51.  578     700 E. Cherokee                 Wagoner           Wagoner        OK

52.  582     230 W. 1st                      Dumas             Moore          TX

53.  587     101 W. 10th St.                 Borger            Hutchinson     TX

54.  600     7302 S.W. 34th                  Amarillo          Randall        TX

55.  601     4111 Plains                     Amarillo          Potter         TX

56.  603     3505 N.E. 24th                  Amarillo          Potter         TX

57.  604     202 N. 23rd                     Canyon            Randall        TX

58.  605     535 N. 25 Mile Ave.             Hereford          Deaf Smith     TX

59.  677     5811 S. Western                 Amarillo          Randall        TX

60.  778     4001 S. 97 Highway              Sand Springs      Tulsa          OK

61.  793     7001 Northwest Expressway       Oklahoma City     Oklahoma       OK

62.  794     2121 N.W. 23rd                  Oklahoma City     Oklahoma       OK

63.  795     1202 N.W. 40th                  Lawton            Comanche       OK

64.  796     10700 S. Penn                   Oklahoma City     Cleveland      OK

65.  850     316 E. Main                     Pawhuska          Osage          OK

66.  851     702 Fir Street                  Perry             Noble          OK

67.  852     305 S. Broadway                 Cleveland         Pawnee         OK

68.  853     1629 S. Main                    Jay               Delaware       OK

69.  854     310 S. Main                     Blackwell         Kay            OK

70.  855     108 S. Division                 Okemah            Okfuskee       OK

71.  856     813 E. Cherokee                 Nowata            Nowata         OK

72.  857     102 Haskell Blvd.               Haskell           Muskogee       OK

73.  880     3115 W. Okmulgee St.            Muskogee          Muskogee       OK

74.  881     1300 S. York                    Muskogee          Muskogee       OK
</Table>

<PAGE>

<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
75.  882     800 E. Okmulgee                 Muskogee          Muskogee       OK

76.  883     6 East Shawnee                  Muskogee          Muskogee       OK

77.  886     24 S.E. 33rd Street             Edmond            Oklahoma       OK

78.  887     2213 S.W. 74th Street           Oklahoma City     Oklahoma       OK
</Table>

  Plus any replacements and/or substitutions for any of the foregoing Stores.

<PAGE>

                                  EXHIBIT "B"
                                       TO
                               SUPPLY AGREEMENT

                        RIGHT OF FIRST REFUSAL AGREEMENT
                                   (Homeland)

         THIS RIGHT OF FIRST REFUSAL AGREEMENT ("AGREEMENT") is made and entered
into as of the 15th day of August, 2001, by and between ASSOCIATED WHOLESALE
GROCERS, INC., a Missouri corporation ("AWG"), HOMELAND STORES, INC., a Delaware
corporation ("HOMELAND"), Chapter 11 debtor-in-possession and HOMELAND HOLDING
CORPORATION, a Delaware corporation ("HOLDING"), Chapter 11 debtor-in-possession
(which jointly, severally and/or collectively along with those others defined in
Section 2 below shall be referred to herein as the "OWNER" or "OWNERS").

                                    RECITALS:

         THE FOLLOWING RECITALS ARE A MATERIAL PART OF THIS AGREEMENT:

         A. Unless otherwise defined in the text of this Agreement, capitalized
terms shall have the meanings set forth in Section 2 of this Agreement.

         B. Homeland and Holding have filed petitions seeking relief under
Chapter 11 of the Bankruptcy Code ("BANKRUPTCY CASES").

         C. Prior to the filing of the Bankruptcy Cases, Homeland owned and
operated seventy-eight (78) retail grocery stores. (The stores and all
additional stores of any kind owned, leased, operated and/or hereinafter
acquired by Homeland and/or Holding shall be referred to collectively herein as
the "STORES". The Stores currently owned, leased and/or operated by Homeland are
set forth on EXHIBIT "A" attached hereto and incorporated herein.). Upon the
conclusion of the Bankruptcy Cases, Homeland intends to continue to operate
certain of the Stores.

         D. AWG is a wholesaler of grocery and store products operating in a
cooperative manner. By providing loans and other financial accommodations to its
qualified retail members, the proceeds or benefits of which are used for
business purposes including, but not limited to, the acquisition of facilities
and/or merchandise, supplies, inventory, fixtures and/or equipment for such
member's retail grocery stores, AWG seeks to maintain and increase its volume of
wholesale sales, thereby enhancing the interests of all of its retail members.

         E. Homeland is and intends to remain a retail member of AWG.

<PAGE>

         F. Homeland and Holding have made application with AWG for the
extension or continuation of certain financial accommodations during the
pendency of and after emergence from the Bankruptcy Cases (the "FINANCIAL
ACCOMMODATIONS").

         G. Due to (i) AWG's substantial investment in connection with the
Financial Accommodations and the related transactions contemplated thereby and
(ii) AWG's desire to enhance the interests of its retail membership by way of,
among other things, receipt of assurances that products and goods to be
purchased in connection with the operation of the Stores will continue to be
made through the AWG warehouse, AWG is unwilling to extend the Financial
Accommodations to Homeland and Holding unless it obtains adequate assurances
that the Stores will be supplied by AWG during the pendency of the Bankruptcy
Cases and will continue to be supplied by AWG after the conclusion of the
Bankruptcy Cases.

         H. Homeland and Holding have advised AWG that Homeland intends to
concentrate with AWG an agreed upon percentage of all of its ordering of
inventory (including but not limited to all grocery, meat and produce products
and all health and beauty products and general merchandise) and supplies
(excluding pharmacy purchases) to be held for sale to the public at or to be
used in connection with each of the Stores individually and all of the Stores in
the aggregate.

         I. To provide assurances of its intentions to make such purchases and
to induce AWG to extend the Financial Accommodations to Homeland and Holding,
Homeland has agreed, among other things, to enter into that certain Supply
Agreement ("SUPPLY AGREEMENT") concurrently with the execution of this
Agreement.

         J. To further induce AWG to provide the Financial Accommodations,
Homeland also desires to provide adequate assurance to AWG that the Stores will
continue to be supplied by AWG in the future by granting or taking subject to
certain rights with respect to the Stores under (i) the Supply Agreement, (ii)
this Agreement; (iii) a Non-Competition Agreement and (iv) Use Restrictions
(collectively "SUPPLY PROTECTION AGREEMENTS"), each entered into
contemporaneously with this Agreement. The current delivery of the Supply
Protection Agreements is intended to constitute contemporaneous consideration
between the parties as an inducement in connection with their respective rights
and obligations under this Agreement. It is the parties' intent that the
implementation and operation of the Supply Protection Agreements will be
independent and will not be executory.

         K. AWG is willing to extend the Financial Accommodations upon the terms
agreed upon with Homeland and Holding provided Homeland and Holding will, among
other things, grant AWG certain unconditional rights, including the Supply
Protection Agreements, with respect to the Retailer Property, which rights shall
remain in effect for the period of time specified in this Agreement or as
described in the underlying documents. The execution of this Agreement and the
rights granted by Homeland herein are conditions


                                       2
<PAGE>

precedent to the extension and/or continuation of the Financial Accommodations
by AWG, in order to further enhance the interests of AWG's retail members by
helping to ensure the maintenance of volume of wholesale sales.

         L. Owners will benefit, directly or indirectly, from the Financial
Accommodations extended or continued by AWG to Homeland.

         M. Holding owns all of the capital stock of Homeland and is entering
into this Agreement with respect to Holding's ownership and/or disposition of
the capital stock of Homeland.

                               TERMS OF AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing recitals, which are
hereby incorporated into the terms of this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby mutually agree as follows:

         1. FINANCIAL ACCOMMODATIONS. AWG agrees to provide the Financial
Accommodations agreed upon with by Homeland and Holding, and the same shall be
effected upon the (i) approval of the Financial Accommodations and all
associated documents, including this Agreement, by the court in the Bankruptcy
Cases and such orders shall have become final and nonappealable and (ii)
execution and delivery of this Agreement, one or more contracts, promissory
notes, a loan agreement, a security agreement, UCC Financing Statements and/or
such other documents or security evidencing, governing or securing Homeland's
obligations to AWG, as may be required by AWG. The current grant of rights
contained herein constitutes contemporaneous consideration among the parties as
an inducement in connection with their respective rights and obligations in
connection with the Financial Accommodations. This Agreement is intended to be
an independent obligation of Homeland and Holding and is not intended to be
executory in its implementation and operation.

         2. DEFINITIONS. In addition to terms defined elsewhere in this
Agreement, the following terms shall have the meanings assigned to them
hereinbelow:

                  (a) "AFFILIATE" of a Person shall mean any other Person (i)
         that directly or indirectly Controls, is Controlled by or is under
         common Control with, the Person or any of its subsidiaries, (ii) that
         directly or indirectly beneficially owns or holds 15% or more of any
         class of voting stock or other interest of the Person or any of its
         subsidiaries or (iii) 15% or more of the voting stock or other interest
         of which is directly or indirectly beneficially owned or held by the
         Person or any of its subsidiaries. As to any corporation, partnership
         or other entity, Affiliate also means its officers, directors and
         general partners.


                                       3
<PAGE>

                  (b) "APPRAISAL" shall mean a determination of value made at
         the request of either AWG or Transferor in accordance with the
         following procedures:

                           (i) If either AWG or Transferor desires to request an
                  Appraisal, then the party so requesting the Appraisal (the
                  "requesting party") shall deliver Notice thereof to the other
                  party (the "non-requesting party"), which Notice shall include
                  the name and address of the qualified, independent appraiser
                  selected by the requesting party. Within ten (10) business
                  days after its receipt of such Notice, the non-requesting
                  party shall designate a qualified, independent appraiser and
                  shall notify the requesting party, in writing, of the name and
                  address of such appraiser. If, after receipt of such Notice,
                  the non-requesting party fails within ten (10) business days
                  to appoint an appraiser, the appraiser who was appointed by
                  the requesting party shall conduct the Appraisal. All
                  appraisers shall be qualified in appraising property of the
                  same or similar type as the Property being appraised.

                           (ii) The appraisers shall determine the "fair market
                  value" of the Property to be appraised as of the date of
                  appointment of the last appraiser. As used herein, the term
                  "fair market value" shall mean the price which a seller,
                  willing but not obligated to sell, would accept for such
                  Property, and which a buyer, willing but not obligated to buy,
                  would pay therefor in an arm's length transaction.

                           (iii) After reaching a decision, the appraisers shall
                  given written Notice thereof to AWG and Transferor, which
                  Notice shall state the fair market value of the appraised
                  Property and shall be accompanied by a written report. The
                  decision of the appraisers shall be binding on AWG and
                  Transferor.

                           (iv) In the event the appraisers are unable to reach
                  a decision and their independent valuations differ by less
                  than ten percent (10%), then the "fair market value" of the
                  Property being appraised shall be the average of the two
                  valuations. However, in the event the valuations differ by
                  more than ten percent (10%), then the appraisers shall select
                  a third independent appraiser who shall also make a
                  determination regarding the fair market value of the Property
                  being appraised. The valuations of the three appraisers shall
                  then be averaged, and the average shall be deemed to be the
                  fair market value of such Property; provided, however, if the
                  valuation made by an appraiser deviates more than ten percent
                  (10%) from the average of all such valuations, then the
                  Property's fair market value shall be the average of the two
                  closest valuations.


                                       4
<PAGE>

                           (v) The fair market value, as established by the
                  Appraisal, shall be valid for a period of one hundred eighty
                  (180) days after the date as of which the Appraisal was
                  delivered to AWG and Transferor.

                  (c) "CONTROL" shall mean the possession, directly or
         indirectly, of the power to direct or cause the direction of the
         management and policies of a Person, whether through the ownership of
         voting securities, by contract or otherwise.

                  (d) "INVOLUNTARY TRANSFER" means any transfer, proceeding or
         action (other than to a Permitted Transferee) by or in which Homeland
         or any Owner shall be deprived or divested of any right, title or
         interest in or to all or any part of any of the Property including,
         without limitation, any seizure under levy or attachment or execution,
         any foreclosure upon such Property, any transfer in connection with
         bankruptcy (whether pursuant to the filing of a voluntary or an
         involuntary petition under the Bankruptcy Reform Act of 1978, as
         amended, or any modifications or revisions thereto) or other court
         proceeding to a debtor in possession, trustee in bankruptcy or receiver
         or other officer or agency, or any transfer to a state or to a public
         officer or agency pursuant to any statute pertaining to escheat or
         abandoned property. The term does not include the vesting of assets in
         Homeland or Holding pursuant to a consummated plan of reorganization.

                  (e) "NOTICE" shall mean a written communication satisfying the
         requirements of Section 13(c).

                  (f) "OBLIGATIONS" shall collectively mean, include and refer
         to all present and future loans and advances made by AWG to Homeland
         and/or Holding, and all notes, debts, liabilities, indebtedness,
         obligations, covenants and duties of, or made or owed by, Homeland,
         Holding or any guarantor or surety of any of the same (collectively,
         "GUARANTORS") to AWG, including, without limitation, those under any
         contract, lease or sublease, of every kind, nature and description,
         present or future, however evidenced, created or incurred, whether
         primary or secondary, direct or indirect (by guaranty or otherwise),
         absolute or contingent, due or not due, now existing or hereafter
         arising and however acquired or extended, matured or unmatured,
         voluntary or involuntary, liquidated or unliquidated, determined or
         undetermined, earned or unearned, joint or several or otherwise,
         whether or not such notes, loans, advances, debts, liabilities,
         indebtedness, obligations, contracts, covenants and duties are of the
         same kind or quality or relate to the same transactions or the same
         series of transactions, all sums payable by Homeland, Holding, any
         affiliate of Homeland, Holding or any Guarantor to AWG under this
         Agreement or any promissory note, loan agreement, security agreement or
         other loan document, contract, lease, sublease, or under any open
         account arrangement between Homeland, Holding, any affiliate of
         Homeland, Holding or any Guarantor and AWG and all costs and expenses,
         including but not limited to attorneys' fees incurred by AWG in
         preparing, reviewing, securing, collecting (including but not


                                       5
<PAGE>

         limited to those arising in any bankruptcy proceeding), enforcing or
         compromising any of said notes, loans, advances, debts, liabilities,
         indebtedness, obligations, contracts, covenants and duties.

                  (g) "OFFER" shall mean a bona fide written and signed offer
         from a proposed transferee containing the terms of a proposed Transfer
         of all or any portion of the Property.

                  (h) "OWNER" shall mean a Person (i) holding an Ownership
         Interest in (A) Homeland, (B) an Affiliate of Homeland, (C) any other
         Person which can or does exert Control over Homeland or (D) the
         Property, direct or indirect and at any level or (ii) having any right
         (whether pursuant to an option, a lien, an assignment or under any
         other agreement, or by operation of law) in or to an Ownership Interest
         except for the liens and security interests of any third party lender
         approved in writing by AWG. This definition of Owner is intended to be
         broad enough to include interest holders at all levels of any form or
         type of multi-level ownership structure.

                  (i) "OWNER PROPERTY" shall mean any Owner's right, title,
         interest or estate now owned or hereafter acquired in or to (i) any
         Ownership Interest, (ii) the above identified Stores, or any part
         thereof, (iii) any entity which owns an interest or estate in such
         Stores, or any part thereof (if other than Homeland), (iv) all
         associated rights in connection with any of the foregoing, (v) any new
         location to which any Store or its operations are moved, or (vi) any
         name under which any Store, or any part thereof, is operated. The
         foregoing shall include, without limitation, any and all (A) ownership
         interest in the business owned or operated in, at or from any such
         location; (B) real estate owned or leased at or in connection with any
         such location; (C) FF&E or inventory used or located at or in
         connection with any such location; (D) coupon rights; (E) contract(s)
         or franchise(s) that are in any way used or associated with any Store
         or business owned or operated in, at or from any such location; or (F)
         other tangible or intangible assets owned, located or used at or in
         connection with any such Store or business owned or operated in, at or
         from any such location.

                  (j) "OWNERSHIP INTEREST" shall mean an ownership interest in
         (i) Homeland, whether held in the form of stock of any class or
         classes, or any other form of ownership, (ii) an Owner, whether held in
         the form of stock of any class or classes (if Owner is a corporation),
         a partnership interest (limited or general, if Owner is a partnership),
         a membership interest (if Owner is a limited liability company), or any
         other form of ownership, and/or (iii) all or any portion of the
         Property, whether in fee, a leasehold estate or otherwise and whether
         direct, indirect or beneficial.

                  (k) "PERMITTED TRANSFER" means only a Transfer to which AWG
         has granted its prior written approval.


                                       6
<PAGE>

                  (l) "PERMITTED TRANSFEREE" means any Person to whom Property
         (including but not limited to any Ownership Interest) is transferred
         under a Permitted Transfer.

                  (m) "PERSON" means any individual or group of individuals,
         corporation, general partnership, limited partnership, limited
         liability company, joint venture, trust, business trust, cooperative,
         association or any other legal entity.

                  (n) "PROPERTY" shall collectively mean Retailer Property and
         Owner Property.

                  (o) "RETAILER PROPERTY" shall mean Homeland's right, title,
         interest or estate now owned or hereafter acquired in or to (i) any
         Ownership Interest, (ii) any of the Stores or parts thereof, (iii) any
         entity which owns an interest or estate in any such Stores (if other
         than Homeland), (iv) all associated rights in connection with any of
         the foregoing, (v) any new location to which any such Store or its
         operations are moved, or (vi) any different name under which any such
         Store, or any part thereof, is operated. The foregoing shall include,
         without limitation, any and all (A) ownership interest in the business
         owned or operated in, at or from any such location; (B) real estate
         owned or leased at or in connection with any such location; (C) FF&E or
         inventory used or located at or in connection with any such location;
         (D) coupon rights; (E) contract(s) or franchise(s) that are in any way
         used or associated with any such Store or business owned or operated
         in, at or from any such location; or (F) other tangible or intangible
         assets of Homeland owned, located or used at or in connection with any
         such Store or business owned or operated in, at or from any such
         location.

                  (P) "PURCHASE RIGHTS" means the Right of First Refusal granted
         herein.

                  (q) "TRANSFER" means any sale, exchange, assignment, transfer,
         pledge, mortgage, hypothecation, gift, bequest, grant, redemption,
         encumbrance, dissolution, liquidation, stock transfer, merger,
         consolidation, transfer in connection with any kind of business
         combination or other disposition of any kind, whether voluntary,
         involuntary, by operation of law or otherwise, including any
         Involuntary Transfer. The foregoing is intended to encompass every
         mode, direct or indirect, absolute or conditional, voluntary or
         involuntary, of disposing or parting with property or an interest in
         property, including retention of title as a security interest and
         foreclosure of the right of redemption.

                  (r) "TRANSFEROR" shall mean either Homeland or any Owner or
         Owners, with respect to the Transfer by Homeland or Owner(s) of all or
         any portion of the Property.


                                      7
<PAGE>

         3. GRANT OF RIGHT OF FIRST REFUSAL.

                  (a) In consideration of AWG's execution hereof, ten dollars
         and other valuable consideration, the adequacy and receipt of which are
         hereby acknowledged, Homeland does hereby grant to AWG the absolute
         right of first refusal and option (collectively "RIGHT OF FIRST
         REFUSAL") to purchase all of Homeland's interest(s) and/or estate(s) in
         the Retailer Property and all of Homeland's property utilized in
         connection with the Retailer Property, all whether now or hereafter
         owned or acquired. The Right of First Refusal granted herein shall
         remain in full force and effect for the term set forth in subparagraph
         13(a) below. This grant of the Right of First Refusal constitutes a
         restrictive covenant against and/or in connection with the Retailer
         Property, and is intended to be an absolute and present conveyance of a
         property right which, to the extent allowed by applicable law, is
         appurtenant to and runs with the Retailer Property and, subject only to
         satisfaction in accordance with the terms hereof, shall survive any
         prepayment and/or other satisfaction or termination of the Financial
         Accommodations prior to the expiration or termination of this
         Agreement.

