Exhibit 10.40



Exhibit 10.40


THIRD AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT


This
Third Amendment to Amended and Restated Credit Agreement (the “Third
Amendment”) is made as of the 13th day of December, 2005 by and among


PATHMARK
STORES,  INC., a corporation  organized under the laws of the State of Delaware,  having
a place  of business at 200 Milik Street, Carteret, New Jersey 07008;


the LENDERS
party hereto;


FLEET
RETAIL  GROUP, LLC (f/k/a Fleet Retail Group, Inc.), as Administrative Agent and
Collateral Agent  for the Lenders, a Delaware limited liability company, having a place
of business at 40  Broad Street, Boston, Massachusetts 02109


THE CIT
GROUP/BUSINESS CREDIT, INC., as Syndication Agent; and


GMAC
COMMERCIAL FINANCE LLC and GENERAL ELECTRIC CAPITAL CORPORATION, as Co-Documentation
Agents


in consideration of the mutual
covenants herein contained and benefits to be derived herefrom.


WITNESSETH


WHEREAS,
the Borrower, the Administrative Agent, the Collateral Agent, the Lenders, the
Syndication Agent, and the Co-Documentation Agents have entered into an Amended
and Restated Credit Agreement dated as of October 1, 2004 (as amended and in
effect, the “Credit Agreement”); and


WHEREAS,
the Borrower, the Administrative Agent, the Collateral Agent, the Lenders, the
Syndication Agent, and the Co-Documentation Agents have agreed to amend certain
provisions of the Credit Agreement as set forth herein.


NOW
THEREFORE, it is hereby agreed as follows:


	1. 	Definitions:
All  capitalized  terms used herein and not  otherwise  defined shall have the same
meaning  herein as in the Credit Agreement.





	2. 	Amendments
to Article I. The  provisions  of Article I of the  Credit  Agreement  are hereby
amended as  follows:





	 	a.
By  deleting  the  definition  of  “Consolidated  EBITDA” in  its  entirety
and  substituting the following in its stead:






“Consolidated
EBITDA” means, for any period, Consolidated Net Income for such period,
plus, without duplication and to the extent deducted from revenues in determining
Consolidated Net Income, the sum of (a) the aggregate amount of Consolidated Interest
Expense for such period, (b) the aggregate amount of letter of credit fees paid during
such period, (c) provisions for taxes based on income for such period, (d) all amounts
attributable to depreciation and amortization for such period, (e) other non-cash items
(including charges for inventory accounted for on a last in, first out basis) reducing
Consolidated Net Income for such period (f) all Yucaipa Charges during such period, (g)
all extraordinary charges during such period, (h) all Strategic Charges during such
period, (i) all Project 2005 Expenses during such period, and (j) all expenses paid or
accrued through Fiscal Year 2006 for lease mitigation costs, shrink and other costs
incurred in connection with store closings reducing Consolidated Net Income for such
period, but in no event to exceed $22,000,000, and minus, without duplication and
to the extent increasing Consolidated Net Income for such period, (k) all extraordinary
gains during such period, (l) net gains (howsoever classified) from the sale of Real
Property Assets in excess of $10,000,000 during any four fiscal quarter period, and (m)
other non-cash items (other than pension income related to the Borrower’s qualified
pension plan, to the extent such pension income constitutes a non-cash item) during such
period, all as determined on a consolidated basis with respect to the Borrower and its
consolidated Subsidiaries in accordance with GAAP.


 


	 	b.
By deleting  the  definition  of  "Employee  Stock  Option Plan" in its
entirety and  substituting the following in its stead:






“Employee
Stock Option Plan” means,  collectively,  (a) the Pathmark Stores, Inc. 2000 Equity
Plan,  (b) the Pathmark Stores,  Inc. 2000 Non-Employee  Directors Equity Plan, and (c)
other arrangements  providing stock-based compensation exempt under Section 16b-3 of the
Exchange Act.


	 	c.
By adding the following new definition in appropriate alphabetical order:






“Project
2005 Expenses” means the sum of the following items, without duplication and to
the extent deducted from revenues in determining Consolidated Net Income for the Fiscal
Year ending on or about January 31, 2006 only: (a) expenses paid or accrued for the
remodeling of the Borrower’s stores and charges to income made for inventory
shrinkage, all of which together shall not exceed an aggregate amount greater than
$13,500,000, plus (b) employee related expenses paid or accrued in connection with
(i) labor buyouts with respect to union associates, (ii) the termination of the employment
agreement of the former chief executive officer, and (iii) non-union employee
reorganization, all of which together shall not exceed an aggregate amount greater than
$11,700,000, in each case, as determined in accordance with GAAP.


	3. 	Conditions
to  Effectiveness.  This Third  Amendment  shall not be effective  until each of the
following  conditions precedent have been fulfilled to the satisfaction of the Agent:





	 	a. 	This
Third Amendment shall have been duly executed and delivered by the  Borrower, the
Administrative Agent, the Collateral Agent and the Required  Lenders. The Administrative
Agent shall have received a fully executed copy  hereof and of each other document
required hereunder.





	 	b. 	The
Borrower shall have reimbursed the Administrative Agent for all expenses due  and payable
in connection herewith, including, without limitation, its  reasonable attorneys’ fees.





	 	c. 	No
Default or Event of Default shall have occurred and be continuing.





	 	d. 	The
Borrower shall have provided such additional instruments and documents to the
Administrative Agent as the Administrative Agent and its counsel may have  reasonably
requested.





	4. 	Miscellaneous.





	 	a. 	Except
as provided herein, all terms and conditions of the Credit Agreement and  the other Loan
Documents remain in full force and effect. The Borrower hereby  ratifies, confirms, and
reaffirms all of the representations, warranties and  covenants therein contained.
Without limiting the generality of the foregoing,  the Borrower hereby acknowledges,
confirms and agrees that all Collateral shall  continue to secure the Obligations and any
modifications, amendments,  substitutions or renewals thereof.





 


	 	b. 	This
Third Amendment may be executed in several counterparts and by each party  on a separate
counterpart, each of which when so executed and delivered, shall  be an original, and all
of which together shall constitute one instrument.  Delivery of an executed counterpart
of a signature page hereto by telecopy or  electronic transmission shall be effective as
delivery of a manually executed  counterpart hereof.





	 	c. 	This
Third Amendment expresses the entire understanding of the parties with  respect to the
matters set forth herein and supersedes all prior discussions or  negotiations hereon.
Any determination that any provision of this Third  Amendment or any application hereof
is invalid, illegal or unenforceable in any  respect and in any instance shall not effect
the validity, legality, or  enforceability of such provision in any other instance, or
the validity,  legality or enforceability of any other provisions of this Third Amendment.





IN
WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be
executed and their seals to be hereto affixed as of the date first above
written.


	 	 	PATHMARK STORES, INC.


/s/ Frank Vitrano
Frank Vitrano

President and Chief Financial Officer


FLEET RETAIL GROUP, LLC, as Administrative

Agent, Collateral Agent and Lender


/s/ Keith Vercauteren
Keith Vercauteren

Managing Director


GMAC COMMERCIAL FINANCE LLC


/s/ Christopher M. Gauch
Christopher M. Gauch

Vice President


GENERAL ELECTRIC CAPITAL CORPORATION


/s/ Brian P. Schwinn
Brian P. Schwinn

Duly Authorized Signatory


THE CIT GROUP/BUSINESS CREDIT, INC.


/s/ Matthew V. DeFranco
Matthew V. DeFranco

Assistant Vice President


WELLS FARGO FOOTHILL, LLC


/s/ David Hill
David Hill

Vice President