Document:

c51046_ex10-3.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

 Exhibit 10.3

  

	BANK
            OF AMERICA, N.A. 

            BANC
        OF AMERICA BRIDGE LLC 

        BANC
        OF AMERICA SECURITIES LLC 

        9 WEST 57TH STREET 

    NEW YORK, NY 10019 
	LEHMAN BROTHERS COMMERCIAL BANK 

          LEHMAN BROTHERS INC. 

          LEHMAN COMMERCIAL PAPER INC. 

          745 SEVENTH AVENUE 

        NEW YORK, NY 10019 

November 5, 2007 

The Great Atlantic & Pacific Tea Company, Inc. 

2 Paragon Drive 

Montvale, NJ 07645 

 

	 	Project
          Pearl 

       Letter Agreement  	 

 

Ladies and Gentlemen: 

     Reference is made to the Commitment Letter, dated March 4, 2007 (together with the Summaries of Terms attached thereto, the “Commitment
Letter”), among Bank of America, N.A. (“Bank of America”), Banc of America Bridge LLC
(“Banc of America Bridge”), Banc of America Securities LLC (“BAS”), Lehman Brothers Commercial Bank (“LBCB”), Lehman Brothers Inc. (“Lehman”) and Lehman Commercial Paper Inc. (“LCPI” and, together with Bank of
America, Banc of America Bridge, BAS, LBCB and Lehman, each a “Commitment Party” and, collectively, the “Commitment Parties”) and The Great Atlantic & Pacific Tea Company, Inc., a Maryland corporation (the “Borrower” or “you”). Defined terms used herein are used as defined in the
Commitment Letter. The parties to this Letter Agreement hereby agree that the Commitment Letter shall only be modified to the extent expressly stated herein and shall otherwise remain in full force and effect in accordance with the terms and
conditions therein until March 4, 2008 or such earlier time provided therein. 

     The Commitment Parties agree that notwithstanding anything stated in the Commitment Letter, (1) the aggregate commitments of the Commitment Parties under the ABL Facility shall be
increased to $675 million consisting of a $547,100,000 revolver, a $45,000,000 last out revolver advance and a term loan up to $82,900,000; (2) the allocation of proceeds from collateral as among the several ABL Facilities shall be
on a basis consistent with that previously disclosed to the Borrower, (3) availability on the Closing Date, by function of reserve calculations, advance rates or otherwise, shall not be less favorable to the Borrower than availability calculated on
the basis provided for in the Commitment Letter, and (4) interest for the several ABL Facilities shall be on a basis consistent with that previously disclosed to the Borrower, and in any event no more than 0.25% higher than comparable interest rates
provided for in the Commitment Letter. In addition, for the avoidance of doubt, the Commitment Parties hereby waive any perceived or actual conditions precedent (insofar as they relate to the ABL Facility) that (a) Borrower provide the Commitment
Parties with a completed offering memorandum for the offering and sale of Senior Secured Notes not later than 20 days prior to the Closing Date and (b) senior management of the Companies (including the Target) make themselves available prior to the
Closing Date for roadshows and other meetings with potential investors for the Senior Secured Notes to market the Senior Secured Notes prior to the Closing Date, (c) at the Closing Date Borrower and its subsidiaries, including A&P Bermuda
Limited, own, directly or indirectly, at least 10.9 million Metro Shares and (d) Borrower receive $780 million in gross proceeds from the advance of the Bridge Loans or the issuance and sale by Borrower of the Senior Secured Notes. 

     The Commitment Parties’ agreements in the preceding paragraph are expressly conditioned on (a) Borrower’s receiving gross proceeds from the advance of the Bridge Loans or other
securities of Borrower in accordance with the sixth paragraph of that certain letter agreement of even date herewith among the Borrower and the Commitment Parties (the “Bridge Letter Agreement”), and (b) with 

respect to the amendments in the first sentence of the immediately preceding paragraph, either (i) the sale of securities by the Borrower as contemplated by condition (i) of the Bridge Letter Agreement, or (ii) if
securities are not sold by Borrower as contemplated by condition (i) of the Bridge Letter Agreement, the repayment, retirement or refinancing in full of the Bridge Loans.

