Exhibit 4.3 

Execution Copy







  STOCKHOLDER AGREEMENT




by and among


THE GREAT ATLANTIC & PACIFIC TEA COMPANY,
INC.


and


TENGELMANN WARENHANDELSGESELLSCHAFT KG


Dated as of March 4, 2007









TABLE OF CONTENTS


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
Page


	
 

	
 

	
 

	
 

	



	
ARTICLE I


	
 


	
Definitions


	
 


	
SECTION
  1.01.

	
 

	
Definitions

	
 

	
1


	
 


	
ARTICLE II


	
 


	
Corporate Governance


	
 


	
SECTION
  2.01.

	
 

	
Composition
  of the Board of Directors

	
 

	
8


	
 

	
 

	
 

	
 

	
 


	
SECTION
  2.02.

	
 

	
Committees

	
 

	
12


	
 

	
 

	
 

	
 

	
 


	
SECTION
  2.03.

	
 

	
Solicitation
  of Shares

	
 

	
12


	
 

	
 

	
 

	
 

	
 


	
SECTION
  2.04.

	
 

	
Approval
  Required for Certain Actions

	
 

	
12


	
 

	
 

	
 

	
 

	
 


	
SECTION
  2.05.

	
 

	
Charter and
  Bylaws

	
 

	
15


	
 

	
 

	
 

	
 

	
 


	
SECTION
  2.06.

	
 

	
Change in
  Law

	
 

	
15


	
 

	
 

	
 

	
 

	
 


	
ARTICLE III


	
 


	
Registration Rights


	
 


	
SECTION
  3.01.

	
 

	
Registration

	
 

	
16


	
 

	
 

	
 

	
 

	
 


	
SECTION
  3.02.

	
 

	
Piggyback
  Registration

	
 

	
17


	
 

	
 

	
 

	
 

	
 


	
SECTION
  3.03.

	
 

	
Reduction of
  Offering

	
 

	
18


	
 

	
 

	
 

	
 

	
 


	
SECTION
  3.04.

	
 

	
Registration
  Procedures

	
 

	
19


	
 

	
 

	
 

	
 

	
 


	
SECTION
  3.05.

	
 

	
Conditions
  to Offerings

	
 

	
23


	
 

	
 

	
 

	
 

	
 


	
SECTION
  3.06.

	
 

	
Black-out
  Period

	
 

	
24


	
 

	
 

	
 

	
 

	
 


	
SECTION
  3.07.

	
 

	
Registration
  Expenses

	
 

	
24


	
 

	
 

	
 

	
 

	
 


	
SECTION
  3.08.

	
 

	
Indemnification;
  Contribution

	
 

	
25


	
 

	
 

	
 

	
 

	
 


	
SECTION
  3.09.

	
 

	
Rule 144

	
 

	
28


	
 

	
 

	
 

	
 

	
 


	
SECTION
  3.10.

	
 

	
Lockup

	
 

	
28





i






	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
Page


	
 

	
 

	
 

	
 

	



	
 

	
 

	
 

	
 

	
 


	
SECTION
  3.11.

	
 

	
Termination
  of Registration Rights

	
 

	
28


	
 

	
 

	
 

	
 

	
 


	
SECTION
  3.12.

	
 

	
Specific
  Performance

	
 

	
28


	
 

	
 

	
 

	
 

	
 


	
SECTION
  3.13.

	
 

	
Other
  Registration Rights

	
 

	
28


	
 

	
 

	
 

	
 

	
 


	
ARTICLE IV


	
 


	
PREEMPTIVE RIGHTS


	
 


	
SECTION
  4.01.

	
 

	
Rights to
  Purchase New Equity Securities

	
 

	
29


	
 

	
 

	
 

	
 

	
 


	
ARTICLE V


	
 


	
PUT RIGHT


	
 


	
SECTION
  5.01.

	
 

	
Put Right

	
 

	
30


	
 

	
 

	
 

	
 

	
 


	
ARTICLE VI


	
 

	
 

	
 

	
 

	
 


	
Miscellaneous


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.01.

	
 

	
Adjustments

	
 

	
32


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.02.

	
 

	
Changes in
  Outstanding Percentage Interest Attributable to Issuances of A&P Common
  Stock

	
 

	
32


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.03.

	
 

	
Notices

	
 

	
32


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.04.

	
 

	
Reasonable
  Efforts; Further Actions

	
 

	
34


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.05.

	
 

	
Consents

	
 

	
34


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.06.

	
 

	
Fees and Expenses

	
 

	
34


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.07.

	
 

	
Access to
  Information; Financial Statements

	
 

	
34


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.08.

	
 

	
Amendments;
  Waivers

	
 

	
35


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.09.

	
 

	
Interpretation

	
 

	
35


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.10.

	
 

	
Severability

	
 

	
36


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.11.

	
 

	
Counterparts

	
 

	
36


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.12.

	
 

	
Entire
  Agreement; No Third-Party Beneficiaries

	
 

	
36


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.13.

	
 

	
Governing
  Law

	
 

	
36





ii






	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
Page


	
 

	
 

	
 

	
 

	



	
SECTION
  6.14.

	
 

	
Assignment

	
 

	
37


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.15.

	
 

	
Enforcement

	
 

	
37


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.16.

	
 

	
Effectiveness

	
 

	
37


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.17.

	
 

	
Termination.

	
 

	
37


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.18.

	
 

	
Confidentiality

	
 

	
38


	
 

	
 

	
 

	
 

	
 


	
SECTION
  6.19.

	
 

	
No Liability
  of Partners

	
 

	
39





iii






	
 

	
 


	
 

	
          STOCKHOLDER
  AGREEMENT dated as of March 4, 2007 (this “Agreement”), among THE
  GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., a Maryland corporation (“A&P”),
  and TENGELMANN WARENHANDELSGESELLSCHAFT KG, a limited partnership organized
  under the laws of Germany (“TENGELMANN”).





          WHEREAS,
A&P, Sand Merger Corp, a Delaware corporation and a wholly owned subsidiary
of A&P, and Pathmark Stores, Inc., a Delaware corporation (“Pathmark”),
have entered into a Merger Agreement (the “Merger Agreement”), dated as
of the date of this Agreement, pursuant to which, on the Closing Date
(capitalized terms used in this Agreement shall have the meanings given to such
terms in Article I), A&P will acquire (the “Merger”) Pathmark;


          WHEREAS,
prior to the Merger, Tengelmann and its Affiliates beneficially own in the
aggregate approximately 54% of the A&P Common Stock, and following the Merger,
Tengelmann and its Affiliates will beneficially own in the aggregate
approximately 45% of the A&P Common Stock;


          WHEREAS,
the parties hereto desire to establish in this Agreement certain terms and
conditions concerning the corporate governance of A&P and certain other
matters; 


          WHEREAS,
Tengelmann has informed the Board of Directors of A&P that Tengelmann would
not be willing to support the Merger without the rights granted to Tengelmann
in this Agreement;


          WHEREAS,
the Board of Directors of A&P has concluded that the Merger will provide
substantial benefits to all A&P stockholders; and


          WHEREAS,
the Board of Directors of A&P has concluded that the rights set forth in
Section 2.01(f) and other related rights obtained from Tengelmann as a result
of the negotiation of this Agreement will provide substantial benefits to the
stockholders of A&P other than Tengelmann;


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


ARTICLE I


DEFINITIONS


          SECTION
1.01. Definitions. (a) As used in this Agreement, the following terms
will have the following meanings:





2

          An
“Affiliate” of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person.


          “beneficial
owner” and words of similar import have the meaning assigned to such terms
in Rule 13d-3 promulgated under the Exchange Act as in effect on the date
of this Agreement.


          “Board
of Directors” means the board of directors of A&P.


          “Business
Combination” with respect to any Person will mean any of the following:
(i) the sale, lease, transfer, conveyance or other disposition (other than
by way of merger or consolidation), of all or substantially all of the assets
of such Person and its Subsidiaries, taken as a whole, to any other Person or
(ii) any transaction (including any merger or consolidation) the
consummation of which would result in any other Person (or, in the case of a
merger or consolidation, the shareholders of such other Person) becoming,
directly or indirectly, the beneficial owner of more than 50% of the Voting
Stock and/or Equity Securities of such Person (measured in the case of Voting
Stock by Voting Power rather than number of shares).


          “Bylaws”
means the bylaws of A&P, as amended from time to time in accordance with
this Agreement.


          “Charter”
means the charter of A&P, as amended from time to time in accordance with
this Agreement.


          “Closing”
means the closing of the Merger.


          “Closing
Date” means the date of the Closing.


          “Director”
means a member of the Board of Directors.


          “Discriminatory
Transaction” means any corporate action (other than those taken pursuant to
the express terms of this Agreement) that would (i) impose material
limitations on the legal rights of Tengelmann as a holder of a class of Voting
Stock of A&P (including any action that would impose material restrictions
without lawful exemption on Tengelmann that are based upon the size of security
holding, the business in which a security holder is engaged or other
considerations applicable to Tengelmann and not to holders of the same class of
Voting Stock of A&P generally, but excluding any such action which is
expressly required by applicable Law without any provision to exclude
Tengelmann), which limitations are disproportionately (i.e. other than in a
proportionate manner consistent with Tengelmann’s pro rata ownership of such
class of Voting Stock) borne by Tengelmann as opposed to other A&P
stockholders, or (ii) deny any material benefit to Tengelmann
proportionately as a holder of any class of Voting Stock of A&P that is
made available to other holders of that same class of Voting Stock of A&P
generally, but excluding any such action which is expressly required by
applicable Law without any provision to exclude Tengelmann.





3

          “Dissolution”
means with respect to any Person the dissolution of such Person, the adoption
of a plan of liquidation of such Person or any action by such Person to
commence any suit, case, proceeding or other action (i) under any existing
or future Law of any jurisdiction relating to bankruptcy, insolvency,
reorganization or relief of debtors seeking to have an order for relief entered
with respect to such Person, or seeking to adjudicate such Person bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding up,
liquidation, dissolution, composition or other relief with respect to such
Person or (ii) seeking appointment of a receiver, trustee, custodian or
other similar official for such Person, or making a general assignment for the
benefit of the creditors of such Person. Any verb forms of this term have
corresponding meanings.


          “Encumbrance”
means any lien, encumbrance, security interest, pledge, mortgage, hypothecation,
charge, restriction on transfer of title, adverse claim, title retention
agreement of any nature or kind, or other encumbrance, except for any
restrictions arising under any applicable securities Laws.


          “Equity
Security” means (i) any common stock or other Voting Stock,
(ii) any securities convertible into or exchangeable for common stock or
other Voting Stock or (iii) any options, rights or warrants (or any
similar securities) to acquire common stock or other Voting Stock.


          “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder, as amended.


          “Fair
Market Value” means (i) with respect to cash or cash equivalents, the
amount of such cash or cash equivalents, (ii) with respect to any security
listed on a national securities exchange or otherwise traded on any national
securities exchange or other trading system, the average of the closing prices
of such security as reported on such exchange or trading system for each of the
five Trading Days prior to the date of determination, and (iii) with
respect to property other than cash or securities of the type described in
clauses (i) and (ii), the cash price at which a willing seller would sell
and a willing buyer would buy such property in an arm’s length negotiated
transaction without time constraints.


          “GAAP”
means U.S. generally accepted accounting principles, as in effect at the time
such term is relevant.


          “Governance
Committee” means the Governance Committee of the Board of Directors or any
successor committee thereto.


          “Governmental
Entity” means any transnational, federal, state, local or foreign
government, or any court of competent jurisdiction, administrative agency or commission
or other governmental authority or instrumentality, domestic or foreign, or any
national securities exchange or national quotation system on which securities
issued by A&P or any of its Subsidiaries are listed or quoted.


          “Indebtedness”
means, with respect to any Person, without duplication: (i) (A) indebtedness
for borrowed money, (B) all obligations of such Person evidenced by 





4

bonds,
debentures, notes or similar instruments, (C) all obligations of such Person
under interest rate or currency hedging transactions (valued at the termination
value thereof), (D) all letters of credit issued for the account of such Person
and (E) obligations of such Person to pay rent or other amounts under any lease
of real property or personal property, which obligations are required to be
classified as capital leases in accordance with GAAP; (ii) indebtedness for
borrowed money of any other Person guaranteed, directly or indirectly, in any
manner by such Person; and (iii) indebtedness of the type described in clause
(i) above secured by any Encumbrance upon property owned by such Person, even
though such Person has not in any manner become liable for the payment of such
indebtedness; provided, however, that Indebtedness shall not be
deemed to include (i) any accounts payable or trade payables incurred in the
ordinary course of business of such Person, or (ii) any intercompany
indebtedness between any Person and any wholly owned Subsidiary of such Person
or between any wholly owned Subsidiaries of such Person.


          “Issuer
FWP” has the meaning assigned to “issuer free writing prospectus” in
Rule 433 under the Securities Act.


          “Law”
means any law, treaty, statute, ordinance, code, rule, regulation, judgment,
decree, order, writ, award, injunction, authorization or determination enacted,
entered, promulgated, enforced or issued by any Governmental Entity.


          “Market
Price” for any security on each business day means: (A) if such security is
listed or admitted to trading on any securities exchange, the closing price,
regular way, on such day on the principal exchange on which such security is
traded, or if no sale takes place on such day, the average of the closing bid
and asked prices on such day, (B) if such security is not then listed or admitted
to trading on any securities exchange, the last reported sale price on such
day, or if there is no such last reported sale price on such day, the average
of the closing bid and the asked prices on such day, as reported by a reputable
quotation source designated by A&P, or (C) if neither clause (A) nor (B) is
applicable, the average of the reported high bid and low asked prices on such
day, as reported by a reputable quotation service, or a newspaper of general
circulation in the Borough of Manhattan, City of New York, customarily
published on each business day, designated by A&P. If there are no such
prices on a business day, then the Market Price shall not be determinable on
such business day. 


          “MGCL”
means the Maryland General Corporation Law, codified in Md Code Ann., Corps.
& Ass’ns, Titles 1-3, as may be in effect from time to time.


          “Non-Tengelmann
Director” means a Director who is not a Tengelmann Director.


          “NYSE”
means the New York Stock Exchange.


          “Outstanding
Percentage Interest” means, as of any date of determination, the percentage
of Voting Power in A&P (determined on the basis of the number of
outstanding shares of Voting Stock of A&P (including for such purposes any
Voting Stock underlying stock options that is beneficially owned by Christian
W.E. Haub as of 





5

the date of
this Agreement), as set forth in the most recent SEC filing of A&P prior to
such date that contained such information) that is beneficially owned by
Tengelmann and its Affiliates as of such date.


          “A&P
Common Stock” means the common stock of A&P, par value $1.00 per share,
and any other common stock of A&P that may be issued from time to time.


          “Person”
means any individual, firm, corporation, partnership, company, limited
liability company, trust, joint venture, association, Governmental Entity,
unincorporated organization or other entity, foreign or domestic.


          “Piggyback
Percentage” of Tengelmann or Yucaipa, as applicable, means the result of
dividing (i) the product of the number of shares requested to be
registered by such Person (including, in the case of Yucaipa, shares issuable
under the Roll-over Warrants) and the number of shares beneficially owned by
such Person as of the date of any notice given pursuant to Section 3.02 or, if
not practicably obtainable as of such date, as of the most recent date
practicably obtainable (excluding, in the case of Yucaipa, shares issuable
under the Roll-over Warrants to the extent not requested to be registered) (in
the case of Tengelmann, the “Tengelmann Amount” and, in the case of
Yucaipa, the “Yucaipa Amount”), by (ii) the sum of the Tengelmann Amount
and the Yucaipa Amount. 