                  (b) Homeland and Holding represent and warrant that the
         Property owned by them is and at the time of any Exercise Event shall
         be free and clear of all claims, liens (statutory or otherwise),
         pledges, licenses, equities, options, conditional sales contracts,
         assessments, levies, charges, easements, security interests, deeds of
         trust, mortgages, rights-of-way, covenants, conditions, reservations,
         exceptions, limitations, charges, restrictions, encumbrances or other
         right or rights of third parties of any nature whatsoever, except as
         specifically disclosed to AWG in writing concurrently herewith on
         attached EXHIBIT "B" and consented to by AWG (the "PERMITTED
         ENCUMBRANCES"), or except with respect to liens or encumbrances
         previously granted to AWG or granted to AWG concurrently herewith.
         Homeland further covenants and agrees that it shall not, without the
         prior written consent of AWG, create, incur, assume, or suffer to exist
         any claim, lien (statutory or otherwise), pledge, license, equity,
         option, conditional sales contract, assessment, levy, charge, easement,
         security interest, deed of trust, mortgage, right-of-way, covenant,
         condition, reservation, exception, limitation, charge, restriction,
         encumbrance or other right or rights of third parties of any nature
         whatsoever on the Retailer Property or Owner Property owned by Holding,
         or any part thereof, other than the Permitted Encumbrances.

         4. EXERCISE EVENTS DEFINED. Except in the case of a Transfer to a
Permitted Transferee, or as otherwise required or permitted by this Agreement,
the Right of First Refusal shall be exercisable immediately, and continue to be
exercisable thereafter, by AWG in connection with all or any part of the
Retailer Property upon the occurrence of any one or more of the following (each
an "EXERCISE EVENT"): (i) Homeland shall, at any time, attempt to Transfer or
does Transfer any Property or any part(s) thereof or interest(s) or estate(s)
therein, (ii) the Transfer or attempted Transfer by any Owner or Owners of any


                                       8
<PAGE>

of the Property (including but not limited to any Ownership Interest) through
one or more Transfers to any Person (including any Affiliate(s) of such Person)
where such Transfer or Transfers could result in the first to occur of (A) a
change in Control of Homeland or (B) a Transfer of more than twenty percent
(20%) of the Ownership Interests, (iii) one or more events have occurred which
will, with the passage of time, result in a Transfer or attempted Transfer of
the type set forth above, or (iv) there is an Event of Default under this
Agreement. In addition, it shall be an Exercise Event in the event Homeland
ceases to utilize AWG as its primary supplier (as such term is commonly used in
the grocery industry and in which sixty-five percent (65%) of the value
(measured at wholesale cost) of all inventory and supplies purchased by Homeland
are purchased from AWG) for each and all of the "SUPPLIED STORES", as defined in
that certain Supply Agreement between AWG and Homeland dated contemporaneously
herewith ("SUPPLY AGREEMENT") upon the expiration of the Supply Agreement.
Notwithstanding the foregoing, any Transfer required to be made in connection
with any plan of reorganization approved by AWG and the court (by way of a
final, non-appealable order) in connection with the Bankruptcy Cases, shall not
be an Exercise Event. If any such Transfer is made without AWG's approval or
waiver or rights hereunder, it shall be an Exercise Event, and AWG shall be
entitled to damages if this Agreement is breached.

         5. OCCURRENCE OF EXERCISE EVENT. Upon the occurrence of an Exercise
Event, then:

                  (a) Notice of Exercise Event. Homeland and/or Holding shall
         notify AWG in writing (which Notice shall specifically state that it is
         being given to advise AWG that the Right of First Refusal is
         exercisable) of the occurrence of any Exercise Event ("EXERCISE EVENT
         NOTICE").

                           (i) If the Exercise Event is a desire by Homeland
                  and/or an Owner to sell all or part of the Property on the
                  price, terms, provisions and conditions contained in a
                  third-party offer, the Exercise Event Notice shall include a
                  signed copy of the third-party proposal. In connection with
                  proposals involving the Retailer Property, Homeland shall
                  require any such third-party proposal to fully state (1) the
                  name of the proposed purchaser, (2) the specific identity of
                  the Property covered by the proposed offer and (3) the price,
                  terms, provisions and conditions of such offer.

                           (ii) If the Exercise Event is anything other than a
                  desire by Homeland and/or an Owner to sell Property pursuant
                  to a third-party offer, the Exercise Event Notice shall
                  furnish AWG with as complete a description of the Exercise
                  Event as possible including, where applicable, the price,
                  terms, provisions and conditions associated with any such
                  event.

                  (b) Acceptance or Rejection After Notice. Once an Exercise
         Event Notice which complies with the requirements hereof has been
         received, AWG shall have


                                       9
<PAGE>

         the longer of (i) thirty (30) days following the date of receipt of
         such Exercise Event Notice or (ii) the amount of time given any
         proposed transferee of Property to conduct due diligence, to exercise
         the Right of First Refusal as to all or part of the Retailer Property
         or otherwise reject same. The Right of First Refusal shall be exercised
         or rejected by way of a Notice to Homeland.

                  (c) Acceptance or Rejection Absent Notice. In the event (i) an
         Exercise Event occurs which is unknown to Homeland and/or Holding or
         (ii) Homeland and/or Holding fails to give an Exercise Event Notice of
         a known Exercise Event, AWG shall have the longer of (i) thirty (30)
         days following the date upon which AWG's general counsel or other AWG
         staff attorney actually learns of the Exercise Event or (ii) the amount
         of time given any proposed transferee of Property to conduct due
         diligence, to exercise the Right of First Refusal as to all or part of
         the Retailer Property or otherwise reject same. The Right of First
         Refusal shall be exercised or rejected by way of a Notice to Homeland.

         6. EXERCISE OF RIGHT OF FIRST REFUSAL.

                  (a) Price, Terms, Provisions and Conditions. If the Transferor
         is solvent at the time the Right of First Refusal is exercised, the
         purchase price, terms, provisions, conditions and due diligence rights
         associated with the Retailer Property to be purchased by AWG shall be:
         (i) if applicable, the same price, terms, provisions, conditions and
         due diligence rights contained in the third-party offer the Transferor
         wishes to accept, or (ii) if there is no existing or applicable
         third-party offer for the Retailer Property to be purchased by AWG at
         the time AWG exercises the Right of First Refusal, then the price shall
         be the fair market value of the Retailer Property to be purchased by
         AWG at the time of the exercise of the Right of First Refusal and the
         remaining terms, provisions, conditions and due diligence rights shall
         be the same as in similar transactions of like size and complexity
         between similarly situated, commercially prudent transferors and
         transferees. If the Transferor is insolvent at the time the Right of
         First Refusal is exercised, (i) the purchase price for the Property to
         be purchased by AWG shall be the greater of: (A) if applicable, the
         same price contained in the third-party offer the Transferor wishes to
         and is able to accept for such Property or (B) the fair market value of
         the Retailer Property to be purchased by AWG at the time of the
         exercise of the Right of First Refusal and (ii) the remaining terms,
         provisions, conditions and due diligence rights shall be the same as in
         similar transactions of like size and complexity between similarly
         situated, commercially prudent transferors and transferees; provided,
         however, if applicable, the purchase price, terms, provisions,
         conditions and due diligence rights set forth above shall be modified
         to be identical to those approved by any court with jurisdiction over
         the matter. When necessary in connection with the foregoing, fair
         market value shall be determined by way of an Appraisal.


                                       10
<PAGE>

                  (b) Transferor's Duties Upon Exercise. In the event AWG
         exercises the Right of First Refusal at a time when the Transferor is
         solvent, the Transferor shall be required to perform all acts, satisfy
         all obligations and execute such instruments as may be required (i)
         pursuant to the terms of any applicable proposed or final agreement, as
         the case may be, between the Transferor and transferee (whether
         described in an Exercise Event Notice or not), (ii) in connection with
         similar transactions of like size and complexity between similarly
         situated, commercially prudent transferors and transferees and (iii)
         under the provisions of the laws of the state wherein the Retailer
         Property to be purchased by AWG is located, so that good and
         merchantable title may be conveyed to AWG. In the event AWG exercises
         the Right of First Refusal at a time when the Transferor is insolvent,
         the Transferor shall be required to perform only such acts and execute
         such necessary instruments as may be required (i) in connection with
         similar transactions of like size and complexity between similarly
         situated, commercially prudent transferors and transferees and (ii)
         under the provisions of the laws of the state wherein the Retailer
         Property to be purchased by AWG is located, so that good and
         merchantable title may be conveyed to AWG; provided, however, if
         applicable, such obligations shall be limited to the extent required to
         prevent this Agreement from being considered executory by any court
         with jurisdiction over the matter.

                  (c) In all events, except as modified pursuant to the proviso
         in the second to last sentence of subparagraph 6(a) above, AWG and any
         party conducting an Appraisal pursuant hereto shall be provided access
         to all information necessary to allow a fully informed valuation of the
         Property to be Transferred and the consideration to be paid therefor.

         7. REJECTION OF RIGHT OF FIRST REFUSAL. With respect to any Exercise
Event, in the event AWG elects not to exercise its Right of First Refusal with
respect to all or any part of such Retailer Property then, upon receipt of AWG's
Notice of such election, Transferor shall be free to conclude and close the
proposed Transfer of the Retailer Property so rejected (but not as to any
Retailer Property with respect to which AWG exercises its Right of First
Refusal) to the same purchaser or transferee identified in the Exercise Event
Notice under and pursuant to the exact terms, without modification or amendment,
as contained in the Exercise Event Notice received by AWG. Such Transfer of the
rejected Retailer Property shall be deemed to be a Permitted Transfer and
Transferor shall not be required to Transfer to AWG any of such rejected
Retailer Property pursuant to the terms hereof at such time. Upon the
consummation of any such Permitted Transfer, the rights granted to AWG in this
Agreement shall terminate with respect to the Retailer Property so rejected by
AWG. AWG's Right of First Refusal shall survive with respect to (i) any Retailer
Property which is not Transferred pursuant to a Permitted Transfer and (ii) any
Exercise Event caused by the Transfer of any Owner Property. In the event AWG
notifies a Transferor that it has elected not to exercise its Right of First
Refusal with respect to all or any portion of the Retailer Property identified
in the Exercise Event Notice, and Transferor thereafter fails to close and
conclude the sale or Transfer of such


                                      11
<PAGE>

Retailer Property identified in the Exercise Event Notice and rejected by AWG
under the exact terms as contained in such Exercise Event Notice and to the same
purchaser or transferee named in such Exercise Event Notice, then this Agreement
shall continue in full force and effect with respect to (i) all Retailer
Property identified therein and AWG shall continue to have its Right of First
Refusal with respect to such Retailer Property and (ii) any Exercise Event
caused by the Transfer of any Owner Property.

         8. SALE CONFIRMATION. Transferor shall provide AWG with written
confirmation of any Transfer of any of the Retailer Property with respect to
which AWG is not the purchaser and AWG shall have the right to inspect
Transferor's books and records in respect of any such Transfer at Transferor's
headquarters (or wherever such books and records are maintained) during normal
business hours. Transferor shall deliver copies of all closing documents in its
possession or control to AWG within thirty (30) days of the consummation of any
such Transfer. Homeland and Holding shall disclose their obligations hereunder
to all other Owners and potential transferees and shall not enter into any
agreement for the Transfer of any of the Property which would prohibit the
disclosure to AWG of any of the terms of such proposed Transfer.

         9. STORE CLOSING. In the event Homeland intends to close a Store and
not operate a store at such location, then Homeland shall (a) give AWG thirty
(30) days advance written Notice of Homeland's intent to close the Store, and
(b) offer such Retailer Property for sale to AWG at the Option Purchase Price
(as defined below). Homeland may close a Store provided it has first complied
with (a) and (b) above. Nothing contained in this Section 9 shall be deemed or
construed to limit or waive any other obligation of Homeland to AWG whether
contained herein or otherwise. For purposes herein, Option Purchase Price shall
mean the sum of (i) the fair market value of the furniture, fixtures and
equipment and any real estate; (ii) the value of any inventory calculated at
Homeland's net cost, and (iii) the fair market value attributed to any leasehold
interest which Homeland intends to abandon. When necessary in connection with
any of the foregoing, fair market value shall be determined by way of an
Appraisal. The notice period set forth herein shall be adjusted as may be
required to match the notice period required in connection with any agreement
between AWG and any lender which has a Permitted Encumbrance on the Store in
question.

         10. LIMITATION ON PURCHASE RIGHTS. The Purchase Rights granted herein:

                  (a) shall not apply to a Transfer of any Property to a
         Permitted Transferee;

                  (b) shall remain in full force and effect for the full term
         set forth in Section 13(a) of this Agreement; and


                                      12
<PAGE>

                  (c) upon AWG's election to exercise same, may be assigned by
         AWG, in whole or in part, to any one or more of AWG's retail members;
         provided, however, that AWG may retain the right to consummate the
         Purchase Rights.

         11. FURTHER ACTS. Each time AWG exercises its Purchase Rights
hereunder, the Transferor(s), in addition to the acts provided for in this
Agreement, upon request by AWG, shall perform or cause to be performed any and
all such further acts as may be reasonably necessary and shall execute all
necessary instruments as may be reasonably required to give effect to this
Agreement and to consummate the transactions contemplated hereby, including but
not limited to all such acts and instruments required under the provisions of
the Bulk Sales law of the state in which the Property to be purchased by AWG is
located, if any, so that good and marketable title shall be conveyed to AWG.

         12. EVENT OF DEFAULT/REMEDIES. The occurrence of any of the following
events shall constitute, and is hereby defined to be, an "EVENT OF DEFAULT",
and, upon the occurrence of an Event of Default, Homeland and Holding shall be
in default under this Agreement and under each of the Obligations:

                  (a) Any failure in the payment or performance of any of the
         indebtedness, liabilities or Obligations owed to AWG hereunder, or
         otherwise, including but not limited to any promissory note(s) payable
         to AWG by Homeland or Holding or with respect to which Homeland or
         Holding is a guarantor, any indebtedness of Homeland, Holding or any
         Guarantor to AWG on open account or otherwise, or in the compliance
         with or the failure or neglect by Homeland, Holding or any Guarantor in
         the performance or observance of any obligation, covenant, agreement,
         term, condition or other provision or liability contained herein within
         the time limits set forth and in the manner required in this Agreement,
         or in any other instrument given by Homeland, Holding or any Guarantor
         to AWG as security for or relating to any of the Obligations.

                  (b) Default under any of the other Obligations, including loan
         documents or other agreements evidencing or securing any of the
         Obligations.

                  (c) A final determination by a court of competent jurisdiction
         that any warranty or representation made herein or in any loan
         document, the underlying documents in connection with the Supply
         Protection Agreements or under any other agreement evidencing or
         securing any of the Obligations was false when made or was or is
         subsequently breached.

                  (d) Uninsured loss, theft, substantial damage, destruction or
         sale (other than the sale of inventory in the ordinary course of
         business) of any of the Retailer Property or the creation, attachment,
         making or occurrence of or realization upon an unpermitted security
         interest, lien, attachment, levy, seizure, garnishment,


                                      13
<PAGE>

         distraint or other encumbrance or other process of, in, upon or against
         any of the Property.

                  (e) Except for the Bankruptcy Cases, dissolution, termination
         of existence, insolvency of Homeland or Holding or the appointment of a
         receiver for any part of the Property, assignment for the benefit of
         any creditors of (i) Homeland, (ii) any Guarantor, (iii) Holding, or
         (iv) shareholders of Homeland, or commencement of any proceeding under
         any bankruptcy or insolvency law by or against Homeland, any Guarantor,
         Holding or any shareholder of Homeland.

                  (f) The termination, for any reason, of Homeland's stock
         ownership or membership in AWG

                  (g) Except as provided for in this Agreement, the creation,
         attachment, making or occurrence of or realization upon a security
         interest, lien, attachment, levy, seizure, garnishment, distraint or
         other encumbrance or other process of, in, upon or against the
         Property, or any part thereof, or any of Homeland's, Holding's or any
         Guarantor's assets, any ownership interest in Homeland (including but
         not limited to any Ownership Interest) or in any Guarantor, or the
         voluntary Transfer or Involuntary Transfer of any of Homeland's or any
         Guarantor's assets.

                  (h) If, during the term hereof, Homeland or any Owner shall
         Transfer or attempt to Transfer any of the Property (including but not
         limited to any Ownership Interest) to any Person other than to a
         Permitted Transferee or as otherwise required or permitted by this
         Agreement.

                  (i) There is a failure to otherwise perform or comply with the
         provisions of this Agreement.

                  (j) Homeland or Holding enter into a supply agreement or
         similar arrangement with a competitor of AWG.

                  (k) There is an attempted evasion of the terms of this
         Agreement.

Upon the occurrence of an Event of Default by Homeland or Holding under this
Agreement, AWG may, at its option: (i) proceed as if Homeland had advised AWG
that Homeland intended to close the Stores, (ii) proceed as if an Exercise Event
had occurred and/or (iii) pursue such other actions in equity or at law against
Homeland and Holding as may be available to AWG, including but not limited to
actions against Homeland and Holding for specific performance and/or damages.


                                      14
<PAGE>

         13. MISCELLANEOUS.

                  (a) TERM OF RIGHT OF FIRST REFUSAL. The Right of First Refusal
         granted herein shall remain in full force and effect for the longer of
         (i) ten (10) years from the date of this Agreement or (ii) the period
         equal to the entire term of the Financial Accommodations (as the same
         may be extended or modified from time to time); provided, however, that
         in connection with any Store listed on EXHIBIT "C" attached hereto and
         incorporated herein by this reference which is still leased by Homeland
         from AWG at the time that this Agreement would otherwise terminate,
         this Agreement shall be extended for the remaining term (as extended)
         of any such lease or sublease between Homeland and AWG. This Agreement
         shall remain in full force and effect as above detailed, unless
         terminated by a written agreement of the parties hereto or unless
         otherwise terminated as herein provided.

                  (b) RIGHTS OF SUCCESSORS. This Agreement shall be binding upon
         and shall inure to the benefit of Homeland, Holding and AWG and their
         respective heirs, devisees, legatees, executors, administrators,
         personal or legal representatives, permitted successors and permitted
         assigns.

                  (c) NOTICES. Any Notice, demand or other document which either
         party is required or may desire to give or deliver to, or make upon,
         the other party shall be in writing, and may be personally delivered,
         sent by an overnight delivery service (such as Federal Express) or
         given by registered or certified mail, return receipt requested,
         postage prepaid, addressed to the parties at their respective addresses
         set forth below, with copies to be sent to any additional person whose
         name and address has been supplied by one party to the other. Either
         party hereto may designate a different address for itself by Notice
         similarly given.

                  If to Homeland:   Homeland Stores, Inc.
                                    Oil Center East
                                    2601 Northwest Expressway
                                    Oklahoma City, Oklahoma 73112
                                    Attention: David B. Clark, President

                  If to Owners:     Homeland Holding Corporation
                                    Oil Center East
                                    2601 Northwest Expressway
                                    Oklahoma City, Oklahoma 73112
                                    Attention: David B. Clark, President

                  If to AWG:        Associated Wholesale Grocers, Inc.
                                    5000 Kansas Avenue
                                    Kansas City, Kansas 66106
                                    Attention: General Counsel


                                      15
<PAGE>

         Notice shall be deemed served and received upon the date of mailing (in
         the case of Notices mailed by registered or certified mail) or upon
         delivery (in all other cases). A party's failure or refusal to accept
         service of a Notice shall constitute delivery of the Notice.

