Exhibit 10.1


	
 

	
 

	
 


	
 

	
December 12,
  2007


	
 

	
 


	
To:

	
The Great
  Atlantic and Pacific Tea Company, Inc.


	
 

	
2 Paragon
  Drive


	
 

	
Montvale, NJ
  07645


	
 

	
Attn:


	
 

	
Telephone:
    201-573-9700


	
 

	
Facsimile:
     201-937-4079


	
 

	
 


	
From:

	
Bank of
  America, N.A.


	
 

	
c/o Banc of
  America Securities LLC


	
 

	
9 West 57th
  Street


	
 

	
New York, NY
  10019


	
 

	
Attn:

	
John
  Servidio


	
 

	
Telephone:

	
212-847-6527


	
 

	
Facsimile:

	
212-230-8610


	
 

	
 

	
 


	
Re:

	
Issuer Warrant Transaction (2011)


	
 

	
(Transaction Reference Number: NY-32865)





Ladies and
Gentlemen:


          The
purpose of this communication (this “Confirmation”) is to set forth the terms
and conditions of the above-referenced transaction entered into on the Trade
Date specified below (the “Transaction”) between Bank of America, N.A.
(“Dealer”)
and The Great Atlantic and Pacific Tea Company, Inc. (“Issuer”). This communication
constitutes a “Confirmation” as referred to in the ISDA Master Agreement
specified below. 


          1.
This Confirmation is subject to, and incorporates, the definitions and
provisions of the 2000 ISDA Definitions (including the Annex thereto) (the “2000
Definitions”) and the definitions and provisions of the 2002 ISDA
Equity Derivatives Definitions (the “Equity Definitions”, and together with the
2000 Definitions, the “Definitions”), in each case as published by
the International Swaps and Derivatives Association, Inc. (“ISDA”).
In the event of any inconsistency between the 2000 Definitions and the Equity
Definitions, the Equity Definitions will govern. For purposes of the Equity
Definitions, each reference herein to a Warrant shall be deemed to be a
reference to a Call Option or an Option, as context requires.


          This
Confirmation evidences a complete and binding agreement, and supersedes any
prior agreements, written or oral, between Dealer and Issuer as to the terms of
the Transaction to which this Confirmation relates. This Confirmation shall be
subject to an agreement (the “Agreement”) in the form of the 2002 ISDA
Master Agreement (the “ISDA Master Agreement”) as if Dealer and
Issuer had executed an agreement in such form (without any Schedule but with
the elections set forth in this Confirmation). For the avoidance of doubt, the
Transaction shall be the only transaction under the Agreement.


          All
provisions contained in, or incorporated by reference to, the Agreement will
govern this Confirmation except as expressly modified herein. In the event of
any inconsistency between this Confirmation and either the Definitions or the
Agreement, this Confirmation shall govern. 


          2.
The Transaction is a Warrant Transaction, which shall be considered a Share
Option Transaction for purposes of the Equity Definitions. The terms of the
particular Transaction to which this Confirmation relates are as follows:


General Terms:


	
 

	
 

	
 


	
 

	
Trade Date:

	
December 12,
  2007


	
 

	
 

	
 


	
 

	
Effective
  Date:

	
December 18,
  2007, or such other date as agreed between the

  parties, subject to Section 8(n) below










	
 

	
 

	
 

	
 


	
 

	
Components:

	
 

	
The
  Transaction will be divided into individual Components, each with the terms
  set forth in this Confirmation, and, in particular, with the Number of
  Warrants and Expiration Date set forth in this Confirmation. The payments and
  deliveries to be made upon settlement of the Transaction will be determined
  separately for each Component as if each Component were a separate
  Transaction under the Agreement.


	
 

	
 

	
 

	
 


	
 

	
Warrant
  Style:

	
 

	
European


	
 

	
 

	
 

	
 


	
 

	
Warrant
  Type:

	
 

	
Call


	
 

	
 

	
 

	
 


	
 

	
Seller:

	
 

	
Issuer


	
 

	
 

	
 

	
 


	
 

	
Buyer:

	
 

	
Dealer


	
 

	
 

	
 

	
 


	
 

	
Shares:

	
 

	
The Common
  Stock of Issuer, par value USD 1.00 per share
(Ticker Symbol: “GAP”).


	
 

	
 

	
 

	
 


	
 

	
Number of
  Warrants:

	
 

	
For each
  Component, as provided in Annex A to this 
Confirmation.


	
 

	
 

	
 

	
 


	
 

	
Warrant
  Entitlement:

	
 

	
One Share
  per Warrant


	
 

	
 

	
 

	
 


	
 

	
Strike
  Price:

	
 

	
USD 46.20


	
 

	
 

	
 

	
 


	
 

	
Premium:

	
 

	
USD
  5,992,500.00 


	
 

	
 

	
 

	
 


	
 

	
Premium
  Payment Date:

	
 

	
The
  Effective Date


	
 

	
 

	
 

	
 


	
 

	
Exchange:

	
 

	
New York
  Stock Exchange


	
 

	
 

	
 

	
 


	
 

	
Related
  Exchange:

	
 

	
All
  Exchanges


	
 

	
 

	
 

	
 


	
Procedures
  for Exercise:

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
Expiration
  Time:

	
 

	
Valuation
  Time


	
 

	
 

	
 

	
 


	
 

	
Expiration
  Date:

	
 

	
As provided
  in Annex A to this Confirmation (or, if such date is not a Scheduled
  Trading Day, the next following Scheduled Trading Day that is not already an
  Expiration Date for another Component); provided
  that if that date is a Disrupted Day, the Expiration Date for such Component
  shall be the first succeeding Scheduled Trading Day that is not a Disrupted
  Day and is not or is not deemed to be an Expiration Date in respect of any
  other Component of the Transaction hereunder; and provided further that if the Expiration Date has not
  occurred pursuant to the preceding proviso as of the Final Disruption Date,
  the Final Disruption Date shall be the Expiration Date (irrespective of
  whether such date is an Expiration Date occurring on the Final Disruption
  Date in respect of any other Component for the Transaction) and,
  notwithstanding anything to the contrary in this Confirmation or the
  Definitions, the Relevant Price for the Expiration Date shall be the
  prevailing market value per Share determined in good faith by the Calculation
  Agent in a commercially reasonable manner. “Final Disruption Date”
  means ten Exchange Business Days after January 24, 2012. Notwithstanding the
  foregoing and anything to the contrary in the Equity Definitions, if a Market
  Disruption Event occurs on any Expiration Date, the Calculation Agent may
  determine that such Expiration Date is a Disrupted Day only in part, in which
  case the Calculation Agent shall make adjustments to the number of Warrants
  for the relevant Component for which such day shall be the Expiration Date
  and shall designate the 





2






	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Scheduled
  Trading Day determined in the manner described in the immediately preceding
  sentence as the Expiration Date for the remaining Warrants for such
  Component. Section 6.6 of the Equity Definitions shall not apply to any
  Valuation Date occurring on an Expiration Date.


	
 

	
 

	
 

	
 


	
 

	
Market
  Disruption Event:

	
 

	
Section
  6.3(a) of the Equity Definitions is hereby amended by deleting the words
  “during the one hour period that ends at the relevant Valuation Time, Latest
  Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the
  case may be,” in clause (ii) thereof. 


	
 

	
 

	
 

	
 


	
 

	
Automatic
  Exercise:

	
 

	
Applicable;
  and means that the Number of Warrants for each Component will be deemed to be
  automatically exercised at the
  Expiration Time on the Expiration Date for such Component unless Dealer
  notifies Seller (by telephone or in writing) prior to the Expiration Time on
  the Expiration Date that it does not wish Automatic Exercise to occur, in
  which case Automatic Exercise will not apply.


	
 

	
 

	
 

	
 


	
 

	
Issuer’s
  Telephone Number
  and Telex and/or Facsimile Number
  and Contact Details for purpose of
  Giving Notice:

	
 
	


  
To be provided by Issuer.