          “Registrable
Securities” means (i) all shares of A&P Common Stock beneficially
owned by Tengelmann on the date hereof or purchased by Tengelmann and
beneficially owned at any time by Tengelmann and (ii) any securities
issued or issuable with respect to any such shares of A&P Common Stock by
way of a stock dividend or other similar distribution or stock split, or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise; provided that the
following securities are not Registrable Securities (A) any securities
disposed of pursuant to a Registration Statement that has been declared
effective by the SEC (or become automatically effective); (B) any
securities that have been disposed of by Tengelmann pursuant to Rule 144
promulgated under the Securities Act; (C) any securities that may be
disposed of within the next three months without registration under the
Securities Act by Tengelmann pursuant to Rule 144(k) promulgated under the
Securities Act in an orderly manner without materially adversely affecting the
price at which such securities can be sold, as reasonably determined in good
faith by Tengelmann; or (D) any securities that have been sold to or through a
broker, dealer or underwriter in a public distribution or other public
securities transaction or sold in a transaction exempt from the registration
and prospectus delivery requirements of the Securities Act under Rule 144
promulgated thereunder (or any successor rule).


          “Representatives”
means the directors, officers, employees, agents, investment bankers, financing
sources, attorneys, accountants and advisors of either Tengelmann, on the one
hand, or A&P, on the other hand, as the context requires.


          “Roll-over
Warrants” means the warrants issued as part of the Merger by A&P to
Yucaipa in exchange for the Series A Warrants and the Series B
Warrants.





6

          “SEC”
means the U.S. Securities and Exchange Commission.


          “Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, as amended.


          “Series
A Warrants” means the Series A warrants to purchase 10,060,000 shares of
common stock of Pathmark at an exercise price of $8.50 per share, as such share
amount and exercise price may be adjusted from time to time in accordance with
the terms of such warrants in effect on the date hereof (or as such terms shall
be amended pursuant to agreements entered into on the date hereof in connection
with the Merger). 


          “Series
B Warrants” means the Series B warrants to purchase 15,046,350 shares of
common stock of Pathmark at an exercise price of $15.00 per share, as such
share amount and exercise price may be adjusted from time to time in accordance
with the terms of such warrants in effect on the date hereof (or as such terms
shall be amended pursuant to agreements entered into on the date hereof in
connection with the Merger).


          A
“Subsidiary” of any Person means, on any date, any Person (i) the
accounts of which would be consolidated with and into those of the applicable
Person in such Person’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP or (ii) of which (a)
securities or other ownership interests representing more than 50% of the
equity or (b) more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests, as of such
date, are owned, controlled or held by the applicable Person or one or more
Subsidiaries of such Person.


          “Tengelmann
Director” means a Director designated for nomination by Tengelmann and
actually elected or appointed pursuant to the provisions of Section 2.01.


          
“Trading Day” means (i) for so long as the A&P Common Stock is
listed or admitted for trading on the NYSE or another national securities
exchange, a day on which the NYSE or such other national securities exchange is
open for business or (ii) if the A&P Common Stock ceases to be so
listed, any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by Law or
executive order to close.


          “2000
Warrants” means the
warrants issued by Pathmark pursuant to the Warrant Agreement dated as of September 19,
2000 between Pathmark and ChaseMellon Shareholder Services, LLC.


          “13D
Group” means any group of Persons formed for the purpose of acquiring,
holding, voting or disposing of Voting Stock of A&P that would be required
under Section 13(d) of the Exchange Act (as in effect on, and based on
legal interpretations thereof existing at the time such determination is made),
to file a statement on Schedule 13D with the SEC as a “person” within the
meaning of Section 13(d)(3) of the Exchange Act if such group beneficially
owned Voting Stock of A&P representing more than 5% of any class of Voting
Stock of A&P then outstanding.





7

          “Unaffiliated
Equity Holders” means holders of Equity Securities of A&P other than
Tengelmann and its Affiliates and any Person included in any 13D Group with
Tengelmann and/or any of its Affiliates.


          “Underwriter”
means a securities dealer who purchases any Registrable Securities as a
principal in connection with a distribution of such Registrable Securities and
not as part of such dealer’s market-making activities.


          “Voting
Power” means the power to vote or to control, directly or indirectly, by
proxy or otherwise, the vote of any Voting Stock at the time such determination
is made; provided that a Person will not be deemed to have Voting Power
as a result of an agreement, arrangement or understanding to vote such Voting
Stock if such agreement, arrangement or understanding (i) arises solely
from a revocable proxy or consent given in response to a public proxy or
consent solicitation made pursuant to the applicable rules and regulations
under the Exchange Act and (ii) is not also then reportable by such Person
on Schedule 13D under the Exchange Act (or any comparable or successor
report). For purposes of determining the percentage of Voting Power of any class
or series (or classes or series) beneficially owned by Tengelmann or any other
Person, any Voting Stock not outstanding which is issuable pursuant to
conversion, exchange or other rights, warrants, options or similar securities
(other than any Voting Stock underlying stock options that is beneficially
owned by Christian W. E. Haub as of the date of this Agreement) will not be
deemed to be outstanding for the purpose of computing the Voting Power of
Tengelmann or any other Person.


          “Voting
Stock” of any Person means securities beneficially owned by such Person
then having the right to vote generally in any election of directors of
A&P.


          “Yucaipa”
means Yucaipa Corporate Initiatives Fund I, L.P., Yucaipa American Alliance
Fund I, L.P. and Yucaipa American Alliance (Parallel) Fund I, L.P. 


          (b)
As used in this Agreement, the terms set forth below will have the meanings
assigned in the corresponding Section listed below:


	
 

	
 

	
 


	
Term

	
 

	
Section


	


	
 

	



	
 


	
Agreement

	
 

	
Preamble


	
Deferral
  Period

	
 

	
3.06


	
Demand
  Registration

	
 

	
3.01(a)


	
EDGAR

	
 

	
3.04(a)


	
effective
  date

	
 

	
3.04(a)(x)


	
fraudulent
  misrepresentation

	
 

	
3.08(e)


	
free writing
  prospectus

	
 

	
3.04(c)


	
indemnified
  party

	
 

	
3.08(c)


	
Indemnified
  Persons

	
 

	
3.08(a)









8

	
 

	
 

	
 


	
Term

	
 

	
Section


	


	
 

	



	
 


	
indemnifying
  party

	
 

	
3.08(c)


	
Inspectors

	
 

	
3.04(a)(vi)


	
Liquidity
  Impairment

	
 

	
5.01(f)


	
Merger

	
 

	
Recitals


	
Merger
  Agreement

	
 

	
Recitals


	
New Equity
  Securities

	
 

	
4.01(a)


	
Notice of
  Issuance

	
 

	
4.01(b)


	
A&P

	
 

	
Preamble


	
Pathmark

	
 

	
Recitals


	
Piggyback
  Registration

	
 

	
3.02


	
Put Notice

	
 

	
5.01(c)


	
Proposed
  Stock Settlement Amount

	
 

	
5.01(b)


	
Put Price

	
 

	
5.01(c)


	
Put Right

	
 

	
5.01(a)


	
Records

	
 

	
3.04(a)(vi)


	
Registration
  Statement

	
 

	
3.01(a)


	
Share Number

	
 

	
5.01(b)


	
Tengelmann

	
 

	
Preamble


	
Tengelmann
  Mirror Vote

	
 

	
2.01(f)


	
Tengelmann
  Nominee

	
 

	
2.01(c)


	
Warrant
  Exercise Notice

	
 

	
5.01(b)





ARTICLE II


CORPORATE GOVERNANCE


          SECTION
2.01. Composition of the Board of Directors.  The composition of the Board of Directors and manner of selecting
members thereof will be as follows:


          (a) The
Board of Directors will be composed of nine Directors, and, subject to any
additional requirements provided for in the Charter, the number of such
Directors may not be increased or decreased without the approval of that number
of directors that is at least 66.67% of the total number of directorships
(including vacancies); provided, however, that any decrease in
the number of directorships that has the effect of reducing the number of
Tengelmann Directors or the number of Directors








9 


that
Tengelmann is entitled to nominate hereunder shall require the consent of
Tengelmann. 


                    (b)
Immediately upon the Closing, the Board of Directors will be comprised of (i)
four Directors nominated by Tengelmann, (ii) four Non-Tengelmann Directors
that, immediately prior to the Closing, were Non-Tengelmann Directors serving
on the Board of Directors and (iii) one Non-Tengelmann Director selected in
accordance with Section 2.5 of the Merger Agreement. 


                    (c)
For so long as Tengelmann’s Outstanding Percentage Interest is equal to at
least ten percent (10%) and subject to 2.01(e) below to the extent A&P has
complied therewith, Tengelmann will have the right to designate for nomination
(it being understood that such nomination will include any nomination of any
incumbent Tengelmann Director for reelection to the Board of Directors) to the
Board of Directors that number of individuals equal to (i) the product of the
total number of directorships (including vacancies) at such time and the
Outstanding Percentage Interest of Tengelmann at such time (rounded to the
nearest whole number), minus (ii) the number of Tengelmann Directors who are
not then subject to election or who will otherwise be continuing to serve on
the Board following such election, and each such designee (each, a “Tengelmann
Nominee”) will be nominated and recommended for election to the Board of
Directors by the Governance Committee. 


                    (d)
Subject to Section 2.01(e) to the extent A&P has complied therewith,
A&P and the Board of Directors, including the Governance Committee, shall
cause each Tengelmann Nominee to be included in management’s slate of nominees
for such meeting and shall recommend such Person for election to the Board of Directors.



                    (e)
Notwithstanding anything to the contrary in this Section 2.01, neither the
Governance Committee, A&P nor the Board of Directors shall be under any
obligation to nominate and recommend a Tengelmann Nominee to the extent it
determines, in good faith and after consideration of specific written advice of
outside counsel (a copy of which will be provided to Tengelmann), that such
recommendation would reasonably be expected to violate their duties under MGCL
§2-405.1(a) because (i) such nominee is unfit to serve as a director of an
NYSE-listed company or (ii) service by such nominee as a Director would
reasonably be expected to violate applicable Law or, due to such nominee’s
relationship as a director, employee or stockholder of another company, result
in a conflict of interest (it being understood that any such person’s
relationship with Tengelmann may not serve as a basis for any such
determination), in which case A&P shall provide Tengelmann with a
reasonable opportunity (but in any event not less than 30 days) to designate an
alternate Tengelmann Nominee.   


                    (f)
(i) With respect to all elections of Directors other than the Tengelmann
Nominees, if A&P has nominated and recommended the election of the number
of Tengelmann Nominees contemplated by Section 2.01(c) that Tengelmann wished
to nominate (subject to Section 2.01(e) above to the extent A&P has
complied therewith), then Tengelmann hereby agrees, subject to Section 2.01(m)
below, (A) in all elections of Directors to be present in person or by proxy
for purposes of forming a quorum thereat 






10 


and to vote
all shares of Voting Stock beneficially owned by it in a manner identical (on a
proportionate basis) to the manner in which the Unaffiliated Equity Holders vote
their shares of Voting Stock in such elections (the “Tengelmann Mirror Vote”)
and (B) to cause its Affiliates to be present in person or by proxy for
purposes of forming a quorum thereat and to vote in the same manner as the
Tengelmann Mirror Vote.  For purposes of
allocating the Tengelmann Mirror Vote, abstentions and broker non-votes shall
be disregarded.  As promptly as
practicable following the nomination and recommendation of the Tengelmann
Nominees in accordance with Section 2.01(c) above, Tengelmann shall, and shall
cause its Affiliates to, provide A&P a proxy (which will be subject to
Section 2.01(m)) for purposes of effecting the first sentence of this Section
2.01(f).  Notwithstanding the foregoing,
this Section 2.01(f) shall not apply with respect to any election of Directors
in connection with which any Person (other than (x) Tengelmann or any Affiliate
of Tengelmann, (y) any member of any 13D Group that includes Tengelmann or any
Affiliate of Tengelmann or (z) any other Person with whom Tengelmann is acting
in concert) has initiated (and is continuing) a “proxy contest” or other
solicitation of proxies, consents or votes in favor of one or more nominees for
election to the Board of Directors that are different from the Board of
Director nominees in management’s slate.



                    (ii)
In any matter submitted to a vote of stockholders not subject to Section
2.01(f)(i), Tengelmann may vote any or all of its Voting Shares in its sole
discretion subject to applicable Law.   


                    (g)
In addition, for so long as the Board of Directors or Governance Committee
nominates and recommends (subject to Section 2.01(e) above to the extent
A&P has complied therewith) the number of Tengelmann Nominees contemplated
by Section 2.01(c) that Tengelmann wishes to nominate and so long as A&P
has complied with Section 2.01(j), Tengelmann agrees not to take, without the
consent of a majority of the Non-Tengelmann Directors, any action to remove or
oppose any Non-Tengelmann Director or to seek to change the size of the Board
of Directors or otherwise seek to expand Tengelmann’s representation on the
Board of Directors in a manner inconsistent with Section 2.01(c) or Section
2.01(f). 


                    (h)
Tengelmann shall have the right to remove any Tengelmann Nominee or Tengelmann
Director, and A&P and the Board of Directors shall cooperate with
Tengelmann in connection with any such removal. 


                    (i)
Upon the death, resignation, retirement, incapacity, disqualification or removal
from office for any other reason of any Tengelmann Director, Tengelmann will
have the right to designate the replacement for such Tengelmann Director and
the Board of Directors will, subject to Section 2.01(e) above to the extent
A&P has complied therewith, appoint each such Person so designated in
accordance with this Section 2.01(i).
Conversely, in the event of the death, resignation, incapacity,
disqualification or removal of any Non-Tengelmann Director, a majority of the
Non-Tengelmann Directors will have the exclusive right to designate the
replacement for such Director and appoint same. 






11 


                    (j)
Without limiting the generality of Section 2.01(c), in the event that the
number of Tengelmann Directors on the Board of Directors differs from the
number that Tengelmann has the right (and wishes) to designate pursuant to this
Section 2.01, (i) if the number of Tengelmann Directors exceeds such number,
Tengelmann shall use reasonable best efforts to take all necessary action to
remove or cause to resign that number of Tengelmann Directors as is required to
make the remaining number of such Tengelmann Directors conform to this Section
2.01 or (ii) if the number of Tengelmann Directors is less than such number,
the Board of Directors shall use reasonable best efforts to take all necessary
action to permit Tengelmann to designate the full number of Tengelmann
Directors that it is entitled (and wishes) to designate pursuant to this
Section 2.01 (such action to include expanding the size of the Board of
Directors, seeking the resignation of Directors or, at the request of
Tengelmann, calling a special meeting of the stockholders of A&P for the
purpose of removing Directors to create such vacancies to the extent permitted
by applicable Law).  Upon the creation
of any vacancy pursuant to clause (ii) of the preceding sentence, Tengelmann
shall designate the person to fill such vacancy in accordance with this Section
2.01, and, subject to Section 2.01(e) to the extent A&P has complied
therewith, the Board of Directors shall appoint each person so designated.  In the event that the number of
Directors is
increased pursuant to this Section 2.01(j), the Board of Directors shall cause
the number of Directors to be reduced at the first available opportunity to
comply with the number of Directors otherwise specified by Section 2.01(a). 


                    (k)
For the avoidance of doubt, Tengelmann Directors shall be entitled to
compensation and expense reimbursement in accordance with A&P’s policies
and practices applicable to Directors generally. 


                    (l)
The rights and obligations of Tengelmann shall apply to any and all
Affiliate(s) of Tengelmann which currently beneficially own Voting Stock and
any and all Affiliate(s) of Tengelmann to whom any shares of Voting Stock are
transferred in any manner, and any such transfer shall be conditioned on such
transferee entering into a written agreement in form and substance acceptable
to A&P extending the rights and obligations of Tengelmann under this
Agreement to such transferee(s), in which cases all references to Tengelmann
herein shall be deemed to refer to Tengelmann and such Affiliates except as the
context otherwise requires. 