     This letter agreement and the contents hereof are confidential and, except for the disclosure hereof or thereof on a confidential basis to your accountants, attorneys and other
professional advisors retained in connection with the Transaction, may not be disclosed in whole or in part to any person or entity without our prior written consent; provided, however, it is understood and agreed that you may disclose this letter agreement (a) on a confidential basis to the board of directors and
advisors of the Target in connection with their consideration of the Transaction, (b) in filings with the SEC and other applicable regulatory authorities and stock exchanges and (c) after prompt written notice to the Lead Arrangers of any legally
required disclosure, as otherwise required by law or in response to a valid court order by a court or other governmental body. 

     This letter agreement may be executed in counterparts which, taken together, shall constitute one original. Delivery of an executed counterpart of a signature page to this letter agreement
by telecopier shall be effective as delivery of a manually executed counterpart thereof. 

     THIS LETTER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. Each of you and each of the Commitment Parties hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based
in contract, tort or otherwise) arising out of or relating to this letter agreement, the Transaction and the other transactions contemplated hereby or the actions of each of the Commitment Parties in the negotiation, performance, administration or
enforcement hereof. Each of you and the Commitment Parties hereby irrevocably submits to the non-exclusive jurisdiction of any New York State court or Federal court sitting in the Borough of Manhattan in New York City in respect of any suit, action
or proceeding arising out of or relating to the provisions of this letter agreement, the Transaction and the other transactions contemplated hereby and irrevocably agrees that all claims in respect of any such suit, action or proceeding, to the
fullest extent permitted under applicable law, may be heard and determined in any such court.  Each of you and the Commitment Parties waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceedings brought in any such court, and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

     This letter agreement (together with the Commitment Letter and the other matters previously disclosed to Borrower) embodies the entire agreement and understanding among each of the
Commitment Parties, you and your affiliates with respect to the matters covered herein and supersedes all prior agreements and understandings related to the subject matter hereof. Those matters that are not covered or made clear herein are subject
to mutual agreement of the parties

     Nothing herein, express or implied, is intended to or shall confer upon any other third party any legal or equitable right, benefit, standing or remedy of any nature whatsoever under or by
reason of this letter agreement. 

     All respective agreements of the Commitment Parties under this Letter Agreement with respect to the ABL Facility will expire at 5:00 p.m. (New York City time) on November 5, 2007, unless
you execute this Letter Agreement as provided below to accept such agreements and return it to us prior to that time.

     BY SIGNING THIS LETTER AGREEMENT, EACH OF THE PARTIES HERETO HEREBY ACKNOWLEDGES AND AGREES THAT (A) BANK OF AMERICA IS OFFERING TO 

2 

PROVIDE THE ABL FACILITY SEPARATE AND APART FROM BANC OF AMERICA BRIDGE’S AND LBCB’S OFFER TO PROVIDE THE BRIDGE FACILITY, (B) BANC OF AMERICA BRIDGE AND LBCB ARE OFFERING TO PROVIDE THE BRIDGE FACILITY
SEPARATE AND APART FROM BANK OF AMERICA’S OFFER TO PROVIDE THE ABL FACILITY AND (C) BAS’ AND LEHMAN’S ENGAGEMENT WITH RESPECT TO AN OFFERING OF SENIOR SECURED NOTES OR SECURITIES PURSUANT TO THE ENGAGEMENT LETTER IS SEPARATE AND APART
FROM (1) BANK OF AMERICA’S OFFER TO PROVIDE THE ABL FACILITY AND (2) BANC OF AMERICA BRIDGE’S AND LBCB’S OFFER TO PROVIDE THE BRIDGE FACILITY. YOU MAY, AT YOUR OPTION, ELECT TO ACCEPT THIS LETTER AGREEMENT WITH RESPECT TO ANY OR ALL
OF THE FOREGOING. 

     We are pleased to have the opportunity to work with you in connection with this important financing. 

[The remainder of this page intentionally left blank.] 

3 

 

  	Very truly
      yours, 
	 
	
    BANK OF AMERICA, N.A. 
      
	 

	
	 

	
	
    By: 
      	/s/
      James G. Rose Jr. 
	
    Name: 
    James G. Rose Jr. 
	