	
 

	
 

	
 

	
 


	
Settlement
  Terms:

	
 

	
 


	
 

	
 

	
 


	
     In respect of any Component:

	
 

	
 


	
 

	
 

	
 


	
 

	
Settlement
  Currency:

	
 

	
USD 


	
 

	
 

	
 

	
 


	
 

	
Settlement
  Method Election:

	
 

	
Applicable; provided that the same Settlement Method
  shall apply to all Components; and provided
  further that references in the Equity Definitions to “Physical
  Settlement” shall be deemed to be references to “Net Share Settlement” as
  defined herein. If the Issuer elects Cash Settlement or Cash Settlement
  becomes the Default Settlement Method, the Issuer shall use its reasonable
  best efforts to provide Dealer with a written statement that the
  representations contained in paragraphs (a)(i) and (a)(iv) of “Representations,
  Warranties and Agreements” below are true and correct as of and as if made on
  the date of such election.


	
 

	
 

	
 

	
 


	
 

	
Electing
  Party:

	
 

	
Issuer


	
 

	
 

	
 

	
 


	
 

	
Settlement
  Method Election Date:

	
 

	
Five
  Scheduled Trading Days prior to, and including, the scheduled Expiration Date
  for the Component with the earliest scheduled Expiration Date.


	
 

	
 

	
 

	
 


	
 

	
Default
  Settlement Method:

	
 

	
Net Share
  Settlement; provided that, unless on
  the Settlement Method Election Date, the number of Reserved Shares, as
  defined in Section 8(e), is at least equal to the Capped Number, as defined
  in Section 8(e), the Default Settlement Method shall be Cash Settlement; provided
  further that if the default settlement method
  applicable to warrant transactions entered into between the Issuer and Lehman
  Brothers OTC Derivatives Inc. (“Lehman OTC”) on the Trade
  Date becomes cash settlement pursuant to a proviso identical to the proceeding
  proviso, the Default Settlement Method hereunder shall be Cash Settlement.


	
 

	
 

	
 

	
 


	
 

	
VWAP Price:

	
 

	
For any
  Valuation Date, the Rule 10b-18 dollar volume weighted average price per
  Share for such Valuation Date based on 





3






	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
transactions
  executed during such Valuation Date, as reported on Bloomberg Page
  “GAP<Equity> AQR SEC” (or any successor thereto) or, in the event such
  price is not so reported on such Valuation Date for any reason, as reasonably
  determined by the Calculation Agent.


	
 

	
 

	
 

	
 


	
Cash
  Settlement Terms:

	
 

	
 


	
 

	
 

	
 


	
     In
  respect of any Component:

	
 

	
 


	
 

	
 

	
 


	
 

	
Settlement
  Currency:

	
 

	
USD 


	
 

	
 

	
 

	
 


	
 

	
Cash
  Settlement Payment Date:

	
 

	
With respect
  to each Valuation Date, three (3) full Exchange Business Days after the final
  Valuation Date.


	
 

	
 

	
 

	
 


	
Net Share
  Settlement Terms:

	
 

	
 


	
 

	
 

	
 


	
     In respect of any Component:

	
 

	
 


	
 

	
 

	
 


	
 

	
Net Share
  Settlement:

	
 

	
On each
  Settlement Date, Issuer shall deliver to Dealer a number of Shares equal to
  the Number of Shares to be Delivered for such Settlement Date to the account
  specified by Dealer and cash in lieu of any fractional shares valued at the
  Relevant Price on the Valuation Date corresponding to such Settlement Date. 


	
 

	
 

	
 

	
 


	
 

	
Number of
  Shares to be Delivered:

	
 

	
In respect
  of any Exercise Date, subject to the last sentence of Section 9.5 of the
  Equity Definitions, the product of (i) the number of Warrants exercised or
  deemed exercised on such Exercise Date, (ii) the Warrant Entitlement and
  (iii) (A) the excess of the VWAP Price on the Valuation Date occurring on
  such Exercise Date over the Strike Price divided by (B) such VWAP Price. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Number
  of Shares to be Delivered shall be delivered by Issuer to Dealer no later
  than 4:00 P.M. (local time in New York City) on the relevant Settlement Date.


	
 

	
 

	
 

	
 


	
 

	
Other
  Applicable Provisions:

	
 

	
The
  provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except that the
  Representation and Agreement contained in Section 9.11 of the Equity
  Definitions shall be modified by excluding any representations therein
  relating to restrictions, obligations, limitations or requirements under
  applicable securities laws as a result of the fact that Seller is the Issuer
  of the Shares) and 9.12 of the Equity Definitions will be applicable as if
  “Physical Settlement” applied to the Transaction.


	
 

	
 

	
 

	
 


	
Adjustments:

	
 

	
 


	
 

	
 

	
 

	
 


	
     In respect of any Component:

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
Method of
  Adjustment:

	
 

	
Calculation
  Agent Adjustment


	
 

	
 

	
 

	
 


	
 

	
Extraordinary
  Dividend:

	
 

	
Any dividend
  or distribution (i) that has an ex-dividend date occurring on or after the
  Trade Date and on or prior to the Expiration Date and (ii) the amount or
  value of which exceeds the Ordinary Dividend Amount for such dividend or
  distribution, as determined by the Calculation Agent. 


	
 

	
 

	
 

	
 


	
 

	
Ordinary
  Dividend Amount:

	
 

	
USD 0.00.


	
 

	
 

	
 

	
 


	
Extraordinary
  Events:

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
Consequences
  of Merger Events:

	
 

	
 





4






	
 

	
 

	
 

	
 


	
     (a)
  Share-for-Share:

	
 

	
Modified
  Calculation Agent Adjustment


	
 

	
 

	
 

	
 


	
     (b)
  Share-for-Other:

	
 

	
Cancellation
  and Payment (Calculation Agent Determination)


	
 

	
 

	
 

	
 


	
     (c) Share-for-Combined:

	
 

	
Cancellation
  and Payment (Calculation Agent Determination)


	
 

	
 

	
 

	
 


	
Tender
  Offer:

	
 

	
Applicable


	
 

	
 

	
 

	
 


	
Consequences
  of Tender Offers:

	
 

	
 


	
 

	
 

	
 

	
 


	
     (a)
  Share-for-Share:

	
 

	
Modified
  Calculation Agent Adjustment


	
 

	
 

	
 

	
 


	
     (b)
  Share-for-Other:

	
 

	
Cancellation
  and Payment (Calculation Agent Determination) on that portion of the Other
  Consideration that consists of cash; Modified Calculation Agent Adjustment on
  the remainder of the Other Consideration.


	
 

	
 

	
 

	
 


	
     (c)
  Share-for-Combined:

	
 

	
Modified
  Calculation Agent Adjustment


	
 

	
 

	
 

	
 


	
Modified
  Calculation 

  Agent Adjustment:

	
 

	

If, in respect of any Merger Event or
  Tender Offer to which Modified Calculation Agent Adjustment applies, the adjustments
  to be made in accordance with Section 12.2(e)(i) or Section 12.3(d)(i), as
  the case may be, of the Equity Definitions would result in Issuer being
  different from the issuer of the Shares, then with respect to such Merger
  Event or Tender Offer, as a condition precedent to the adjustments
  contemplated in Section 12.2(e)(i) or Section 12.3(d)(i), as the case may be,
  of the Equity Definitions, Issuer and the issuer of the Shares shall, prior
  to the Merger Date or Tender Offer, as the case may be, have entered into
  such documentation containing representations, warranties and agreements
  relating to securities law and other issues as requested by Dealer that
  Dealer has determined, in its commercially reasonable discretion, to be
  reasonably necessary or appropriate to allow Dealer to continue as a party to
  the Transaction, as adjusted under Section 12.2(e)(i) or Section 12.3(d)(i),
  as the case may be, of the Equity Definitions, and to preserve its hedging or
  hedge unwind activities in connection with the Transaction in a manner
  compliant with applicable legal, regulatory or self-regulatory requirements,
  or with related policies and procedures applicable to Dealer, and if such
  conditions are not met or if the Calculation Agent determines that no
  adjustment that it could make under Section 12.2(e)(i) or Section 12.3(d)(i),
  as the case may be, of the Equity Definitions will produce a commercially
  reasonable result, then the consequences set forth in Section 12.2(e)(ii) or
  Section 12.3(d)(ii), as the case may be, of the Equity Definitions shall
  apply.


