Document:

Exhibit 4.1

    Exhibit
      4.1

     

    EXECUTION
      VERSION

     

      
        

      

    

     

     

    AMENDED
      AND RESTATED

     

    WARRANT
      AGREEMENT

     

    Dated
      as of March 4, 2007

     

    among

     

    The
      Great Atlantic & Pacific Tea Company, Inc.

     

    and

     

    The
      Investors Identified Herein

    

    

     

      
        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    AMENDED
      AND RESTATED

     

    WARRANT
      AGREEMENT

     

    AMENDED
      AND RESTATED WARRANT AGREEMENT (the “Agreement”)
      dated
      as of  March 4, 2007 among The Great Atlantic & Pacific Tea Company,
      Inc., a Maryland corporation (the “Company”),
      and
      the investors identified on the signature pages hereof, or their registered
      permitted assigns (the “Investors”).

     

    RECITALS

     

    WHEREAS,
      pursuant to that certain Warrant Agreement, dated as of June 9, 2005
      (the
“Pathmark
      Warrant Agreement”),
      by and
      among Pathmark, Inc., a Delaware corporation (“Pathmark”),
      and
      the Investors, Pathmark issued to the Investors (i) a series of warrants (the
      “Exchanged
      Series A Warrants”)
      to
      purchase an aggregate of 10,060,000 shares of the common stock, $.01 par value
      per share, of Pathmark (the “Pathmark
      Common Stock”)
      at an
      exercise price of $8.50 per share and (ii) a series of warrants (the
“Exchanged
      Series B Warrants”
and,
      together with the Exchanged Series A Warrants, the “Exchanged
      Warrants”)
      to
      purchase an aggregate of 15,046,350 shares of Pathmark Common Stock at an
      exercise price of $15.00 per share.

     

    WHEREAS,
      the Company and Pathmark have entered into that certain Agreement and Plan
      of
      Merger of even date herewith (the “Merger
      Agreement”),
      pursuant to which, among other things, a wholly owned subsidiary of the Company
      will merge with and into Pathmark (the “Merger”)
      and
      each share of Pathmark Common Stock issued and outstanding at the time of the
      Merger shall be converted into the right to receive $9.00 in cash and 0.12963
      shares of the common stock, $1.00 par value per share, of the Company (the
      “Common
      Stock”).

     

    WHEREAS,
      Section 3.3(b) of the Merger Agreement provides that, at the Effective Time
      (as
      defined in the Merger Agreement), the Company shall issue warrants to purchase
      Common Stock to the holders of the Exchanged Warrants on the terms and subject
      to the conditions set forth herein.

     

    WHEREAS,
      at the Effective Time, the Company has agreed to issue, and the Investors have
      agreed to accept, in each case on the terms and subject to the conditions set
      forth herein, (i) in exchange for the Exchanged Series A Warrants, Series A
      Warrants (the “Series
      A Warrants”)
      to
      purchase an aggregate of 4,657,377.61 shares of Common Stock (subject to
      adjustment) at an exercise price of $18.36 per share (subject to adjustment)
      and
      (ii) in exchange for the Exchanged Series B Warrants, Series B Warrants (the
      “Series
      B Warrants”
and,
      together with the Series A Warrants, the “Warrants”)
      to
      purchase an aggregate of 6,965,858.19 shares of Common Stock (subject to
      adjustment) at an exercise price of $32.40 per share (subject to adjustment).
      The shares of Common Stock issuable on exercise of the Warrants are referred
      to
      herein as the “Warrant
      Shares.”

     

    WHEREAS,
      the Warrants will be exercisable solely on a net (i.e.,
      “cashless”) basis.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    WHEREAS,
      subject to the terms of this Agreement, in lieu of issuing Warrant Shares,
      the
      Company, in its sole discretion, shall be entitled to settle all or any portion
      of exercised Warrants in cash.

     

    AGREEMENT

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual agreements herein
      set
      forth, the parties hereto agree as follows:

     

    SECTION
      1.  Issuance.
      At the
      Effective Time, the Company will issue and deliver certificates evidencing
      the
      Warrants (the “Warrant
      Certificates”)
      to the
      Investors in the amounts (subject to adjustment) set forth on Annex
      I
      hereto.
      Upon the issuance and delivery thereof, Pathmark shall be released from any
      and
      all of its obligations under the Pathmark Warrant Agreement with respect to
      the
      Exchanged Warrants.

     

    SECTION
      2.  Warrant
      Certificates.
      The
      Warrant Certificates evidencing the Series A Warrants will be issued
      substantially in the form of Exhibit A
      hereto.
      The Warrant Certificates evidencing the Series B Warrants will be issued
      substantially in the form of Exhibit
      B
      hereto.
      The Warrant Certificates shall be in registered form only, shall be dated the
      date of issuance by the Company and may have such additional notations, legends
      and endorsements as required by law, or the rules and regulations of applicable
      stock exchanges.