    Title: 
    Managing Director 
	 

	
	 

	
	
    BANC OF AMERICA BRIDGE LLC 
      
	 

	
	 

	
	
    By: 
      	/s/
      James G. Rose Jr. 
	
    Name:  James
    G. Rose Jr. 
	
    Title:  Managing
    Director 
	 

	
	 

	
	
    BANC OF AMERICA SECURITIES LLC 
      
	 

	
	 

	
	
    By: 
      	/s/
      James G. Rose Jr. 
	
    Name: 
    James G. Rose Jr. 
	
    Title: 
    Managing Director 
	 

	
	 

	
	 

	
	
    LEHMAN BROTHERS COMMERCIAL BANK 
      
	 

	
	 

	
	
    By: 
      	/s/
      Brian McNany
	
    Name: 
    Brian McNany 
	
    Title: 
    Authorized Signatory 
	 

	
	 

	
	
    LEHMAN BROTHERS INC. 
      
	 

	
	 

	
	
    By: 
      	/s/
      Michael C. Moravec 
	
    Name: 
    Michael C. Moravec 
	
    Title: 
    Managing Director 
	 

	
	 

	
	
    LEHMAN COMMERCIAL PAPER INC. 
      
	 

	
	 

	
	
    By: 
      	/s/
      Michael C. Moravec 
	
    Name: 
    Michael C. Moravec 
	
    Title: 
    Managing Director 

  

4 

 

	The provisions
        of this Letter Agreement with respect to the ABL Facility are Accepted
    and Agreed to as of November 5, 2007: 

THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC. 

	
By: 	/s/
    William J. Moss  
	 	Name: William
    J. Moss  
	 	Title: Vice
    President and Treasurer  

 

	The provisions of
        this Letter Agreement with respect to the Bridge Facility are Accepted
    and Agreed to as of November 5, 2007: 

THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC. 

	
By: 	/s/
    William J. Moss  
	 	Name: William
    J. Moss  
	 	Title: Vice
    President and Treasurer  

 

5-- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

 Exhibit 10.4

  

Pathmark Stores, Inc. 

200 Milik Street 

Carteret, New Jersey 07008

November 5, 2007 

The Great Atlantic & Pacific 

Tea Company, Inc. 

Two Paragon Drive 

Montvale, New Jersey 07645

Attention: Allan Richards 

Re: Waiver, Consent and Notice

Ladies and Gentlemen:

           Reference is made to that certain Agreement and Plan of Merger, dated March 4, 2007, among The Great Atlantic & Pacific Tea Company, Inc., a Maryland corporation (“Parent”), Sand Merger Corp., a Delaware corporation (“Merger Sub”), and Pathmark Stores, Inc., a Delaware corporation (the
“Company”), as amended by that certain Letter Agreement re: Payment for Fractional Shares, dated June 27, 2007, among the Company, Parent and Merger Sub (as so amended, the
“Merger Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Merger Agreement. 

           By its execution hereof, each of the Company, Parent and Merger Sub hereby agree as follows: 

	          	
(1)      		
Notwithstanding anything to the contrary set forth in the
Merger Agreement, each of Parent and Merger Sub hereby waives, for all purposes
under the Merger Agreement, compliance by the Company with its obligations under
Section 3.3(a)(iii)(A) of the Merger Agreement to use commercially reasonable
efforts to obtain the consents set forth therein.	
	 
	 	
(2)      		
The Company hereby consents to the amendments and modifications to the Financing Commitments set forth in each of (a) that certain Letter Agreement re: Metro inc., dated as of the date hereof (the “Metro Letter Agreement”), by and among Parent, A&PLuxembourg S.à.r.l. (“A&P Luxembourg”) and TD Securities Inc., attached hereto as Exhibit A; (b) that certain Letter Agreement re: Bridge Facility, dated as of the date hereof, by and among Parent, Bank of America, N.A., Banc of America Bridge LLC, Banc of America Securities LLC, Lehman Brothers Commercial Bank, Lehman
Brothers Inc., and Lehman Commercial Paper Inc., attached hereto as Exhibit B; and (c) that certain Letter Agreement re: ABL Facility, dated as of the date hereof, by and among Parent, Bank of America, N.A., Banc of America Bridge LLC, Banc of America Securities LLC, Lehman Brothers Commercial Bank, Lehman Brothers Inc., and Lehman Commercial Paper Inc., attached hereto as Exhibit C, each of which shall from and after	
	 

	 	 	 the date hereof constitute additional “Financing Commitments” for all purposes under the
Merger Agreement.	
	 