                  (d) COUNTERPARTS. This Agreement may be executed in any number
         of counterparts, each of which shall be fully effective as an original
         and all of which when taken together shall constitute one and the same
         instrument.

                  (e) SEVERABILITY. In the event any of the provisions of this
         Agreement shall for any reason be held invalid, illegal or
         unenforceable in any respect, then, to the maximum extent permitted by
         law, such invalidity, illegality or unenforceability shall not affect
         any other provision hereof, and this Agreement shall be construed as if
         the invalid, illegal or unenforceable provision had never been
         contained herein. Furthermore, any such invalid, illegal or
         unenforceable provision shall be deemed amended to reflect, and
         enforced to carry out, to the greatest extent valid, legal, and
         enforceable, the intentions of the parties, as determined by the
         original language of such invalid, illegal or unenforceable provision.
         It is the intent of the parties that none of the provisions hereof is
         severable for any purpose (including bankruptcy) other than to avoid
         invalidity, illegality or unenforceability. For purposes hereof, the
         Supply Protection Agreements shall not be considered provisions hereof
         but shall be considered separate agreements delivered as part of the
         consideration for this Agreement. In addition, while the execution of
         this Agreement and the Supply Protection Agreements are conditions
         precedent to the execution and the performance by AWG under the
         Financial Accommodations, once executed, this Agreement and each of the
         Supply Protection Agreements are intended to be separate and
         independent agreements, severable from the Financial Accommodations and
         each of the other Supply Protection Agreements, and except as limited
         by the express terms thereof, shall survive any expiration, termination
         or rejection of any other document or agreement.

                  (f) HEADINGS AND CONSTRUCTION. Section headings herein
         contained are inserted only for convenience and are in no way to be
         construed as a part of this Agreement or as a limitation on the scope
         of the particular portions of this Agreement to which they refer. It is
         the intent of the parties that the provisions of this Agreement shall
         be construed in the manner which most favors AWG's acquisition of
         Property rather than acquisition of such Property by a third party.

                  (g) ENTIRE AGREEMENT/NON-WAIVER. This Agreement shall not be
         amended or modified or any of the terms hereof waived except by a
         written instrument executed by AWG, Homeland and Holding. No waiver of
         any condition or covenant of this Agreement shall be deemed to imply or
         constitute a further waiver of the same or any other condition or
         covenant of this Agreement.

                  (h) ATTORNEY'S FEES. In the event that either party hereto
         retains an attorney to conduct litigation arising as a result of any
         breach of this Agreement,


                                      16
<PAGE>

         then, in addition to any damages or other relief which may be
         appropriate, the prevailing party shall be entitled to recover its
         reasonable attorneys' fees.

                  (i) FURTHER ACTS. It is the intention of the parties that this
         Right of First Refusal shall encumber the Property until the provisions
         hereof have been satisfied in full. In order to more fully give notice
         of and/or perfect this Right of First Refusal, Homeland and Holding
         shall execute such memoranda in recordable form, place such restrictive
         legends in organizational documents and any documents indicating
         ownership and perform such other acts as may be necessary to accomplish
         the foregoing or as reasonably requested by AWG.

                  (j) GOVERNING LAW/VENUE. This Agreement shall be governed by,
         and construed under, the internal laws of the State of Kansas, without
         regard to principles of conflicts of law, as the same may from time to
         time be in effect, except to the extent that the creation, validity,
         perfection or enforcement of any liens or security interests securing
         the Obligations are governed by the laws of another jurisdiction. Venue
         of any action or proceeding to enforce, or arising out of, this
         Agreement shall be in a State or Federal Court of appropriate
         jurisdiction located in or having jurisdiction over Johnson County,
         Kansas, except that a lien enforcement action, an action to appoint a
         receiver, or any other action by AWG pursuant to this Agreement shall
         be brought in or transferred to such venue as AWG may elect from time
         to time in its sole and absolute discretion. AWG and Homeland each
         waives any objection to the jurisdiction of, or venue in, any such
         court and to the service of process issued by such court. Homeland, to
         the extent permitted by law, waives personal service of process and
         agrees that a summons and complaint commencing an action or proceeding
         in any such court shall be properly served and shall confer personal
         jurisdiction if served by registered or certified mail to Homeland, or
         as otherwise provided by the laws of Kansas or the United States.
         Homeland waives any right to claim that any such court is an
         inconvenient forum or to raise "lack of sufficient contacts" in
         opposition to the choice of law or venue in this Section 13(j) or to
         assert any similar defense. Notwithstanding anything herein to the
         contrary, until the consummation of a plan of reorganization, the
         parties agree that the United States Bankruptcy Court for the Western
         District of Oklahoma shall have exclusive jurisdiction to hear and
         determine claims in connection with or arising out of this Agreement.

                  (k) SECURITY FOR PERFORMANCE. The Right of First Refusal
         granted to AWG hereunder shall be secured by a lien on all of the
         Retailer Property, and Homeland does hereby grant, bargain, sell,
         convey and mortgage to AWG a mortgage and security interest in all of
         the Retailer Property. Homeland agrees to and shall execute such other
         and further documents, including UCC-1 financing statements, and
         perform such further acts as AWG may request in connection with the
         foregoing.

                  (l) TIME FOR PERFORMANCE. Time is of the essence in
         performance of the parties respective obligations herein contained.


                                      17
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized undersigned officers effective as
of the day and year first above written.

[Corporate Seal]
                                       ASSOCIATED WHOLESALE GROCERS, INC.,
ATTEST:                                a Missouri corporation


                                       By:
----------------------------------         ----------------------------------
Joseph L. Campbell, II, Secretary              Gary L. Phillips, President
                                               and Chief Executive Officer

                                               "AWG"




[Corporate Seal]
                                       HOMELAND STORES, INC.
ATTEST:                                a Delaware corporation


                                       By:
----------------------------------         ----------------------------------
Wayne S. Peterson, Secretary                   David B. Clark, President
                                              and Chief Executive Officer

                                               "HOMELAND"



[Corporate Seal]
                                       HOMELAND HOLDING CORPORATION,
ATTEST:                                a Delaware corporation


                                       By:
----------------------------------         ----------------------------------
Wayne S. Peterson, Secretary                   David B. Clark, President
                                              and Chief Executive Officer

                                               "HOLDING"


                                      18
<PAGE>

                                 ACKNOWLEDGMENTS

STATE OF KANSAS        )
                       )    ss.
COUNTY OF WYANDOTTE    )

         On this _____ day of August, 2001, before me, appeared Gary L. Phillips
and Joseph L. Campbell, II, to me personally known, who, being by me duly sworn,
did say that they are the President/Chief Executive Officer and Secretary of
ASSOCIATED WHOLESALE GROCERS, INC., a Missouri corporation, and that the seal
affixed to the foregoing instrument is the corporate seal of said corporation
and that said instrument was signed and sealed on behalf of said corporation by
authority of its Board of Directors, and said officers acknowledged said
instrument to be the free act and deed of said corporation.

         In Witness Whereof, I have hereunto set my hand and affixed my official
seal the day and year first above written.


                                        ----------------------------------------
My appointment expires:                              Notary Public

-----------------------




STATE OF OKLAHOMA      )
                       )    ss.
COUNTY OF OKLAHOMA     )

         On this _____ day of August, 2001, before me appeared David B. Clark
and Wayne S. Peterson, to me personally known, who being by me duly sworn, did
say that they are the President/Chief Executive Officer and Secretary of
HOMELAND STORES, INC., a Delaware corporation, and that the seal affixed to the
foregoing instrument is the corporate seal of said corporation and that said
instrument was signed and sealed on behalf of said corporation by authority of
its Board of Directors, and said officers acknowledged said instrument to be the
free act and deed of said corporation.

         In Witness Whereof, I have hereunto set my hand and affixed my official
seal on the day and year last written above.


                                        ----------------------------------------
My appointment expires:                              Notary Public

-----------------------


                                      19
<PAGE>

STATE OF OKLAHOMA      )
                       )    ss.
COUNTY OF OKLAHOMA     )

         On this ____ day of August, 2001, before me appeared David B. Clark and
Wayne S. Peterson, to me personally known, who being by me duly sworn, did say
that they are the President/Chief Executive Officer and Secretary of HOMELAND
HOLDING CORPORATION, a Delaware corporation, and that the seal affixed to the
foregoing instrument is the corporate seal of said corporation and that said
instrument was signed and sealed on behalf of said corporation by authority of
its Board of Directors, and said officers acknowledged said instrument to be the
free act and deed of said corporation.

         In Witness Whereof, I have hereunto set my hand and affixed my official
seal on the day and year last written above.


                                        ----------------------------------------
My appointment expires:                              Notary Public

-----------------------


                                      20
<PAGE>

                                   EXHIBIT "A"

                                     STORES

<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
1.   26      520 Minnesota                   Chickasha         Grady          OK

2.   101     1100 W. Main                    Norman            Cleveland      OK

3.   102     8922 S. Memorial                Tulsa             Tulsa          OK

4.   105     1315 N. Eastern Ave.            Moore             Cleveland      OK

5.   122     6473 N. MacArthur               Oklahoma City     Oklahoma       OK

6.   125     3828 W. Owen K. Garriott        Enid              Garfield       OK

7.   127     759 Grand Avenue                Chickasha         Grady          OK

8.   141     1402 N. Main St.                Guymon            Texas          OK

9.   145     1800 Central                    Dodge City        Ford           OK

10.  146     1701 N. Milt Phillips           Seminole          Seminole       OK

11.  148     1212 Choctaw                    Clinton           Custer         OK

12.  153     1108 N.W. 18th                  Oklahoma City     Oklahoma       OK

13.  154     2016 N.W. 39th St.              Oklahoma City     Oklahoma       OK

14.  161     510 N. Commerce                 Ardmore           Carter         OK

15.  163     4308 S.E. 44th                  Oklahoma City     Oklahoma       OK

16.  164     706 Flynn                       Alva              Woods          OK

17.  167     1310 Oklahoma Ave.              Woodward          Woodward       OK

18.  170     412 W. Third                    Elk City          Beckham        OK

19.  178     505 S. Chickasaw                Pauls Valley      Garvin         OK

20.  181     12508 N. May Ave.               Oklahoma City     Oklahoma       OK

21.  182     1401 Beech Ave.                 Duncan            Stephens       OK
</Table>



                                       21
<PAGE>
<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
22.  183      3020 N.W. 16th St.             Oklahoma City     Oklahoma       OK

23.  188      220 E. Cleveland               Guthrie           Logan          OK

24.  192      415 S.W. 59th                  Oklahoma City     Oklahoma       OK

25.  193      301 N.W. 67th                  Lawton            Comanche       OK

26.  195      4301 S. May Ave.               Oklahoma City     Oklahoma       OK

27.  196      2705 N. Harrison               Shawnee           Pottawatomie   OK

28.  197      11241 W. Reno                  Yukon             Canadian       OK

29.  200      1724 W. Lindsey Rd.            Norman            Cleveland      OK

30.  204      115 E. Hiway 152               Mustang           Canadian       OK

31.  206      11120 N. Rockwell              Oklahoma City     Oklahoma       OK

32.  207      9320 N. Penn                   Oklahoma City     Oklahoma       OK

33.  208      2205 W. Edmond Rd.             Edmond            Oklahoma       OK

34.  457      3948 S. Peoria                 Tulsa             Tulsa          OK

35.  495      310 W. Trudgeon                Henryetta         Okmulgee       OK

36.  502      2235 E. 61st St.               Tulsa             Tulsa          OK

37.  503      1110 S. Denver                 Tulsa             Tulsa          OK

38.  515      915 S. Madison                 Bartlesville      Washington     OK

39.  528      12011 S. Memorial              Bixby             Tulsa          OK

40.  529      3405 S. Georgia                Amarillo          Randall        TX

41.  538      504 E. Graham                  Pryor             Mayes          OK

42.  545      12572 East 21st St.            Tulsa             Tulsa          OK

43.  549      400 Plaza Court                Sand Springs      Tulsa          OK

44.  550      6402 E. Pine                   Tulsa             Tulsa          OK

45.  553      575 N. Gilcrease Museum        Tulsa             Osage          OK
              Road
              [a/k/a 575 N. 26th W. Ave.]
</Table>


                                      22
<PAGE>


<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
46.  561     708 S. Aspen                    Broken Arrow      Tulsa          OK

47.  563     811 E. Frank Phillips Blvd.     Bartlesville      Washington     OK

48.  567     3139 S. Harvard                 Tulsa             Tulsa          OK

49.  573     19302 E. Admiral Blvd.          Tulsa             Wagoner        OK

50.  574     2351 E. Kenosha                 Broken Arrow      Tulsa          OK

51.  578     700 E. Cherokee                 Wagoner           Wagoner        OK

52.  582     230 W. 1st                      Dumas             Moore          TX

53.  587     101 W. 10th St.                 Borger            Hutchinson     TX

54.  600     7302 S.W. 34th                  Amarillo          Randall        TX

55.  601     4111 Plains                     Amarillo          Potter         TX

56.  603     3505 N.E. 24th                  Amarillo          Potter         TX

57.  604     202 N. 23rd                     Canyon            Randall        TX

58.  605     535 N. 25 Mile Ave.             Hereford          Deaf Smith     TX

59.  677     5811 S. Western                 Amarillo          Randall        TX

60.  778     4001 S. 97 Highway              Sand Springs      Tulsa          OK

61.  793     7001 Northwest Expressway       Oklahoma City     Oklahoma       OK

62.  794     2121 N.W. 23rd                  Oklahoma City     Oklahoma       OK

63.  795     1202 N.W. 40th                  Lawton            Comanche       OK

64.  796     10700 S. Penn                   Oklahoma City     Cleveland      OK

65.  850     316 E. Main                     Pawhuska          Osage          OK

66.  851     702 Fir Street                  Perry             Noble          OK

67.  852     305 S. Broadway                 Cleveland         Pawnee         OK

68.  853     1629 S. Main                    Jay               Delaware       OK

69.  854     310 S. Main                     Blackwell         Kay            OK

70.  855     108 S. Division                 Okemah            Okfuskee       OK
</Table>


                                      23
<PAGE>

<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
71.  856     813 E. Cherokee                 Nowata            Nowata         OK

72.  857     102 Haskell Blvd.               Haskell           Muskogee       OK

73.  880     3115 W. Okmulgee St.            Muskogee          Muskogee       OK

74.  881     1300 S. York                    Muskogee          Muskogee       OK

75.  882     800 E. Okmulgee                 Muskogee          Muskogee       OK

76.  883     6 East Shawnee                  Muskogee          Muskogee       OK

77.  886     24 S.E. 33rd Street             Edmond            Oklahoma       OK

78.  887     2213 S.W. 74th Street           Oklahoma City     Oklahoma       OK
</Table>

  Plus any replacements and/or substitutions for any of the foregoing Stores.


                                      24
<PAGE>

                                   EXHIBIT "B"

                        [List of Permitted Encumbrances]

Security interests of AWG and any third party lender approved in writing by AWG.


                                       25
<PAGE>


                                   EXHIBIT "C"

                               STORES AWG ON LEASE

<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
1.   850     316 E. Main                     Pawhuska          Osage          OK

2.   851     702 Fir Street                  Perry             Noble          OK

3.   852     305 S. Broadway                 Cleveland         Pawnee         OK

4.   853     1629 S. Main                    Jay               Delaware       OK

5.   854     310 S. Main                     Blackwell         Kay            OK

6.   855     108 S. Division                 Okemah            Okfuskee       OK

7.   856     813 E. Cherokee                 Nowata            Nowata         OK

8.   857     102 Haskell Blvd.               Haskell           Muskogee       OK

9.   880     3115 W. Okmulgee St.            Muskogee          Muskogee       OK

10.  882     800 E. Okmulgee                 Muskogee          Muskogee       OK

11.  883     6 East Shawnee                  Muskogee          Muskogee       OK

12.  886     24 S.E. 33rd Street             Edmond            Oklahoma       OK

13.  887     2213 S.W. 74th Street           Oklahoma City     Oklahoma       OK
</Table>


                                       26
<PAGE>

                                   EXHIBIT "C"
                                       TO
                           SUPPLY AGREEMENT AGREEMENT

                            NON-COMPETITION AGREEMENT

         THIS NON-COMPETITION AGREEMENT (the "AGREEMENT") is made and entered
into as of the 15th day of August, 2001 by and among HOMELAND STORES, INC., a
Delaware corporation, Chapter 11 debtor-in-possession ("HOMELAND"), HOMELAND
HOLDING CORPORATION, a Delaware corporation, Chapter 11 debtor-in-possession
("HOLDING") and ASSOCIATED WHOLESALE GROCERS, INC., a Missouri corporation
("AWG").

                                    RECITALS:

         THE FOLLOWING RECITALS ARE A MATERIAL PART OF THIS AGREEMENT:

         A. AWG is a wholesaler of grocery and supermarket products operating in
a cooperative manner. In entering into this Agreement, AWG is seeking to enhance
the interests of its retail members.

         B. Homeland is a retail grocery store operator, and is currently a
member of AWG. Homeland currently owns and operates the Stores. As used in this
Agreement, the term "STORES" shall mean those seventy-eight (78) stores set
forth on EXHIBIT "A" attached hereto and incorporated herein by this reference,
together with any and all additional, substitute, replacement or other retail
grocery stores leased, operated or owned by Homeland at any time during the term
of this Agreement. For purposes hereof, "RETAIL GROCERY STORE" shall mean all
retail stores selling grocery items, including, without limitation, conventional
stores, convenience stores or limited assortment stores. It is the express
intent of the parties that at no time during the term of this Agreement shall
there be any retail grocery store leased, operated or owned, directly or
indirectly, by Homeland which is not to be included as a Store under this
Agreement.

         C. Contemporaneously herewith Homeland and its parent, Holding, have
filed petitions under Chapter 11 of the Bankruptcy Code ("BANKRUPTCY CASES").

         D. AWG and Homeland entered into that certain Supply Agreement dated as
of April 21, 1995, as amended pursuant to that certain First Amendment to Supply
Agreement dated as of August 2, 1996 and that certain Second Amendment to Supply
Agreement dated as of August 12, 1997 (as so amended, the "1995 SUPPLY
AGREEMENT").

         E. In connection with and as certain consideration for the sale to
Homeland of nine (9) retail grocery stores by AWG, which were previously owned
by Horner Foods Inc., AWG and Homeland entered into, among other things, that
certain Supply Agreement dated as of April 23, 1999 (the "HORNER SUPPLY
AGREEMENT").

<PAGE>

         F. In connection with and as certain consideration for the sale to
Homeland of four (4) retail grocery stores previously owned by Brattain Foods,
Inc., AWG and Homeland entered into, among other things, that certain Supply
Agreement dated as of November 2, 1999 (the "BRATTAIN SUPPLY AGREEMENT").

         G. In connection with and as certain consideration for the sale to
Homeland of three (3) retail grocery stores previously owned by Belton Food
Center, Inc., AWG and Homeland entered into that certain Supply Agreement dated
as of February 29, 2000 (the "BELTON SUPPLY AGREEMENT; the 1995 Supply
Agreement, the Horner Supply Agreement, the Brattain Supply Agreement and the
Belton Supply Agreement are collectively referred to as the "EXISTING SUPPLY
AGREEMENTS").

         H. Homeland intends to assume the Existing Supply Agreements by way of
first day orders in the Bankruptcy Cases. In addition, Homeland and Holding (i)
intend to enter into a new supply agreement covering all of the Stores ("NEW
SUPPLY AGREEMENT") and (ii) have requested that AWG provide debtor-in-possession
financing, all of which the parties intend to have approved by way of first day
orders in the Bankruptcy Cases.