     

    SECTION
      3.  Execution
      of Warrant Certificates.
      Warrant
      Certificates shall be signed on behalf of the Company by its Chairman of the
      Board or its Chief Executive Officer, President or a Vice President. Each such
      signature upon the Warrant Certificates may be in the form of a facsimile
      signature of the present or any future Chairman of the Board, Chief Executive
      Officer, President or Vice President, and may be imprinted or otherwise
      reproduced on the Warrant Certificates and for that purpose the Company may
      adopt and use the facsimile signature of any person who shall have been Chairman
      of the Board, Chief Executive Officer, President or Vice President,
      notwithstanding the fact that at the time the Warrant Certificates shall be
      delivered or disposed of he shall have ceased to hold such office. Each Warrant
      Certificate shall also be manually signed on behalf of the Company by its
      Secretary or an Assistant Secretary under its corporate seal. The seal of the
      Company may be in the form of a facsimile thereof and may be impressed, affixed,
      imprinted or otherwise reproduced on the Warrant Certificates.

     

    SECTION
      4.  Registration.
      The
      Company shall number and register the Warrant Certificates in a register as
      they
      are issued. The Company may deem and treat the registered holder(s) of the
      Warrant Certificates (the “Holders”)
      as the
      absolute owner(s) thereof (notwithstanding any notation of ownership or other
      writing thereon made by anyone) for all purposes and shall not be affected
      by
      any notice to the contrary. The Warrants shall be registered initially in such
      name or names as the Investors shall designate.

     

    SECTION
      5.  Restrictions
      on Transfer; Registration of Transfers and Exchanges.
      The
      Warrants (and any Warrant Shares issued upon the exercise of the Warrants)
      shall
      not be transferable except in accordance with the terms of that certain
      Stockholders’ Agreement of even date herewith by and among the Investors and the
      Company (the “Stockholders’
      Agreement”).

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    

     

    Prior
      to
      any proposed transfer of any Warrants, the transferring Holder will deliver
      to
      the Company a Certificate of Transfer in the form attached to the Warrant
      Certificate
      and,
      if so requested by the Company, such other information relating to the proposed
      transfer and the identity of the proposed transferee as the Company may
      reasonably request in order to confirm that the Warrants may be sold or
      otherwise transferred in the manner proposed. Upon original issuance thereof,
      and until such time as the same shall have been registered under the United
      States Securities Act of 1933, as amended (the “Securities
      Act”)
      or sold
      pursuant to Rule 144 promulgated thereunder (or any similar rule or
      regulation), each Warrant Certificate and any certificates evidencing Warrant
      Shares shall bear any legend required pursuant to the Stockholders’ Agreement
      unless, in the opinion of qualified counsel, such legend is no longer required
      by the Securities Act.

     

    The
      Company shall from time to time, subject to compliance with the applicable
      provisions of the Stockholders’ Agreement, register the transfer of any
      outstanding Warrant Certificates in a Warrant register to be maintained by
      the
      Company upon surrender thereof accompanied by a written instrument or
      instruments of transfer in form satisfactory to the Company, duly executed
      by
      the registered Holder or Holders thereof or by the duly appointed legal
      representative thereof or by a duly authorized attorney. Upon any such
      registration of transfer, a new Warrant Certificate shall be issued to the
      transferee(s) and the surrendered Warrant Certificate shall be canceled and
      disposed of by the Company.

     

    Warrant
      Certificates may be exchanged at the option of the Holder(s) thereof, when
      surrendered to the Company at its office for another Warrant Certificate or
      other Warrant Certificates of like series and tenor and representing in the
      aggregate a like number of Warrants. Warrant Certificates surrendered for
      exchange shall be canceled and disposed of by the Company.

     

    SECTION
      6.  Warrants;
      Exercise of Warrants.
      Subject
      to the terms of this Agreement, each Holder shall have the right, which may
      be
      exercised at any time or from time to time during the applicable Exercise Period
      (as defined below) to receive from the Company, that number (the “Gross Number”)
      of fully paid and nonassessable Warrant Shares (and such other consideration)
      which the Holder may at the time be entitled to receive upon the exercise of
      such Warrants, less that number of Warrant Shares equal to the quotient of
      (a)
      the product of (i) the Gross Number and (ii) the Exercise Price (as defined
      below) then in effect for such Warrants and (b) the Market Price of the Warrant
      Shares on the business day immediately preceding the date the Warrants are
      presented for exercise. The exercise price for each Series A Warrant (the
“Series
      A Exercise Price”)
      shall
      initially be $18.36 per share, subject to adjustment pursuant to the terms
      hereof. The exercise price for each Series B Warrant (the “Series
      B Exercise Price”)
      shall
      initially be $32.40 per share, subject to adjustment pursuant to the terms
      hereof. Each of the Series A Exercise Price and the Series B Exercise Price
      may
      be referred to herein generically as an “Exercise
      Price.”
For
      the
      avoidance of doubt, Warrants may be exercised solely on a net basis in the
      manner set forth in the immediately preceding sentence, and no Investor shall
      be
      required, or permitted, to pay any cash in connection with the exercise of
      Warrants. Each Warrant not exercised during the Exercise Period shall become
      void and all rights thereunder and all rights in respect thereof under this
      Agreement shall cease as of such time. No adjustments as to dividends will
      be
      made upon exercise of the Warrants, except as otherwise expressly provided
      herein.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    