	          	
(3)      		
In the event that the sale of all of the Class A Subordinate Voting Shares of Metro, Inc. held by Parent, A&P Luxembourg or any of Parent’s other subsidiaries (the “Metro
Shares”), as contemplated by the Metro Letter Agreement or otherwise, is consummated, Parent and Merger Sub hereby agree that: (a) Parent shall draw upon the “Bridge Facility” (as such term is defined in
the Financing Commitments) for the purpose of consummating the transactions contemplated by the Merger Agreement; (b) the first proviso in Section 2.2 of the Merger Agreement shall be deleted; (c) the term “Marketing Period” shall cease to be applicable for all purposes under the Merger Agreement; and (d) the Closing shall occur no later than December 4, 2007 unless otherwise consented to in writing by
the Company (which consent shall not be unreasonably withheld or delayed).	
	 
	 	
(4)      		
In accordance with the provisions of Section 6.11(b) of the Merger Agreement, Parent hereby requests that the Company, in lieu of commencing the Debt Tender Offer, issue substantially simultaneously with the Effective Time a
notice of redemption pursuant to Section 3.03 of the Indenture, subject to the terms and conditions set forth in Section 6.11(b) of the Merger Agreement.	
	 
	 	
(5)      		
Each of Parent, Merger Sub and the Company hereby acknowledges and agrees, for all purposes under the Merger Agreement, that all obligations of Parent and Merger Sub with respect to the Preemptive Rights Charter Amendment,
including under Sections 6.2(a), 6.4(b) and 6.10(a) and any condition to the consummation of the transactions contemplated by the Merger Agreement to be satisfied by obtaining the Preemptive Rights Charter Amendment, have been satisfied by the
filing and continued effectiveness of the Articles of Amendment and Restatement of the Articles of Incorporation of Parent, as filed with State Department of Assessments and Taxation of the State of Maryland on September 6, 2007, and no further
action is required by Parent or Merger Sub with respect to such obligations.	
	 
	 	
(6)      		
Notwithstanding anything to the contrary set forth in the Merger Agreement, each of Parent, Merger Sub and the Company hereby agrees, for all purposes under the Merger Agreement, including Section 3.2(a) thereof, that Mellon
Investor Services LLC, a New Jersey limited liability company, shall be appointed to be the Exchange Agent.	
	 

           Each of Parent, Merger Sub and the Company further acknowledges and agrees that, except as expressly modified hereby, the Merger Agreement shall continue in full force and effect in accordance with its terms and that nothing set
forth herein shall constitute a waiver of any failure of any party to comply with any obligation, covenant, agreement or condition set forth in the Merger Agreement at any time prior to the date hereof. 

(Signature pages follow)

2

	 	
Sincerely,
	
	 	 

	
	 	 

	
	 	
PATHMARK STORES, INC.

	 	 

	
	 	 

	
	 	
By: /s/ Marc A. Strassler
	
	 	
Name: Marc A. Strassler
	
	 	
Title: Senior Vice President, Secretary and
	
	 	
        General
Counsel
	

	
Acknowledged, agreed and accepted
	
	
as of the date first written above:
	
	 

	
	 

	
	 

	
	
THE GREAT ATLANTIC &
	
	
PACIFIC TEA COMPANY, INC.
	
	 

	
	 

	
	
By:
		 
		
/s/ Brenda Galgano
		 
	 

		 
		
Name: Brenda Galgano
	
	 

		 
		
Title: Senior Vice President and Chief
	
	 	 	Financial Officer 

	 

	
	 

	
	
SAND MERGER CORP.
	
	 

	
	 

	
	
By:
		 
		
/s/ Christoper McGarry
		 
	 

		 
		
Name: Christopher McGarry
	
	 

		 
		
Title: President
	

Exhibit A 

Metro Letter Agreement

See Exhibit 10.1 

Exhibit B 

Bridge Facility Letter Agreement

See Exhibit 10.2 

Exhibit C 

ABL Facility Letter Agreement

See Exhibit 10.3

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