                    (m)
Notwithstanding anything to the contrary in this Section 2.01, Tengelmann shall
be under no obligation to vote in favor of a Non-Tengelmann Director nominee
who has been nominated by a Person other than the Governance Committee or the
Board of Directors to the extent Tengelmann determines, in good faith and after
consideration of specific written advice of outside counsel (a copy of which
will be provided to A&P and the Board of Directors), that the hypothetical
nomination or recommendation of such nominee by the Board of Directors would have
been reasonably expected to violate the Board of Directors’ duties under MGCL
§2-405.1(a) because (i) such nominee is unfit to serve as a director of an
NYSE-listed company or (ii) service by such nominee as a Director would
reasonably be expected to violate applicable Law or, due to such nominee’s
relationship as a director, employee or stockholder of another company, result
in a conflict of interest (it being understood that any such person’s 






12 


relationship
with the nominating Person may not serve as a basis for any such
determination); provided that Tengelmann shall make such determination as soon
as practicable and, if applicable, provide written notice thereof to A&P
and the Board of Directors as soon as practicable thereafter.  


                    SECTION 2.02. Committees. Tengelmann Directors shall serve on each
committee of the Board of Directors and the number of Tengelmann Directors on a
committee of the Board of Directors shall be not less than (x) the number of
Tengelmann Directors at such time divided by (y) the total number of seats on
the Board of Directors at such time multiplied by (z) the number of Directors
serving on such committee (rounded to the nearest whole number). Tengelmann shall have the right to select
the Tengelmann Directors that will serve on each committee of the Board of
Directors; provided that, so long as there are any Tengelmann Directors serving
on the Board of Directors, at least one Tengelmann Director shall serve on each
committee of the Board of Directors.
Notwithstanding the foregoing, a Tengelmann Director shall not serve on
any committee if such service would violate any Law concerning the independence
of directors.  


                    SECTION
2.03. Solicitation of Shares.
A&P will use its reasonable best efforts to solicit proxies in favor
of the Tengelmann Nominees selected in accordance with Section 2.01 from its
stockholders eligible to vote for the election of Directors. 


                    SECTION
2.04. Approval Required for Certain Actions.  (a)  For so long as
Tengelmann’s Outstanding Percentage Interest is at least 25%, the approval of
Tengelmann will be required for A&P to do any of the following actions (in
addition to any other Board of Directors or stockholder approval required by
any Law, the Charter or Bylaws): 


	
 

	
 


	
 

	
          (i)
  any Business Combination by A&P, except for the Merger and any other
  Business Combination involving consideration with a Fair Market Value not
  exceeding $50,000,000 to be paid by or to A&P or its stockholders as the
  case may be; 


	
 

	
 


	
 

	
          (ii)
  the issuance of any Equity Security of A&P, the creation of any right to
  acquire such Equity Security or any amendment to the terms of any such Equity
  Security, to the extent such issuance, creation or amendment requires
  stockholder approval; provided, however that this clause (ii)
  shall not include any issuance (A) of any Roll-over Warrants, (B) pursuant to
  any employee compensation plan or other benefit plan including stock option,
  restricted stock or other equity based compensation plans or (C) of any
  Equity Security issued or issuable under rights existing as of the Closing
  Date after giving effect to the Merger; 


	
 

	
 


	
 

	
          (iii)
  any amendment to the Charter or Bylaws (other than amendments contemplated by
  this Agreement or the Merger Agreement); 










13 


	
 

	
 


	
 

	
          (iv)
  any amendment to the charter of any committee of the Board of Directors or to
  any corporate governance guideline relating to any matter addressed by this
  Agreement that would reasonably be expected to obviate in any manner any of
  Tengelmann’s rights hereunder or the exercise thereof; 


	
 

	
 


	
 

	
          (v)
  the adoption, implementation or amendment of, or redemption under, any
  takeover defense measures (including a rights plan); 


	
 

	
 


	
 

	
          (vi)
  any Discriminatory Transaction; 


	
 

	
 


	
 

	
          (vii)
  any transaction between (A) A&P or any of its Subsidiaries, on the one
  hand, and (B) any Affiliate of A&P (other than (1) any Director,  officer or Subsidiary of A&P and (2)
  Tengelmann or any of its Affiliates), on the other hand; 


	
 

	
 


	
 

	
          (viii)
  a change of A&P’s policies concerning the need for Board approval
  intended or reasonable likely to have the effect of obviating any of
  Tengelmann’s rights hereunder or the exercise thereof; or 


	
 

	
 


	
 

	
          (ix)
  the issuance and delivery to Yucaipa of any A&P Common Stock upon
  exercise by Yucaipa of the Roll-over Warrants, except to the extent that a
  cash settlement of any Roll-over Warrants would reasonably be expected to
  cause a Liquidity Impairment (as defined in Section 5.01(f)), in which case
  A&P shall be permitted to issue and deliver A&P Common Stock to
  Yucaipa upon exercise of such Roll-over Warrants to the extent necessary to
  avoid a Liquidity Impairment. 





                    (b)
For so long as Tengelmann’s Outstanding Percentage Interest is at least 25%,
the approval of a majority of the Tengelmann Directors will be required for the
Board of Directors to approve or authorize, and for A&P to do, any of the
following (in addition to any other Board of Directors or stockholder approval
required by any Law, the Charter or Bylaws):


	
 

	
 


	
 

	
          (i)
  any acquisition or disposition (in one transaction or a series of related
  transactions) of any assets (including any Equity Securities of any
  Subsidiary of A&P), business operations or securities, with a Fair Market
  Value of more than $50,000,000, including such a disposition of equity
  securities of Metro, Inc. owned by A&P, but excluding any disposition to,
  or acquisition from or of, a wholly-owned Subsidiary of A&P or any
  disposition that (A) occurs in connection with creating or granting any
  Encumbrances to a third party that is not a Subsidiary or Affiliate of
  A&P in connection with a bona fide financing or (B) arises as a matter of
  Law or occurs pursuant to a court order; 


	
 

	
 


	
 

	
          (ii)
  the issuance of any Equity Security of A&P, the creation of any right to
  acquire such Equity Security or any amendment to the terms of any such Equity
  Security; provided, however that this clause (ii) shall not 










14 


	
 

	
 


	
 

	
include any
  issuance (A) of any Roll-over Warrants, (B) pursuant to any employee
  compensation plan or other benefit plan including stock option, restricted
  stock or other equity based compensation plans or (C) of any Equity Security
  issued or issuable under rights existing as of the Closing Date after giving
  effect to the Merger; 


	
 

	
 


	
 

	
          (iii)
  any repurchase of A&P Common Stock pursuant to a self-tender offer, stock
  repurchase program, open market transaction or otherwise, other than a
  repurchase of A&P Common Stock from employees or former employees
  pursuant to the terms and conditions of employee stock plans or a purchase of
  A&P Common Stock from Tengelmann pursuant to this Agreement; 


	
 

	
 


	
 

	
          (iv)
  any declaration or payment of a dividend on the A&P Common Stock; 


	
 

	
 


	
 

	
          (v)
  the adoption or amendment of any strategic plans, priorities or direction for
  A&P and its Subsidiaries and their businesses for a period of at least
  three years, except for amendments not exceeding $10,000,000 individually or
  in the aggregate in any 12-month period; 


	
 

	
 


	
 

	
          (vi)
  the adoption or amendment of the operating plan or budget, capital
  expenditure budget, financing plan or any financial goal, except for
  amendments not exceeding $10,000,000 individually or in the aggregate in any
  12-month period; 


	
 

	
 


	
 

	
          (vii)
  the appointment or removal of the chairman of the Board of Directors or the
  appointment (but not removal) of the chief executive officer of A&P; 


	
 

	
 


	
 

	
          (viii)
  the Dissolution of A&P; 


	
 

	
 


	
 

	
          (ix)
  any capital expenditure of more than $10,000,000 (excluding any capital
  expenditure previously approved, or capital expenditure pursuant to a capital
  expenditure program or budget or plan that was previously approved, by the
  Board of Directors as part of the approval of A&P’s annual operating
  plan, capital expenditures budget or otherwise); or 


	
 

	
 


	
 

	
          (x)
  any incurrence, assumption, or issuance of Indebtedness in one or a series of
  related transactions in an aggregate principal amount of more than
  $50,000,000 (other than any refinancing of Indebtedness existing on the
  Closing Date or the incurrence of which was approved by the Board of
  Directors in accordance with this Section 2.04, which refinancing is on terms
  consistent with or more favorable (to A&P) than the material terms of
  such Indebtedness and does not increase the principal amount of such
  Indebtedness). 










15


                    (c)
Any transaction between (i) A&P or any of its Subsidiaries, on the one
hand, and (ii) Tengelmann, or any Subsidiary or Affiliate of Tengelmann, on the
other hand (other than the compensation of directors and officers in the
ordinary course of business), will require the approval of a majority of the
Board of Directors, including a majority of the Non-Tengelmann Directors (in
addition to any other Board of Directors or stockholder approval required by
any Law, the Charter or Bylaws). 


                    (d)
The approval of a majority of the Board of Directors, including a majority of
the Non-Tengelmann Directors, will be required for the Board of Directors to
approve or authorize A&P effecting, and for A&P to effect (i) any
action that is required by Law, the Charter or Bylaws to be approved by the
stockholders of A&P and would reasonably be expected to adversely and
disproportionately affect the stockholders of A&P other than Tengelmann or
(ii) any amendment to A&P’s policies or change to A&P’s practices in a
manner that would limit or adversely affect the authority of the Non-Tengelmann
Directors. 


                    (e)
Prior to proposing to take any action set forth in Section 2.04(a), Section
2.04(b), Section 2.04(c) or Section 2.04(d) at any meeting, the secretary for
the meeting will cause to be included in the agenda of the meeting a statement
that such proposed action is an action set forth in such Section 2.04(a),
Section 2.04(b), Section 2.04(c) or Section 2.04(d), as applicable, the vote
required to approve such action in accordance with this Agreement and the party
or parties proposing such action, which party or parties will provide to
A&P all relevant information relating to such action to accompany such
agenda and A&P will cause such agenda to be supplied to each Director and
Tengelmann at least five days prior to such meeting. 


                    (f)
A&P will amend its generally applicable policies regarding Board of
Director approval to reflect the requirements of this Section 2.04. 


                    SECTION
2.05. Charter and Bylaws.
(a)  Immediately after the
Closing, any Director will have the right to call a meeting of the Board of
Directors. 


                    (b)
A&P represents and warrants to Tengelmann that it has adopted resolutions
providing that automatically upon the Closing and without any further act of
any Person, the Bylaws will be amended as set forth in Exhibit A.  A&P will not amend, rescind or cause to
be superseded such resolution prior to the effectiveness of such amendments. 


                    (c)
The Board of Directors will use reasonable best efforts to ensure, to the
extent lawful, at all times that the Charter, Bylaws and corporate governance
policies and guidelines of A&P are not at any time inconsistent in any
material respect with the provisions of this Agreement. 


                    SECTION
2.06. Change in Law.  Without
limiting the obligations of the Board or Directors under Section 2.05(c), in
the event any Charter provision, Bylaw provision or any Law exists or hereafter
comes into force or effect (including by amendment) which conflicts with the
terms and conditions of this Agreement, the parties 






16 


will negotiate
in good faith to revise this Agreement to achieve the parties’ intention set
forth herein to the greatest extent possible. 


ARTICLE III


REGISTRATION RIGHTS


                    SECTION
3.01. Registration.  (a)  At any time and from time to time on or
after the 180th day following the Closing Date, A&P agrees that, upon the
written request of Tengelmann from time to time (a “Demand Notice”) and
subject to Section 3.01(e) and 3.06, it will as promptly as reasonably
practical prepare and file a registration statement (which, if A&P is a
well-known seasoned issuer, shall be an automatic shelf registration statement)
under the Securities Act (a “Registration Statement”, which term will
include any amendments thereto and any documents incorporated by reference
therein); provided, however, that (i) A&P shall be obligated
to prepare, file or cause a Registration Statement to become effective pursuant
to this Section 3.01 (a “Demand Registration”): (i) no more than two (2)
times in any 12-month period and (ii) no more than three (3) times in any
24-month period; provided, further, however, that a
Registration Statement shall not be counted as one of the Demand Registrations
hereunder unless it becomes effective and is maintained effective for at least
90 days or until the completion of the distribution of the Registrable
Securities registered pursuant to such Registration Statement, and (ii) the
Registrable Securities for which a Demand Registration has been requested will
have a value (based on the average closing price per share of A&P Common
Stock for the ten Trading Days preceding the delivery of such Demand Notice) of
not less than $25,000,000 or such lesser remaining amount of Registrable Securities
held by Tengelmann.  Each such Demand
Notice will specify the number of Registrable Securities proposed to be offered
for sale and will also specify the intended method of distribution thereof; provided that Tengelmann may change such number if such change (x) will not
materially adversely affect the timing, cost or success of the offering and (y)
does not result in less than $25,000,000 or such lesser amount (determined as
provided above) of Registrable Securities being included in the Registration
Statement. 


                    (b)
A&P agrees to use its commercially reasonable efforts (i) to cause any
Registration Statement to be declared effective (unless it becomes effective
automatically upon filing) as promptly as reasonably practicable after the filing
thereof, but in no event later than 90 days after receipt of a Demand Notice,
and (ii) to keep such Registration Statement effective for a period of not less
than 90 days or, if earlier, the completion of the distribution of the
Registrable Securities registered pursuant to such Registration Statement.  A&P shall be deemed not to have
used its
commercially reasonable efforts to keep a Registration Statement effective
during the requisite period if it voluntarily takes any action that would
result in Tengelmann not being able to offer and sell the Registrable
Securities during that period, unless such action is required by applicable Law
or permitted by Section 3.06.  A&P
further agrees to supplement or make amendments to the Registration Statement
as may be necessary to keep such Registration Statement effective for the
period set forth in clause (ii) above, including (A) to respond to the comments
of the SEC, if any, (B) as may be required by the registration form 






17 


utilized by
A&P for such Registration Statement or by the instructions applicable to
such registration form, (C) as may be required by the Securities Act or (D) as
may be reasonably requested in writing by Tengelmann or any Underwriter for
Tengelmann.  A&P agrees to furnish
to Tengelmann copies of any such supplement or amendment prior to its being
used or filed with the SEC.   


                    (c)
In the event an offering of Registrable Securities under this Section 3.01
involves one or more Underwriters, Tengelmann will select the lead Underwriter
and any additional Underwriters in connection with the offering from the list
of investment banks set forth on Schedule I.
The list of investment banks on Schedule I may be amended from time to
time by Tengelmann with the consent of A&P (such consent not to be
unreasonably withheld or delayed). 



                    (d)
Notwithstanding the foregoing provisions of this Section 3.01, Tengelmann may
not request a Demand Registration during a period commencing upon the filing
(or earlier, but not more than 30 days prior to such filing upon notice by
A&P to Tengelmann that it so intends to file) of a Registration Statement
for A&P Common Stock by A&P (for its own account or for any other
security holder) and ending (i) 90 days after such Registration Statement is
declared effective by the SEC (or becomes automatically effective), (ii) upon
the withdrawal of such Registration Statement or (iii) 30 days after such
notice if no such Registration Statement has been filed within such 30-day
period, whichever occurs first; provided that the foregoing limitation will not
apply if Tengelmann was not given reasonable opportunity, in violation of
Section 3.02, to include its Registrable Securities in the Registration
Statement described in this Section 3.01(d).  


                    (e)
Tengelmann will be permitted to rescind a Demand Registration or request the
removal of any Registrable Securities held by it from any Demand Registration
at any time (so long as, in the case of a Demand Registration, after such removal
it would still constitute a Demand Registration, including with respect to the
required Fair Market Value thereof); provided that if Tengelmann
rescinds a Demand Registration, such Demand Registration will nonetheless count
as a Demand Registration for purposes of determining when future Demand
Registrations can be requested by Tengelmann pursuant to this Section 3.01,
unless Tengelmann reimburses A&P for all expenses (including reasonable
fees and disbursements of counsel) incurred by A&P in connection with such
Demand Registration. 