	
 

	
 

	
 

	
 


	
Nationalization,
  Insolvency 

  or Delisting:

	
 

	

Cancellation and Payment (Calculation
  Agent Determination); provided
  that, in addition to the provisions of Section 12.6(a)(iii) of the Equity
  Definitions, it shall also constitute a Delisting if the Exchange is located
  in the United States and the Shares are not immediately re-listed, re-traded
  or re-quoted on any of the New York Stock Exchange, the American Stock
  Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or
  their respective successors); if the Shares are immediately re-listed,
  re-traded or re-quoted on any such exchange or quotation 





5






	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
system, such
  exchange or quotation system shall thereafter be deemed to be the Exchange.


	
 

	
 

	
 

	
 


	
 

	
Additional
  Disruption Events: 

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
     (a)
  Change in Law:

	
 

	
Applicable


	
 

	
 

	
 

	
 


	
 

	
     (b)
  Failure to Deliver:

	
 

	
Applicable


	
 

	
 

	
 

	
 


	
 

	
     (c)
  Insolvency Filing:

	
 

	
Applicable


	
 

	
 

	
 

	
 


	
 

	
     (d)
  Hedging Disruption:

	
 

	
Applicable


	
 

	
 

	
 

	
 


	
 

	
     (e)
  Increased Cost of Hedging:

	
 

	
Applicable


	
 

	
 

	
 

	
 


	
 

	
     (f)
  Loss of Stock Borrow:

	
 

	
Applicable


	
 

	
 

	
 

	
 


	
 

	
          Maximum
  Stock Loan Rate:

	
 

	
100 basis
  points


	
 

	
 

	
 

	
 


	
 

	
(g)
  Increased Cost of Stock Borrow:

	
 

	
Applicable


	
 

	
 

	
 

	
 


	
 

	
           Initial
  Stock Loan Rate:

	
 

	
50 basis
  points


	
 

	
 

	
 

	
 


	
 

	
     Hedging
  Party:

	
 

	
Dealer for
  all applicable Additional Disruption Events


	
 

	
 

	
 

	
 


	
 

	
     Determining
  Party:

	
 

	
Dealer for
  all applicable Extraordinary Events


	
 

	
 

	
 

	
 


	
 

	
Non-Reliance:

	
 

	
Applicable


	
 

	
 

	
 

	
 


	
 

	
Agreements
  and Acknowledgments 

  Regarding Hedging Activities:

	
 

	

Applicable


	
 

	
 

	
 

	
 


	
 

	
Additional
  Acknowledgments:

	
 

	
Applicable


	
 

	
 

	
 

	
 


	
 

	
3. 
  Calculation Agent:

	
 

	
Dealer,
  which shall at all times act in good faith and in a commercially reasonable
  manner. In addition, Dealer shall use commercially reasonable efforts under
  the circumstances to consult with Issuer on decisions it makes in its
  capacity as Calculation Agent; provided
  that Dealer shall not be required to take into account or be bound by any
  considerations raised by Issuer.


	
 

	
 

	
 

	
 


	
 

	
4.
  Account Details:

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
     Dealer
  Payment Instructions:

	
 

	
Bank of
  America 

  New York, NY

  SWIFT: BOFAUS65


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Bank
  Routing: 026–009–593

  Account Name: Bank of America


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Account No.
  : 0012333–34172


	
 

	
 

	
 

	
 


	
 

	
     Issuer
  Payment Instructions:

	
 

	
To be
  provided by Issuer.








	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
5. Offices:

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
     The
  Office of Dealer for the Transaction is: New York


	
 

	
 

	
 

	
 


	
 

	
 

	
Bank of
  America, N.A.

  c/o Banc of America Securities LLC

  9 West 57th Street, 40th Floor

  New York, NY 10019


	
 

	
 

	
Attention:

	
John
  Servidio

	
 

	
 


	
 

	
 

	
Telephone:

	
212-847-6527

	
 

	
 


	
 

	
 

	
Facsimile:

	
212-230-8610

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
     The
  Office of Issuer for the Transaction is: Not applicable





6






	
 

	
 

	
 

	
 


	
 

	
6. 
  Notices: For purposes of this Confirmation:


	
 

	
 

	
 

	
 


	
 

	
(a) Address
  for notices or communications to Issuer:


	
 

	
 

	
 

	
 


	
 

	
 

	
To:

  

  

  Attn: 

  Telephone:

  Facsimile:

	
The Great
  Atlantic & Pacific Tea Company

  2 Paragon Drive

  Montvale, New Jersey 07645

  Brenda Galgano, Senior Vice President and Chief Financial Officer

  201-571-4363

  201-571-8715


	
 

	
 

	
 

	
 


	
 

	
(b) Address
  for notices or communications to Dealer:


	
 

	
 

	
 

	
 


	
 

	
 

	
To:

  

  

  

  Attn: 

     Telephone:

  Facsimile:

	
Bank of
  America, N.A.

  c/o Banc of America Securities LLC

  9 West 57th Street, 40th Floor

  New York, NY 10019

  John Servidio

  212-847-6527

  212-230-8610





          7. Representations,
Warranties and Agreements:


	
 

	
 


	
          (a)
  In addition to the representations and warranties in the Agreement and those
  contained elsewhere herein, Issuer represents and warrants to and for the
  benefit of, and agrees with, Dealer as follows:


	
 

	
 


	
 

	
          (i)
  On the Trade Date, (A) none of Issuer and its officers and directors is aware
  of any material nonpublic information regarding Issuer or the Shares and (B)
  all reports and other documents filed by Issuer with the Securities and
  Exchange Commission pursuant to the Securities Exchange Act of 1934, as
  amended (the “Exchange Act”), when considered as a whole (with the more
  recent such reports and documents deemed to amend inconsistent statements
  contained in any earlier such reports and documents), do not contain any
  untrue statement of a material fact or any omission of a material fact
  required to be stated therein or necessary to make the statements therein, in
  the light of the circumstances in which they were made, not misleading.


	
 

	
 


	
 

	
          (ii)
  Without limiting the generality of Section 13.1 of the Equity Definitions,
  Issuer acknowledges that Dealer is not making any representations or
  warranties with respect to the treatment of the Transaction under FASB
  Statements 133, as amended, or 150, EITF Issue No. 00-19 (or any successor
  issue statements) or under FASB’s Liabilities & Equity Project.


	
 

	
 


	
 

	
          (iii)
  Prior to the Trade Date, Issuer shall deliver to Dealer a resolution of
  Issuer’s board of directors authorizing the Transaction and such other
  certificate or certificates as Dealer shall reasonably request.


	
 

	
 


	
 

	
          (iv)
  Issuer is not entering into this Confirmation to create actual or apparent
  trading activity in the Shares (or any security convertible into or
  exchangeable for Shares) or to raise or depress or otherwise manipulate the
  price of the Shares (or any security convertible into or exchangeable for
  Shares) or otherwise in violation of the Exchange Act. 


	
 

	
 


	
 

	
          (v)
  Issuer is not, and after giving effect to the transactions contemplated
  hereby will not be, an “investment company” as such term is defined in the
  Investment Company Act of 1940, as amended.


	
 

	
 


	
 

	
          (vi)
  On the Trade Date (A) the assets of Issuer at their fair valuation exceed the
  liabilities of Issuer, including contingent liabilities, (B) the capital of
  Issuer is adequate to conduct the business of Issuer and (C) Issuer has the
  ability to pay its debts and obligations as such debts mature and does not
  intend to, or does not believe that it will, incur debt beyond its ability to
  pay as such debts mature.


	
 

	
 


	
 

	
          (vii)
  Issuer shall not take any action to decrease the number of Available Shares
  below the Capped Number (each as defined below).


	
 

	
 


	
 

	
          (viii)
  The representations and warranties of Issuer set forth in Section 3 of the
  Agreement and Sections 1 and 3 of the Underwriting Agreement (the “Underwriting
  Agreement”) dated as of December 12,





7






	
 

	
 


	
 

	
2007 between Bank of America,
  N.A. and Lehman Brothers Inc., as representatives of the underwriters party
  thereto are true and correct and are hereby deemed to be repeated to Dealer
  as if set forth herein.