         I. Upon the conclusion of the Bankruptcy Cases and after the expiration
of the Existing Supply Agreements, Homeland intends that the Stores will
continue to be supplied by AWG pursuant to the terms of the New Supply
Agreement.

         J. AWG and Homeland have entered into certain loan documents dated of
even date herewith including without limitation, that certain Credit Agreement
dated of even date herewith (collectively, the "LOAN DOCUMENTS") to provide
certain debtor-in-possession financing to allow Homeland, to the extent
possible, to continue to operate the Stores, the consummation of which is
conditioned upon, among other things, the parties entering into this Agreement
and this Agreement receiving Bankruptcy Court approval as part of the
debtor-in-possession financing being provided by AWG pursuant to the Loan
Documents.

         K. Homeland has advised AWG that Homeland intends to concentrate with
AWG an agreed upon percentage of all of its ordering of products and goods
(excluding pharmacy purchases) to be held for sale to the public at or to be
used in connection with the Stores.

         L. To provide assurances of their intentions to take no actions which
would frustrate such minimum purchases and to induce AWG to execute and perform
under the Loan Documents, Homeland and Holding have agreed to enter into this
Agreement.

         M. Homeland and Holding desire to provide adequate assurance to AWG
that the Stores will continue to be supplied by AWG in the future by granting or
taking subject to certain rights with respect to the Stores under (i) a Right of
First Refusal Agreement between Homeland and AWG (the "RIGHT OF FIRST REFUSAL
AGREEMENT"); (ii) this


                                        2
<PAGE>

Agreement; and (iii) certain Use Restrictions (collectively "SUPPLY PROTECTION
AGREEMENTS"), each entered into contemporaneously with this Agreement or as
otherwise agreed pursuant to the Loan Documents. It is the parties' intent that
the implementation and operation of the Supply Protection Agreements will be
independent of each other and will not be executory.

         N. AWG is unwilling to enter into the Credit Agreement and associated
Loan Documents unless it receives the Supply Protection Agreements and adequate
assurances that the Stores will be supplied by AWG during the pendency of the
Bankruptcy Cases and will continue to be supplied by AWG pursuant to the terms
of the Existing Supply Agreements and/or the New Supply Agreement after the
conclusion of the Bankruptcy Cases.

         O. AWG is willing to supply to Homeland and the Stores, AWG's full line
of available products and services based on the terms, conditions and financial
assurances contained herein.

         P. The parties understand and acknowledge that in addition to the
consideration set forth specifically herein, AWG will be required to make a
substantial current and continuing commitment of its resources in reliance upon
Homeland's commitment to purchase products and services as set forth in the
Existing Supply Agreements and New Supply Agreement, and that AWG and its retail
members will not realize the full benefit of their anticipated bargain hereunder
unless Homeland and Holding materially fulfill their obligations hereunder for
the full term of this Agreement.

                                   AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing premises, the
following mutual promises, and other good and valuable consideration, the
parties agree as follows:

         1. TERM AND TERMINATION. The term of this Agreement shall commence upon
the execution hereof and shall continue until it shall expire at the end of ten
(10) years or is terminated earlier by mutual agreement of the parties.

         2. GEOGRAPHICAL AREA. The area in which Homeland and Holding shall be
prohibited from competing with AWG's Business pursuant to the terms of this
Agreement shall be the States of Arkansas, Oklahoma, Missouri, Texas and Kansas
(the "GEOGRAPHICAL AREA").


                                       3
<PAGE>

         3. OBLIGATIONS OF HOMELAND.

                  (a) Non-Competition. Homeland and Holding will not (and shall
         not allow any person or entity controlled or under common control of
         Homeland or Holding to), at any time prior to the termination or
         expiration of this Agreement, directly or indirectly, as owner,
         shareholder, director, officer, partner, consultant, employee,
         co-venturer or otherwise, own, manage, operate, control, be employed
         by, participate in, or be connected in any manner with the ownership,
         management, operation, or control of any business that engages in
         business similar to AWG's Business, within the Geographical Area.

                  (b) Non-Competition with Wholesaler. Homeland and Holding will
         not during the term of this Agreement compete directly or indirectly
         with AWG as a wholesaler of grocery products, including Available
         Products (as defined in the New Supply Agreement), in the Geographical
         Area. A sale of any of the Stores to a competitor of AWG in a manner
         which is not consistent with the terms and provisions of the New Supply
         Agreement and the underlying Supply Protection Agreements set forth in
         the New Supply Agreement shall (i) be a violation of this Agreement and
         (ii) deemed to be competing with AWG. If Homeland is in compliance with
         the Right of First Refusal Agreement in connection with any Transfer
         (as defined therein), such Transfer shall not be deemed to be a
         violation of this Agreement.

                  (c) Acts of Parent or other Affiliates. If Homeland, Holding
         or any other affiliate engages in any of the activities prohibited
         under this Agreement, Homeland and Holding shall be deemed to be (i) in
         violation of this Agreement and (ii) competing with AWG.

         4. RELIEF IN THE EVENT OF BREACH. The parties to this Agreement hereby
agree and stipulate that the restrictions contained in this Agreement are
reasonable and necessary in order to protect AWG's legitimate business
interests. If Homeland or Holding shall breach the foregoing agreement, Homeland
and Holding agree that AWG will have no adequate remedy at law and that
immediate ex parte injunctive relief will be appropriate. In the event that a
court of competent jurisdiction refuses to grant AWG injunctive relief, AWG
shall be free to pursue any and all remedies, including remedies at law, which
may be available to AWG. In the event that AWG is required to pursue legal
remedies and is found to be entitled to damages, any such damages may be set off
against any amounts owed by AWG to Homeland and/or Holding.

         5. MISCELLANEOUS PROVISIONS.

                  (a) Modification of Agreement. No waiver or modification of
         this Agreement or of any covenant, condition, or limitation herein
         contained shall be


                                       4
<PAGE>

         valid unless in writing and duly executed by the party to be charged
         therewith, and no evidence of any waiver or modification shall be
         offered or received in evidence of any proceeding, arbitration, or
         litigation between the parties hereto arising out of or affecting this
         Agreement, or the rights or obligations of the parties hereunder,
         unless such waiver or modification is in writing, duly executed as
         aforesaid, and the parties further agree that the provisions of this
         Agreement may not be waived except as herein set forth.

                  (b) Burden and Benefit. This Agreement shall be binding upon,
         and shall inure to the benefit of AWG, Homeland and their respective
         successors and assigns:

                  (c) Assignment. Homeland and Holding shall not be entitled to
         assign their rights and obligations under this Agreement. AWG may
         assign its rights and obligations under this Agreement to any
         individual or entity which acquires all or part of AWG's Business in
         the Geographical Area.

                  (d) Severability. In the event any of the provisions of this
         Agreement shall for any reason be held invalid, illegal or
         unenforceable in any respect, then, to the maximum extent permitted by
         law, such invalidity, illegality or unenforceability shall not affect
         any other provision hereof, and this Agreement shall be construed as if
         the invalid, illegal or unenforceable provision had never been
         contained herein. Furthermore, any such invalid, illegal or
         unenforceable provision shall be deemed amended to reflect, and
         enforced to carry out, to the greatest extent valid, legal, and
         enforceable, the intentions of the parties, as determined by the
         original language of such invalid, illegal or unenforceable provision.
         It is the intent of the parties that none of the provisions hereof is
         severable for any purpose (including bankruptcy) other than to avoid
         invalidity, illegality or unenforceability. For purposes hereof, the
         New Supply Agreement and other Supply Protection Agreements and
         transactions contemplated thereby shall not be considered provisions
         hereof but shall be considered separate agreements delivered as part of
         the consideration for the loan evidenced by the Loan Documents. In
         addition, while the execution of this Agreement, the New Supply
         Agreement and the other Supply Protection Agreements are conditions
         precedent to the execution and the performance by AWG under the Loan
         Documents, once executed, this Agreement, the New Supply Agreement and
         each of the other Supply Protection Agreements are intended to be
         separate and independent agreements, severable from the Loan Documents,
         the New Supply Agreement and each of the other Supply Protection
         Agreements and except as limited by the express terms thereof, shall
         survive any expiration, termination or rejection of any other document
         or agreement.

                  (e) Notices. Any notice required to be given hereunder shall
         be sufficient if in writing, and hand delivered, delivered by way of a
         recognized national


                                       5
<PAGE>

         overnight delivery service or sent by certified or registered mail,
         return receipt requested, first-class postage prepaid, to the parties'
         last known addresses.

                  (f) Governing Law. It is understood and agreed that the
         construction and interpretation of this Agreement shall at all times
         and in all respects be governed by the laws of the State of Kansas,
         without considering its law or rules related to choice of law. Any
         dispute or cause of action under this Agreement shall be resolved by a
         court of competent jurisdiction in Johnson County, Kansas.

                  (g) Counterparts: Facsimile Execution. This Agreement may be
         executed in one or more counterparts, each of which shall be deemed to
         be an original but all of which together will constitute one and the
         same instrument. Facsimile execution of this Agreement shall be valid
         and binding for all purposes.

                  (h) Time of Essence. Time is of the essence in connection with
         the performance of the duties of the parties hereto.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as follows:

                                        HOMELAND STORES, INC.
                                        a Delaware corporation


                                        By:
                                            ---------------------------------
                                                David B. Clark, President
                                               and Chief Executive Officer

                                                        "HOMELAND"



                                        HOMELAND HOLDING CORPORATION,
                                        a Delaware corporation


                                        By:
                                            ---------------------------------
                                                David B. Clark, President
                                               and Chief Executive Officer

                                                         "HOLDING"


                                      6
<PAGE>

                                        ASSOCIATED WHOLESALE GROCERS, INC.,
                                        a Missouri corporation


                                        By:
                                            ---------------------------------
                                               Gary L. Phillips, President
                                               and Chief Executive Officer

                                                       "AWG"


                                       7
<PAGE>

                                   EXHIBIT "A"

                                     STORES

<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
1.   26      520 Minnesota                   Chickasha         Grady          OK

2.   101     1100 W. Main                    Norman            Cleveland      OK

3.   102     8922 S. Memorial                Tulsa             Tulsa          OK

4.   105     1315 N. Eastern Ave.            Moore             Cleveland      OK

5.   122     6473 N. MacArthur               Oklahoma City     Oklahoma       OK

6.   125     3828 W. Owen K. Garriott        Enid              Garfield       OK

7.   127     759 Grand Avenue                Chickasha         Grady          OK

8.   141     1402 N. Main St.                Guymon            Texas          OK

9.   145     1800 Central                    Dodge City        Ford           KS

10.  146     1701 N. Milt Phillips           Seminole          Seminole       OK

11.  148     1212 Choctaw                    Clinton           Custer         OK

12.  153     1108 N.W. 18th                  Oklahoma City     Oklahoma       OK

13.  154     2016 N.W. 39th St.              Oklahoma City     Oklahoma       OK

14.  161     510 N. Commerce                 Ardmore           Carter         OK

15.  163     4308 S.E. 44th                  Oklahoma City     Oklahoma       OK

16.  164     706 Flynn                       Alva              Woods          OK

17.  167     1310 Oklahoma Ave.              Woodward          Woodward       OK

18.  170     412 W. Third                    Elk City          Beckham        OK

19.  178     505 S. Chickasaw                Pauls Valley      Garvin         OK

20.  181     12508 N. May Ave.               Oklahoma City     Oklahoma       OK

21.  182     1401 Beech Ave.                 Duncan            Stephens       OK

22.  183     3020 N.W. 16th St.              Oklahoma City     Oklahoma       OK
</Table>


                                       8
<PAGE>

<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
23.  188     220 E. Cleveland                Guthrie           Logan          OK

24.  192     415 S.W. 59th                   Oklahoma City     Oklahoma       OK

25.  193     301 N.W. 67th                   Lawton            Comanche       OK

26.  195     4301 S. May Ave.                Oklahoma City     Oklahoma       OK

27.  196     2705 N. Harrison                Shawnee           Pottawatomie   OK

28.  197     11241 W. Reno                   Yukon             Canadian       OK

29.  200     1724 W. Lindsey Rd.             Norman            Cleveland      OK

30.  204     115 E. Hiway 152                Mustang           Canadian       OK

31.  206     11120 N. Rockwell               Oklahoma City     Oklahoma       OK

32.  207     9320 N. Penn                    Oklahoma City     Oklahoma       OK

33.  208     2205 W. Edmond Rd.              Edmond            Oklahoma       OK

34.  457     3948 S. Peoria                  Tulsa             Tulsa          OK

35.  495     310 W. Trudgeon                 Henryetta         Okmulgee       OK

36.  502     2235 E. 61st St:                Tulsa             Tulsa          OK

37.  503     1110 S. Denver                  Tulsa             Tulsa          OK

38.  515     915 S. Madison                  Bartlesville      Washington     OK

39.  528     12011 S. Memorial               Bixby             Tulsa          OK

40.  529     3405 S. Georgia                 Amarillo          Randall        TX

41.  538     504 E. Graham                   Pryor             Mayes          OK

42.  545     12572 East 21st St.             Tulsa             Tulsa          OK

43.  549     400 Plaza Court                 Sand Springs      Tulsa          OK

44.  550     6402 E. Pine                    Tulsa             Tulsa          OK

45.  553     575 N. Gilcrease Museum         Tulsa             Osage          OK
             Road
             [a/k/a 575 N. 26th W. Ave.]

46.  561     708 S. Aspen                    Broken Arrow      Tulsa          OK
</Table>


                                       9
<PAGE>

<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
47.  563     811 E. Frank Phillips Blvd.     Bartlesville      Washington     OK

48.  567     3139 S. Harvard                 Tulsa             Tulsa          OK

49.  573     19302 E. Admiral Blvd.          Tulsa             Wagoner        OK

50.  574     2351 E. Kenosha                 Broken Arrow      Tulsa          OK

51.  578     700 E. Cherokee                 Wagoner           Wagoner        OK

52.  582     230 W. 1st                      Dumas             Moore          TX

53.  587     101 W. 10th St.                 Borger            Hutchinson     TX

54.  600     7302 S.W. 34th                  Amarillo          Randall        TX

55.  601     4111 Plains                     Amarillo          Potter         TX

56.  603     3505 N.E. 24th                  Amarillo          Potter         TX

57.  604     202 N. 23rd                     Canyon            Randall        TX

58.  605     535 N. 25 Mile Ave.             Hereford          Deaf Smith     TX

59.  677     5811 S. Western                 Amarillo          Randall        TX

60.  778     4001 S. 97 Highway              Sand Springs      Tulsa          OK

61.  793     7001 Northwest Expressway       Oklahoma City     Oklahoma       OK

62.  794     2121 N.W. 23rd                  Oklahoma City     Oklahoma       OK

63.  795     1202 N.W. 40th                  Lawton            Comanche       OK

64.  796     10700 S. Penn                   Oklahoma City     Cleveland      OK

65.  850     316 E. Main                     Pawhuska          Osage          OK

66.  851     702 Fir Street                  Perry             Noble          OK

67.  852     305 S. Broadway                 Cleveland         Pawnee         OK

68.  853     1629 S. Main                    Jay               Delaware       OK

69.  854     310 S. Main                     Blackwell         Kay            OK

70.  855     108 S. Division                 Okemah            Okfuskee       OK

71.  856     813 E. Cherokee                 Nowata            Nowata         OK
</Table>


                                       10
<PAGE>

<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
72.  857     102 Haskell Blvd.               Haskell           Muskogee       OK

73.  880     3115 W. Okmulgee St.            Muskogee          Muskogee       OK

74.  881     1300 S. York                    Muskogee          Muskogee       OK

75.  882     800 E. Okmulgee                 Muskogee          Muskogee       OK

76.  883     6 East Shawnee                  Muskogee          Muskogee       OK

77.  886     24 S.E. 33rd Street             Edmond            Oklahoma       OK

78.  887     2213 S.W. 74th Street           Oklahoma City     Oklahoma       OK
</Table>


                                       11
<PAGE>

                                  EXHIBIT "D-1"
                                       TO
                                SUPPLY AGREEMENT

                                 USE RESTRICTION
                                     (Lease)

         THIS USE RESTRICTION ("USE RESTRICTION") is executed as of the 15th day
of August, 2001, by and between HOMELAND STORES, INC., a Delaware corporation,
Chapter 11 debtor-in-possession ("Grantor") for the benefit of ASSOCIATED
WHOLESALE GROCERS, INC., a Missouri corporation ("AWG").

                                   WITNESSETH

         Pursuant to the terms of certain agreements between AWG and Grantor
dated of even date herewith, including without limitation (i) that certain
Credit Agreement ("CREDIT AGREEMENT") dated August 15, 2001 and (ii) that
certain Supply Agreement ("SUPPLY AGREEMENT") dated August 15, 2001
(collectively, the "AGREEMENTS") which provide for certain debtor-in-possession
financing and a supply of inventory which will allow Grantor, to the extent
possible, to continue to operate its business, Grantor hereby declares that, as
to Grantor's leasehold interest under a lease of such premises (the "LEASE"),
the following described premises ("PROPERTY") situated at ______________________
in the City of _____________, County of _____________, State of ____________, to
wit:

                         See EXHIBIT "A" attached hereto

shall be dedicated to the exclusive use of a grocery store owned or operated by
a retail member of AWG which utilizes AWG as its supplier of Available Products
(as defined in the Supply Agreement) such that the value of all Available
Products purchased from AWG (valued at wholesale cost), measured quarterly,
equals or exceeds sixty-five percent (65%) of all inventory and supplies (except
pharmacy products) purchased for such store. Such restriction shall run with the
leasehold interest created by the Lease whether such interest continues to be
held by Grantor or is held by a successor-in-interest.

         In the event the Lease expires or the Lease is terminated, the Use
Restriction created hereby shall be released and of no further force and effect.
Record notice of such expiration may be given by AWG or the owner of the
Property by filing a sworn affidavit stating that the Lease has expired.
Contemporaneously with the recordation of any such affidavit, the party filing
same shall give Grantor, AWG and/or the owner of the Property written notice of
such recordation.

         The Use Restriction created hereby shall be released and of no further
force and effect upon the recordation of a sworn affidavit by the President of
Grantor stating that AWG's purchase rights have been complied with as set forth
in that certain Right of First


<PAGE>

Refusal Agreement ("ROFR") between AWG and Grantor of even date herewith with
respect to the Property covered hereby. Contemporaneously with the recordation
of any such affidavit, Grantor shall give AWG written notice of such
recordation.

         Reference is hereby expressly made to the above described ROFR for the
full particulars of AWG's purchase rights, the same as though all the terms,
agreements, conditions and covenants contained therein were set forth in full in
this Use Restriction. A fully executed copy of the ROFR is available for
inspection by those parties that may be entitled thereto at the offices of
Grantor at: Oil Center East, 2601 Northwest Expressway, Oklahoma City, Oklahoma
73112 and the principal office of AWG at 5000 Kansas Avenue, Kansas City, Kansas
66106.

         This Use Restriction is solely for the benefit of, and can only be
enforced by, AWG and it does not confer third party beneficiary rights on any
party. This Use Restriction is not intended to and shall in no way encumber the
fee interest in the Property.

         The obligations of Grantor and the Use Restrictions which encumber the
leasehold interest created by the Lease are separate and independent from each
other and the obligations of Grantor under the Credit Agreement, Supply
Agreement and all agreements and/or documents contemplated thereby, and except
as limited by the terms thereof, shall survive any expiration, termination or
rejection of any other document or agreement.

         Executed as of the day and year first above written.