                    SECTION
3.02. Piggyback Registration.  If
A&P proposes to file a Registration Statement under the Securities Act with
respect to an offering of A&P Common Stock for (a) A&P’s own account
(other than (i) a Registration Statement on Form S-4 or S-8 (or any substitute
form that may be adopted by the SEC) or (ii) a Registration Statement filed in
connection with an offering of securities solely to A&P’s existing security
holders) or (b) the account of any holder of A&P Common Stock (other than
Tengelmann) pursuant to a demand registration requested by such holder, then
A&P will give written notice of such proposed filing to Tengelmann as soon
as practicable (but in no event less than 20 days before the anticipated filing
date), and upon the written request, given within 10 days after delivery of any
such notice by A&P, of Tengelmann 






18 


to include in
Registrable Securities in such registration (which request shall specify the
number of Registrable Securities proposed to be included in such registration),
A&P will, subject to Section 3.03, include all such Registrable Securities
in such registration on the same terms and conditions as A&P’s or such
holder’s A&P Common Stock (a “Piggyback Registration”); provided,
however, that if at any time after giving written notice of such proposed
filing and prior to the business day prior to the effective date of the
Registration Statement filed in connection with such registration, A&P
shall determine for any reason not to proceed with the proposed registration of
the securities, then A&P may, at its election, give written notice of such
determination to Tengelmann and, thereupon, will be relieved of its obligation
to register any Registrable Securities in connection with such registration.
A&P will control the determination of the form of any offering contemplated
by this Section 3.02, including whether any such offering will be in the form
of an underwritten offering and, if any such offering is in the form of an underwritten
offering, A&P will select the lead Underwriter and any additional
Underwriters in connection with such offering. 


                    SECTION
3.03. Reduction of Offering.
Notwithstanding anything contained herein, if the lead Underwriter of an
underwritten offering described in Section 3.01 or Section 3.02 advises A&P
in writing that the number of shares of A&P Common Stock (including any
Registrable Securities) that A&P, Tengelmann and any other Persons intend
to include in any Registration Statement is such that the success of any such
offering would be materially and adversely affected, including the price at
which the securities can be sold or the number of Registrable Securities that
any participant may sell, then the number of shares of A&P Common Stock to
be included in the Registration Statement for the account of A&P,
Tengelmann and any other Persons will be reduced to the extent necessary to
reduce the total number of securities to be included in any such Registration
Statement to the number recommended by such lead Underwriter; provided that
(a) priority in the case of a Demand Registration pursuant to Section 3.01 will
be (i) first, the Registrable Securities requested to be included in the
Registration Statement for the account of Tengelmann pursuant to its
registration rights provided in this Agreement, (ii) second, securities
proposed to be offered by A&P for its own account and (iii) third,
among any other securities of A&P requested to be registered by the holders
thereof pursuant to a contractual right so that the total number of registrable
securities to be included in any such offering for the account of all such
Persons will not exceed the number recommended by such lead Underwriter; (b)
priority in the case of a Registration Statement initiated by A&P for its
own account which gives rise to a Piggyback Registration pursuant to Section
3.02 will be (i) first, securities initially proposed to be offered by
A&P for its own account, (ii) second, the Registrable Securities
requested to be included in the Registration Statement for the account of
Tengelmann pursuant to its registration right provided in this Agreement and
securities requested to be included in the Registration Statement for the
account of Yucaipa pursuant to the registration rights afforded to Yucaipa
pursuant to the Stockholder Agreement between Yucaipa and A&P dated as of
the date hereof pro rata, based on Tengelmann’s Piggyback Percentage and
Yucaipa’s Piggyback Percentage, respectively, and (iii) third, among any
other securities of A&P requested to be registered pursuant to a
contractual right so that the total number of securities to be included in any such offering for the account of all such Persons will not exceed the number recommended by such






19 


lead
Underwriter; (c) priority in the case of a Registration Statement initiated by
A&P for the account of Yucaipa pursuant to the registration rights afforded
to Yucaipa pursuant to the Stockholder Agreement between Yucaipa and A&P
dated as of the date hereof will be (i) first, the securities requested
to be included in the Registration Statement for the account of Yucaipa, (ii) second,
securities to be offered by A&P for its own account, (iii) third,
securities requested to be included in the Registration Statement for the
account of Tengelmann pursuant to its registration right provided in this
Agreement and (iv) fourth, among any other securities of A&P requested to
be registered pursuant to a contractual right so that the total number of
securities to be included in any such offering for the account of all such
Persons will not exceed the number recommended by such lead Underwriter, and
(d) priority with respect to inclusion of securities in a Registration
Statement initiated by A&P for the account of holders other than Tengelmann
or Yucaipa pursuant to registration rights afforded such holders will be (i) first,
pro rata among securities requested to be included in the Registration
Statement for the account of such holders, (ii) second, securities
requested to be included in the Registration Statement by A&P for its own
account, (iii) third, the Registrable Securities requested to be
included in the Registration Statement for the account of Tengelmann pursuant
to its registration right provided in this Agreement and securities requested
to be included in the Registration Statement for the account of Yucaipa
pursuant to the registration rights afforded to Yucaipa pursuant to the
Stockholder Agreement between Yucaipa and A&P dated as of the date hereof
pro rata, based on Tengelmann’s Piggyback Percentage and Yucaipa’s Piggyback
Percentage, respectively, and (iv) fourth, pro rata among any other
securities of A&P requested to be registered pursuant to a contractual
right so that the total number of securities to be included in any such
offering for the account of all such Persons will not exceed the number
recommended by such lead Underwriter.  


                    SECTION
3.04. Registration Procedures.
(a) Subject to the provisions of Section 3.01 hereof, in connection with
the registration of the sale of Registrable Securities hereunder, A&P will
as promptly as reasonably practicable: 


	
 

	
 


	
 

	
          (i)
  furnish to Tengelmann without charge, if requested, prior to the filing of a
  Registration Statement, copies of such Registration Statement as it is
  proposed to be filed, and thereafter such number of copies of such
  Registration Statement, each amendment and supplement thereto (in each case
  including all exhibits thereto and documents incorporated by reference
  therein, except to the extent such exhibits or documents are currently
  available electronically via the SEC’s Electronic Data Gathering, Analysis,
  and Retrieval system (“EDGAR”)), the prospectus included in such
  Registration Statement (including each preliminary prospectus), copies of any
  and all transmittal letters or other correspondence with the SEC relating to
  such Registration Statement (except to the extent such letters or
  correspondence are currently available electronically via EDGAR) and such
  other documents in such quantities as Tengelmann may reasonably request from
  time to time in order to facilitate the disposition of such Registrable
  Securities; 










20 


	
 

	
 


	
 

	
          (ii)
  use its commercially reasonable efforts to register or qualify such
  Registrable Securities under such other securities or blue sky laws of such
  jurisdictions as Tengelmann reasonably requests and do any and all other acts
  and things as may be reasonably necessary or advisable to enable Tengelmann
  to consummate the disposition of such Registrable Securities in such
  jurisdictions; provided that A&P will not be required to (x)
  qualify generally to do business in any jurisdiction where it would not
  otherwise be required to qualify but for this Section 3.04(a)(ii), (y)
  subject itself to taxation in any such jurisdiction or (z) consent to general
  service of process in any such jurisdiction;
  


	
 

	
 


	
 

	
          (iii)
  notify Tengelmann at any time when a prospectus relating to Registrable
  Securities is required to be delivered under the Securities Act, of the
  happening of any event as a result of which the prospectus included in a
  Registration Statement or the Registration Statement or amendment or
  supplement relating to such Registrable Securities contains an untrue
  statement of a material fact or omits to state any material fact required to
  be stated therein or necessary to make the statements therein, in the light
  of the circumstances under which they were made, not misleading, and A&P
  will promptly prepare and file with the SEC a supplement or amendment to such
  prospectus and Registration Statement (and comply fully with the applicable
  provisions of Rules 424, 430A and 430B under the Securities Act in a timely
  manner) so that, as thereafter delivered to the purchasers of the Registrable
  Securities, such prospectus and Registration Statement will not contain an
  untrue statement of a material fact or omit to state any material fact
  required to be stated therein or necessary to make the statements therein, in
  the light of the circumstances under which they were made, not misleading; 


	
 

	
 


	
 

	
          (iv)
  advise the Underwriters, if any, and Tengelmann promptly and, if requested by
  such Persons, confirm such advice in writing, of the issuance by the SEC of
  any stop order suspending the effectiveness of the Registration Statement
  under the Securities Act or of the suspension by any state securities
  commission of the qualification of the Registrable Securities for offering or
  sale in any jurisdiction, or the initiation of any proceeding for any of the
  preceding purposes.  If at any time
  the SEC shall issue any stop order suspending the effectiveness of the
  Registration Statement, or any state securities commission or other
  regulatory authority shall issue an order suspending the qualification or
  exemption from qualification of the Registrable Securities under state
  securities or blue sky laws, A&P shall use its commercially reasonable
  efforts to obtain the withdrawal or lifting of such order at the earliest
  possible time; 


	
 

	
 


	
 

	
          (v)
  use its commercially reasonable efforts to cause such Registrable Securities
  to be registered with or approved by such other Governmental Entities as may
  be necessary by virtue of the business and operations of A&P to enable
  Tengelmann to consummate the disposition of such 










21 


	
 

	
 


	
 

	
Registrable
  Securities; provided that A&P will not be required to (x) qualify
  generally to do business in any jurisdiction where it would not otherwise be
  required to qualify but for this Section 3.04(a)(v), (y) subject itself to
  taxation in any such jurisdiction or (z) consent to general service of
  process in any such jurisdiction; 


	
 

	
 


	
 

	
          (vi)
  enter into customary agreements and use commercially reasonable efforts to
  take such other actions as are reasonably requested by Tengelmann in order to
  expedite or facilitate the disposition of such Registrable Securities,
  including preparing for and participating in, a road show and all such other
  customary selling efforts as the Underwriters reasonably request in order to
  expedite or facilitate such disposition; 


	
 

	
 


	
 

	
          (vii)
  if requested by Tengelmann or the Underwriter(s) in connection with such sale,
  if any, promptly include in any Registration Statement or prospectus,
  pursuant to a supplement or post-effective amendment if necessary, such
  information as Tengelmann and such Underwriter(s), if any, may reasonably
  request to have included therein, including information relating to the “Plan
  of Distribution” of the Registrable Securities, information with respect to
  the number of Registrable Securities being sold to such Underwriter(s), the
  purchase price being paid therefor and any other terms of the offering of the
  Registrable Securities to be sold in such offering, and make all required
  filings of such prospectus supplement or post-effective amendment as soon as
  practicable after A&P is notified of the matters to be included in such
  prospectus supplement or post-effective amendment; 


	
 

	
 


	
 

	
          (viii)
  make available for inspection by Tengelmann, any Underwriter participating in
  any disposition of such Registrable Securities, and any attorney for
  Tengelmann and such Underwriter and any accountant or other agent retained by
  Tengelmann or such Underwriter (collectively, the “Inspectors”), all
  financial and other records, pertinent corporate documents and properties of
  A&P (collectively, the “Records”) as will be reasonably necessary
  to enable them to conduct customary due diligence with respect to Tengelmann
  and the related Registration Statement and prospectus, and cause the
  Representatives of A&P and its Subsidiaries to supply all information
  reasonably requested by any such Inspector; provided that (x) Records
  and information obtained hereunder will be used by such Inspector only to
  conduct such due diligence and (y) Records or information that A&P
  determines, in good faith, to be confidential will not be disclosed by such
  Inspector unless (A) the disclosure of such Records or information is
  necessary to avoid or correct a material misstatement or omission in a
  Registration Statement or related prospectus or (B) the release of such
  Records or information is ordered pursuant to a subpoena or other order from
  a court or governmental authority of competent jurisdiction; 










22 


	
 

	
 


	
 

	
          (ix)
  (A) cause A&P’s Representatives to supply all information reasonably
  requested by Tengelmann, or any Underwriter, attorney, accountant or agent in
  connection with the Registration Statement and (B) provide Tengelmann and its
  counsel with the opportunity to participate in the preparation of such
  Registration Statement and the related prospectus; 


	
 

	
 


	
 

	
          (x)
  use its commercially reasonable efforts to obtain and deliver to each
  Underwriter and Tengelmann a comfort letter from the independent public
  accountants for A&P (and additional comfort letters from independent
  public accountants for any company acquired by A&P whose financial
  statements are included or incorporated by reference in the Registration
  Statement) in customary form and covering such matters as are customarily
  covered by comfort letters as such Underwriter and Tengelmann may reasonably
  request, including (x) that the financial statements included or incorporated
  by reference in the Registration Statement or the prospectus, or any
  amendment or supplement thereof, comply as to form in all material respects
  with the applicable accounting requirements of the Securities Act and (y) as
  to certain other financial information for the period ending no more than
  five business days prior to the date of such letter; provided, however,
  that if A&P fails to obtain such comfort letter, then such Demand
  Registration will not count as a Demand Registration for purposes of
  determining when future Demand Registrations can be requested by Tengelmann
  pursuant to Section 3.01; 


	
 

	
 


	
 

	
          (xi)
  use its commercially reasonable efforts to obtain and deliver to each
  Underwriter and Tengelmann a 10b-5 statement and legal opinion from A&P’s
  counsel in customary form and covering such matters as are customarily
  covered by 10b-5 statements and legal opinions as such Underwriter and
  Tengelmann may reasonably request; provided, however, that if
  A&P fails to obtain such statement or opinion, then such Demand
  Registration will not count as a Demand Registration for purposes of
  determining when future Demand Registrations can be requested by Tengelmann
  pursuant to Section 3.01; 


	
 

	
 


	
 

	
          (xii)
  otherwise use its commercially reasonable efforts to comply with all
  applicable rules and regulations of the SEC, and make generally available to
  its security holders, within the required time period, an earnings statement
  (which need not be audited) covering a period of 12 months, beginning with
  the first fiscal quarter after the effective date of the Registration
  Statement relating to such Registrable Securities (as the term “effective
  date” is defined in Rule 158(c) under the Securities Act), which earnings
  statement will satisfy the provisions of Section 11(a) of the Securities Act
  and Rule 158 thereunder or any successor provisions thereto; and 










23 


	
 

	
 


	
 

	
          (xiii)
  use its commercially reasonable efforts to cause such Registrable Securities
  to be listed or quoted on the NYSE or, if A&P Common Stock is not then
  listed on the NYSE, then on any other securities exchange or national
  quotation system on which similar securities issued by A&P are listed or
  quoted. 





                    (b)
In connection with the Registration Statement relating to such Registrable
Securities covering an underwritten offering, (i) A&P and Tengelmann agree
to enter into a written agreement with each Underwriter selected in the manner
herein provided in such form and containing such provisions as are customary in
the securities business for such an arrangement between such Underwriter and
companies of A&P’s size and investment stature and, to the extent
practicable, on terms consistent with underwriting agreements entered into by
A&P (it being understood that, unless required otherwise by the Securities
Act or any other Law,  A&P will not
require Tengelmann to make any representation, warranty or agreement in such
agreement other than with respect to Tengelmann, the ownership of Tengelmann’s
securities being registered and Tengelmann’s intended method of disposition)
and (ii) Tengelmann agrees to complete and execute all such other documents
customary in similar offerings, including any reasonable questionnaires, powers
of attorney, hold back agreements, letters and other documents customarily
required under the terms of such underwriting arrangements.  The representations and warranties by, and
the other agreements on the part of, A&P to and for the benefit of such
Underwriter in such written agreement with such Underwriter will also be made
to and for the benefit of Tengelmann.
In the event that an underwritten offering is not consummated because
any condition to the obligations under any related written agreement with such
Underwriter is not met or waived in connection with a Demand Registration, and
such failure to be met or waived is not attributable to the fault of
Tengelmann, such Demand Registration will not be deemed exercised. 