	
 

	
 


	
 

	
          (ix)
  Issuer understands no obligations of Dealer to it hereunder will be entitled
  to the benefit of deposit insurance and that such obligations will not be
  guaranteed by any Affiliate of Dealer or any governmental agency.


	
 

	
 


	
 

	
          (x)
  (A) During the period starting on the first Expiration Date and ending on the
  last Expiration Date (the “Settlement Period”), the Shares or
  securities that are convertible into, or exchangeable or exercisable for
  Shares, are not, and shall not be, subject to a “restricted period,” as such
  term is defined in Regulation M under the Exchange Act (“Regulation M”) and (B)
  Issuer shall not engage in any “distribution,” as such term is defined in
  Regulation M, other than a distribution meeting the requirements of the
  exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M,
  until the second Exchange Business Day immediately following the Settlement
  Period.


	
 

	
 


	
 

	
          (xi)
  During the Settlement Period, neither Issuer nor any “affiliate” or
  “affiliated purchaser” (each as defined in Rule 10b-18 of the Exchange Act (“Rule
  10b-18”)) shall directly or indirectly (including, without
  limitation, by means of any cash-settled or other derivative instrument)
  purchase, offer to purchase, place any bid or limit order that would effect a
  purchase of, or commence any tender offer relating to, any Shares (or an
  equivalent interest, including a unit of beneficial interest in a trust or
  limited partnership or a depository share) or any security convertible into
  or exchangeable or exercisable for Shares, except through Dealer.


	
 

	
 


	
 

	
          (xii)
  As of the Trade Date, the Issuer has not entered into any obligation that
  would contractually limit it from effecting Cash Settlement or Net Share
  Settlement under the Transaction.





          (b)
Each of Dealer and Issuer agrees and represents that it is an “eligible
contract participant” as defined in Section 1a(12) of the U.S. Commodity
Exchange Act, as amended.


          (c)
Each of Dealer and Issuer acknowledges that the offer and sale of the
Transaction to it is intended to be exempt from registration under the
Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2)
thereof. Accordingly, Dealer represents and warrants to Issuer that (i) it has
the financial ability to bear the economic risk of its investment in the
Transaction and is able to bear a total loss of its investment, (ii) it is an
“accredited investor” as that term is defined in Regulation D as promulgated
under the Securities Act, (iii) it is entering into the Transaction for its own
account without a view to the distribution or resale thereof and (iv) the
assignment, transfer or other disposition of the Transaction has not been and
will not be registered under the Securities Act and is restricted under this
Confirmation, the Securities Act and state securities laws.


          (d) Each
of Dealer and Issuer agrees and acknowledges that Dealer is a “financial
institution,” “swap participant” and “financial participant” within the meaning
of Sections 101(22), 101(53C) and 101(22A) of Title 11 of the United States
Code (the “Bankruptcy Code”). The parties hereto further agree and
acknowledge (A) that this Confirmation is (i) a “securities contract,” as such
term is defined in Section 741(7) of the Bankruptcy Code, with respect to which
each payment and delivery hereunder is a “settlement payment,” as such term is
defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,”
as such term is defined in Section 101(53B) of the Bankruptcy Code, with
respect to which each payment and delivery hereunder is a “transfer,” as such
term is defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer
is entitled to the protections afforded by, among other sections, Section
362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code. 


          (e)
Issuer shall deliver to Dealer an opinion of counsel, dated as of the Trade
Date and reasonably acceptable to Dealer in form and substance (subject to
customary qualifications, assumptions and exceptions), with respect to the
matters set forth in Section 3(a) of the Agreement. 


          8.
Other Provisions:


          (a)
Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary
Events. If, subject to Section 8(l) below, Issuer shall owe Dealer
any amount pursuant to Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity
Definitions (except in the event of an Insolvency, a Nationalization, a Tender
Offer or a Merger Event, in each case, in which the consideration or proceeds
to be paid to holders of Shares consists solely of cash) or pursuant to Section
6(d)(ii) of the Agreement (except in the event of an Event of Default in which
Issuer is the Defaulting Party or a Termination Event in which Issuer is the
Affected Party, that resulted from an event or events within Issuer’s control)
(a “Payment
Obligation”), Issuer shall have the right, in its sole discretion,
to satisfy any such Payment Obligation by the Share Termination Alternative (as
defined below) by giving irrevocable telephonic notice to Dealer, confirmed in
writing 


8






within one
Scheduled Trading Day, between the hours of 9:00 A.M. and 4:00 P.M. New York
City time on the Merger Date, Tender Offer Date, Announcement Date or Early
Termination Date, as applicable (“Notice of Share Termination”). Upon such
Notice of Share Termination, the following provisions shall apply on the
Scheduled Trading Day immediately following the Merger Date, the Tender Offer
Date, Announcement Date or Early Termination Date, as applicable:


	
 

	
 


	
Share
  Termination Alternative:

	
Applicable
  and means that Issuer shall deliver to Dealer the Share Termination Delivery
  Property on the date on which the Payment Obligation would otherwise be due
  pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii)
  of the Agreement, as applicable, in satisfaction of the Payment Obligation. 


	
 

	
 


	
Share
  Termination Delivery 

  Property:

	

A number of Share Termination
  Delivery Units, as calculated by the Calculation Agent in good faith, equal
  to the Payment Obligation divided by the Share Termination Unit Price. The
  Calculation Agent shall adjust the Share Termination Delivery Property by
  replacing any fractional portion of a security therein with an amount of cash
  equal to the value of such fractional security based on the values used to
  calculate the Share Termination Unit Price. 


	
 

	
 


	
Share
  Termination Unit Price:

	
The value of
  property contained in one Share Termination Delivery Unit on the date such
  Share Termination Delivery Units are to be delivered as Share Termination
  Delivery Property, as determined by the Calculation Agent in its discretion
  by commercially reasonable means and notified by the Calculation Agent to
  Issuer at the time of notification of the Payment Obligation. 


	
 

	
 


	
Share
  Termination Delivery Unit:

	
In the case
  of a Termination Event, Event of Default or Delisting, one Share or, in the
  case of an Insolvency, Nationalization, Merger Event or Tender Offer, a unit
  consisting of the number or amount of each type of property received by a
  holder of one Share (without consideration of any requirement to pay cash or
  other consideration in lieu of fractional amounts of any securities) in such
  Insolvency, Nationalization, Merger Event or Tender Offer. If such
  Insolvency, Nationalization, Merger Event or Tender Offer involves a choice
  of consideration to be received by holders, such holder shall be deemed to
  have elected to receive the maximum possible amount of cash.


	
 

	
 


	
Failure to
  Deliver:

	
Applicable


	
 

	
 


	
Other
  applicable provisions:

	
If Share
  Termination Alternative is applicable, the provisions of Sections 9.1(c),
  9.8, 9.9, 9.10, 9.11 (except that the Representation and Agreement contained
  in Section 9.11 of the Equity Definitions shall be modified by excluding any
  representations therein relating to restrictions, obligations, limitations or
  requirements under applicable securities laws as a result of the fact that
  Seller is the Issuer of the Shares) and 9.12 of the Equity Definitions will
  be applicable as if “Physical Settlement” applied to the Transaction, except
  that all references to “Shares” shall be read as references to “Share
  Termination Delivery Units”. 