                                        HOMELAND STORES, INC.
                                        a Delaware corporation


                                        By:
                                            ------------------------------------
                                                  David B. Clark, President
                                                 and Chief Executive Officer

                                                 "GRANTOR"

                                        ASSOCIATED WHOLESALE GROCERS, INC.,
                                        a Missouri corporation


                                        By:
                                            ------------------------------------
                                                 Gary L. Phillips, President
                                                 and Chief Executive Officer

                                                 "AWG"


                                       2
<PAGE>

                                ACKNOWLEDGMENTS

STATE OF KANSAS        )
                       )   ss.
COUNTY OF WYANDOTTE    )

         Before me, a Notary Public in and for said county and state, on this
_____ day of August, 2001, personally appeared Gary L. Phillips, to me known to
be the identical person who subscribed the name of the maker thereof to the
foregoing instrument as the President and Chief Executive Officer of ASSOCIATED
WHOLESALE GROCERS, INC., a Missouri corporation, and acknowledged to me that he
executed the same as his free and voluntary act and deed, and as the free and
voluntary act and deed of Associated Wholesale Grocers, Inc., for the uses and
purposes therein set forth.


                                        ----------------------------------------
My Appointment Expires:                              Notary Public


------------------------


STATE OF OKLAHOMA     )
                      )   ss.
COUNTY OF OKLAHOMA    )

         Before me, a Notary Public in and for said county and state, on this
_____ day of August, 2001, personally appeared David B. Clark, to me known to
be the identical person who subscribed the name of the maker thereof to the
foregoing instrument as the President and Chief Executive Officer of HOMELAND
STORES, INC., a Delaware corporation, and acknowledged to me that he executed
the same as his free and voluntary act and deed, and as the free and voluntary
act and deed of Homeland Stores, Inc., for the uses and purposes therein set
forth.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year last above written.


                                        ----------------------------------------
My Appointment Expires:                              Notary Public


------------------------


                                       3
<PAGE>

                                  EXHIBIT "D-2"
                                       TO
                                SUPPLY AGREEMENT

                                 USE RESTRICTION
                                      (Fee)

         THIS USE RESTRICTION ("USE RESTRICTION") is executed as of the 15th day
of August, 2001, by and between HOMELAND STORES, INC., a Delaware corporation,
Chapter 11 debtor-in-possession ("GRANTOR") for the benefit of ASSOCIATED
WHOLESALE GROCERS, INC., a Missouri corporation ("AWG").

                                   WITNESSETH

         Pursuant to the terms of certain agreements between AWG and Grantor
dated of even date herewith, including without limitation (i) that certain
Credit Agreement ("CREDIT AGREEMENT") dated August 15, 2001 and (ii) that
certain Supply Agreement ("SUPPLY AGREEMENT") dated August 15, 2001
(collectively, the "AGREEMENTS") which provide for certain debtor-in-possession
financing and a supply of inventory which will allow Grantor, to the extent
possible, to continue to operate its business, Grantor hereby declares that the
following described premises ("PROPERTY") situated at ___________________ in the
City of ___________, County of ____________, State of ____________, to wit:

                         See EXHIBIT "A" attached hereto

shall be dedicated to the exclusive use of a grocery store owned or operated by
a retail member of AWG which utilizes AWG as its supplier of Available Products
(as defined in the Supply Agreement) such that the value of all Available
Products purchased from AWG (valued at wholesale cost), measured quarterly,
equals or exceeds sixty-five percent (65%) of all inventory and supplies (except
pharmacy products) purchased for such store. Such restriction shall run with the
Property whether such Property continues to be owned by Grantor or is owned by a
successor-in-interest.

         Except as provided in the following paragraph, the Use Restriction
created hereby shall be in effect until released by AWG. Record notice of such
expiration may be given by AWG by filing a sworn affidavit stating that this Use
Restriction has been terminated. Contemporaneously with the recordation of any
such affidavit, AWG shall give Grantor (or Grantor's successor-in-interest),
written notice of such recordation.

         The Use Restriction created hereby shall be released and of no further
force and effect upon the recordation of a sworn affidavit by the President of
Grantor stating that AWG's purchase rights have been complied with as set forth
in that certain Right of First Refusal Agreement ("ROFR") between AWG and
Grantor of even date herewith with


<PAGE>

respect to the Property covered hereby. Contemporaneously with the recordation
of any such affidavit, Grantor shall give AWG written notice of such
recordation.

         Reference is hereby expressly made to the above described ROFR for the
full particulars of AWG's purchase rights, the same as though all the terms,
agreements, conditions and covenants contained therein were set forth in full in
this Use Restriction. A fully executed copy of the ROFR is available for
inspection by those parties that may be entitled thereto at the offices of
Grantor at: Oil Center East, 2601 Northwest Expressway, Oklahoma City, Oklahoma
73112 and the principal office of AWG at 5000 Kansas Avenue, Kansas City, Kansas
66106.

         This Use Restriction is solely for the benefit of, and can only be
enforced by, AWG and it does not confer third party beneficiary rights on any
party.

         The obligations of Grantor and the Use Restrictions which encumber the
Property are separate and independent from each other and the obligations of
Grantor under the Credit Agreement, Supply Agreement and all agreements and/or
documents contemplated thereby, and except as limited by the terms thereof,
shall survive any expiration, termination or rejection of any other document or
agreement.

         Executed as of the day and year first above written

                                        HOMELAND STORES, INC.
                                        a Delaware corporation


                                        By:
                                            --------------------------------
                                               David B. Clark, President
                                              and Chief Executive Officer

                                               "GRANTOR"


                                        ASSOCIATED WHOLESALE GROCERS, INC.,
                                        a Missouri corporation



                                        By:
                                            --------------------------------
                                              Gary L. Phillips, President
                                              and Chief Executive Officer

                                              "AWG"


                                        2
<PAGE>

                                ACKNOWLEDGMENTS


STATE OF KANSAS        )
                       )   ss.
COUNTY OF WYANDOTTE    )

         Before me, a Notary Public in and for said county and state, on this
______ day of August, 2001, personally appeared Gary L. Phillips, to me known to
be the identical person who subscribed the name of the maker thereof to the
foregoing instrument as the President and Chief Executive Officer of ASSOCIATED
WHOLESALE GROCERS, INC., a Missouri corporation, and acknowledged to me that he
executed the same as his free and voluntary act and deed, and as the free and
voluntary act and deed of Associated Wholesale Grocers, Inc., for the uses and
purposes therein set forth.


                                        ----------------------------------------
My Appointment Expires:                              Notary Public


------------------------


STATE OF OKLAHOMA     )
                      )   ss.
COUNTY OF OKLAHOMA    )

         Before me, a Notary Public in and for said county and state, on this
______ day of August, 2001, personally appeared David B. Clark, to me known to
be the identical person who subscribed the name of the maker thereof to the
foregoing instrument as the President and Chief Executive Officer of HOMELAND
STORES, INC., a Delaware corporation, and acknowledged to me that he executed
the same as his free and voluntary act and deed, and as the free and voluntary
act and deed of Homeland Stores, Inc., for the uses and purposes therein set
forth.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year last above written.


                                        ----------------------------------------
My Appointment Expires:                              Notary Public


------------------------


                                       3
<PAGE>


                                   EXHIBIT "E"

                               STORES AWG ON LEASE

<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
1.   850     316 E. Main                     Pawhuska          Osage          OK

2.   851     702 Fir Street                  Perry             Noble          OK

3.   852     305 S. Broadway                 Cleveland         Pawnee         OK

4.   853     1629 S. Main                    Jay               Delaware       OK

5.   854     310 S. Main                     Blackwell         Kay            OK

6.   855     108 S. Division                 Okemah            Okfuskee       OK

7.   856     813 E. Cherokee                 Nowata            Nowata         OK

8.   857     102 Haskell Blvd.               Haskell           Muskogee       OK

9.   880     3115 W. Okmulgee St.            Muskogee          Muskogee       OK

10.  882     800 E. Okmulgee                 Muskogee          Muskogee       OK

11.  883     6 East Shawnee                  Muskogee          Muskogee       OK

12.  886     24 S.E. 33rd Street             Edmond            Oklahoma       OK

13.  887     2213 S.W. 74th Street           Oklahoma City     Oklahoma       OK
</Table>

<PAGE>

                                   EXHIBIT "F"

                              CLOSE/SELL STORE LIST

<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
1.   882     800 E. Okmulgee                 Muskogee          Muskogee       OK

2.   793     7001 Northwest Expressway       Oklahoma City     Oklahoma       OK

3.   794     2121 N.W. 23rd                  Oklahoma City     Oklahoma       OK

4.   887     2213 S.W. 74th Street           Oklahoma City     Oklahoma       OK

5.   883     6 East Shawnee                  Muskogee          Muskogee       OK

6.   545     12572 East 21st St.             Tulsa             Tulsa          OK

7.   550     6402 E. Pine                    Tulsa             Tulsa          OK

8.   574     2351 E. Kenosha                 Broken Arrow      Tulsa          OK

9.   164     706 Flynn                       Alva              Woods          OK

10.  578     700 E. Cherokee                 Wagoner           Wagoner        OK

11.  795     1202 N.W. 40th                  Lawton            Comanche       OK

12.  167     1310 Oklahoma Ave.              Woodward          Woodward       OK

13.  207     9320 N. Penn                    Oklahoma City     Oklahoma       OK

14.  105     1315 N. Eastern Ave.            Moore             Cleveland      OK

15.  122     6473 N. MacArthur               Oklahoma City     Oklahoma       OK

16.  192     415 S.W. 59th                   Oklahoma City     Oklahoma       OK

17.  183     3020 N.W. 16th St.              Oklahoma City     Oklahoma       OK

18.  502     2235 E. 61st St.                Tulsa             Tulsa          OK

19.  503     1110 S. Denver                  Tulsa             Tulsa          OK

20.  553     575 N. Gilcrease Museum         Tulsa             Osage          OK
             Road
             [a/k/a 575 N. 26th W. Ave.]

21.  549     400 Plaza Court                 Sand Springs      Tulsa          OK

22.  145     1800 Central                    Dodge City        Ford           KS
</Table>

<PAGE>


<Table>
<Caption>
HOMELAND
STORE NO.    ADDRESS                         CITY              COUNTY         STATE
---------    ---------------------------     -------------     ----------     -----

<S>  <C>     <C>                             <C>               <C>            <C>
23.  600     7302 SW. 34th                   Amarillo          Randall        TX

24.  601     4111 Plains                     Amarillo          Potter         TX

25.  603     3505 N.E. 24th                  Amarillo          Potter         TX

26.  604     202 N. 23rd                     Canyon            Randall        TX

27.  605     535 N. 25 Mile Ave.             Hereford          Deaf Smith     TX

28.  677     5811 S. Western                 Amarillo          Randall        TX

29.  26      520 Minnesota                   Chickasha         Grady          OK

30.  528     12011 S. Memorial               Bixby             Tulsa          OK

31.  582     230 W. 1st                      Dumas             Moore          TX

32.  587     101 W. 10th St.                 Borger            Hutchinson     TX

33.  529     3405 S. Georgia                 Amarillo          Randall        TX

34.  561     708 S. Aspen                    Broken Arrow      Tulsa          OK
</Table>


<PAGE>

                                   EXHIBIT "G"

                                  CREDIT TERMS

         Homeland shall pay for the Purchased Goods on the following terms: A
statement for the Purchased Goods in connection with the Stores will be prepared
by AWG on the last business day of each week ("FRIDAY STATEMENT"). For purposes
herein, the last business day of each week shall be Friday, unless Friday is a
holiday in which case the last business day shall be Thursday. Payment shall be
due from Homeland to AWG as follows by bank wire transfer:

                  (a) by 12:00 p.m. on the following Monday in the amount of
         $1,000,000 for each $1,000,000 or part thereof which is necessary to
         reduce the Statement Balance Credit to be equal to or less than
         $5,500,000, with a minimum required payment of $1,000,000 (by way of
         example, should a given Friday Statement show a Statement Balance
         Credit of $6,750,000, a payment in the amount of $2,000,000 would be
         required);

                  (b) by 12:00 p.m. on the following Tuesday in an amount, if
         any, which is necessary to reduce the full remaining balance of the
         Friday Statement to $1,000,000; and

                  (c) by 12:00 p.m. on the following Wednesday in the amount of
         $1,000,000 or the then remaining balance of the Friday Statement,
         whichever is less.

         In the event any given Monday or Tuesday payment due date is a holiday,
the applicable payment shall be due on the next preceding business day; provided
however, a Monday holiday will not affect or delay the applicable Tuesday and
Wednesday payment due date unless the applicable Tuesday and/or Wednesday is
also a holiday. Any other products, goods or services charged to Homeland's open
account other than Purchased Goods shall also be paid according to the terms of
Statement Balance Credit described above.

<PAGE>
                                   EXHIBIT "H"

                                       TO

                                SUPPLY AGREEMENT

                               SECURITY AGREEMENT

                  SECURITY AGREEMENT, dated as of August 15, 2001, among
HOMELAND HOLDING CORPORATION, Chapter 11 debtor-in-possession, a Delaware
corporation ("Holding"), HOMELAND STORES, INC., Chapter 11 debtor-in-possession,
a Delaware corporation ("Homeland"); (Holding and Homeland are sometimes
collectively referred to herein as "Grantors" and individually as a "Grantor"),
and ASSOCIATED WHOLESALE GROCERS, INC., a Missouri corporation ("Lender" or
"AWG").

         The following Recitals are a material part of this Security Agreement:

         A. AWG is a wholesaler of grocery and supermarket products operating in
a cooperative manner.

         B. Homeland, a wholly-owned subsidiary of Holding, is a retail grocery
operator of 78 grocery stores.

         C. Pursuant to the Existing Supply Protection Agreements, AWG is
Homeland's primary supplier of grocery and supermarket products.

         D. Homeland and Holding, as of August 1, 2001, have filed for
bankruptcy in the Bankruptcy Court pursuant to the Bankruptcy Code.

         E. Homeland and Holding desire for AWG to continue to supply grocery
and supermarket products to Homeland as Homeland's primary supplier during the
pendency of the Bankruptcy Cases and after confirmation of an Acceptable Plan of
Reorganization.

         F. Grantors, in an effort to continue operations during the pendency of
the Bankruptcy Cases, desire that Lender extend debtor-in-possession financing,
pursuant to that certain Credit Agreement dated as of the date hereof by and
among Grantors and Lender (including all annexes, exhibits and schedules
thereto, as from time to time amended, restated, supplemented or otherwise
modified, the "Credit Agreement"), consisting of term credit facilities to
Grantors of up to Twenty Nine Million Sixty Five Thousand Nine Hundred Fifty Six
and 60/100 Dollars ($29,065,956.60) in the aggregate for the purpose of
refinancing certain senior creditor secured indebtedness of Grantors and to
provide (a) working capital financing for Grantors and (b) funds for other
general corporate purposes of Grantors; and for these purposes, Lender is
willing to make certain debtor-in-possession loans and other extensions of
credit to Grantors of up to such amount upon the terms and conditions set forth
herein;

         G. The above-referenced term credit facilities will have three (3)
components, consisting of the following: (i) a $16,500,000 loan; (ii) an
approximate $9,400,000 loan (to consolidate certain existing indebtedness of
Homeland to AWG under the Existing Notes); and (iii) a $3,100,000 restated loan
(which loan relates to the restatement of the First Day Note); and

<PAGE>


         H. AWG is unwilling to enter into the Credit Agreement and provide the
financing contemplated thereunder unless Grantors execute and deliver to AWG,
among other things, this Security Agreement and the other Loan Documents; and
that such agreements are each approved by the Bankruptcy.

                  NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

         1. DEFINED TERMS. All capitalized terms used but not otherwise defined
herein have the meanings given to them in the Credit Agreement or in Annex A
thereto. All other undefined terms contained in this Security Agreement, unless
the context indicates otherwise, have the meanings provided for by the Code to
the extent the same are used or defined therein.

         2. GRANT OF LIEN.

                  (a) To secure the prompt and complete payment, performance and
observance of all of the Obligations (specifically including, without
limitation, each Grantor's Obligations arising under the cross-guaranty
provisions of Section 12 of the Credit Agreement), each Grantor hereby grants,
assigns, conveys, mortgages, pledges, hypothecates and transfers to Lender, a
Lien upon all of its right, title and interest in, to and under the following
property, whether now owned by or owing to, or hereafter acquired by or arising
in favor of such Grantor (including under any trade names, styles or derivations
thereof), and whether owned or consigned by or to, or leased from or to, such
Grantor, and regardless of where located (all of which being hereinafter
collectively referred to as the "Collateral"):

                           (i)     all Accounts;

                           (ii)    all Chattel Paper;

                           (iii)   all Contracts;

                           (iv)    all Deposit Accounts;

                           (v)     all Documents;

                           (vi)    all Electronic Chattel Paper;

                           (vii)   all Equipment;

                           (viii)  all Fixtures;

                           (ix)    all General Intangibles;


                                       2
<PAGE>



                           (x)     all goods;

                           (xi)    all Instruments;

                           (xii)   all Inventory;

                           (xiii)  all Investment Property;

                           (xiv)   all Letter-of-Credit Rights;

                           (xv)    all money, cash or cash equivalents of any
                  Grantor; and

                           (xvi)   the following specifically listed commercial
                  tort claims: None.

                           (xvii)  any and all causes of action pursuant to
                  Sections 542, 543, 544, 545, 547, 548 or 553 of the Bankruptcy
                  Code and the proceeds therefrom;

                           (xviii) without limiting the generality of the
                  foregoing all leasehold improvements, leasehold interests and
                  rents owned by either Grantor and located at or used in
                  connection with or relating to the businesses at the locations
                  set forth on Schedule VI-A attached hereto and incorporated
                  herein by this reference; whether or not specifically assigned
                  to Lender and whether now owned or existing or hereafter
                  acquired or arising and wherever located and whether held for
                  resale or used in business or purchased with proceeds of the
                  Loans or ever located at, or ever purchased with revenues
                  from, the grocery stores identified on Schedule VI-B, together
                  with all additions, accessories, attachments and accessions
                  thereto and all substitutions and replacements therefor, and
                  all proceeds (including insurance proceeds) from the sale or
                  other disposition thereof and all proceeds thereof;

                           (xix) all equity, deposits, credits, sums and
                  indebtedness of any kind or description, whatsoever, at any
                  time owed by Lender to either Grantor or at any time standing
                  in the name of or to the credit of either Grantor on the books
                  and/or records of Lender, including without limitation,
                  capital stock, members deposit certificates, patronage refund
                  certificates, members savings, direct patronage or year-end
                  patronage; and

                           (xx) to the extent not otherwise included, all
                  Proceeds and products of the foregoing and all accessions to,
                  substitutions and replacements for, and rents and profits of,
                  each of the foregoing.

                  (b) In addition, to secure the prompt and complete payment,
performance and observance of the Obligations and in order to induce Lender as
aforesaid, each Grantor hereby grants to Lender, a right of setoff against the
property of such Grantor held by Lender, consisting of property described above
in Section 2(a) now or hereafter in the possession or custody of or in


                                       3
<PAGE>
transit to Lender, for any purpose, including safekeeping, collection or pledge,
for the account of such Grantor, or as to which such Grantor may have any right
or power.

        3.  LENDER'S RIGHTS: LIMITATIONS ON LENDER'S OBLIGATIONS.

                  (a) It is expressly agreed by Grantors that, anything herein
to the contrary notwithstanding, each Grantor shall remain liable under each of
its Contracts and each of its Licenses to observe and perform all the conditions
and obligations to be observed and performed by it thereunder. Lender shall have
no obligation or liability under any Contract or License by reason of or arising
out of this Security Agreement or the granting herein of a Lien thereon or the
receipt by Lender of any payment relating to any Contract or License pursuant
hereto. Lender shall not be required or obligated in any manner to perform or
fulfill any of the obligations of any Grantor under or pursuant to any Contract
or License, or to make any payment, or to make any inquiry as to the nature or
the sufficiency of any payment received by it or the sufficiency of any
performance by any party under any Contract or License, or to present or file
any claims, or to take any action to collect or enforce any performance or the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.