                    SECTION
3.05. Conditions to Offerings.
(a) The obligations of A&P to take the actions contemplated by
Section 3.01, Section 3.02 and Section 3.04 with respect to an offering of
Registrable Securities will be subject to the following conditions: 


	
 

	
 


	
 

	
          (i)
  A&P may require Tengelmann to furnish to A&P such information
  regarding Tengelmann or the distribution of such Registrable Securities as
  A&P may from time to time reasonably request in writing, in each case
  only as required by the Securities Act or under state securities or blue sky
  laws; and 


	
 

	
 


	
 

	
          (ii)
  in any underwritten offering pursuant to Section 3.01 or Section 3.02 hereof,
  Tengelmann, together with A&P, will enter into an underwriting agreement
  in accordance with Section 3.04(b) above with the Underwriter or Underwriters
  selected for such underwriting, as well as such other documents customary in
  similar offerings. 





                    (b)
Tengelmann agrees that, upon receipt of any notice from A&P of the
happening of any event of the kind described in Section 3.04(a)(iii) or Section
3.04(a)(iv) hereof or a condition described in Section 3.06 hereof, Tengelmann
will forthwith 






24 


discontinue
disposition of such Registrable Securities pursuant to the Registration
Statement covering the sale of such Registrable Securities until Tengelmann’s
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 3.04(a)(iii) hereof or notice from A&P of the termination of stop
order or the Deferral Period. 



                    SECTION
3.06. Black-out Period.
A&P’s obligations pursuant to Section 3.01, Section 3.02 and Section
3.03 hereof will be suspended if compliance with such obligations would (a)
violate applicable Law or (b) require A&P to disclose a financing,
acquisition, disposition or other corporate development, and the chief
executive officer of A&P has determined, in the good faith exercise of his
reasonable business judgment, that such disclosure is not in the best interests
of A&P; provided that any such suspension pursuant to clause (b) will not exceed
90 days and all such suspensions pursuant to clause (b) will not exceed 180
days in any 12-month period (the “Deferral Period”). A&P will promptly give Tengelmann
written notice of any such suspension containing the approximate length of the
anticipated delay, and A&P will notify Tengelmann upon the termination of
the Deferral Period. Upon receipt of
any notice from A&P of any Deferral Period, Tengelmann shall forthwith
discontinue disposition of the Registrable Securities pursuant to the
Registration Statement relating thereto until Tengelmann receives copies of the
supplemented or amended prospectus contemplated hereby or until it is advised
in writing by A&P that the use of the prospectus may be resumed and has
received copies of any additional or supplemented filings that are incorporated
by reference in the prospectus, and, if so directed by A&P, Tengelmann
will, and will request the lead Underwriter or Underwriters, if any, to,
deliver to A&P all copies, other than permanent file copies, then in
Tengelmann’s or such Underwriter’s or Underwriters’ possession of the current
prospectus covering such Registrable Securities.  


                    SECTION
3.07. Registration Expenses.  All
fees and expenses incident to A&P’s performance of or compliance with the obligations
of this Article III, including all fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of
counsel for any Underwriters in connection with qualification of Registrable
Securities under applicable blue sky laws), printing expenses, messenger and
delivery expenses of A&P, any registration or filing fees payable under any
Federal or state securities or blue sky laws, the fees and expenses incurred in
connection with any listing or quoting of the securities to be registered on
any national securities exchange or automated quotation system, fees of the
National Association of Securities Dealers, Inc., fees and disbursements of
counsel for A&P, its independent certified public accountants and any other
public accountants who are required to deliver comfort letters (including the
expenses required by or incident to such performance), transfer taxes, fees of
transfer agents and registrars, costs of insurance, fees and expenses of one
counsel (in addition to any local counsel) for Tengelmann and the fees and
expenses of other Persons retained by A&P, will be borne by A&P.  Tengelmann will bear and pay any
underwriting discounts and commissions applicable to Registrable Securities
offered for its account pursuant to any Registration Statement. 






25 


                    SECTION
3.08. Indemnification; Contribution.
(a) In connection with any registration of Registrable Securities
pursuant to Section 3.01, Section 3.02 or Section 3.03 hereof, A&P agrees to
indemnify and hold harmless, to the fullest extent permitted by Law,
Tengelmann, its Affiliates, directors, officers and stockholders and each
Person who controls Tengelmann within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively, the “Indemnified
Persons”) from and against any and all losses, claims, damages,
liabilities, judgments, actions and expenses (including reasonable attorneys’
fees), joint or several, caused by any untrue or alleged untrue statement of
material fact contained in any part of any Registration Statement or any
preliminary or final prospectus used in connection with the Registrable
Securities or any Issuer FWP, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a prospectus, in the light of the
circumstances under which they were made) not misleading; provided that
A&P will not be required to indemnify any Indemnified Person for any
losses, claims, damages, liabilities, judgments, actions or expenses resulting
from any such untrue statement or omission if such untrue statement or omission
was made in reliance on and in conformity with information with respect to any
Indemnified Person furnished to A&P in writing by Tengelmann expressly for
use therein.  


                    (b)
In connection with any Registration Statement or preliminary or final
prospectus or Issuer FWP, Tengelmann agrees to indemnify A&P, its
Directors, its officers who sign such Registration Statement and each Person,
if any, who controls A&P (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act) to the same extent as the
foregoing indemnity from A&P to Tengelmann, but only with respect to
information with respect to any Indemnified Person furnished to A&P in
writing by Tengelmann expressly for use in such Registration Statement,
preliminary or final prospectus, or Issuer FWP. 


                    (c)
In case any claim, action or proceeding (including any governmental
investigation) is instituted involving any Person in respect of which indemnity
may be sought pursuant to Section 3.08(a) or (b), such Person (hereinafter
called the “indemnified party”) will (i) promptly notify the Person
against whom such indemnity may be sought (hereinafter called the “indemnifying
party”) in writing; provided that the failure to give such notice
shall not relieve the indemnifying party of its obligations pursuant to this
Agreement except to the extent such indemnifying party has been prejudiced in
any material respect by such failure; (ii) permit the indemnifying party to
assume the defense of such claim, action or proceeding with counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and
(iii) pay the fees and disbursements of such counsel related to such claim,
action or proceeding.  In any such
claim, action or proceeding, any indemnified party will have the right to
retain its own counsel, but the fees and expenses of such counsel will be at
the expense of such indemnified party (without prejudice to such indemnified
party’s indemnity and other rights under the Charter, Bylaws and applicable
Law, if any) unless (A) the indemnifying party and the indemnified party have
mutually agreed to the retention of such counsel, (B) the named parties to any
such claim, action or proceeding (including any impleaded parties) include both
the indemnifying party and the indemnified party and the 






26 


indemnified party
has been advised in writing by counsel, with a copy provided to A&P, that
representation of both parties by the same counsel would be inappropriate due
to actual or potential conflicting interests between them or (C) the
indemnifying party has failed to assume the defense of such claim and employ
counsel reasonably satisfactory to the indemnified party.  It is understood that the indemnifying party
will not, in connection with any claim, action or proceeding or related claims,
actions or proceedings in the same jurisdiction, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel at any time for all such indemnified parties), and that all
such reasonable fees and expenses will be reimbursed reasonably promptly
following a written request by an indemnified party stating under which clause
of (A) through (C) above reimbursement is sought and delivery of documentation
of such fees and expenses.  In the case
of the retention of any such separate firm for the indemnified parties, such
firm will be designated in writing by the indemnified parties.  The indemnifying party will not be liable
for any settlement of any claim, action or proceeding effected without its
written consent (which consent shall not be unreasonably withheld), but if such
claim, action or proceeding is settled with such consent or if there has been a
final judgment for the plaintiff, the indemnifying party agrees to indemnify
the indemnified party from and against any loss or liability by reason of such
settlement or judgment.  Notwithstanding
the foregoing sentence, if at any time an indemnified party will have requested
an indemnifying party to reimburse the indemnified party for reasonable fees
and expenses of counsel as contemplated by the third sentence of this Section
3.08(c), the indemnifying party agrees that it will be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party will not have
reimbursed the indemnified party in accordance with such request or reasonably
objected in writing, on the basis of the standards set forth herein, to the propriety
of such reimbursement prior to the date of such settlement.  No indemnifying party will, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such proceeding. 


                    (d)
If the indemnification provided for in this Section 3.08 from the indemnifying
party is unavailable to an indemnified party hereunder in respect of any
losses, claims, damages, liabilities, actions, judgments or expenses referred
to in this Section 3.08, then the indemnifying party, in lieu of indemnifying
such indemnified party, will contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities,
actions, judgments or expenses (i) in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified party in
connection with the actions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations, or (ii) if the allocation provided by clause (i) is not
permitted by applicable Law, in such proportion as is appropriate to reflect
not only the relative fault referred to in clause (i) but also the relative benefit
of A&P, on the one hand, and Tengelmann, on the other, in connection with
the statements or omissions that resulted in such losses, claims, damages, 






27 


liabilities,
actions, judgments or expenses, as well as any other relevant equitable
considerations.  The relative fault of
such indemnifying party and indemnified party will be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action.  The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and expenses
referred to above will be deemed to include, subject to the limitations set
forth in Section 3.08(c), any legal or other fees or expenses reasonably incurred
by such party in connection with any investigation or proceeding. 


                    (e)
The parties agree that it would not be just and equitable if contribution
pursuant to Section 3.08(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in Section 3.08(d).
No Person guilty of “fraudulent misrepresentation” (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any Person who was not guilty of such fraudulent misrepresentation.  Notwithstanding the provisions of this
Section 3.08(e), Tengelmann shall not be required to contribute, in the
aggregate, any amount in excess of the amount by which the net proceeds
received by Tengelmann with respect to the Registrable Securities exceed the
greater of (A) the amount paid by Tengelmann for its Registrable Securities and
(B) the amount of any damages which Tengelmann has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. 


                    (f)
For purposes of this Section 3.08, each controlling person of Tengelmann shall
have the same rights to contribution as Tengelmann, and each officer, Director
and Person, if any, who controls A&P within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act shall have the same
rights to contribution as A&P, subject in each case to the limitations set
forth in the immediately preceding paragraph.
Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party or
parties under this Section 3.08, notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from who contribution may be sought from
any obligation it or they may have under this Section 3.08 or otherwise except
to the extent that it has been prejudiced in any material respect by such
failure.  No party shall be liable for
contribution with respect to any action or claim settled without its written
consent; provided, however, that such written consent was not unreasonably
withheld. 


                    (g)
If indemnification is available under this Section 3.08, the indemnifying party
will indemnify each indemnified party to the full extent provided in Sections
3.08(a) and (b) without regard to the relative fault of said indemnifying party
or indemnified party or any other equitable consideration provided for in
Section 3.08(d) or (e). 






28 


                    SECTION
3.09. Rule 144.  For so long as
A&P is subject to the requirements of Section 13, 14 or 15(d) of the
Exchange Act, A&P agrees that it will timely file the reports required to
be filed by it under the Securities Act and the Exchange Act and it will take
such further action as Tengelmann reasonably may request, all to the extent
required from time to time to enable Tengelmann to sell Registrable Securities
within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC.  Upon the request of Tengelmann, A&P will
deliver to Tengelmann a written statement as to whether it has complied with
such requirements. 


                    SECTION
3.10. Lockup.  If and to the
extent requested by the lead Underwriter of an underwritten offering of Equity
Securities of A&P, A&P and Tengelmann agree not to effect, and to cause
their respective Affiliates not to effect, except as part of such registration,
any offer, sale, pledge, transfer or other distribution or disposition or any
agreement with respect to the foregoing, of the issue being registered or
offered, as applicable, or of a similar security of A&P, or any securities
into which such Equity Securities are convertible, or any securities convertible
into, or exchangeable or exercisable for, such Equity Securities, including a
sale pursuant to Rule 144 under the Securities Act, during a period of up to
seven days prior to, and during a period of up to 90 days after, the effective
date of such registration as reasonably requested by the lead Underwriter.  The lead Underwriter shall give
A&P and
Tengelmann prior notice of any such request. 


                    SECTION
3.11. Termination of Registration Rights.  This Article III (other than Sections 3.07, 3.08 and 3.09) will
terminate on the date on which all shares of A&P Common Stock subject to
this Agreement cease to be Registrable Securities.  Section 3.09 will terminate on the date on which all shares of
A&P Common Stock subject to this Agreement may be sold pursuant to Rule
144(k). 


                    SECTION
3.12. Specific Performance.
Tengelmann, in addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of liquidated or other
damages, will be entitled to specific performance of its rights under this
Agreement.  A&P agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Agreement and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate. 


                    SECTION
3.13. Other Registration Rights.
A&P (a) has not granted and will not grant to any third party any
registration rights inconsistent with any of those contained herein and (b) has
not entered into and will not enter into any agreement that will impair its
ability to perform its obligations under this Article III, so long as any of the registration rights under this
Agreement
remain in effect.  







29


ARTICLE IV


PREEMPTIVE RIGHTS


                    SECTION
4.01. Rights to Purchase New Equity Securities. (a) In the event that
A&P proposes to issue any Equity Securities (“New Equity Securities”)
other than Equity Securities of A&P which are (i) issued or reserved for
issuance pursuant to any employee compensation plan or other benefit plan
(including stock option, restricted stock or other equity based compensation
plans), now existing or hereafter approved by the Board of Directors, (ii)
issued or issuable upon the exercise of the Roll-over Warrants or the 2000
Warrants, (iii) to the extent issued or issuable in exchange for consideration
consisting of property or assets other than cash, (iv) issued or issuable to
Tengelmann or any Affiliate of Tengelmann or any wholly owned Subsidiaries of
A&P, (v) existing as of the Closing Date or that are issued or issuable
thereafter pursuant to the terms of any Equity Securities or other purchase
rights existing or assumed by A&P as of the Closing Date after giving
effect to the Merger; or (vi) issued pursuant to preemptive rights contained in
the Charter, Tengelmann shall have the right to purchase, in accordance with
paragraph (b) below, a number of such New Equity Securities equal to the
product of (x) the total number of such New Equity Securities to be issued and
(y) the Outstanding Percentage Interest of Tengelmann at such time.


                    (b)
In the event that A&P proposes to undertake an issuance of
New Equity Securities to which this Section 4.01 applies, it shall give written
notice (a “Notice of Issuance”) of its intention to Tengelmann, describing the material terms of the New
Equity Securities and the issuance thereof, including the number of New Equity
Securities proposed to be issued, the price (or method for determining price)
thereof, the terms of payment and the proposed date of issuance. Tengelmann
shall have 30 days from the date of receipt of the Notice of Issuance to
exercise its right to purchase all or a portion of its pro rata share of such
New Equity Securities (as determined pursuant to paragraph (a) above) for the
same consideration, and otherwise upon the terms specified in the Notice of
Issuance, by giving written notice to A&P and stating therein the quantity
of New Equity Securities to be purchased by Tengelmann. The rights of
Tengelmann with respect to a particular issuance of New Equity Securities under
this Section 4.01(b) shall expire if unexercised within 30 days after receipt
of the applicable Notice of Issuance.


                    (c)
If Tengelmann exercises its right pursuant to a Notice of Issuance, then the
closing of the purchase and sale of the
New Equity Securities to be issued to Tengelmann will be consummated
simultaneously with the closing of the purchase and sale of the New Equity
Securities to be issued to Persons other than Tengelmann, unless (i) Tengelmann
requests that the closing of the purchase and sale of the New Equity Securities
to be issued to Tengelmann be consummated on a later date, which date shall be
on or prior to the date that is 20 days after the closing of the purchase and
sale of the New Equity Securities to be issued to Persons other than Tengelmann
or (ii) the closing of the purchase and sale of the New Equity Securities
issued to Tengelmann is required by Law to be consummated on a later date. In
the event any purchase by Tengelmann is not consummated, other than as a result
of the fault of A&P, within the provided time 






30


period, A&P may issue the New Equity Securities to Persons other
than Tengelmann free and clear from the rights of Tengelmann and restrictions
under this Section 4.01. Any New Equity Securities not elected to be purchased
by Tengelmann may be sold by A&P to any Person or Persons to which A&P
intended to sell such New Equity Securities on terms and conditions no less
favorable to A&P than those offered to Tengelmann.