          (b)
Registration/Private
Placement Procedures. (i) If, in the commercially reasonable
judgment of Dealer, for any reason, any Shares or any securities of Issuer or
its affiliates comprising any Share Termination Delivery Units deliverable to
Dealer hereunder (any such Shares or securities, “Delivered Securities”) would
not be immediately freely transferable by Dealer under the provisions of Rule 144
of the Securities Act, as may be amended from time to time (including the
amendment adopted on November 15, 2007 pursuant to Release No. 33-8869)
applicable to sales of restricted securities by non-affiliates of an issuer,
then the provisions set forth in this Section 8(b) shall apply. At the election
of Issuer by notice to Dealer within one Exchange Business Day after the
relevant delivery obligation arises, but in any event at least one Exchange
Business Day prior to the date on which such delivery obligation is due, either
(A) all Delivered Securities delivered by Issuer to Dealer shall be, at the
time of such delivery, covered by an effective registration statement of Issuer
for immediate resale by Dealer (such registration statement and the corresponding
prospectus (the “Prospectus”) (including, without limitation, any sections
describing the plan of distribution) in form and content commercially
reasonably satisfactory to Dealer) or (B) Issuer shall deliver additional
Delivered Securities so that the value of such Delivered Securities, as
determined by the Calculation Agent to reflect an appropriate liquidity 


9






	
 

	
 


	
discount,
  equals the value of the number of Delivered Securities that would otherwise
  be deliverable if such Delivered Securities were freely tradeable (without
  prospectus delivery) upon receipt by Dealer (such value, the “Freely
  Tradeable Value”); provided
  that Issuer may not make the election described in this clause (B) if, on the
  date of its election, it has taken, or caused to be taken, any action that
  would make unavailable either the exemption pursuant to Section 4(2) of the
  Securities Act for the delivery by Issuer to Dealer (or any affiliate
  designated by Dealer) of the Delivered Securities or the exemption pursuant
  to Section 4(1) or Section 4(3) of the Securities Act for resales of the
  Delivered Securities by Dealer (or any such affiliate of Dealer). (For the
  avoidance of doubt, as used in this paragraph (b) only, the term “Issuer”
  shall mean the issuer of the relevant securities, as the context shall
  require.)


	
 

	
 


	
 

	
(ii) If
  Issuer makes the election described in clause (b)(i)(A) above:


	
 

	
 


	
 

	
          (A)
  Dealer (or an Affiliate of Dealer designated by Dealer) shall be afforded a
  reasonable opportunity to conduct a due diligence investigation with respect
  to Issuer that is customary in scope for underwritten offerings of equity
  securities and that yields results that are commercially reasonably
  satisfactory to Dealer or such Affiliate, as the case may be, in its
  commercially reasonable discretion; and


	
 

	
 


	
 

	
          (B)
  Dealer (or an Affiliate of Dealer designated by Dealer) and Issuer shall
  enter into an agreement (a “Registration Agreement”) on commercially
  reasonable terms in connection with the public resale of such Delivered Securities
  by Dealer or such Affiliate substantially similar to underwriting agreements
  customary for underwritten offerings of equity securities, in form and
  substance commercially reasonably satisfactory to Dealer or such Affiliate
  and Issuer, which Registration Agreement shall include, without limitation,
  provisions substantially similar to those contained in such underwriting
  agreements relating to the indemnification of, and contribution in connection
  with the liability of, Dealer and its Affiliates and Issuer, shall provide
  for the payment by Issuer of all reasonable expenses in connection with such
  resale, including all registration costs and all reasonable fees and expenses
  of counsel for Dealer, and shall provide for the delivery of accountants’
  “comfort letters” to Dealer or such Affiliate with respect to the financial
  statements and certain financial information contained in or incorporated by
  reference into the Prospectus.


	
 

	
 


	
 

	
(iii) If
  Issuer makes the election described in clause (b)(i)(B) above:


	
 

	
 


	
 

	
          (A)
  Dealer (or an Affiliate of Dealer designated by Dealer) and any potential
  institutional purchaser of any such Delivered Securities from Dealer or such
  Affiliate identified by Dealer shall be afforded a commercially reasonable
  opportunity to conduct a due diligence investigation in compliance with
  applicable law with respect to Issuer customary in scope for private
  placements of equity securities (including, without limitation, the right to
  have made available to them for inspection all financial and other records,
  pertinent corporate documents and other information reasonably requested by
  them); 


	
 

	
 


	
 

	
          (B)
  Dealer (or an Affiliate of Dealer designated by Dealer) and Issuer shall
  enter into an agreement (a “Private Placement Agreement”) on
  commercially reasonable terms in connection with the private placement of
  such Delivered Securities by Issuer to Dealer or such Affiliate and the
  private resale of such shares by Dealer or such Affiliate, substantially
  similar to private placement purchase agreements customary for private
  placements of equity securities, in form and substance commercially
  reasonably satisfactory to Dealer and Issuer, which Private Placement
  Agreement shall include, without limitation, provisions substantially similar
  to those contained in such private placement purchase agreements relating to
  the indemnification of, and contribution in connection with the liability of,
  Dealer and its Affiliates and Issuer, shall provide for the payment by Issuer
  of all reasonable expenses in connection with such resale, including all
  reasonable fees and expenses of counsel for Dealer, shall contain
  representations, warranties and agreements of Issuer reasonably necessary or
  advisable to establish and maintain the availability of an exemption from the
  registration requirements of the Securities Act for such resales, and shall
  use best efforts to provide for the delivery of accountants’ “comfort
  letters” to Dealer or such Affiliate with respect to the financial statements
  and certain financial information contained in or incorporated by reference
  into the offering memorandum prepared for the resale of such Shares; and


	
 

	
 


	
 

	
          (C)
  Issuer agrees that any Delivered Securities so delivered to Dealer, (i) may
  be transferred by and among Dealer and its Affiliates, and Issuer shall
  effect such transfer without any further action by Dealer and (ii) after the
  minimum “holding period” within the meaning of Rule 144(d) under the
  Securities Act has elapsed with respect to such Delivered Securities, Issuer
  shall promptly remove, or cause the transfer agent for such Shares or
  securities to remove, any legends referring to any such restrictions or
  requirements from such Delivered Securities upon delivery by Dealer (or such
  Affiliate of Dealer) to Issuer or such transfer agent of 





10






	
 

	
 


	
 

	
seller’s and
  broker’s representation letters customarily delivered by Dealer in connection
  with resales of restricted securities pursuant to Rule 144 under the
  Securities Act, without any further requirement for the delivery of any
  certificate, consent, agreement, opinion of counsel, notice or any other
  document, any transfer tax stamps or payment of any other amount or any other
  action by Dealer (or such affiliate of Dealer).


	
 

	
 


	
 

	
          (D)
  Issuer shall not take, or cause to be taken, any action that would make
  unavailable either the exemption pursuant to Section 4(2) of the Securities
  Act for the sale by Issuer to Dealer (or any affiliate designated by Dealer)
  of the Shares or Share Termination Delivery Units, as the case may be, or the
  exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for
  resales of the Shares or Share Termination Delivery Units, as the case may
  be, by Dealer (or any such affiliate of Dealer).





          (c)
Make-whole. If Issuer makes the
election described in clause (b)(i)(B) of paragraph (b) of this Section 8, then
Dealer or its affiliate may sell such Shares or Share Termination Delivery
Units, as the case may be, during a period (the “Resale Period”) commencing on
the Exchange Business Day following delivery of such Shares or Share
Termination Delivery Units, as the case may be, and ending on the Exchange
Business Day on which Dealer completes the sale of all such Shares or Share
Termination Delivery Units, as the case may be, or a sufficient number of
Shares or Share Termination Delivery Units, as the case may be, so that the
realized net proceeds of such sales exceed the Freely Tradeable Value (such
amount of the Freely Tradeable Value, the “Required Proceeds”). If any of such
delivered Shares or Share Termination Delivery Units remain after such realized
net proceeds exceed the Required Proceeds, Dealer shall return such remaining
Shares or Share Termination Delivery Units to Issuer. If the Required Proceeds
exceed the realized net proceeds from such resale, Issuer shall transfer to
Dealer by the open of the regular trading session on the Exchange on the
Exchange Business Day immediately following the last day of the Resale Period
the amount of such excess (the “Additional Amount”) in cash or in a number
of additional Shares (“Make-whole Shares”) in an amount that,
based on the Relevant Price on the last day of the Resale Period (as if such
day was the “Valuation Date” for purposes of computing such Relevant Price),
has a dollar value equal to the Additional Amount. The Resale Period shall
continue to enable the sale of the Make-whole Shares in the manner contemplated
by this Section 8(c). This provision shall be applied successively until the
Additional Amount is equal to zero, subject to Section 8(e). 