                  (b) Lender may at any time after a Default or Event of Default
shall have occurred and be continuing, without prior notice to any Grantor,
notify Account Debtors, parties to the Contracts and obligors in respect of
Instruments and Chattel Paper, that the Accounts and the right, title and
interest of any Grantor in and under such Contracts, Instruments and Chattel
Paper have been assigned to Lender, and that payments shall be made directly to
Lender. Upon the request of Lender, each Grantor shall so notify Account
Debtors, parties to Contracts and obligors in respect of Instruments and Chattel
Paper.

                  (c) Lender may at any time in Lender's own name or in the name
of any Grantor communicate with Account Debtors, parties to Contracts, obligors
in respect of Instruments and obligors in respect of Chattel Paper to verify
with such Persons, to Lender's satisfaction, the existence, amount and terms of
any such Accounts, Contracts, Instruments or Chattel Paper. If a Default or
Event of Default shall have occurred and be continuing, each Grantor, at its own
expense, shall cause the independent certified public accountants then engaged
by such Grantor to prepare and deliver to Lender at any time and from time to
time promptly upon Lender's request the following reports with respect to each
Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts;
(iii) trial balances; and (iv) a test verification of such Accounts as Lender
may request. Each Grantor, at its own expense, shall deliver to Lender the
results of each physical verification, if any, which such Grantor may in its
discretion have made, or caused any other Person to have made on its behalf, of
all or any portion of its Inventory.

        4.  REPRESENTATIONS AND WARRANTIES. Each Grantor represents and warrants
 that:

                  (a) Each Grantor is the sole owner of each item of the
Collateral upon which it purports to grant a Lien hereunder, and has good and
marketable title thereto free and clear of any and all Liens other than
Permitted Encumbrances.

                                       4
<PAGE>

                  (b) No effective security agreement, financing statement,
equivalent security or Lien instrument or continuation statement covering all or
any part of the Collateral is on file or of record in any public office, except
such as may have been filed (i) by any Grantor in favor of Lender pursuant to
the Existing Loan Documents, this Security Agreement or the other Loan
Documents, and (ii) in connection with any other Permitted Encumbrances.

                  (c) This Security Agreement is effective to create a valid and
continuing Lien on and, upon the entry by the Bankruptcy Court of an Interim
Financing Order, a perfected Lien in favor of Lender, on the Collateral subject
to the Intercreditor Agreement. Such Lien is prior to all other Liens, except
Permitted Encumbrances that would be prior to Liens in favor of Lender as a
matter of law, and is enforceable as such as against any and all creditors of
and purchasers from any Grantor (other than purchasers of Inventory in the
ordinary course of business). All action by any Grantor necessary or desirable
to protect and perfect such Lien on each item of the Collateral has been duly
taken.

                  (d) Schedule II hereto lists all Instruments and Chattel Paper
of each Grantor. All action by any Grantor necessary or desirable to protect and
perfect the Lien of Lender on each item set forth on Schedule II (including the
delivery of all originals thereof to Lender and the legending of all Chattel
Paper as required by Section 5(b) hereof) has been duly taken. The Lien of
Lender, on the Collateral listed on Schedule II hereto is prior to all other
Liens, except Permitted Encumbrances that would be prior to the Liens in favor
of Lender as a matter of law, and is enforceable as such against any and all
creditors of and purchasers from any Grantor.

                  (e) Each Grantor's exact legal name and state of organization
are set forth in Schedule III-A and Schedule III-B, respectively, hereto.
Grantors shall only change the foregoing in accordance with the provisions of
the Credit Agreement.

                  (f) Each Grantor's chief executive office, principal place of
business, corporate offices, all warehouses and premises where Collateral is
stored or located, and the locations of all of its books and records concerning
the Collateral are set forth on Schedule IV-A and Schedule IV-B, respectively,
hereto. Grantors shall only change the foregoing in accordance with the
provisions of the Credit Agreement.

                  (g) With respect to the Accounts (i) they represent bona fide
sales of Inventory or rendering of services to Account Debtors in the ordinary
course of each Grantor's business and are not evidenced by a judgment,
Instrument or Chattel Paper; (ii) there are no setoffs, claims or disputes
existing or asserted with respect thereto and no Grantor has made any agreement
with any Account Debtor for any extension of time for the payment thereof, any
compromise or settlement for less than the full amount thereof, any release of
any Account Debtor from liability therefor, or any deduction therefrom except a
discount or allowance allowed by such Grantor in the ordinary course of its
business for prompt payment and disclosed to Lender; (iii) to each Grantor's
knowledge, there are no facts, events or occurrences which in any way impair the
validity or enforceability thereof or could reasonably be expected to reduce the
amount payable thereunder as shown on any Grantor's books and records and any
invoices, statements and Collateral Reports delivered to Lender with respect
thereto; (iv) no Grantor has received any


                                       5
<PAGE>



notice of proceedings or actions which are threatened or pending against any
Account Debtor which might result in any adverse change in such Account Debtor's
financial condition; and (v) no Grantor has knowledge that any Account Debtor is
unable generally to pay its debts as they become due. Further with respect to
the Accounts (x) the amounts shown on all invoices and statements which may be
delivered to Lender with respect thereto are actually and absolutely owing to
such Grantor as indicated thereon and are not in any way contingent; and (y) to
each Grantor's knowledge, all Account Debtors have the capacity to contract.

                  (h) With respect to any Inventory (i) such Inventory is
located at one of the applicable Grantor's locations set forth on Schedule IV-A
or Schedule IV-B hereto, as applicable, (ii) no Inventory is now, or shall at
any time or times hereafter be stored at any other location without Lender's
prior written consent, and if Lender gives such consent, each applicable Grantor
will concurrently therewith obtain, to the extent required by the Credit
Agreement, bailee, landlord and mortgagee agreements acknowledging that the
bailee, landlord or mortgagee is holding the Inventory for Lender, (iii) the
applicable Grantor has good, indefeasible and merchantable title to such
Inventory and such Inventory is not subject to any Lien or security interest or
document whatsoever except for the Lien granted to Lender, and (iv) except for
Permitted Encumbrances, such Inventory is not subject to any licensing, patent,
royalty, trademark, trade name or copyright agreements with any third parties
which would require any consent of any third party upon sale or disposition of
that Inventory or the payment of any monies to any third party as a precondition
of such sale or other disposition, and (v) the completion of manufacture, sale
or other disposition of such Inventory by Lender following an Event of Default
shall not require the consent of any Person and shall not constitute a breach or
default under any contract or agreement to which any Grantor is a party or to
which such property is subject.

                  (i) Grantor will obtain bailee, landlord and mortgagee
agreements with respect to all Collateral held by such third parties
acknowledging that such third party is holding the Collateral for Lender.

                  (j) No Grantor has any interest in, or title to, any Patent,
Trademark or Copyright except as set forth in Schedule V hereto. This Security
Agreement is effective to create a valid and continuing Lien on and, upon filing
of the Copyright Security Agreements with the United States Copyright Office and
filing of the Patent Security Agreements and the Trademark Security Agreements
with the United States Patent and Trademark Office, perfected Liens in favor of
Lender on each Grantor's Patents, Trademarks and Copyrights and such perfected
Liens are enforceable as such as against any and all creditors of and purchasers
from any Grantor. Upon filing of the Copyright Security Agreements with the
United States Copyright Office and filing of the Patent Security Agreements and
the Trademark Security Agreements with the United States Patent and Trademark
Office and the filing of appropriate financing statements listed on Schedule I
hereto, all action necessary or desirable to protect and perfect Lender's Lien
on each Grantor's Patents, Trademarks or Copyrights shall have been duly taken.

                  (k) Grantors will cooperate with Lender in obtaining control
with respect to Collateral consisting of Deposit Accounts, Investment Property,
Letter-of-Credit Rights and


                                       6
<PAGE>



Electronic Chattel Paper. Such cooperation shall include, without limitation,
providing Lender with executed Control Letters as Lender deems reasonably
necessary.


                  (l) To the extent Grantors use the proceeds of the Loans to
purchase Collateral, Grantors' repayment of the Loans shall apply on a "first
in, first out" basis so that the portion of the Loans used to purchase a
particular item of Collateral shall be paid in the chronological order that
Grantors purchased the Collateral.


        5.  COVENANTS. Each Grantor covenants and agrees with Lender, that from
and after the date of this Security Agreement and until the Termination Date:

                  (a) Further Assurances: Pledge of Instruments. At any time and
from time to time, upon the written request of Lender and at the sole expense of
Grantors, each Grantor shall promptly and duly execute and deliver any and all
such further instruments and documents and take such further actions as Lender
may deem desirable to obtain the full benefits of this Security Agreement and of
the rights and powers herein granted, including (i) using its best efforts to
secure all consents and approvals necessary or appropriate for the assignment to
or for the benefit of Lender of any License or Contract held by such Grantor or
in which such Grantor has any rights not heretofore assigned, (ii) filing any
financing or continuation statements under the Code with respect to the Liens
granted hereunder or under any other Loan Document, (iii) transferring
Collateral to Lender's possession if such Collateral consists of Chattel Paper,
Instruments, Investment Property or if a Lien on such Collateral can be
perfected only by possession, or if requested by Lender, (iv) obtaining, or
using its best efforts to obtain, waivers of Liens, if any exist, from landlords
and mortgagees in accordance with the Credit Agreement, and (v) confer control
to Lender with respect to Collateral consisting of Deposit Accounts, Investment
Property, Letter-of-Credit Rights or Electronic Chattel Paper. Each Grantor also
hereby authorizes Lender to file any such financing or continuation statements
without the signature of such Grantor to the extent permitted by applicable law,
including financing statements with "all assets" or other such descriptions of
Collateral. If any amount payable under or in connection with any of the
Collateral is or shall become evidenced by any Instrument, such Instrument,
other than checks and notes received in the ordinary course of business, shall
be duly endorsed in a manner satisfactory to Lender immediately upon such
Grantor's receipt thereof.

                  (b) Maintenance of Records. Grantors shall keep and maintain,
at their own cost and expense, satisfactory and complete records of the
Collateral, including a record of any and all payments received and any and all
credits granted with respect to the Collateral and all other dealings with the
Collateral. Grantors shall mark their books and records pertaining to the
Collateral to evidence this Security Agreement and the Liens granted hereby. All
Chattel Paper shall be marked with the following legend: "This writing and the
obligations evidenced or secured hereby are subject to the security interest of
Associated Wholesale Grocers, Inc. as Lender." All Electronic Chattel Paper
shall be marked with an identifying reference in form satisfactory to Lender.


                                       7
<PAGE>



                  (c) Covenants Regarding Patent, Trademark and Copyright
Collateral.

                         (i) Grantors shall notify Lender immediately if they
                  know or have reason to know that any application or
                  registration relating to any Patent, Trademark or Copyright
                  (now or hereafter existing) may become abandoned or dedicated,
                  or of any adverse determination or development (including the
                  institution of, or any such determination or development in,
                  any proceeding in the United States Patent and Trademark
                  Office, the United States Copyright Office or any court)
                  regarding any Grantor's ownership of any Patent, Trademark or
                  Copyright, its right to register the same, or to keep and
                  maintain the same.

                         (ii) In no event shall any Grantor, either itself or
                  through any agent, employee, licensee or designee, file an
                  application for the registration of any Patent, Trademark or
                  Copyright with the United States Patent and Trademark Office,
                  the United States Copyright Office or any similar office or
                  agency without giving Lender prior written notice thereof,
                  and, upon request of Lender, Grantor shall execute and deliver
                  any and all Patent Security Agreements, Copyright Security
                  Agreements or Trademark Security Agreements as Lender may
                  request to evidence Lender's Lien on such Patent, Trademark or
                  Copyright, and the General Intangibles of such Grantor
                  relating thereto or represented thereby.

                         (iii) Grantors shall take all actions necessary or
                  requested by Lender to maintain and pursue each application,
                  to obtain the relevant registration and to maintain the
                  registration of each of the Patents, Trademarks and Copyrights
                  (now or hereafter existing), including the filing of
                  applications for renewal, affidavits of use, affidavits of
                  noncontestability and opposition and interference and
                  cancellation proceedings, unless the applicable Grantor shall
                  determine that such Patent, Trademark or Copyright is not
                  material to the conduct of its business.

                         (iv) In the event that any of the Patent, Trademark or
                  Copyright Collateral is infringed upon, or misappropriated or
                  diluted by a third party, such Grantor shall notify Lender
                  promptly after such Grantor learns thereof Such Grantor shall,
                  unless such Grantor shall reasonably determine that such
                  Patent, Trademark or Copyright Collateral is in no way
                  material to the conduct of its business or operations,
                  promptly sue for infringement, misappropriation or dilution
                  and to recover any and all damages for such infringement,
                  misappropriation or dilution, and shall take such other
                  actions as Lender shall deem appropriate under the
                  circumstances to protect such Patent, Trademark or Copyright
                  Collateral.

                  (d) Indemnification. In any suit, proceeding or action brought
by Lender relating to any Account, Chattel Paper, Contract, Document, Electronic
Chattel Paper, General Intangible or Instrument for any sum owing thereunder or
to enforce any provision of any Account, Chattel Paper, Contract, Deposit
Account, Document, Electronic Chattel Paper, General Intangible or Instrument,
each Grantor will save, indemnify and keep Lender harmless from and against all


                                       8
<PAGE>


expense (including reasonable attorneys' fees and expenses), loss or damage
suffered by reason of any defense, setoff, counterclaim, recoupment or reduction
of liability whatsoever of the obligor thereunder, arising out of a breach by
any Grantor of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to, or in favor of, such obligor or
its successors from such Grantor, except in the case of Lender, to the extent
such expense, loss, or damage is attributable solely to the gross negligence or
willful misconduct of Lender as finally determined by a court of competent
jurisdiction. All such obligations of Grantors shall be and remain enforceable
against and only against Grantors and shall not be enforceable against Lender.

                  (e) Compliance with Terms of Accounts, etc. In all material
respects, each Grantor will perform and comply with all obligations in respect
of its Accounts, Chattel Paper, Contracts and Licenses and all other agreements
to which it is a party or by which it is bound relating to the Collateral.

                  (f) Limitation on Liens on Collateral. No Grantor will create,
permit or suffer to exist, and each Grantor will defend the Collateral against,
and take such other action as is necessary to remove, any Lien on the Collateral
except Permitted Encumbrances, and will defend the right, title and interest of
Lender in and to any of such Grantor's rights under the Collateral against the
claims and demands of all Persons whomsoever.

                  (g) Limitations on Disposition. No Grantor will, and Lender
does not authorize any Grantor to, sell, lease, transfer or otherwise dispose of
any of the Collateral, or attempt or contract to do so except as permitted by
the Credit Agreement.

                  (h) Further Identification of Collateral. Grantors will, if so
requested by Lender, furnish to Lender, as often as Lender requests, statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Lender may reasonably request, all
in such detail as Lender may specify.

                  (i) Notices. Grantors will advise Lender promptly, in
reasonable detail, (i) of any Lien (other than Permitted Encumbrances) or claim
made or asserted against any of the Collateral, and (ii) of the occurrence of
any other event which would have a material adverse effect on the aggregate
value of the Collateral or on the Liens created hereunder or under any other
Loan Document.

        6. LENDER'S APPOINTMENT AS ATTORNEY-IN-FACT.

                  On the Closing Date each Grantor shall execute and deliver to
Lender a power of attorney (the "Power of Attorney") substantially in the form
attached hereto as Exhibit "A". The power of attorney granted pursuant to the
Power of Attorney is a power coupled with an interest and shall be irrevocable
until the Termination Date. The powers conferred on Lender under the Power of
Attorney are solely to protect Lender's interests in the Collateral and shall
not impose any duty upon Lender to exercise any such powers. Lender agrees that
(a) it shall not exercise any power or authority granted under the Power of
Attorney unless an Event of Default


                                        9
<PAGE>



has occurred and is continuing, and (b) Lender shall account for any moneys
received by Lender in respect of any foreclosure on or disposition of Collateral
pursuant to the Power of Attorney provided that Lender shall not have any duty
as to any Collateral, and Lender shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers. NONE OF LENDER OR
ITS RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
REPRESENTATIVES SHALL BE RESPONSIBLE TO ANY GRANTOR FOR ANY ACT OR FAILURE TO
ACT UNDER ANY POWER OF ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT OF DAMAGES
ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS
FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION, NOR FOR ANY PUNITIVE,
EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

        7. REMEDIES: RIGHTS UPON DEFAULT.

                  (a) In addition to all other rights and remedies granted to it
under this Security Agreement, the Credit Agreement, the other Loan Documents
and under any other instrument or agreement securing, evidencing or relating to
any of the Obligations, if any Event of Default shall have occurred and be
continuing, Lender may exercise all rights and remedies of a secured party under
the Code. Without limiting the generality of the foregoing, each Grantor
expressly agrees that in any such event Lender, without demand of performance or
other demand, advertisement or notice of any kind (except the notice specified
below of time and place of public or private sale) to or upon such Grantor or
any other Person (all and each of which demands, advertisements and notices are
hereby expressly waived to the maximum extent permitted by the Code and other
applicable law), may forthwith enter upon the premises of such Grantor where any
Collateral is located through self-help, without judicial process, without first
obtaining a final judgment or giving such Grantor or any other Person notice and
opportunity for a hearing on Lender's claim or action and may collect, receive,
assemble, process, appropriate and realize upon the Collateral, or any part
thereof, and may forthwith sell, lease, assign, give an option or options to
purchase, or sell or otherwise dispose of and deliver said Collateral (or
contract to do so), or any part thereof, in one or more parcels at a public or
private sale or sales, at any exchange at such prices as it may deem acceptable,
for cash or on credit or for future delivery without assumption of any credit
risk. Lender shall have the right upon any such public sale or sales and, to the
extent permitted by law, upon any such private sale or sales, to purchase for
the benefit of Lender, the whole or any part of said Collateral so sold, free of
any right or equity of redemption, which equity of redemption each Grantor
hereby releases. Such sales may be adjourned and continued from time to time
with or without notice. Lender shall have the right to conduct such sales on any
Grantor's premises or elsewhere and shall have the right to use any Grantor's
premises without charge for such time or times as Lender deems necessary or
advisable.

                  Each Grantor further agrees, at Lender's request, to assemble
the Collateral and make it available to Lender at places which Lender shall
select, whether at such Grantor's premises or elsewhere. Until Lender is able to
effect a sale, lease, or other disposition of Collateral, Lender shall have the
right to hold or use Collateral, or any part thereof, to the extent that it
deems appropriate for the purpose of preserving Collateral or its value or for
any other purpose deemed appropriate by Lender. Lender shall have no obligation
to any Grantor to


                                       10
<PAGE>


maintain or preserve the rights of such Grantor as against third parties with
respect to Collateral while Collateral is in the possession of Lender. Lender
may, if it so elects, seek ex parte the appointment of a receiver or keeper, to
take possession of Collateral and to enforce any of Lender's remedies with
respect to such appointment without prior notice or hearing as to such
appointment. Lender shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale to the Obligations as
provided in the Credit Agreement, and only after so paying over such net
proceeds, and after the payment by Lender of any other amount required by any
provision of law, need Lender account for the surplus, if any, to any Grantor.
To the maximum extent permitted by applicable law, each Grantor waives all
claims, damages, and demands against Lender arising out of the repossession,
retention or sale of the Collateral except such as arise solely out of the gross
negligence or willful misconduct of Lender as finally determined by a court of
competent jurisdiction. Each Grantor agrees that ten (10) days prior notice by
Lender of the time and place of any public sale or of the time after which a
private sale may take place is reasonable notification of such matters. Grantors
shall remain liable for any deficiency if the proceeds of any sale or
disposition of the Collateral are insufficient to pay all Obligations, including
any attorneys' fees and other expenses incurred by Lender to collect such
deficiency.