                    (d)
If, for any reason, the issuance of New Equity Securities to Persons other than
Tengelmann is not consummated, Tengelmann’s right to purchase its pro rata
share of the New Equity Securities shall automatically lapse. Thereafter,
Tengelmann will continue to have pre-emptive rights with respect to other
issuances of New Equity Securities at later dates or times.


                    (e)
A&P represents and covenants to Tengelmann that (i) upon issuance, all of
the shares of New Equity Securities sold to Tengelmann pursuant to this Article
IV shall be duly authorized, validly issued, fully paid and nonassessable and
will be approved (if outstanding securities of A&P of the same type that
are included in the issuance are at the time already approved) for listing on
the NYSE or for quotation or listing on the principal trading market for the
securities of A&P at the time of issuance and (ii) upon delivery of such
shares, they shall be free and clear of all claims, liens, encumbrances,
security interests and charges of any nature and shall not be subject to any
preemptive right of any stockholder of A&P other than Tengelmann except as
provided in the Charter (as in effect on the date hereof or as hereafter
amended with the approval of Tengelmann). 


ARTICLE V


PUT RIGHT


                    SECTION
5.01. Put Right. (a) Prior to the settlement by A&P of any Roll-over
Warrant upon exercise by Yucaipa, and subject to Tengelmann’s right to approve
any issuance of A&P Common Stock in connection therewith pursuant to
Section 2.04(a)(ix), A&P will give Tengelmann the right (a “Put Right”)
to (i) cause A&P to settle such Roll-over Warrant by issuing and delivering
A&P Common Stock to Yucaipa (in which case, such issuance shall be deemed
to be approved by Tengelmann pursuant to Section 2.04(b)(ix)) and (ii) sell to
A&P some or all of the shares of A&P Common Stock to be so issued and
delivered to Yucaipa in the following manner, provided that A&P
shall not be required to purchase A&P Common Stock pursuant to this clause
(ii) to the extent necessary to avoid a Liquidity Impairment:


                    (b)
A&P will give notice (a “Warrant Exercise Notice”) to Tengelmann in
writing of each exercise by Yucaipa of one or more Roll-over Warrants,
specifying the number of shares (the “Share Number”) of A&P Common
Stock subject to such Roll-over Warrants and what portion, if any, A&P
proposes to settle by the issuance and delivery to Yucaipa of A&P Common
Stock (the “Proposed Stock Settlement Amount”) and what portion, if any,
A&P proposes to settle in cash.






31


                    (c)
If Tengelmann determines to exercise its Put Right, Tengelmann will deliver a
notice (a “Put Notice”) to A&P within ten business days after
receipt of a Warrant Exercise Notice indicating, (i) the number of shares of
A&P Common Stock which A&P shall purchase from Tengelmann pursuant to
Tengelmann’s Put Right (which number shall not exceed the Share Number) and
(ii) if the Proposed Stock Settlement Amount exceeds the number specified
pursuant to clause (i), the portion of such excess to be settled by the
issuance and delivery of A&P Common Stock, if any, which Tengelmann has
approved pursuant to Section 2.04(a)(ix) (to the extent such approval is
required thereby). The purchase price per share for such A&P Common Stock
will be equal to the Market Price of the A&P Common Stock on the business
day immediately preceding the date of exercise by Yucaipa of such Roll-over
Warrants (the “Put Price”).


                    (d)
If Tengelmann exercises its Put Right, A&P will purchase from Tengelmann,
the number of shares of A&P Common Stock set forth in the Put Notice at the
Put Price.


                    (e)
Such purchase and sale shall occur on the date A&P issues and delivers
A&P Common Stock to Yucaipa in settlement of such Roll-over Warrants.


                    (f)
A “Liquidity Impairment” shall be deemed to occur to
the extent that any necessary cash settlement(s) of Roll-over Warrants, or any
payment(s) in accordance with Article V of this Agreement, would: 


	
 

	
 


	
 

	
          (i)
  violate, breach or give rise to a default or event of default under or in
  respect of any contract, credit facility, agreement or other obligation of
  A&P, either existing as of the Closing Date, incurred in connection with
  the Merger or the financing and other transactions consummated substantially
  concurrently with the Merger or entered into after the Closing Date (with the
  approval of a majority of the Tengelmann Directors), or any refinancing
  thereof (with the approval of a majority of Tengelmann Directors or on terms
  substantially similar to, and in any event no less favorable to A&P than,
  the terms of the obligation being refinanced), or 


	
 

	
 


	
 

	
          (ii)
  reasonably be expected, after giving effect to the proposed cash
  settlement or payment, to cause (A) cash plus cash equivalents plus
  marketable securities plus cash available for drawdown under any then
  existing credit agreement or other financing facility of A&P or any of
  its Subsidiaries (without conditions that are not reasonably capable of being
  satisfied at the applicable time) less (B) cash in stores plus
  restricted cash plus restricted marketable securities, to equal less
  than $200,000,000, as of the date of the proposed cash settlement or payment,
  as applicable, or any date within 180 days thereafter, after taking into
  account any changes or adjustments to any of the foregoing items scheduled or
  reasonably anticipated, in good faith, by the Chief Financial Officer of
  A&P to occur during such 180-day period. 










32


For purposes of the foregoing
definition, the terms “cash”, “cash equivalents”, “marketable securities”,
“restricted cash” and “restricted marketable securities” shall mean the amount
set forth opposite the corresponding line item on A&P’s most recent audited
or unaudited consolidated balance sheet prior to the date of the proposed cash
settlement or payment (i.e. as at the end of the most recently concluded 4-week
fiscal period) and “cash in stores” shall mean cash held by all of A&P’s or
any of its Subsidiaries’ stores as of such balance sheet date as determined by
A&P in accordance with past practices.


ARTICLE VI


MISCELLANEOUS


                    SECTION
6.01. Adjustments. References to numbers of shares and to sums of money
contained herein will be adjusted to account for any reclassification,
exchange, substitution, combination, stock split or reverse stock split of the
shares.


                    SECTION
6.02. Changes in Outstanding Percentage Interest Attributable to Issuances
of A&P Common Stock. To the extent that any decrease in Tengelmann’s
Outstanding Percentage Interest is attributable to issuances of Equity
Securities by A&P (as opposed to dispositions of Equity Securities of
A&P by Tengelmann or its Affiliates), such decrease will not be taken into
account for purposes of this Agreement unless such decrease is attributable to
issuance of Equity Securities by A&P (x) in connection with a Business
Combination by A&P or other acquisition by A&P, other than the Merger,
approved by Tengelmann in accordance with Section 2.04(a)(i) or 2.04(b)(i), (y)
for purposes of Article IV only, in connection with which Tengelmann was
entitled to exercise its rights under Article IV hereof or (z) on or about the
Closing Date in connection with the Merger, as merger consideration, but not in
any event by any warrants or options issued in connection with the Merger.


                    SECTION
6.03. Notices. All notices, requests, claims, demands and other
communications under this Agreement will be in writing and will be deemed given
(i) when delivered, if delivered in person, (ii) when sent by facsimile
(provided the facsimile is promptly confirmed by telephone confirmation
thereof), (iii) when sent by email (provided the email is promptly confirmed by
telephone confirmation thereof) or (iv) two business days following sending by
overnight delivery by an internationally recognized overnight courier, in each
case to the respective parties at the following addresses (or at such other
address for a party as will be specified in a notice given in accordance with
this Section 6.03):






33


	
 

	
 

	
 

	
 

	
 


	
 

	
(a) if to
  A&P:


	
 

	
 

	
 


	
 

	
 

	
2 Paragon
  Drive

  Montvale, NJ 07645

  Fax: (201) 571-4106

  Phone: 201-573-9700

  Email: richarda@aptea.com

  Attention: Allan Richards


	
 

	
 

	
 


	
 

	
with a copy
  to:


	
 

	
 

	
 


	
 

	
 

	
Cahill
  Gordon & Reindel LLP 

  80 Pine Street

  New York, NY 10005

  Fax: 212-378-2324

  Phone: 212-701-3215

  Email: korce@cahill.com

  Attention: Kenneth W. Orce, Esq.


	
 

	
 

	
 


	
 

	
 

	
McGuireWoods LLP 

  7 Saint Paul St., Suite 1000

  Baltimore, MD 21202-1671

  Fax: 410.659.4535

  Phone: 410.659.4419

  Email: cmartin@mcguirewoods.com

  Attention: Cecil E. Martin, III, Esq.


	
 

	
 

	
 


	
 

	
(b) if to
  Tengelmann:


	
 

	
 


	
 

	
 

	
Wissollstrasse 5-43

  D-45478 Mülheim an der Ruhr

  GERMANY

  Fax: +49 (0)208 5806 6585

  Phone: +49 (0)208 5806 6382


	
 

	
 

	
Email: 

	
HaubC@APTEA.com,


	
 

	
 

	
 

	
fhartmann@uz.tengelmann.de


	
 

	
 

	
Attention: 

	
Mr. Christian Haub


	
 

	
 

	
 

	
 

	
Dr. Frank Hartmann










34


	
 

	
 

	
 

	
 


	
 

	
with a copy
  to:


	
 


	
 

	
 

	
Cravath,
  Swaine & Moore LLP

  825 Eighth Avenue

  New York, NY 10019

  Fax: 212-474-3700

  Phone: 212-474-1000

  Email: sjebejian@cravath.com


	
 

	
 

	
Attention:

	
Philip A.
  Gelston, Esq.


	
 

	
 

	
 

	
Sarkis
  Jebejian, Esq.





                    SECTION
6.04. Reasonable Efforts; Further Actions. The parties hereto each will
use all reasonable efforts to take or cause to be taken all action and to do or
cause to be done all things necessary, proper or advisable under applicable
Laws and regulations to consummate and make effective the transactions
contemplated by this Agreement as promptly as practicable.


                    SECTION
6.05. Consents. The parties hereto will cooperate, with each other in
filing any necessary applications, reports or other documents with, giving any
notices to, and seeking any consents from, all regulatory bodies and all
Governmental Entities and all third parties as may be required in connection
with the consummation of the transactions contemplated by this Agreement.


                    SECTION
6.06. Fees and Expenses. (a) Following the date hereof, A&P and
Tengelmann agree, subject to any restrictions under applicable Law, to
negotiate in good faith to enter into a services agreement whereby Tengelmann
would provide transactional and other services to A&P as requested from
time to time in exchange for reasonable compensation to Tengelmann as agreed by
the parties. 


                    (b)
Whether or not the Merger is consummated, A&P will pay its own costs and
expenses, and will reimburse Tengelmann for its reasonable out of pocket costs
and expenses, incurred in connection with (a) this Agreement, (b) the Merger
and related potential transactions and financings and (c) subject to
authorization of Tengelmann’s activities by the Non-Tengelmann Directors, any
purchase or sale of more than 15% of the A&P Common Stock outstanding on
the date of such purchase or sale or Business Combination or other strategic
transaction or capital transaction involving A&P, in each case including
the reasonable fees and expenses of counsel, irrespective of when incurred.


                    SECTION
6.07. Access to Information; Financial Statements. (a) Upon reasonable
prior written notice, A&P will, and will cause its Subsidiaries and the
Representatives of A&P and its Subsidiaries to, afford Tengelmann and its
Representatives reasonable access, consistent with applicable Law, to its and
its Subsidiaries’ Representatives, and to the books and records of A&P and
its Subsidiaries, and shall furnish Tengelmann with financial, operating and
other data and information of A&P and its Subsidiaries as Tengelmann may
from time to time reasonably request in writing, including to enable Tengelmann
to prepare its financial statements and in 






35


connection
with its financial reporting generally. Neither A&P nor its Subsidiaries
shall be required to provide access to or to disclose information where such
access or disclosure would jeopardize the attorney-client privilege of A&P
or its Subsidiaries or contravene any Law (including antitrust Laws).


                    (b)
As soon as reasonably practicable following the end of each fiscal quarter and
fiscal year, A&P will furnish to Tengelmann the consolidated financial
statements of A&P (including providing draft statements as such statements
become available and, with respect to fiscal years, audit reports as such
reports become available). A&P shall use its reasonable best efforts to
assist Tengelmann with respect to preparing Tengelmann’s financial statements
and in connection with Tengelmann’s financial reporting generally, in a manner
consistent with past practice. A&P will cooperate, in a manner consistent
with past practice, with and assist Tengelmann in the translation of A&P’s
financial statements in order to conform such financial statements to
applicable German and/or international accounting standards and shall otherwise
provide Tengelmann with access to information necessary in connection with such
financial statements and financial reporting.


                    SECTION
6.08. Amendments; Waivers. (a) No provision of this Agreement may be
amended or waived unless such amendment or waiver is in writing and signed, in
the case of an amendment, by the parties hereto, or in the case of a waiver, by
the party against whom the waiver is to be effective; provided that no
such amendment or waiver by A&P will be effective without the approval of a
majority of the Non-Tengelmann Directors (except for amendments or waivers that
are administrative in nature or that do not materially adversely affect the
rights of the Unaffiliated Equity Holders, which amendments and waivers will
only require the approval of a majority of the Directors).


                    (b)
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise will not constitute a waiver of such rights nor
will any single or partial exercise by any party to this Agreement of any of
its rights under this Agreement preclude any other or further exercise of such
rights or any other rights under this Agreement. The rights and remedies herein
provided will be cumulative and not exclusive of any rights or remedies
provided by Law or otherwise.


                    SECTION
6.09. Interpretation. When a reference is made in this Agreement to an
Article, a Section, a Subsection or a Schedule, such reference will be to an
Article, a Section, a Subsection or a Schedule of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement. Whenever the words “include”, “includes” or “including” are
used in this Agreement, they will be deemed to be followed by the words
“without limitation”. The words “hereof”, “herein” and “hereunder” and words of
similar import when used in this Agreement will refer to this Agreement as a
whole and not to any particular provision of this Agreement. The words “date
hereof” will refer to the date of this Agreement. The term “or” is not
exclusive. The word “extent” in the phrase “to the extent” will mean the degree
to which a subject or other thing extends, and such phrase will not mean simply
“if”. The






36


definitions
contained in this Agreement are applicable to the singular as well as the
plural forms of such terms. Any agreement or instrument defined or referred to
herein or in any agreement or instrument that is referred to herein means such
agreement or instrument as from time to time amended, modified or supplemented.
References to a Person are also to its permitted successors and assigns. In the
event that A&P reorganizes such that it becomes a Subsidiary of a holding
company, all references herein to A&P shall be deemed to be to such holding
company and A&P shall cause such holding company to become a party to this
Agreement and comply herewith and, to the extent necessary or appropriate for
enforcement hereof, cause the organizational documents of such holding company
to reflect the terms hereof. 


                    SECTION
6.10. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule or Law, or public
policy, all other conditions and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Without limiting the generality of the foregoing, the
invalidity, illegality or unenforceability of the Tengelmann Mirror Vote
provisions hereof will be deemed to materially adversely affect the economic
and legal substance of the transactions contemplated hereby in the event
Tengelmann ceases to comply therewith. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
will negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner
to the end that the purpose of this Agreement is fulfilled to the fullest
extent possible.


                    SECTION
6.11. Counterparts. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.


                    SECTION
6.12. Entire Agreement; No Third-Party Beneficiaries. This Agreement
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and is not intended to confer upon any Person other than
the parties any rights or remedies.


                    SECTION
6.13. Governing Law. Except to the extent specifically required by the
MGCL, this Agreement will be governed by, and construed in accordance with, the
Laws of the State of New York, regardless of the Laws that might otherwise
govern under applicable principles of conflicts of Laws thereof. The parties
declare that it is their intention that this Agreement will be regarded as made
under the Laws of the State of New York and that the Laws of the State of New
York will be applied in interpreting its provisions in all cases where legal
interpretation will be required, except to the extent the MGCL is specifically
required by such act to govern the interpretation of this Agreement.






37


                    SECTION
6.14. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement will be assigned, in whole or in
part, by any of the parties without the prior written consent of the other
parties hereto. Any purported assignment without such prior written consent
will be void. Subject to the preceding sentences, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns.