          (d)
Beneficial
Ownership. Notwithstanding anything to the contrary in the Agreement
or this Confirmation, in no event shall Dealer be entitled to receive, or shall
be deemed to receive, any Shares if, upon such receipt of such Shares, the
“beneficial ownership” (within the meaning of Section 13 of the Exchange Act
and the rules promulgated thereunder) of Shares by Dealer or any affiliate of
Dealer or other person subject to aggregation with Dealer under such Section 13
and rules (collectively, “Buyer Group”) would be equal to or greater
than 8.5% or more of the outstanding Shares. If any delivery owed to Dealer
hereunder is not made, in whole or in part, as a result of this provision,
Issuer’s obligation to make such delivery shall not be extinguished and Issuer
shall make such delivery as promptly as practicable after, but in no event
later than one Exchange Business Day after, Dealer gives notice to Issuer that
such delivery would not result in Buyer Group directly or indirectly so
beneficially owning in excess of 8.5% of the outstanding Shares.


(e) Limitations
on Settlement by Issuer. Notwithstanding anything herein or in the
Agreement to the contrary, in no event shall Issuer be required to deliver
Shares in connection with the Transaction in excess of a number of Shares equal
to 1.2 times the aggregate Number of Shares for all Components (the “Capped
Number”). If at any time the Issuer does not have a number of
authorized but unissued Shares that are not reserved for future issuance in
connection with other transactions in the Shares (the “Available Shares”) that is
greater than the Capped Number, Issuer agrees to use its reasonable best
efforts to seek approval from its shareholders at the next meeting of shareholders,
or, if necessary, a subsequent meeting of shareholders, to increase the number
of authorized but unissued Shares and to reserve a number of Shares at least
equal to the Capped Number for settlement of this Transaction (the “Reserved
Shares”). If Issuer does not succeed in obtaining shareholder
approval for such an increase and so increasing the number of Reserved Shares
at or prior to its second annual meeting of shareholders following the Trade
Date, (i) the Number of Shares for each Component shall be automatically
increased by 10% and (ii) an Additional Termination Event shall occur with
respect to which the Transaction shall be the sole Affected Transaction and
Issuer shall be the sole Affected Party; provided
however that if such shareholder approval is obtained and such
increase in the number of Reserved Shares occurs after Issuer’s second annual
meeting of shareholders but before the earlier of the Expiration Date for such
Component and any earlier date that Dealer has designated as an Early Termination
Date or other date for cancellation or termination of the Transaction, the
Additional Termination Event arising from such prior failure to obtain
shareholder approval or failure to increase the number of Reserved Shares shall
cease to exist. For the avoidance of doubt Dealer shall have no obligation to
exercise its right pursuant to such Additional Termination Event, such right
will be an ongoing right until Issuer has 


11






obtained such
approval from its shareholders for such an increase in the number of Available
Shares and has so increased the number of Reserved Shares, and such right will
automatically terminate upon Issuer obtaining such shareholder approval for
such an increase and so increasing the number of Reserved Shares. Unless  the
number of Reserved Shares is at least equal to the Capped Number, Issuer shall
not retire any Shares that are repurchased, acquired or otherwise received by
Issuer or any of its subsidiaries from any persons (whether or not in exchange
for cash, fair value or any other consideration, and including, for the
avoidance of doubt, any Shares received in settlement of any option or other
derivative transaction) (such Shares, “Acquired Shares”) or issue or deliver or
agree to issue or deliver any Acquired Shares to any person other than Issuer
except that such Acquired Shares may be used to settle this Transaction and any
other warrant transactions entered into between Issuer and Dealer or Lehman OTC
on the Trade Date.


          (f) Right to
Extend. Dealer may postpone any Exercise Date or any other date of
valuation or delivery with respect to some or all of the relevant Warrants (in
which event the Calculation Agent shall make appropriate adjustments to the
Number of Shares to be Delivered with respect to one or more Components), if
Dealer determines, in its commercially reasonable discretion, that such
extension is reasonably necessary or appropriate (i) to preserve Dealer’s
hedging or hedge unwind activity hereunder in light of existing liquidity
conditions or (ii) to enable Dealer to effect purchases of Shares in connection
with its hedging, hedge unwind or settlement activity hereunder in a manner
that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in
compliance with applicable legal, regulatory or self-regulatory requirements,
or with related policies and procedures applicable to Dealer.


          (g)
Equity
Rights. Dealer acknowledges and agrees that this Confirmation is not
intended to convey to it rights with respect to the Transaction that are senior
to the claims of common stockholders in the event of Issuer’s bankruptcy. For
the avoidance of doubt, the parties agree that the preceding sentence shall not
apply at any time other than during Issuer’s bankruptcy to any claim arising as
a result of a breach by Issuer of any of its obligations under this
Confirmation or the Agreement. For the avoidance of doubt, the parties
acknowledge that this Confirmation is not secured by any collateral that would
otherwise secure the obligations of Issuer herein under or pursuant to any
other agreement.


          (h)
Amendments
to Equity Definitions and the Agreement. The following amendments
shall be made to the Equity Definitions and to the Agreement:


	
 

	
 


	
 

	
          (i)  The first sentence of Section 11.2(c) of
  the Equity Definitions, prior to clause (A) thereof, is hereby amended to
  read as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the
  Method of Adjustment in the related Confirmation of a Share Option
  Transaction, then following the announcement or occurrence of any Potential
  Adjustment Event, the Calculation Agent will determine whether such Potential
  Adjustment Event has a material effect on the theoretical value of the
  relevant Shares or options on the Shares and, if so, will (i) make
  appropriate adjustment(s), if any, to any one or more of:’ and, the portion
  of such sentence immediately preceding clause (ii) thereof is hereby amended
  by deleting the words “diluting or concentrative” and the words “(provided
  that no adjustments will be made to account solely for changes in volatility,
  expected dividends, stock loan rate or liquidity relative to the relevant
  Shares)” and replacing such latter phrase with the words “(and, for the
  avoidance of doubt, adjustments may be made to account solely for changes in
  volatility, expected dividends, stock loan rate or liquidity relative to the
  relevant Shares)”; 


	
 

	
 


	
 

	
          (ii)  Section 11.2(e)(vii) of the Equity
  Definitions is hereby amended by deleting the words “diluting or
  concentrative” and replacing them with “material”;


	
 

	
 


	
 

	
          (iii)  Section 12.6(a)(ii) of the Equity
  Definitions is hereby amended by (1) deleting from the fourth line thereof
  the word “or” after the word “official” and inserting a comma therefor, and
  (2) deleting the semi-colon at the end of subsection (B) thereof and
  inserting the following words therefor “or (C) at Dealer’s option, the
  occurrence of any of the events specified in Section 5(a)(vii) (1) through
  (9) of the ISDA Master Agreement with respect to that Issuer.”.


	
 

	
 


	
 

	
          (iv)
  Section 12.9(b)(v) of the Equity Definitions is hereby amended by:








	
 
	
 
	
 

	
 
	
 
	
                    (A)
  adding the word “or” immediately before subsection “(B)” and deleting the
  comma at the end of subsection (A); and

	
 
	
 
	
 

	
 
	
 
	                    (B)
    (1) deleting subsection (C) in its entirety, (2) deleting the word “or”
  immediately preceding subsection (C) and (3) deleting the final two sentences
  in its entirety and replacing it with the sentence “The Hedging Party
  will determine (in a manner consistent, for such purposes, with Section 3



12






	
 

	
 


	
 

	
hereunder
  governing the conduct of the Calculation Agent) the Cancellation Amount
  payable by one party to the other.”





          (i)
Transfer
and Assignment. Dealer may transfer or assign its rights and
obligations under the Transaction with the prior written consent of the Issuer,
such consent not to be unreasonably withheld. Notwithstanding the foregoing,
Dealer may transfer or assign its rights and obligations hereunder and under the
Agreement, in whole or in part, without the consent of the Issuer to (i) any of
its affiliates or (ii) any entities sponsored or organized by, or on behalf of
or for the benefit of Dealer. 


          (j)
Disclosure.
Effective from the date of commencement of discussions concerning the
Transaction, Issuer and each of its employees, representatives, or other agents
may disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the Transaction and all materials of any kind
(including opinions or other tax analyses) that are provided to Issuer relating
to such tax treatment and tax structure.