                  (b) Except as otherwise specifically provided herein, each
Grantor hereby waives presentment, demand, protest or any notice (to the maximum
extent permitted by applicable law) of any kind in connection with this Security
Agreement or any Collateral.

         8. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY COLLATERAL. For the
purpose of enabling Lender to exercise rights and remedies under Section 7
hereof (including, without limiting the terms of Section 7 hereof, in order to
take possession of, hold, preserve, process, assemble, prepare for sale, market
for sale, sell or otherwise dispose of Collateral) at such time as Lender shall
be lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to Lender an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to such Grantor) to use, license or
sublicense any Intellectual Property now owned or hereafter acquired by such
Grantor, and wherever the same may be located, and including in such license
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof.

         9. LIMITATION ON LENDER'S DUTY IN RESPECT OF COLLATERAL. Lender shall
use reasonable care with respect to the Collateral in its possession or under
its control. Lender shall not have any other duty as to any Collateral in its
possession or control or in the possession or control of any agent or nominee of
Lender, or any income thereon or as to the preservation of rights against prior
parties or any other rights pertaining thereto.

         10. REINSTATEMENT. This Security Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against any Grantor for liquidation or reorganization, should any Grantor become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Grantor's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or any
part thereof, is, pursuant to


                                       11
<PAGE>


applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Obligations, whether as a "voidable preference,"
"fraudulent conveyance," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.

         11. NOTICES. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other party, or whenever any of the parties desires to give and
serve upon any other party any communication with respect to this Security
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be given in the manner, and
deemed received, as provided for in the Credit Agreement.

         12. SEVERABILITY. Whenever possible, each provision of this Security
Agreement shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision of this Security Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Security
Agreement. This Security Agreement is to be read, construed and applied together
with the Credit Agreement and the other Loan Documents which, taken together,
set forth the complete understanding and agreement of Lender and Grantors with
respect to the matters referred to herein and therein.

         13. NO WAIVER; CUMULATIVE REMEDIES. Lender shall not by any act, delay,
omission or otherwise be deemed to have waived any of its rights or remedies
hereunder, and no waiver shall be valid unless in writing, signed by Lender and
then only to the extent therein set forth. A waiver by Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which Lender would otherwise have had on any future occasion. No
failure to exercise nor any delay in exercising on the part of Lender, any
right, power or privilege hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or future exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies hereunder provided are
cumulative and may be exercised singly or concurrently, and are not exclusive of
any rights and remedies provided by law. None of the terms or provisions of this
Security Agreement may be waived, altered, modified or amended except by an
instrument in writing, duly executed by Lender and Grantors.

         14. LIMITATION BY LAW. All rights, remedies and powers provided in this
Security Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this
Security Agreement are intended to be subject to all applicable mandatory
provisions of law that may be controlling and to be limited to the extent
necessary so that they shall not render this Security Agreement invalid,
unenforceable, in whole or in part, or not entitled to be recorded, registered
or filed under the provisions of any applicable law.


                                       12
<PAGE>


         15. TERMINATION OF THIS SECURITY AGREEMENT. Subject to Section 10
hereof, this Security Agreement shall terminate upon the Termination Date.

         16. SUCCESSORS AND ASSIGNS. This Security Agreement and all obligations
of Grantors hereunder shall be binding upon the successors and assigns of each
Grantor (including any debtor-in-possession on behalf of such Grantor) and
shall, together with the rights and remedies of Lender hereunder, inure to the
benefit of Lender all future holders of any instrument evidencing any of the
Obligations and their respective successors and assigns. No sales of
participations, other sales, assignments, transfers or other dispositions of any
agreement governing or instrument evidencing the Obligations or any portion
thereof or interest therein shall in any manner affect the Lien granted to
Lender hereunder. No Grantor may assign, sell, hypothecate or otherwise transfer
any interest in or obligation under this Security Agreement.

         17. COUNTERPARTS. This Security Agreement may be executed in any number
of separate counterparts, each of which shall collectively and separately
constitute one agreement.

         18. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THIS SECURITY AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF KANSAS APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE,
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH GRANTOR HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN JOHNSON COUNTY,
KANSAS SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN GRANTORS AND LENDER PERTAINING TO THIS SECURITY AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO
THIS SECURITY AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, PROVIDED, THAT
LENDER AND GRANTORS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO
BE HEARD BY A COURT LOCATED OUTSIDE OF JOHNSON COUNTY, KANSAS, AND, PROVIDED,
FURTHER, NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE LENDER
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF LENDER. EACH GRANTOR
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
SUIT COMMENCED IN ANY SUCH COURT, AND EACH GRANTOR HEREBY WAIVES ANY OBJECTION
WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH GRANTOR HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO


                                       13
<PAGE>


SUCH GRANTOR AT THE ADDRESS SET FORTH ON ANNEX C TO THE CREDIT AGREEMENT AND
THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF ACTUAL
RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE PREPAID. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, UNTIL THE DATE
OF THE CONSUMMATION OF THE FINAL ORDER APPROVING AN ACCEPTABLE PLAN OF
REORGANIZATION, THE PARTIES AGREE THAT THE BANKRUPTCY COURT SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES PERTAINING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS EXECUTED ON OR ABOUT THE DATE
HEREOF.

         19. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT DISPUTES
ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG LENDER AND GRANTORS
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED IN CONNECTION WITH, THIS SECURITY AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO.

         20. SECTION TITLES. The Section titles contained in this Security
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

         21. NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Security Agreement. In the event
an ambiguity or question of intent or interpretation arises, this Security
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Security Agreement.

         22. ADVICE OF COUNSEL. Each of the parties represents to each other
party hereto that it has discussed this Security Agreement and, specifically,
the provisions of Section 18 and Section 19, with its counsel.

         23. BENEFIT OF LENDER. All Liens granted or contemplated hereby shall
be for the benefit of Lender, and all proceeds or payments realized from
Collateral in accordance herewith shall be applied to the Obligations in
accordance with the terms of the Credit Agreement.


                                       14
<PAGE>



         IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be executed and delivered by its duly authorized officer as of the
date first set forth above.

                                    HOLDINGS

                                    HOMELAND HOLDING
                                    CORPORATION, Debtor-in-Possession,
                                    a Delaware corporation

                                    By:
                                       ---------------------------------

                                    Name:
                                         -------------------------------

                                    Title:
                                          ------------------------------

                                    HOMELAND

                                    HOMELAND STORES, INC., Debtor-in-
                                    Possession, a Delaware corporation

                                    By:
                                       ---------------------------------

                                    Name:
                                         -------------------------------

                                    Title:
                                          ------------------------------

                                    LENDER

                                    ASSOCIATED WHOLESALE
                                    GROCERS, INC., a Missouri corporation

                                    By:
                                       ---------------------------------

                                    Name:
                                         -------------------------------

                                    Title:
                                          ------------------------------


                                       15
<PAGE>


                                   SCHEDULE I

                                       TO

                               SECURITY AGREEMENT

                              FILING JURISDICTIONS

1.  UCC-1 Financing Statement to be filed with the Delaware Secretary of State
    listing Associated Wholesale Grocers, Inc. as Secured Party and Homeland
    Holding Corporation as Debtor.

2.  UCC-1 Financing Statement to be filed with the Delaware Secretary of State
    listing Associated Wholesale Grocers, Inc. as Secured Party and Homeland
    Stores, Inc. as Debtor.

3.  Two (2) Fixture Financing Statements naming Homeland Holding Corporation and
    Homeland Stores, Inc. as Debtors and Associated Wholesale Grocers, Inc. as
    Secured Party in each of the following counties:

    Ford County, Kansas                     Canadian County, Oklahoma
    Deaf Smith, Texas                       Okmulgee County, Oklahoma
    Hutchinson County, Texas                Washington County, Oklahoma
    Moore County, Texas                     Mayes County, Oklahoma
    Potter County, Texas                    Osage County, Oklahoma
    Randall County, Texas                   Wagoner County, Oklahoma
    Grady County, Oklahoma                  Noble County, Oklahoma
    Cleveland County, Oklahoma              Pawnee County, Oklahoma
    Tulsa County, Oklahoma                  Delaware County, Oklahoma
    Oklahoma County, Oklahoma               Kay County, Oklahoma
    Garfield County, Oklahoma               Carter County, Oklahoma
    Texas County, Oklahoma                  Woods County, Oklahoma
    Seminole County, Oklahoma               Woodward County, Oklahoma
    Custer County, Oklahoma                 Beckham County, Oklahoma
    Stephens County, Oklahoma               Garvin County, Oklahoma
    Logan County, Oklahoma                  Okfuskee County, Oklahoma
    Comanche County, Oklahoma               Nowata County, Oklahoma
    Pottawatomie County, Oklahoma           Muskogee County, Oklahoma


<PAGE>

                                   SCHEDULE II

                                       TO

                               SECURITY AGREEMENT

                                   INSTRUMENTS

                                       AND

                                  CHATTEL PAPER

                          [TO BE COMPLETED BY GRANTORS]

<PAGE>

                                 SCHEDULE III-A

                                       TO

                               SECURITY AGREEMENT

                 SCHEDULE OF LEGAL NAME, STATE OF ORGANIZATION,

                              OFFICES OF HOLDINGS,

I.   Exact Legal Name:       Homeland Holding Corporation

II.  State of Organization:  Delaware

<PAGE>

                                 SCHEDULE III-B

                                       TO

                               SECURITY AGREEMENT

           SCHEDULE OF LEGAL NAME AND STATE OF ORGANIZATION OF STORES

I.          Exact Legal Name:        Homeland Stores, Inc.

II.         State of Organization:   Delaware

<PAGE>

                                  SCHEDULE IV-A

                                       TO

                               SECURITY AGREEMENT

            SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL AND RECORDS
                         CONCERNING HOLDINGS' COLLATERAL

I.      Chief Executive Office and principal place of business of Holding:

II.     2601 NW Expressway, Suite 1100 East
        Oklahoma City, Oklahoma 73112

III.    Corporate Offices of Holding: Same as I above.

IV.     Warehouses: None.

V.      Other Premises at which Collateral is Stored or Located: None.

VI.     Locations of Records Concerning Collateral: Same as I above.

<PAGE>


                                  SCHEDULE IV-B

                                       TO

                               SECURITY AGREEMENT

            SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL AND RECORDS
                          CONCERNING STORES COLLATERAL

I.    Chief Executive Office and principal place of business of Homeland:
      2601 NW Expressway, Suite 1100 East
      Oklahoma City, Oklahoma 73112

II.   Corporate Offices of Homeland: Same as I above.

III.  Warehouses: None.

IV.   Other Premises at which Collateral is Stored or Located: See attached.

V.    Locations of Records Concerning Collateral: Same as I above.

<PAGE>


             OTHER PREMISES AT WHICH COLLATERAL IS STORED OR LOCATED

<Table>
<Caption>

  STORE NO.            ADDRESS                            COUNTY
------------    ------------------------                 ------------
<S>   <C>       <C>                                      <C>
1.    26        520 Minnesota                            Grady
                Chickasha, OK

2.   101        1100 W. Main                             Cleveland
                Norman, OK

3.   102        8922 S. Memorial                         Tulsa
                Tulsa, OK 74133

4.   105        1315 N. Eastern                          Oklahoma
                Moore, OK 73160

5.   107        NWC Coltrane & Danforth                  Oklahoma
                Edmond, OK

6.   109        119th & South Western                    Cleveland
                Oklahoma City, OK

7.   119        U.S. 82 & Hwy. 78                        Fannin
                Bonham, TX

8.   122        6473 N. MacArthur                        Oklahoma
                Oklahoma City, OK

9.   125        3828 W. Owen K. Garriott                 Garfield
                Enid, OK 73703

10.  127        759 Grand Avenue                         Grady
                Chickasha, OK 73018

11.  141        1402 N. Main St.                         Texas
                Guymon, TX

12.  145        1800 Central                             Ford
                Dodge City, KS

13.  146        1701 N. Milt Phillips                    Seminole
                Seminole, OK

14.  148        1212 Choctaw                             Custer
                Clinton, OK

15.  153        1108 N.W. 18th                           Oklahoma
                Oklahoma City, OK

16.  154        2016 N.W. 39th St.                       Oklahoma
                Oklahoma City, OK
</Table>


<PAGE>

<Table>
<Caption>

  STORE NO.            ADDRESS                           COUNTY
------------   ------------------------                ------------
<S>  <C>       <C>                                     <C>
17.  161       510 N. Commerce                          Carter
               Ardmore, OK

18.  163       4308 S.E. 44th                           Oklahoma
               Oklahoma City, OK

19.  164       706 Flynn                                Woods
               Alva, OK 73717

20.  167       1310 Oklahoma Ave.                       Woodward
               Woodward, OK

21.  170       412 W. Third                             Beckham
               Elk City, OK

22.  178       505 S. Chickasaw                         Garvin
               Pauls Valley, OK

23.  181       12508 N. May Ave.                        Oklahoma
               Oklahoma City, OK

24.  182       1401 Beech Ave.                          Stephens
               Duncan, OK

25.  183       3020 N.W. 16th St.                       Oklahoma
               Oklahoma City, OK

26.  188       220 E. Cleveland                         Logan
               Guthrie, OK 73044

27.  192       415 S.W. 59th                            Oklahoma
               Oklahoma City, OK

28.  193       301 N. W. 67th Street                    Comanche
               Lawton,  OK 73505

29.  195       4301 S. May Ave.                         Oklahoma
               Oklahoma City, OK

30.  196       2705 N. Harrison                         Pottawatomie
               Shawnee, OK

31.  197       11241 W. Reno                            Canadian
               Oklahoma City (Yukon), OK

32.  200       1724 W. Lindsey Rd.                      Cleveland
               Norman, OK

33.  204       115 E. Highway 152                       Canadian
               Mustang, OK
</Table>

<PAGE>

<Table>
<Caption>

  STORE NO.                 ADDRESS                         COUNTY
-----------        --------------------------              ---------
<S>  <C>           <C>                                     <C>
34.  206           11120 N. Rockwell                       Oklahoma
                   Oklahoma City, OK 73132

35.  207           9320 N. Penn                            Oklahoma
                   Oklahoma City, OK

36.  208           2205 W. Edmond Road                     Oklahoma
                   Edmond, OK  73034

37.  457           3948 S. Peoria                          Tulsa
                   Tulsa, OK

38.  495           310 W. Trudgeon                         Okmulgee
                   Henryetta, OK  74437

39.  502           2235 E. 61st St.                        Tulsa
                   Tulsa, OK

4O.  503           1110 S. Denver                          Tulsa
                   Tulsa, OK

41.  515           915 S. Madison                          Washington
                   Bartlesville, OK

42.  528           12011 S. Memorial                       Tulsa
                   Bixby, OK

43.  529           3405 S. Georgia                         Randall
                   Amarillo, TX

44.  538           504 E. Graham                           Mayes
                   Pryor, OK 74361

45.  545           12572 E. 21st Street                    Tulsa
                   Tulsa, OK 74129

46.  549           400 Plaza Court                         Tulsa
                   Sand Springs, OK

47.  550           6402 E. Pine                            Tulsa
                   Tulsa, OK

48.  553           575 N. Gilcrease Museum Road            Osage
                   [a/k/a 575 N. 26th W. Avenue]
                   Tulsa, OK

49.  561           708 S. Aspen                            Tulsa
                   Broken Arrow, OK
</Table>



<PAGE>

<Table>
<Caption>

  STORE NO.               ADDRESS                         COUNTY
------------      ---------------------------           ----------
<S>  <C>          <C>                                   <C>
50.  563          811 E. Frank Phillips Blvd.           Washington
                  Bartlesville, OK 74003

51.  567          3139 S. Harvard                       Tulsa
                  Tulsa, OK

52.  573          19302 E. Admiral Blvd.                Wagoner
                  Tulsa, OK

53.  574          2351 E. Kenosh                        Tulsa
                  Broken Arrow, OK 74012

54.  578          700 E. Cherokee                       Wagoner
                  Wagoner, OK

55.  582          230 W. 1st                            Moore
                  Dumas, TX

56.  587          101 W. 10th St.                       Hutchinson
                  Borger, TX

57.  598          401 S. Western                        Potter
                  Amarillo, TX

58.  600          7302 S.W. 34th                        Randall
                  Amarillo, TX

59.  601          4111 Plains                           Potter
                  Amarillo, TX

60.  603          3505 N.E. 24th                        Potter
                  Amarillo, TX

61.  604          202 N. 23rd                           Randall
                  Canyon, TX

62.  605          535 N. 25 Mile Ave.                   Deaf Smith
                  Hereford, TX

63.  677          5811 S. Western                       Randall
    f/k/a         Amarillo, TX 79109
     599

64.  778          4001 S. 97 Highway                    Tulsa
                  Sand Springs, OK

65.  793          7001 Northwest Expressway             Oklahoma
                  Oklahoma City, OK
</Table>

<PAGE>

<Table>
<Caption>

  STORE NO.                  ADDRESS                      COUNTY
-----------             ---------------------           -----------
<S>  <C>                <C>                             <C>
66.   794               2121 N.W. 23rd                  Oklahoma
                        Oklahoma City, OK

67.   795               1202 N.W. 40th                  Comanche
                        Lawton, OK

68.   796               10700 S. Penn                   Cleveland
                        Oklahoma City, OK

69.   850               316 E. Main                     Osage
                        Pawhuska, OK

70.   851               702 Fir Street                  Noble
                        Perry, OK

71.   852               305 S. Broadway                 Pawnee
                        Cleveland, OK

72.   853               1629 S. Main                    Delaware
                        Jay, OK

73.   854               310 S. Main                     Kay
                        Blackwell, OK

74.   855               108 S. Division                 Okfuskee
                        Okemah, OK

75.   856               813 E. Cherokee                 Nowata
                        Nowata, OK

76.   857               102 Haskell Blvd.               Muskogee
                        Haskell, OK

77.   880               3115 W. Okmulgee St.            Muskogee
                        Muskogee, OK

78.   881               1300 S. York                    Muskogee
                        Muskogee, OK

79.   882               800 E. Okmulgee                 Muskogee
                        Muskogee, OK

80.   883               6 East Shawnee                  Muskogee
                        Muskogee, OK

81.   886               24 S.E. 33rd Street             Oklahoma
                        Edmond, OK

82.   887               2213 S.W. 74th Street           Oklahoma
                        Oklahoma City, OK
</Table>

<PAGE>


<Table>
<Caption>

  STORE NO.                       ADDRESS                  COUNTY
---------------         -------------------------        ---------
<S>  <C>                <C>                              <C>
83.  Office             2601 Northwest Expressway        Oklahoma
                        Suite 1100 East
                        Oklahoma City, OK

84.                     4901 N. Cooper                   Oklahoma
                        Oklahoma City, OK
</Table>

<PAGE>

                                   SCHEDULE V

                                       TO

                               SECURITY AGREEMENT

                       PATENTS, TRADEMARKS AND COPYRIGHTS

                          [TO BE COMPLETED BY GRANTORS]

<PAGE>

                                  SCHEDULE VI-A

                                       TO

                               SECURITY AGREEMENT

                               LEASEHOLD LOCATIONS


<Table>
<Caption>

STORE NO.             ADDRESS                        COUNTY                             COMMENTS
---------         ----------------                 -----------                  ---------------------
<S>   <C>         <C>                              <C>                          <C>
1.     26         (520 Minnesota)                  Grady                        Leased
                  Chickasha, OK