                    SECTION
6.15. Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties will be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in the Supreme Court of the State of
New York sitting in New York County or the United States District Court of the
Southern District of New York, or in each case any appellate court thereof,
without the necessity of proving the inadequacy of money damages as a remedy,
this being in addition to any other remedy to which they are entitled at Law or
in equity. In addition, each of the parties (a) irrevocably and unconditionally
consents to submit itself and its property to the exclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and in each
case any appellate court thereof, in any dispute arising out of this Agreement,
(b) agrees that it will not attempt to deny or defeat such exclusive
jurisdiction by motion or other request for leave from any such court, (c)
irrevocably and unconditionally waives (and agrees not to plead or claim) any
objection to the laying of venue, or the defense of an inconvenient forum to
the maintenance, of any action, suit or proceeding arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment, (d)
agrees that it will not bring any action arising out of or relating to this
Agreement in any court other than the Supreme Court of the State of New York
sitting in New York County or the United States District Court of the Southern
District of New York, or in each case any appellate court thereof, and (e) waives
any right to trial by jury with respect to any action related to or arising out
of this Agreement, or for recognition or enforcement of any judgment. Each of
the parties hereto agrees that a final nonappealable judgment in any such
action or proceeding will be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by Law.
Each of the parties to this Agreement irrevocably consents to service of
process in the manner provided for delivering notices in Section 6.03. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by Law.


                    SECTION
6.16. Effectiveness. Except for this Section 6.16 and Sections 6.03,
6.06(b), 6.08, 6.09, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.17, 6.18 and 6.19,
which shall become effective as of the date hereof, this Agreement will become
effective upon the Closing Date.


                    SECTION
6.17. Termination.


                    (a)
Automatic Termination. Notwithstanding anything to the contrary
contained in this Agreement, this Agreement will automatically terminate upon
the earlier 






38


to occur of
(i) the termination of the Merger Agreement in accordance with its terms, (ii)
the percentage of Voting Power in A&P (determined on the basis of the
number of outstanding shares of Voting Stock of A&P (including for such
purposes any Voting Stock underlying stock options that is beneficially owned
by Christian W.E. Haub as of the date of this Agreement), as set forth in the
most recent SEC filing of A&P prior to such date that contained such
information) that is beneficially owned by Tengelmann and its Affiliates
equaling 100% or (iii) such percentage equaling less than 10%.


                    (b)
Survival. In the event that this Agreement will terminate, all
provisions of this Agreement will terminate and will be void, except (i)
Article III will survive any such termination until Tengelmann and its
Affiliates no longer hold Registrable Securities and (ii) Articles I and VI
will survive any such termination indefinitely. Nothing in this Section 6.17
will be deemed to release any party from any liability for any willful and
material breach of this Agreement or to impair the right of any party to compel
specific performance by any other party of its obligations under this
Agreement.


                    SECTION
6.18. Confidentiality. (a) Tengelmann agrees to maintain, and shall
cause its Representatives to maintain, the confidentiality of all material
non-public information obtained by it from A&P or any of its Subsidiaries
or any of their respective Representatives, and not to use such information for
any purpose other (i) than the evaluation and protection of its investment in
A&P, (ii) the exercise of any of its respective rights under this Agreement
and (iii) the exercise by the Tengelmann Directors of their duties as
Directors.


                    (b)
Notwithstanding the foregoing, the confidentiality obligations of Section
6.18(a) will not apply to information obtained other than in violation of this
Agreement:


	
 

	
 


	
 

	
          (i)
  which Tengelmann or any of its Representatives is required to disclose by
  judicial or administrative process, or by other requirements of applicable
  Law or regulation or any governmental authority (including any applicable
  rule, regulation or order of a self-governing authority, such as the NYSE); provided
  that, where and to the extent practicable, the disclosing party (A) gives the
  other party reasonable notice of any such requirement and, to the extent
  protective measures consistent with such requirement are available, the
  opportunity to seek appropriate protective measures and (B) cooperates with
  such party in attempting to obtain such protective measures;


	
 

	
 


	
 

	
          (ii)
  which becomes available to the public other than as a result of a breach of
  Section 6.18(a); or


	
 

	
 


	
 

	
          (iii)
  which has been provided to Tengelmann or any of its Representatives by a
  third party who obtained such information other than from any such Person or
  other than as a result of a breach of Section 6.18(a).










39


                    SECTION
6.19. No Liability of Partners. Notwithstanding anything that may be
expressed or implied in this Agreement, A&P acknowledges and agrees that
(i) notwithstanding that Tengelmann may be a partnership, no recourse hereunder
or under any documents or instruments delivered by Tengelmann in connection
herewith may be had against any officer, agent or employee of Tengelmann or any
partner, member or stockholder of Tengelmann or any director, officer,
employee, partner, affiliate, member, manager, stockholder, assignee or
representative of the foregoing (any such person or entity, a
“Representative”), whether by the enforcement of any judgment or assessment or
by any legal or equitable proceeding, or by virtue of any statute, regulation
or other applicable law, and (ii) no personal liability whatsoever will attach
to, be imposed on or otherwise be incurred by any Representative under this
Agreement or any documents or instruments delivered in connection herewith or
for any claim based on, in respect of or by reason of such obligations or by
their creation.






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


	
 

	
 

	
 

	
 


	
 

	
THE GREAT
  ATLANTIC & PACIFIC TEA COMPANY, INC.


	
 

	
 

	
 

	
 


	
 

	
By:

	
/s/
  Allan Richards


	
 

	
 

	



	
 

	
 

	
Name:

	
Allan
  Richards


	
 

	
 

	
Title:

	
Senior Vice
  President,

  Human Resources, Labor

  Relations, Legal Services &

  Secretary










	
 

	
 

	
 

	
 


	
 

	
TENGELMANN

  WARENHANDELSGESELLSCHAFT KG


	
 

	
 

	
 

	
 


	
 

	
By:

	
Tengelmann
  Verwaltungs-und Beteiligungs GmbH, as Managing Partner


	
 

	
 

	
 

	
 


	
 

	
 

	
By  

	
/s/
  Christian W. E. Haub


	
 

	
 

	
 

	



	
 

	
 

	
 

	
Name:
  Christian W. E. Haub


	
 

	
 

	
 

	
Title:   Managing Director






Signature Page to Stockholder Agreement






SCHEDULE I


Investment Banks 


	
 

	
 


	
1.

	
J.P. Morgan


	
 

	
 


	
2.

	
Morgan
  Stanley 


	
 

	
 


	
3.

	
UBS 











EXHIBIT A


Amendments
to the By-laws


The By-laws of
the Great Atlantic & Pacific Tea Company, Inc. (the “By-laws”) shall
be amended to insert the following as a new Article XI: 


ARTICLE XI.


Section
1. Notwithstanding anything to the contrary in the By-laws, so long as the
Outstanding Percentage Interest (such term, and other capitalized terms used
but not defined in the By-laws, shall have the meanings set forth in Section 4
of this Article XI) is at least 10%: 


          (a) The
Board of Directors will be composed of nine directors, and, subject to any
additional requirements provided for in the Certificate of Incorporation of the
Corporation, the number of such directors may not be increased or decreased
without the approval of that number of directors that is at least 66.67% of the
total number of directorships (including vacancies); provided, however,
that any decrease in the number of directorships that has the effect of
reducing the number of Tengelmann Directors or the number of directors that
Tengelmann is entitled to nominate hereunder shall require the consent of
Tengelmann.


          (b) Subject
to Section 1(c) below to the extent such section has been complied with by the
Corporation, Tengelmann will have the right to designate for nomination (it being
understood that such nomination will include any nomination of any incumbent
Tengelmann Director for reelection to the Board of Directors) to the Board of
Directors that number of individuals equal to (i) the product of the total
number of directorships (including vacancies) at such time and the Outstanding
Percentage Interest of Tengelmann at such time (rounded to the nearest whole
number), minus (ii) the number of Tengelmann Directors who are not then subject
to election and who will be continuing to serve on the Board of Directors
following such election (each such directorship, a “Tengelmann Directorship”)
and each such designee (each, a “Tengelmann Nominee”) will be included in the
slate of nominees recommended by the Corporation for election to the Board of
Directors. No individual who does not satisfy the qualification set forth in
the preceding sentence shall be eligible for nomination or election to a
Tengelmann Directorship. 


          (c) Notwithstanding
anything to the contrary in this Section 1, no member of the Governance
Committee of the Board of Directors and no director shall be under any
obligation to nominate and recommend a Tengelmann Nominee or elect a Tengelmann
Nominee to fill a vacant Tengelmann Directorship if he or she determines, in
good faith and after consideration of specific written advice of outside
counsel expert in Maryland corporation law (a copy of which will be provided to
Tengelmann), that such nomination or recommendation would reasonably be
expected to violate his or her duties 







2


under
§2-405.1(a) of the Maryland General Corporation Law (the “MGCL”) because (i)
such nominee is unfit to serve as a director of an NYSE-listed company or (ii)
service by such nominee as a Director would reasonably be expected to violate
applicable Law or, due to such nominee’s relationship as a director, employee
or stockholder of another company, result in a conflict of interest (it being
understood that any such person’s relationship with Tengelmann may not serve as
a basis for any such determination), in which case the provisions of Section
1(b) above or Section 1(e) below, as the case may be, will continue to apply
but Tengelmann will have a reasonable opportunity (but in any event not less
than 30 days) to designate an alternate Tengelmann Nominee. 


          (d) No
Tengelmann Nominee or Tengelmann Director shall be qualified to be a director
unless at all times during his or her term, he or she remains acceptable to
Tengelmann.


          (e) Upon
the death, resignation, retirement, incapacity, disqualification or removal
from office for any other reason of any Tengelmann Director, Tengelmann will
have the right to designate the replacement for such Tengelmann Director and
only such designee will, subject to Section 1(c) above to the extent such
section has been complied with by the Corporation, be qualified to fill such
vacancy. Conversely, in the event of the death, resignation, incapacity,
disqualification or removal of any director other than a Tengelmann Director (a
“Non-Tengelmann Director”), a majority of the Non-Tengelmann Directors will
have the exclusive right to designate the replacement for such Director and
only such designee will be qualified to fill such vacancy. Following any such
designation pursuant to either of the two immediately preceding
sentences, no board action (other than to fill such vacancy) may be taken until such
vacancy is filled.


          (f) Without
limiting the generality of Section 1(b) above, if the number of Tengelmann
Directors is less than the number that Tengelmann has the right (and wishes) to
designate pursuant to this Section 1, (i) the number of directors shall
automatically be increased by a number sufficient to permit Tengelmann to
designate the full number of Tengelmann Directors that it is entitled (and
wishes) to designate pursuant to this Section 1 or (ii) alternatively, the
secretary of the Corporation, at the request of Tengelmann, shall call a
special meeting of the stockholders of the Corporation for the purpose of
removing directors to create such vacancies as are necessary to permit
Tengelmann to designate the full number of Tengelmann Directors that it is
entitled (and wishes) to designate pursuant to this Section 1. Upon the
creation of any vacancy pursuant to the preceding sentence, Tengelmann shall
designate the person to fill such vacancy in accordance with this Section 1,
and, subject to Section 1(c) above to the extent such section has been complied
with, such designee shall be qualified to fill such vacancy. Following any such
designation, no board action (other than to fill such vacancy) may
be taken until such vacancy is filled. In the event that the number of
directors is increased pursuant to this Section 1(f), the number of directors
shall automatically be reduced at the first available opportunity to comply
with the number of directors otherwise specified by Section 1(a).


          (g) The
rights and obligations of Tengelmann under this Article XI shall apply to any
and all Affiliate(s) of Tengelmann which beneficially own Voting 






3


Stock as of
the date of the Stockholder Agreement and any and all Affiliate(s) of
Tengelmann to whom any shares of Voting Stock are transferred in any manner,
and any such transfer shall be conditioned on such transferee entering into a
written agreement in form and substance acceptable to the Corporation extending
the rights and obligations of Tengelmann under such provisions to such
transferee(s). All references to Tengelmann in this Article XI shall be deemed
to refer to Tengelmann and such Affiliates except as the context otherwise
requires.


          (h) Tengelmann
Directors shall serve on each committee of the Board of Directors and the
number of Tengelmann Directors on a committee of the Board of Directors shall
be not less than (x) the number of Tengelmann Nominees which Tengelmann is
entitled to designate for nomination as a director at such time divided by
(y) the total number of seats on the Board of Directors at such time
multiplied by (z) the number of directors serving on such committee (rounded
to the nearest whole number). Tengelmann shall have the right to select the
Tengelmann Directors who will serve on each committee of the Board of
Directors; provided that, so long as there are any Tengelmann Directors
serving on the Board of Directors, at least one Tengelmann Director shall serve
on each committee of the Board of Directors. No committee shall take any action
unless the requirements of the preceding two sentences have been fully
satisfied. Notwithstanding the foregoing, a Tengelmann Director shall not serve
on any committee if such service would violate any Law concerning the
independence of directors. 


          (i) Any
director will have the right to call a meeting of the Board of Directors.


Section
2. Notwithstanding anything to the contrary in the By-laws, for so long as
Tengelmann’s Outstanding Percentage Interest is at least 25%: 


          (a) the
approval of Tengelmann will be required for the Corporation to do any of the
following actions (in addition to any other Board of Directors or stockholder
approval required by any Law, the Corporation’s Certificate of Incorporation or
these By-laws):




          (i) any
Business Combination by the Corporation, except for the Merger and any other
Business Combination involving consideration with a Fair Market Value not
exceeding $50,000,000 to be paid by or to the Corporation or its stockholders
as the case may be;


          (ii) the
issuance of any Equity Security of the Corporation, the creation of any right
to acquire such Equity Security or any amendment to the terms of any such
Equity Security, to the extent such issuance, creation or amendment requires
stockholder approval; provided, however that this clause (ii)
shall not include any issuance (A) of any Roll-over Warrants, (B) pursuant to
any employee compensation plan or other benefit plan including stock option,
restricted stock or other equity based compensation plans or (C) of any 








4



Equity
Security issued or issuable under rights existing as of the Closing Date after
giving effect to the Merger;


          (iii) any
amendment to the Corporation’s Certificate of Incorporation or the By-laws;


          (iv) any
amendment to the charter of any committee of the Board of Directors or to any
corporate governance guideline relating to any matter addressed by the
Stockholder Agreement, dated March 4, 2007, between the Corporation and
Tengelmann (the “Stockholder Agreement”) that would reasonably be expected to
obviate in any manner any of Tengelmann’s rights thereunder or the exercise
thereof;


          (v) the
adoption, implementation or amendment of, or redemption under, any takeover
defense measures (including a rights plan);


          (vi) any
Discriminatory Transaction;


          (vii) any
transaction between (A) the Corporation or any of its Subsidiaries, on the
one hand, and (B) any Affiliate of the Corporation (other than
(1) any director, officer or Subsidiary of the Corporation and
(2) Tengelmann or any of its Affiliates), on the other hand;


          (viii) a
change of the Corporation’s policies concerning the need for Board of Directors
approval intended or reasonable likely to have the effect of obviating any of
Tengelmann’s rights under the Stockholder Agreement or the exercise thereof; or


          (ix) the
issuance and delivery to Yucaipa of any common stock of the Corporation upon
exercise by Yucaipa of the Roll-over Warrants, except to the extent that a cash
settlement of any Roll-over Warrants would reasonably be expected to cause a
Liquidity Impairment, in which case the Corporation shall be permitted to issue
and deliver common stock of the Corporation to Yucaipa upon exercise of such
Roll-over Warrants to the extent necessary to avoid a Liquidity Impairment; and





          (b) the
approval of a majority of the Tengelmann Directors will be required for the
Board of Directors to approve or authorize, and for the Corporation to do, any
of the following (in addition to any other Board of Directors or stockholder
approval required by any Law, the Corporation’s Certificate of Incorporation or
these By-laws):