          (k)
Designation
by Dealer. Notwithstanding any other provision in this Confirmation
to the contrary requiring or allowing Dealer to purchase, sell, receive or
deliver any Shares or other securities to or from Issuer, Dealer may designate
any of its affiliates to purchase, sell, receive or deliver such shares or
other securities and otherwise to perform Dealer obligations in respect of the
Transaction and any such designee may assume such obligations. Dealer shall be
discharged of its obligations to Issuer to the extent of any such performance.


          (l)
Additional Termination Events.
The occurrence of any of the following shall constitute an Additional
Termination Event with respect to which the Transaction shall be the sole
Affected Transaction and Issuer shall be the sole Affected Party; provided
that with respect to any Additional Termination Event, Dealer may choose to
treat part of the Transaction as the sole Affected Transaction, and, upon the
termination of the Affected Transaction, a Transaction with terms identical to
those set forth herein except with a Number of Warrants equal to the unaffected
number of Warrants shall be treated for all purposes as the Transaction, which
shall remain in full force and effect:


	
 

	
 

	
 

	
 


	
 

	
          (i)
  Dealer reasonably determines that it is advisable to terminate a portion of
  the Transaction so that Dealer’s related hedging activities will comply with
  applicable securities laws, rules or regulations;


	
 

	
 

	
 

	
 


	
 

	
          (ii)
  any Person (as defined below) acquires beneficial ownership (determined in
  accordance with Rule 13d-3 under the Exchange Act), directly or indirectly,
  through a purchase, merger or other acquisition transaction or series of
  transactions, of Shares entitling the Person to exercise 50% or more of the
  total voting power of all shares of Issuer’s capital stock entitled to vote
  generally in elections of directors, other than an acquisition by Issuer, any
  of Issuer’s subsidiaries or any of Issuer’s employee benefit plans; 


	
 

	
 

	
 

	
 


	
 

	
          (iii)
  Issuer (x) merges or consolidates with or into any other Person, other than a
  subsidiary of Issuer, another Person merges with or into Issuer, or Issuer
  conveys, sells, transfers or leases all or substantially all of its assets to
  another Person or (y) engages in any recapitalization, reclassification or
  other transaction in which all or substantially all Shares are exchanged for
  or converted into cash, securities or other property, in each case, other
  than any merger or consolidation: 


	
 

	
 

	
 

	
 


	
 

	
 

	
(A)

	
that does
  not result in a reclassification, conversion, exchange or cancellation of the
  outstanding Shares; 


	
 

	
 

	
 

	
 


	
 

	
 

	
(B)

	
pursuant to which
  the consideration received by holders of Shares immediately prior to the
  transaction entitles such holders to exercise, directly or indirectly, 50% or
  more of the voting power of all shares of capital stock entitled to vote
  generally in the election of directors of either (x) the continuing or
  surviving corporation or (y) a corporation that directly or indirectly owns
  100% of the capital stock of such continuing or surviving corporation, in
  either case, immediately after such transaction; 


	
 

	
 

	
 

	
 


	
 

	
 

	
(C)

	
which is
  effected solely to change Issuer’s jurisdiction of incorporation and results
  in a reclassification, conversion or exchange of the outstanding Shares
  solely into shares of common stock of the surviving entity; or





13






	
 

	
 

	
 

	
 


	
 

	
          (iv)
  at any time Issuer’s Continuing Directors (as defined below) do not
  constitute a majority of Issuer’s board of directors (or, if applicable, a
  successor Person to Issuer);


	
 

	
 

	
 

	
 


	
 

	
          (v)
  if less than 25% of the outstanding shares of common stock is beneficially
  owned by persons other than a Permitted      Holder (as discussed below); or


	
 

	
 

	
 

	
 


	
 

	
          (vi)
  an Additional Termination Event which arises as provided and subject to
  cessation as described in
Section 8(e).





          Notwithstanding
the foregoing, a transaction set forth in clause (ii), (iii) or (iv) above will
not constitute an Additional Termination Event if at least 90% of the
consideration paid for the Shares (excluding cash payments for fractional
shares and cash payments made pursuant to dissenters’ appraisal rights and cash
dividends) in such merger or consolidation or such other transaction otherwise
constituting an Additional Termination Event under clause (iii) above consists
of shares of capital stock or American Depositary Receipts in respect of shares
of capital stock traded on any of the New York Stock Exchange, the American
Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or
any of their respective successors) (or will be so traded or quoted immediately
following the completion of the merger or consolidation or such other
transaction).


          “Person”
includes any syndicate or group that would be deemed to be a “person” under
Section 13(d)(3) of the Exchange Act.


          “Continuing
Directors” means a directors who either were members of the Issuer’s
board of directors on the date hereof or who become members of the Issuer’s
board of directors subsequent to the date hereof and whose appointment,
election or nomination for election by the Issuer’s shareholders is duly
approved by a majority of the Continuing Directors on the Issuer’s board of
directors at the time of such approval, either by specific vote or by approval
of the proxy statement issued by the Issuer on behalf of the board of directors
in which such individuals are named as nominees for director.


          
“Permitted
Holder” means (1) Tengelmann Warenhandelsgesellschaft, a partnership
organized under the laws of Germany (“Tengelmann”),
(2) each Affiliate of Tengelmann, (3) each partner of Tengelmann and the
respective members of their immediate families and (4) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners, owners
or Persons beneficially holding a majority or more controlling interest of
which consist of any one or more of the Persons described in the preceding
clauses (1), (2) and (3).


          (m)
Netting
and Set-off. 


	
 

	
 


	
 

	
          (i)
  If on any date cash would otherwise be payable or Shares or other property
  would otherwise be deliverable hereunder or pursuant to the Agreement or
  pursuant to any other agreement between the parties by Issuer to Dealer and
  cash would otherwise be payable or Shares or other property would otherwise
  be deliverable hereunder or pursuant to the Agreement or pursuant to any
  other agreement between the parties by Dealer to Issuer and the type of
  property required to be paid or delivered by each such party on such date is
  the same, then, on such date, each such party’s obligation to make such
  payment or delivery will be automatically satisfied and discharged and, if
  the aggregate amount that would otherwise have been payable or deliverable by
  one such party exceeds the aggregate amount that would otherwise have been
  payable or deliverable by the other such party, replaced by an obligation of
  the party by whom the larger aggregate amount would have been payable or
  deliverable to pay or deliver to the other party the excess of the larger
  aggregate amount over the smaller aggregate amount.


	
 

	
 


	
 

	
          (ii)
  In addition to and without limiting any rights of set-off that a party hereto
  may have as a matter of law, pursuant to contract or otherwise, upon the
  occurrence of an Early Termination Date, Dealer shall have the right to
  terminate, liquidate and otherwise close out the Transaction and to set off
  any obligation or right that Dealer or any affiliate of Dealer may have to or
  against Issuer hereunder or under the Agreement against any right or
  obligation Dealer or any of its affiliates may have against or to Issuer,
  including without limitation any right to receive a payment or delivery
  pursuant to any provision of the Agreement or hereunder. In the case of a
  set-off of any obligation to release, deliver or pay assets against any right
  to receive assets of the same type, such obligation and right shall be set
  off in kind. In the case of a set-off of any obligation to release, deliver
  or pay assets against any right to receive assets of any other type, the
  value of each of such obligation and such right shall be determined by the Calculation
  Agent and the result of such set-off shall be that the net 





14






	
 

	
 


	
 

	
obligor
  shall pay or deliver to the other party an amount of cash or assets, at the
  net obligor’s option, with a value (determined, in the case of a delivery of
  assets, by the Calculation Agent) equal to that of the net obligation. In
  determining the value of any obligation to release or deliver Shares or any
  right to receive Shares, the value at any time of such obligation or right
  shall be determined by reference to the market value of the Shares at such
  time, as determined in good faith by the Calculation Agent. If an obligation
  or right is unascertained at the time of any such set-off, the Calculation
  Agent may in good faith estimate the amount or value of such obligation or
  right, in which case set-off will be effected in respect of that estimate,
  and the relevant party shall account to the other party at the time such
  obligation or right is ascertained.


	
 

	
 


	
 

	
          (iii)
  Issuer shall not net or set off its obligations, if any, under the
  Transaction against its rights against Dealer under any other transaction or
  instrument. Dealer shall not net or set off its obligations, if any, under
  the Transaction against its rights against Issuer under any other transaction
  or instrument.