2.    101         1100 W. Main                     Cleveland                    Leased
                  Norman. OK

3.    122         6473 N. MacArthur                Oklahoma                     Leased
                  Oklahoma City, OK

4.    125         3828 W. Owen K. Garriott         Garfield                     Part Leased/Part Owned
                  Enid. OK

5.    127         759 Grand Avenue                 Grady                        Part Leased/Part Owned
                  Chickasha. OK

6.    141         1402 N. Main St.                 Texas                        Leased
                  Guymon, TX

7.    145         1800 Central                     Ford                         Leased
                  Dodge City, KS

8.    146         1701 N. Milt Phillips            Seminole                     Leased
                  Seminole, OK

9.    148         1212 Choctaw                     Custer                       Leased
                  Clinton, OK

10.   153         1108 N.W. 18th                   Oklahoma                     Leased
                  Oklahoma City, OK

11.   154         2016 N.W. 39th St.               Oklahoma                     Leased
                  Oklahoma City, OK

12.   161         510 N. Commerce                  Carter                       Leased
                  Ardmore, OK

13.   163         4308 S.E. 44th                   Oklahoma                     Leased
                  Oklahoma City, OK
</Table>



<PAGE>

<Table>
<Caption>

STORE NO.           ADDRESS                       COUNTY                 COMMENTS
---------       ----------------                -----------        ---------------------
<S>  <C>        <C>                             <C>                <C>
14.  164        706 Flynn                       Woods              Part Leased/Part Owned
                Alva, OK

15.  167        1310 Oklahoma Ave.              Woodward           Leased
                Woodward, OK

16.  170        412 W. Third                    Beckham            Part Leased/Part Owned
                Elk City, OK

17.  178        505 S. Chickasaw                Garvin             Leased
                Pauls Valley, OK

18.  181        12508 N. May Ave.               Oklahoma           Leased
                Oklahoma City, OK

19.  182        1401 Beech Ave.                 Stephens           Part Leased/Part Owned
                Duncan, OK

20.  183        3020 N.W. 16th St.              Oklahoma           Leased
                Oklahoma City, OK

21.  192        415 S.W. 59th                   Oklahoma           Leased
                Oklahoma City, OK

22.  195        4301 S. May Ave.                Oklahoma           Own building/Leased land
                Oklahoma City, OK

23.  196        2705 N. Harrison                Pottawatomie       Leased
                Shawnee, OK

24.  197        11241 W. Reno                   Canadian           Leased
                Oklahoma City (Yukon), OK

25.  200        1724 W. Lindsey Rd.             Cleveland          Leased
                Norman, OK

26.  204        115 E. Hiway 152                Canadian           Leased
                Mustang, OK

27.  207        9320 N. Penn                    Oklahoma           Leased
                Oklahoma City, OK

28.  457        3948 S. Peoria                  Tulsa              Leased
                Tulsa, OK

29.  502        2235 E. 61st St.                Tulsa              Leased
                Tulsa, OK

30.  503        1110 S. Denver                  Tulsa              Leased
                Tulsa, OK
</Table>


<PAGE>

<Table>
<Caption>

STORE NO.           ADDRESS                       COUNTY              COMMENTS
---------       ----------------                -----------       ---------------------
<S>  <C>        <C>                             <C>               <C>

31.  515        915 S. Madison                  Washington        Leased
                Bartlesville, OK

32.  528        12011 S. Memorial               Tulsa             Leased
                Bixby, OK

33.  529        3405 S. Georgia                 Randall           Leased
                Amarillo, TX

34.  549        400 Plaza Court                 Tulsa             Leased
                Sand Springs, OK

35.  550        6402 E. Pine                    Tulsa             Leased
                Tulsa, OK

36.  553        575 N. Gilcrease Museum Road    Osage             Leased
                Tulsa, OK

37.  561        708 S. Aspen                    Tulsa             Leased
                Broken Arrow, OK

38.  567        3139 S. Harvard                 Tulsa             Leased
                Tulsa, OK

39.  573        19302 E. Admiral Blvd.          Wagoner           Leased
                Tulsa, OK

40.  578        700 E. Cherokee                 Wagoner           Leased
                Wagoner, OK

41.  582        230 W. 1st                      Moore             Leased
                Dumas, TX

42.  587        101 W. 10th St.                 Hutchinson        Leased
                Borger, TX

43.  600        7302 S.W. 34th                  Randall           Leased
                Amarillo, TX

44.  601        4111 Plains                     Potter            Leased
                Amarillo, TX

45.  603        3505 N.E. 24th                  Potter            Leased
                Amarillo, TX

46.  604        202 N. 23rd                     Randall           Leased
                Canyon, TX

47.  605        535 N. 25 Mile Ave.             Deaf Smith        Leased
                Hereford, TX
</Table>

<PAGE>

<Table>
<Caption>

STORE NO.           ADDRESS                       COUNTY                      COMMENTS
---------       ----------------                -----------             ---------------------
<S>  <C>        <C>                             <C>                     <C>
48.  778        4001 S. 97 Highway               Tulsa                  Leased
                Sand Springs, OK

49.  793        7001 Northwest Expressway        Oklahoma               Leased
                Oklahoma City, OK

50.  794        2121 N.W. 23rd                   Oklahoma               Leased
                Oklahoma City, OK

51.  795        1202 N.W. 40th                   Comanche               Leased
                Lawton, OK

52.  796        10700 S. Penn                    Cleveland              Leased
                Oklahoma City, OK

53.  850        316 E. Main                      Osage                  Leased
                Pawhuska, OK

54.  851        702 Fir Street                   Noble                  Leased
                Perry, OK

55.  852        305 S. Broadway                  Pawnee                 Leased
                Cleveland, OK

56.  853        1629 S. Main                     Delaware               Leased
                Jay, OK

57.  854        310 S. Main                      Kay                    Leased
                Blackwell, OK

58.  855        108 S. Division                  Okfuskee               Leased
                Okemah, OK

59.  856        813 E. Cherokee                  Nowata                 Leased
                Nowata, OK

60.  857        102 Haskell Blvd.                Muskogee               Leased
                Haskell, OK

61.  880        3115 W. Okmulgee St.             Muskogee               Leased
                Muskogee, OK

62.  881        1300 S. York                     Muskogee               Leased
                Muskogee, OK

63.  882        800 E. Okmulgee                  Muskogee               Leased
                Muskogee, OK

64.  883        6 East Shawnee                   Muskogee               Leased
                Muskogee, OK
</Table>

<PAGE>

<Table>
<Caption>

STORE NO.           ADDRESS                       COUNTY                COMMENTS
---------       ----------------                -----------             ---------
<S>  <C>        <C>                             <C>                     <C>
65.  886        24 S.E. 33rd Street             Oklahoma                Leased
                Edmond, OK

66.  887        2213 S.W. 74th Street           Oklahoma                Leased
                Oklahoma City, OK

67.  Office     2601  Northwest  Expressway     Oklahoma                Leased
                Suite 1100 East
                Oklahoma City, OK

68.             4901 N. Cooper                  Oklahoma                Leased
                Oklahoma City, OK
</Table>

<PAGE>

                                  SCHEDULE IV-B

                                       TO

                               SECURITY AGREEMENT

                                 GROCERY STORES

<Table>
<Caption>

STORE NO.           ADDRESS                       COUNTY                      COMMENTS
---------       ----------------                -----------             ---------------------
<S>             <C>                             <C>                     <C>

1.  26          520 Minnesota                   Grady                   Leased
                Chickasha, OK

2.  101         1100 W. Main                    Cleveland               Leased
                Norman, OK

3.  102         8922 S. Memorial                Tulsa                   Owned Store
                Tulsa, OK

4.  105         13 15 N. Eastern Ave.           Cleveland               Owned Store
                Moore, OK

5.  122         6473 N. MacArthur               Oklahoma                Leased
                Oklahoma City, OK

6.  125         3828 W. Owen K. Garriott        Garfield                Part Leased/Part Owned
                Enid, OK

7.  127         759 Grand Avenue                Grady                   Part Leased/Part Owned
                Chickasha, OK

8.  141         1402 N. Main St.                Texas                   Leased
                Guymon, TX

9.  145         1800 Central                    Ford                    Leased
                Dodge City, KS

10. 146         1701 N. Milt Phillips           Seminole                Leased
                Seminole, OK

11. 148         1212 Choctaw                    Custer                  Leased
                Clinton, OK

12. 153         1108 N.W. 18th                  Oklahoma                Leased
                Oklahoma City, OK

13. 154         2016 N.W. 39th St.              Oklahoma                Leased
                Oklahoma City, OK
</Table>

<PAGE>

<Table>
<Caption>

STORE NO.           ADDRESS                       COUNTY                 COMMENTS
---------       ----------------                -----------        ---------------------
<S>             <C>                             <C>                <C>
14. 161         510 N. Commerce                 Carter             Leased
                Ardmore, OK

15. 163         4308 S.E. 44th                  Oklahoma           Leased
                Oklahoma City, OK

16. 164         706 Flynn                       Woods              Part Leased/Part Owned
                Alva, OK

17. 167         1310 Oklahoma Ave.              Woodward           Leased
                Woodward, OK

18. 170         412 W. Third                    Beckham            Part Leased/Part Owned
                Elk City, OK

19. 178         505 S. Chickasaw                Garvin             Leased
                Pauls Valley, OK

20. 181         12508 N. May Ave.               Oklahoma           Leased
                Oklahoma City, OK

21. 182         1401 Beech Ave.                 Stephens           Part Leased/Part Owned
                Duncan, OK

22. 183         3020 N.W. 16th St.              Oklahoma           Leased
                Oklahoma City, OK

23. 188         220 E. Cleveland                Logan              Owned Store
                Guthrie, OK

24. 192         415 S.W. 59th                   Oklahoma           Leased
                Oklahoma City, OK

25. 193         301 N.W. 67th                   Comanche           Owned Store
                Lawton, OK

26. 195         4301 S. May Ave.                Oklahoma           Own building/Land Leased
                Oklahoma City, OK

27. 196         2705 N. Harrison                Pottawatomie       Leased
                Shawnee, OK

28. 197         11241 W. Reno                   Canadian           Leased
                Oklahoma City (Yukon),
                OK

29. 200         1724 W. Lindsey Rd.             Cleveland          Leased
                Norman, OK
</Table>

<PAGE>

<Table>
<Caption>

STORE NO.           ADDRESS                     COUNTY              COMMENTS
---------       ----------------              -----------      ---------------------
<S>             <C>                           <C>              <C>
30.  204        115 E. Hiway 152              Canadian         Leased
                Mustang, OK

31.  206        11120 N. Rockwell             Oklahoma         Owned Store
                Oklahoma City, OK

32.  207        9320 N. Penn                  Oklahoma         Leased
                Oklahoma City, OK

33.  208        2205 W. Edmond Rd.            Oklahoma         Owned Store
                Edmond, OK

34.  457        3948 S. Peoria                Tulsa            Leased
                Tulsa, OK

35.  495        310 W. Trudgeon               Okmulgee         Owned Store
                Henryetta, OK

36.  502        2235 E. 61st St.              Tulsa            Leased
                Tulsa, OK

37.  503        1110 S. Denver                Tulsa            Leased
                Tulsa, OK

38.  515        915 S. Madison                Washington       Leased
                Bartlesville, OK

39.  528        12011 S. Memorial             Tulsa            Leased
                Bixby, OK

40.  529        3405 S. Georgia               Randall          Leased
                Amarillo, TX

41.  538        504 E. Graham                 Mayes            Owned Store
                Pryor, OK

42.  545        12572 East 21st St.           Tulsa            Owned Store
                Tulsa, OK

43.  549        400 Plaza Court               Tulsa            Leased
                Sand Springs, OK

44.  550        6402 E. Pine                  Tulsa            Leased
                Tulsa, OK

45.  553        575 N. Gilcrease Museum       Osage            Leased
                Road
                Tulsa, OK
</Table>

<PAGE>

<Table>
<Caption>

STORE NO.           ADDRESS                       COUNTY                COMMENTS
---------       ----------------                -----------       ---------------------
<S>             <C>                             <C>               <C>
46. 561         708 S. Aspen                    Tulsa             Leased
                Broken Arrow, OK

47. 563         811 E. Frank Phillips Blvd.     Washington        Owned Store
                Bartlesville, OK

48. 567         3139 S. Harvard                 Tulsa             Leased
                Tulsa, OK

49. 573         19302 E. Admiral Blvd.          Wagoner           Leased
                Tulsa, OK

50. 574         2351 E. Kenosha                 Tulsa             Owned Store
                Broken Arrow, OK

51. 578         700 E. Cherokee                 Wagoner           Leased
                Wagoner, OK

52. 582         230 W. 1st                      Moore             Leased
                Dumas, TX

53. 587         101 W. 10th St.                 Hutchinson        Leased
                Borger, TX

54. 598         401 S. Western                  Patternson        Owned Store Closed - May
                Amarillo, TX                                      29, 1998.

55. 600         7302 S.W. 34th                  Randall           Leased
                Amarillo, TX

56. 601         4111 Plains                     Potter            Leased
                Amarillo, TX

57. 603         3505 N.E. 24th                  Potter            Leased
                Amarillo, TX

58. 604         202 N. 23rd                     Randall           Leased
                Canyon, TX

59. 605         535 N. 25 Mile Ave.             Deaf Smith        Leased
                Hereford, TX

60. 677         5811 S. Western                 Randall           Owned Store
                Amarillo, TX

61. 778         4001 S. 97 Highway              Tulsa             Leased
                Sand Springs, OK
</Table>

<PAGE>

<Table>
<Caption>

STORE NO.           ADDRESS                       COUNTY                     COMMENTS
---------       ----------------                -----------             --------------------
<S>             <C>                             <C>                     <C>
62.  793        7001 Northwest                  Oklahoma                Leased
                Expressway
                Oklahoma City, OK

63.  794        2121 N.W. 23rd                  Oklahoma                Leased
                Oklahoma City, OK

64.  795        1202 N.W. 40th                  Comanche                Leased
                Lawton, OK

65.  796        10700 S. Penn                   Cleveland               Leased
                Oklahoma City, OK

66.  850        316 E. Main                     Osage                   Leased
                Pawhuska, OK

67.  851        702 Fir Street                  Noble                   Leased
                Perry, OK

68.  852        305 S. Broadway                 Pawnee                  Leased
                Cleveland, OK

69.  853        1629 S. Main                    Delaware                Leased
                Jay, OK

70.  854        310 S. Main                     Kay                     Leased
                Blackwell, OK

71.  855        108 S. Division                 Okfuskee                Leased
                Okemah, OK

72.  856        813 E. Cherokee                 Nowata                  Leased
                Nowata, OK

73.  857        102 Haskell Blvd.               Muskogee                Leased
                Haskell, OK

74.  880        3115 W. Okmulgee St.            Muskogee                Leased
                Muskogee, OK

75.  881        1300 S. York                    Muskogee                Leased
                Muskogee, OK

76.  882        800 E. Okmulgee                 Muskogee                Leased
                Muskogee, OK

77.  883        6 East Shawnee                  Muskogee                Leased
                Muskogee, OK
</Table>

<PAGE>

<Table>
<Caption>

STORE NO.           ADDRESS                       COUNTY                 COMMENTS
---------       ----------------                -----------        ---------------------
<S>             <C>                             <C>                <C>
78. 886         24 S.E. 33rd Street             Oklahoma            Leased
                Edmond, OK

79. 887         2213 S.W. 74th Street           Oklahoma            Leased
                Oklahoma City, OK
</Table>

<PAGE>

                                    EXHIBIT A

                                       TO

                               SECURITY AGREEMENT

                                POWER OF ATTORNEY

         This Power of Attorney is executed and delivered by ______________, a
Delaware corporation ("Grantor") to Associated Wholesale Grocers, Inc., a
Missouri corporation (hereinafter referred to as "Attorney"), as Lender under a
Credit Agreement and a Security Agreement, both dated as of _________, ___
2001, and other related documents (the "Loan Documents"). No person to whom this
Power of Attorney is presented, as authority for Attorney to take any action or
actions contemplated hereby, shall be required to inquire into or seek
confirmation from Grantor as to the authority of Attorney to take any action
described below, or as to the existence of or fulfillment of any condition to
this Power of Attorney, which is intended to grant to Attorney unconditionally
the authority to take and perform the actions contemplated herein, and Grantor
irrevocable waives any right to commence any suit or action, in law or equity,
against any person or entity which acts in reliance upon or acknowledges the
authority granted under this Power of Attorney. The power of attorney granted
hereby is coupled with an interest, and may not be revoked or canceled by
Grantor without Attorney's written consent.

         Grantor hereby irrevocably constitutes and appoints Attorney (and all
officers, employees or agents designated by Attorney), with full power of
substitution, as Grantor's true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Grantor and in the
name of Grantor or in its own name, from time to time in Attorney's discretion,
to take any and all appropriate action and to execute and deliver any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of the Loan Documents and, without limiting the generality of the
foregoing, Grantor hereby grants to Attorney the power and right, on behalf of
Grantor, without notice to or assent by Grantor, and at any time, to do the
following: (a) change the mailing address of Grantor, open a post office box on
behalf of Grantor, open mail for Grantor, and ask, demand, collect, give
acquittances and receipts for, take possession of, endorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, and notices in connection with any property
of Grantor; (b) effect any repairs to any asset of Grantor, or continue or
obtain any insurance and pay all or any part of the premiums therefor and costs
thereof, and make, settle and adjust all claims under such policies of
insurance, and make all determinations and decisions with respect to such
policies; (c) pay or discharge any taxes, liens, security interests, or other
encumbrances levied or placed on or threatened against Grantor or its property;
(d) defend any suit, action or proceeding brought against Grantor if Grantor
does not defend such suit, action or proceeding or if Attorney believes that
Grantor is not pursuing such defense in a manner that will maximize the recovery
to Attorney, and settle, compromise or adjust any suit, action, or proceeding
described above and, in connection therewith, give such

<PAGE>

discharges or releases as Attorney may deem appropriate; (e) file or prosecute
any claim, litigation, suit or proceeding in any court of competent jurisdiction
or before any arbitrator, or take any other action otherwise deemed appropriate
by Attorney for the purpose of collecting any and all such moneys due to Grantor
whenever payable and to enforce any other right in respect of Grantor's
property; (f) cause the certified public accountants then engaged by Grantor to
prepare and deliver to Attorney at any time and from time to time, promptly upon
Attorney's request, the following reports: (1) a reconciliation of all accounts,
(2) an aging of all accounts, (3) trial balances, (4) test verifications of such
accounts as Attorney may request, and (5) the results of each physical
verification of inventory; (g) communicate in its own name with any party to any
Contract (as defined in the Loan Documents) with regard to the assignment of the
right, title and interest of such Grantor in and under the Contracts and other
matters relating thereto; and (h) execute, in connection with any sale provided
for in any Loan Document, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral (as defined in the Loan
Documents) and to otherwise direct such sale or resale, all as though Attorney
were the absolute owner of the property of Grantor for all purposes, and to do,
at Attorney's option and Grantor's expense, at any time or from time to time,
all acts and other things that Attorney reasonably deems necessary to perfect,
preserve, or realize upon Grantor's property or assets and Attorney's Liens
thereon, all as fully and effectively as Grantor might do. Grantor hereby
ratifies, to the extent permitted by law, all that said Attorney shall lawfully
do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney is executed by Grantor, and
Grantor has caused its seal to be affixed pursuant to the authority of its board
of directors this ____________ day of ______________, 20____.

ATTEST:

By:                                 (SEAL)
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Title:
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