          (i) any
acquisition or disposition (in one transaction or a series of related
transactions) of any assets (including any Equity Securities of any Subsidiary
of the Corporation), business operations or securities with a Fair Market Value
of more than $50,000,000, including a disposition of equity securities of
Metro, Inc. owned by the 









5



Corporation,
but excluding any disposition to, or acquisition from or of, a wholly-owned
Subsidiary of the Corporation or any disposition that (A) occurs in
connection with creating or granting any Encumbrances to a third party that is
not a Subsidiary or Affiliate of the Corporation in connection with a bona fide
financing or (B) arises as a matter of Law (other than by reason of a
merger or consolidation) or occurs pursuant to a court order;


          (ii) the
issuance of any Equity Security of the Corporation, the creation of any right
to acquire such Equity Security or any amendment to the terms of any such
Equity Security; provided, however that this clause (ii)
shall not include any issuance (A) of any Roll-over Warrants, (B) pursuant to
any employee compensation plan or other benefit plan including stock option,
restricted stock or other equity based compensation plans or (C) of any Equity
Security issued or issuable under rights existing as of the Closing Date after
giving effect to the Merger;


          (iii) any
repurchase of common stock of the Corporation pursuant to a self-tender offer,
stock repurchase program, open market transaction or otherwise, other than a
repurchase of common stock of the Corporation from employees or former
employees pursuant to the terms and conditions of employee stock plans or a
purchase of common stock of the Corporation from Tengelmann pursuant to the
Stockholder Agreement;


          (iv) any
declaration or payment of a dividend on the common stock of the Corporation;


          (v) the
adoption or amendment of any strategic plans, priorities or direction for the
Corporation and its Subsidiaries and their businesses for a period of at least
three years, except for amendments not exceeding $10,000,000 individually or in
the aggregate in any 12-month period;


          (vi) the
adoption or amendment of the operating plan or budget, capital expenditure
budget, financing plan or any financial goal, except for amendments not
exceeding $10,000,000 individually or in the aggregate in any 12-month period;


          (vii) the
appointment or removal of the chairman of the Board of Directors or the
election (but not removal) of the chief executive officer of the Corporation;


          (viii) the
Dissolution of the Corporation;


          (ix) any
capital expenditure of more than $10,000,000 (excluding any capital expenditure
previously approved, or capital 








6



expenditure
pursuant to a capital expenditure program or budget or plan that was previously
approved, by the Board of Directors as part of the approval of the
Corporation’s annual operating plan, capital expenditures budget or otherwise);
or


          (x) any
incurrence, assumption, or issuance of Indebtedness in one or a series of
related transactions in an aggregate principal amount of more than $50,000,000
(other than any refinancing of Indebtedness existing on the Closing Date or the
incurrence of which was approved by the Board of Directors in accordance with
this Section 2, which refinancing is on terms consistent with or more favorable
(to the Corporation) than the terms of such Indebtedness and does not increase
the principal amount of such Indebtedness).





Section
3. So long as the percentage of Voting Power in the Corporation
(determined on the basis of the number of outstanding shares of Voting Stock of
the Corporation (including for such purposes any Voting Stock underlying stock
options that is beneficially owned by Christian W.E. Haub as of the date of
this Agreement), as set forth in the most recent SEC filing of the Corporation
prior to such date that contained such information) that is beneficially owned
by Tengelmann and its Affiliates is at least 10%, this Article XI of the
By-laws shall not be altered, amended or repealed, or any new By-law
inconsistent with such Article adopted, without the prior written approval of
Tengelmann. Anything to the contrary herein notwithstanding, in the event that
such percentage of Voting Power in the Corporation beneficially owned by
Tengelmann and its Affiliates is at any time less than 10%, this Article XI
shall expire and thereafter be of no further force or effect. For the avoidance
of doubt, this Article XI is intended to codify certain of the rights of
Tengelmann in accordance with the Stockholder Agreement. In the event of any
inconsistency between the Stockholder Agreement and any provision of the
By-laws or corporate governance policies and guidelines of the Corporation, the
provisions of the Stockholder Agreement will control, to the extent permitted
by applicable law. 


Section
4. The following terms used in this Article XI but not defined in the
By-laws shall have the following definitions. Capitalized terms used in this
Section 4 and not defined in this Article XI shall have the meanings assigned
to such terms in the By-laws.


          An
“Affiliate” of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person.


          “Business
Combination” with respect to any Person means any of the following:
(i) the sale, lease, transfer, conveyance or other disposition (other than
by way of merger or consolidation), of all or substantially all of the assets
of such Person and its Subsidiaries, taken as a whole, to any other Person or
(ii) any transaction (including any merger or consolidation) the
consummation of which would result in any other Person (or, in the case of a
merger or consolidation, the shareholders of such other Person) becoming,
directly or indirectly, the beneficial owner of more than 50% of the Voting 







7


Stock and/or
Equity Securities of such Person (measured in the case of Voting Stock by
Voting Power rather than number of shares).


          “Closing”
means the closing of the Merger.


          “Closing
Date” means the date of the closing of the Merger.


          “Discriminatory
Transaction” means any corporate action (other than those taken pursuant to
the express terms of the Stockholder Agreement) that would (i) impose
material limitations on the legal rights of Tengelmann as a holder of a class
of Voting Stock of the Corporation (including any action that would impose
material restrictions without lawful exemption on Tengelmann that are based
upon the size of security holding, the business in which a security holder is
engaged or other considerations applicable to Tengelmann and not to holders of
the same class of Voting Stock of the Corporation generally, but excluding any
such action which is expressly required by applicable Law without any provision
to exclude Tengelmann), which limitations are disproportionately (i.e. other
than in a proportionate manner consistent with Tengelmann’s pro rata ownership
of such class of Voting Stock) borne by Tengelmann as opposed to other
stockholders of the Corporation, or (ii) deny any material benefit to Tengelmann
proportionately as a holder of any class of Voting Stock of the Corporation
that is made available to other holders of that same class of Voting Stock of
the Corporation generally.


          “Dissolution”
means with respect to any Person the dissolution of such Person, the adoption
of a plan of liquidation of such Person or any action by such Person to
commence any suit, case, proceeding or other action (i) under any existing
or future Law of any jurisdiction relating to bankruptcy, insolvency, reorganization
or relief of debtors seeking to have an order for relief entered with respect
to such Person, or seeking to adjudicate such Person bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding up, liquidation,
dissolution, composition or other relief with respect to such Person or
(ii) seeking appointment of a receiver, trustee, custodian or other
similar official for such Person, or making a general assignment for the
benefit of the creditors of such Person. Any verb forms of this term have
corresponding meanings.


          “Encumbrance”
means any lien, encumbrance, security interest, pledge, mortgage, hypothecation,
charge, restriction on transfer of title, adverse claim, title retention
agreement of any nature or kind, or other encumbrance, except for any
restrictions arising under any applicable securities Laws.


          “Equity
Security” means (i) any common stock or other Voting Stock,
(ii) any securities convertible into or exchangeable for common stock or
other Voting Stock or (iii) any options, rights or warrants (or any
similar securities) to acquire common stock or other Voting Stock.


          “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder, as amended.






8


          “Fair
Market Value” means (i) with respect to cash or cash equivalents, the
amount of such cash or cash equivalents, (ii) with respect to any security
listed on a national securities exchange or otherwise traded on any national
securities exchange or other trading system, the average of the closing prices
of such security as reported on such exchange or trading system for each of the
five Trading Days prior to the date of determination, and (iii) with
respect to property other than cash or securities of the type described in
clauses (i) and (ii), the cash price at which a willing seller would sell
and a willing buyer would buy such property in an arm’s length negotiated
transaction without time constraints.


          “GAAP”
means U.S. generally accepted accounting principles, as in effect at the time
such term is relevant.


          “Governmental
Entity” means any transnational, federal, state, local or foreign
government, or any court of competent jurisdiction, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, or any national securities exchange or national quotation system on
which securities issued by the Corporation or any of its Subsidiaries are
listed or quoted.


          “Indebtedness”
means, with respect to any Person, without duplication: (i) (A) indebtedness
for borrowed money, (B) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (C) all obligations of such Person
under interest rate or currency hedging transactions (valued at the termination
value thereof), (D) all letters of credit issued for the account of such Person
and (E) obligations of such Person to pay rent or other amounts under any lease
of real property or personal property, which obligations are required to be
classified as capital leases in accordance with GAAP; (ii) indebtedness for
borrowed money of any other Person guaranteed, directly or indirectly, in any
manner by such Person; and (iii) indebtedness of the type described in clause
(i) above secured by any Encumbrance upon property owned by such Person, even
though such Person has not in any manner become liable for the payment of such
indebtedness; provided, however, that Indebtedness shall not be
deemed to include (i) any accounts payable or trade payables incurred in the
ordinary course of business of such Person, or (ii) any intercompany
indebtedness between any Person and any wholly owned Subsidiary of such Person
or between any wholly owned Subsidiaries of such Person.


          “Law”
means any law, treaty, statute, ordinance, code, rule, regulation, judgment,
decree, order, writ, award, injunction, authorization or determination enacted,
entered, promulgated, enforced or issued by any Governmental Entity.


          A
“Liquidity Impairment” shall be deemed to occur to
the extent that any necessary cash settlement(s) of Roll-over Warrants, or any
payment(s) in accordance with Article V of the Stockholder Agreement, would: 


	
 

	
 


	
 

	
          (i)
  violate, breach or give rise to a default or event of default under or in
  respect of any contract, credit facility, agreement or other obligation of
  the Corporation, either existing as of the Closing Date, incurred in
  connection with the Merger or the financing and other transactions 










9


	
 

	
 


	
 

	
consummated substantially
  concurrently with the Merger or entered into after the Closing Date (with the
  approval of a majority of the Tengelmann Directors), or any refinancing
  thereof (with the approval of a majority of Tengelmann Directors or on terms
  substantially similar to, and in any event no less favorable to the
  Corporation than, the terms of the obligation being refinanced), or


	
 

	
 


	
 

	
          (ii)
  reasonably be expected, after giving effect to the proposed cash settlement
  or payment, to cause (A) cash plus cash equivalents plus
  marketable securities plus cash available for drawdown under any then
  existing credit agreement or other financing facility of the Corporation or
  any of its Subsidiaries (without conditions that are not reasonably capable
  of being satisfied at the applicable time) less (B) cash in stores plus
  restricted cash plus restricted marketable securities, to equal less
  than $200,000,000, as of the date of the proposed cash settlement or payment,
  as applicable, or any date within 180 days thereafter, after taking into
  account any changes or adjustments to any of the foregoing items scheduled or
  reasonably anticipated, in good faith, by the Chief Financial Officer of the
  Corporation to occur during such 180-day period. 





For purposes of the foregoing
definition, the terms “cash”, “cash equivalents”, “marketable securities”,
“restricted cash” and “restricted marketable securities” shall mean the amount
set forth opposite the corresponding line item on the Corporation’s most recent
audited or unaudited consolidated balance sheet prior to the date of the
proposed cash settlement or payment (i.e. as at the end of the most recently
concluded 4-week fiscal period) and “cash in stores” shall mean cash held by
all of the Corporation’s or any of its Subsidiaries’ stores as of such balance
sheet date as determined by the Corporation in accordance with past practices.


          “Merger”
means the acquisition of Pathmark, a Delaware corporation, by the Corporation.


          “NYSE”
means the New York Stock Exchange.


          “Outstanding
Percentage Interest” means, as of any date of determination, the percentage
of Voting Power in the Corporation (determined on the basis of the number of
outstanding shares of Voting Stock of the Corporation (including for such
purposes any Voting Stock underlying stock options that is beneficially owned
by Christian W.E. Haub as of the date of the Stockholder Agreement), as set
forth in the most recent Securities and Exchange Commission filing of the Corporation
prior to such date that contained such information) that is beneficially owned
by Tengelmann and its Affiliates as of such date; provided ̧ however,
that to the extent that any decrease in Tengelmann’s Outstanding Percentage
Interest is attributable to issuances of Equity Securities by the Corporation
(as opposed to dispositions of Equity Securities of the Corporation by
Tengelmann or its Affiliates), such decrease will not be taken into account for
purposes of calculating Outstanding Percentage Interest for purposes of this
Article XI unless such decrease is attributable to issuance of Equity
Securities by the Corporation (x) in 






10


connection
with a Business Combination by the Corporation or other acquisition by the
Corporation, other than the Merger, approved by Tengelmann in accordance with
Section 2(a)(i) or Section 2(b)(i) of this Article XI or (y) on or about the
Closing Date in connection with the Merger, as merger consideration, but not in
any event by any warrants or options issued in connection with the Merger.


          “Pathmark”
means Pathmark Stores, Inc., a Delaware corporation.


          “Person”
means any individual, firm, corporation, partnership, company, limited
liability company, trust, joint venture, association, Governmental Entity,
unincorporated organization or other entity, foreign or domestic.


          “Roll-over
Warrants” means the warrants issued as part of the Merger by the
Corporation to Yucaipa in exchange for the Series A Warrants and the
Series B Warrants.


          “Series
A Warrants” means the Series A warrants to purchase 10,060,000 shares of
common stock of Pathmark at an exercise price of $8.50 per share, as such share
amount and exercise price may be adjusted from time to time in accordance with
the terms of such warrants in effect on the date hereof (or as such terms shall
be amended pursuant to agreements entered into on the date hereof in connection
with the Merger). 


          “Series
B Warrants” means the Series B warrants to purchase 15,046,350 shares of common
stock of Pathmark at an exercise price of $15.00 per share, as such share
amount and exercise price may be adjusted from time to time in accordance with
the terms of such warrants in effect on the date hereof (or as such terms shall
be amended pursuant to agreements entered into on the date hereof in connection
with the Merger).


          A
“Subsidiary” of any Person means, on any date, any Person (i) the
accounts of which would be consolidated with and into those of the applicable
Person in such Person’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP or (ii) of which (a)
securities or other ownership interests representing more than 50% of the
equity or (b) more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests, as of such
date, are owned, controlled or held by the applicable Person or one or more
Subsidiaries of such Person.


          “Tengelmann”
means Tengelmann Warenhandels-Gesellschaft KG, a limited partnership organized
under the laws of Germany. 


          “Tengelmann
Director” means a Director designated for nomination by Tengelmann and
actually elected (including to fill a vacancy) pursuant to the provisions of
Section 1.


          “Trading
Day” means (i) for so long as the common stock of the Corporation is
listed or admitted for trading on the NYSE or another national securities
exchange, a day on which the NYSE or such other national securities exchange is
open for business or (ii) if the common stock of the Corporation ceases to
be so listed, any day other than a 






11


Saturday or
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by Law or executive order to close.


          “Voting
Power” means the power to vote or to control, directly or indirectly, by
proxy or otherwise, the vote of any Voting Stock at the time such determination
is made; provided that a Person will not be deemed to have Voting Power
as a result of an agreement, arrangement or understanding to vote such Voting
Stock if such agreement, arrangement or understanding (i) arises solely
from a revocable proxy or consent given in response to a public proxy or
consent solicitation made pursuant to the applicable rules and regulations
under the Exchange Act and (ii) is not also then reportable by such Person
on Schedule 13D under the Exchange Act (or any comparable or successor
report). For purposes of determining the percentage of Voting Power of any
class or series (or classes or series) beneficially owned by Tengelmann or any
other Person, any Voting Stock not outstanding which is issuable pursuant to
conversion, exchange or other rights, warrants, options or similar securities
(other than any Voting Stock underlying stock options that is beneficially
owned by Christian W. E. Haub as of the date of this Agreement) will not be
deemed to be outstanding for the purpose of computing the Voting Power of
Tengelmann or any other Person.


          “Voting
Stock” of any Person means securities beneficially owned by such Person
then having the right to vote generally in any election of directors of the
Corporation.


          “Yucaipa”
means Yucaipa Corporate Initiatives Fund I, L.P., Yucaipa American Alliance
Fund I, L.P. and Yucaipa American Alliance (Parallel) Fund I, L.P.