	
 

	
 





          (n)
Effectiveness. If, prior to the
Effective Date, Dealer reasonably determines that it is advisable to cancel the
Transaction because of concerns that Dealer’s related hedging activities could
be viewed as not complying with applicable securities laws, rules or
regulations, the Transaction shall be cancelled and shall not become effective,
and neither party shall have any obligation to the other party in respect of
the Transaction.


          (o)
Waiver of
Trial by Jury. EACH OF ISSUER AND DEALER HEREBY IRREVOCABLY WAIVES
(ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF
ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THE TRANSACTION OR THE ACTIONS OF ISSUER OR DEALER OR THEIR
RESPECTIVE AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.


          (p)
Governing
Law. THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE
ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM
WITH RESPECT TO, THESE COURTS.


15






          Issuer
hereby agrees (a) to check this Confirmation carefully and promptly upon
receipt so that errors or discrepancies can be promptly identified and
rectified and (b) to confirm that the foregoing (in the exact form provided by
Dealer) correctly sets forth the terms of the agreement between Dealer and
Issuer with respect to the Transaction, by manually signing this Confirmation
or this page hereof as evidence of agreement to such terms and providing the
other information requested herein and promptly returning an executed copy to
John Servidio, Facsimile No. 212-230-8610.


	
 

	
 

	
 


	
 

	
Yours
  faithfully,


	
 

	
 


	
 

	
BANK OF
  AMERICA, N.A.


	
 

	
 


	
 

	
By:

	
/s/ Michael
  Voris


	
 

	
 

	



	
 

	
 

	
  Name:
  Michael Voris


	
 

	
 

	
  Authorized
  Signatory





 Agreed and Accepted By:


THE GREAT
ATLANTIC & PACIFIC TEA COMPANY, INC.


	
                

	
 


	
By:

	
/s/ William
  Moss


	
 

	



	
 

	
Name:
  William Moss

  Title: Vice President and Treasurer





16







Annex A 

 For each Component of the Transaction,
    the Number of Warrants and Expiration Date is set forth below. 

	Component Number 	Number of Warrants 	Expiration Date 
	1. 	22,893.00 	Thu-15-Sep-2011 
	2. 	22,893.00 	Fri-16-Sep-2011 
	3. 	22,893.00 	Mon-19-Sep-2011 
	4. 	22,893.00 	Tue-20-Sep-2011 
	5. 	22,893.00 	Wed-21-Sep-2011 
	6. 	22,893.00 	Thu-22-Sep-2011 
	7. 	22,893.00 	Fri-23-Sep-2011 
	8. 	22,893.00 	Mon-26-Sep-2011 
	9. 	22,893.00 	Tue-27-Sep-2011 
	10. 	22,893.00 	Wed-28-Sep-2011 
	11. 	22,893.00 	Thu-29-Sep-2011 
	12. 	22,893.00 	Fri-30-Sep-2011 
	13. 	22,893.00 	Mon-3-Oct-2011 
	14. 	22,893.00 	Tue-4-Oct-2011 
	15. 	22,893.00 	Wed-5-Oct-2011 
	16. 	22,893.00 	Thu-6-Oct-2011 
	17. 	22,893.00 	Fri-7-Oct-2011 
	18. 	22,893.00 	Mon-10-Oct-2011 
	19. 	22,893.00 	Tue-11-Oct-2011 
	20. 	22,893.00 	Wed-12-Oct-2011 
	21. 	22,893.00 	Thu-13-Oct-2011 
	22. 	22,893.00 	Fri-14-Oct-2011 
	23. 	22,893.00 	Mon-17-Oct-2011 
	24. 	22,893.00 	Tue-18-Oct-2011 
	25. 	22,893.00 	Wed-19-Oct-2011 
	26. 	22,893.00 	Thu-20-Oct-2011 
	27. 	22,893.00 	Fri-21-Oct-2011 
	28. 	22,893.00 	Mon-24-Oct-2011 
	29. 	22,893.00 	Tue-25-Oct-2011 
	30. 	22,893.00 	Wed-26-Oct-2011 
	31. 	22,893.00 	Thu-27-Oct-2011 
	32. 	22,893.00 	Fri-28-Oct-2011 
	33. 	22,893.00 	Mon-31-Oct-2011 
	34. 	22,893.00 	Tue-1-Nov-2011 
	35. 	22,893.00 	Wed-2-Nov-2011 
	36. 	22,893.00 	Thu-3-Nov-2011 
	37. 	22,893.00 	Fri-4-Nov-2011 
	38. 	22,893.00 	Mon-7-Nov-2011 
	39. 	22,893.00 	Tue-8-Nov-2011 
	40. 	22,893.00 	Wed-9-Nov-2011 
	41. 	22,893.00 	Thu-10-Nov-2011 
	42. 	22,893.00 	Fri-11-Nov-2011 
	43. 	22,893.00 	Mon-14-Nov-2011 
	44. 	22,893.00 	Tue-15-Nov-2011 
	45. 	22,893.00 	Wed-16-Nov-2011 
	46. 	22,893.00 	Thu-17-Nov-2011 
	47. 	22,893.00 	Fri-18-Nov-2011 
	48. 	22,893.00 	Mon-21-Nov-2011 
	49. 	22,893.00 	Tue-22-Nov-2011 
	50. 	22,893.00 	Wed-23-Nov-2011 
	51. 	22,893.00 	Fri-25-Nov-2011 
	52. 	22,893.00 	Mon-28-Nov-2011 
	53. 	22,893.00 	Tue-29-Nov-2011 
	54. 	22,893.00 	Wed-30-Nov-2011 
	55. 	22,893.00 	Thu-1-Dec-2011 
	56. 	22,893.00 	Fri-2-Dec-2011 


17








	57. 
	22,893.00 
	Mon-5-Dec-2011 
	58. 
	22,893.00 
	Tue-6-Dec-2011 
	59. 
	22,893.00 
	Wed-7-Dec-2011 
	60. 
	22,893.00 
	Thu-8-Dec-2011 
	61. 
	22,893.00 
	Fri-9-Dec-2011 
	62. 
	22,893.00 
	Mon-12-Dec-2011 
	63. 
	22,893.00 
	Tue-13-Dec-2011 
	64. 
	22,893.00 
	Wed-14-Dec-2011 
	65. 
	22,893.00 
	Thu-15-Dec-2011 
	66. 
	22,893.00 
	Fri-16-Dec-2011 
	67. 
	22,893.00 
	Mon-19-Dec-2011 
	68. 
	22,893.00 
	Tue-20-Dec-2011 
	69. 
	22,893.00 
	Wed-21-Dec-2011 
	70. 
	22,893.00 
	Thu-22-Dec-2011 
	71. 
	22,893.00 
	Fri-23-Dec-2011 
	72. 
	22,893.00 
	Tue-27-Dec-2011 
	73. 
	22,893.00 
	Wed-28-Dec-2011 
	74. 
	22,893.00 
	Thu-29-Dec-2011 
	75. 
	22,893.00 
	Fri-30-Dec-2011 
	76. 
	22,893.00 
	Tue-3-Jan-2012 
	77. 
	22,893.00 
	Wed-4-Jan-2012 
	78. 
	22,893.00 
	Thu-5-Jan-2012 
	79. 
	22,893.00 
	Fri-6-Jan-2012 
	80. 
	22,893.00 
	Mon-9-Jan-2012 
	81. 
	22,893.00 
	Tue-10-Jan-2012 
	82. 
	22,893.00 
	Wed-11-Jan-2012 
	83. 
	22,893.00 
	Thu-12-Jan-2012 
	84. 
	22,893.00 
	Fri-13-Jan-2012 
	85. 
	22,893.00 
	Tue-17-Jan-2012 
	86. 
	22,893.00 
	Wed-18-Jan-2012 
	87. 
	22,893.00 
	Thu-19-Jan-2012 
	88. 
	22,893.00 
	Fri-20-Jan-2012 
	89. 
	22,893.00 
	Mon-23-Jan-2012 
	90. 
	22,961.00 
	Tue-24-Jan-2012 


18