     

    The
      Series
      A Warrants shall be exercisable for a period (the “Series
      A Exercise Period”)
      commencing on their date of issuance and expiring at 5:00 p.m., New York time,
      on June 9, 2008. The Series B Warrants shall be exercisable for a period (the
      “Series
      B Exercise Period”
and,
      together with the Series A Exercise Period, an “Exercise
      Period”)
      commencing on their date of issuance and expiring at 5:00 p.m., New York time,
      on June 9, 2015. Notwithstanding the foregoing or anything else in this
      Agreement to the contrary, until June 9, 2014, no Series B Warrant shall be
      exercisable to the extent that such exercise, when taken together with all
      other
      exercises of Series B Warrants during the twelve (12) months immediately
      preceding such exercise, would result in more than fifty-percent (50%) of the
      aggregate Series B Warrants issued to Investors having been exercised during
      such twelve (12) month period, unless the exercise of such Series B Warrant
      is
      (i) in connection with or following a Change of Control Event (as defined below)
      or (ii) pursuant to the exercise by the Holders, as part of a single transaction
      and on a single date, of all Series B Warrants then outstanding (the
“100%
      Series B Warrant Exercise”).

     

    As
      used
      herein, “Change
      of Control Event”
shall
      mean (i) the acquisition of an interest in the Company by means of any
      transaction or series of related transactions (including, without limitation,
      any reorganization, merger or consolidation) as a result of which the holders
      of
      shares of Common Stock immediately prior to the commencement of such transaction
      or series of transactions hold less than fifty percent (50%) of the ordinary
      voting power (on a fully diluted basis) of the surviving or acquiring entity;
      (ii) the sale to a third party that is not a subsidiary of the Company of all,
      or substantially all, of the Company’s consolidated assets in any single
      transaction or series of related transactions; (iii) any voluntary or
      involuntary dissolution, liquidation or winding up of the Company; or (iv)
      any
      transaction or series of related transactions (including, without limitation,
      any reorganization, merger or consolidation) as a result of which any “person”
(as that term is used in Section 13(d)(3) of the Exchange Act) becomes the
      beneficial owner, directly or indirectly, of a greater number of shares of
      Common Stock or other voting securities representing the votes entitled to
      be
      cast generally in the election of directors of the Company or the surviving
      or
      acquiring entity in any such transaction (as the case may be) than Teal and
      its
      Affiliates, collectively, beneficially own.

     

    A
      Warrant
      may be exercised upon surrender to the Company (at its office address set forth
      in Section 13
      hereof)
      of the Warrant Certificate(s) to be exercised with the form of election to
      exercise attached thereto duly filled in and signed.

     

    Subject
      to
      the provisions of Section
      7
      hereof,
      on or prior to the twentieth (20th) business day after exercise and surrender
      of
      Warrant Certificates, the Company shall issue and cause to be delivered with
      all
      reasonable dispatch to the Holder and in the name of the Holder a certificate
      or
      certificates for the number of full Warrant Shares issuable upon the exercise
      of
      such Warrants (and such other consideration as may be deliverable upon exercise
      of such Warrants) together with cash for fractional Warrant Shares as provided
      in Section 11.
      If the
      exercise is settled by the issuance of Warrant Shares, then such certificate
      or
      certificates shall be deemed to have been issued and the Holder shall be deemed
      to have become a holder of record of such Warrant Shares as of the date of
      the
      surrender of such Warrant Certificates, irrespective of the date of delivery
      of
      such certificate or certificates for Warrant Shares.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    

     

    Except
      as
      otherwise expressly set forth in this Agreement, each Warrant shall be
      exercisable during the Exercise Period, at the election of the Holder thereof,
      either in full or from time to time in part and, in the event that fewer than
      all of the Warrants represented by a Warrant Certificate are exercised at any
      time prior to the date of expiration of the Warrants, a new certificate
      evidencing the remaining Warrant or Warrants will be issued and delivered
      pursuant to the provisions of this Section and of Section 3
      hereof.

     

    All
      Warrant Certificates surrendered upon exercise of Warrants shall be cancelled
      and disposed of by the Company. The Company shall keep copies of this Agreement
      and any notices given or received hereunder available for inspection by the
      Holders during normal business hours at its office.

     

    In
      lieu of
      issuing Warrant Shares upon exercise of Warrants as set forth above (together
      with such other consideration as may be deliverable upon exercise of such
      Warrants), the Company, in its sole discretion, shall be entitled to settle
      all
      or any portion of exercised Warrants in cash on or prior to the twentieth (20th)
      business day after the exercise and surrender of the Warrant
      Certificates.

     

    The
      amount
      of cash or other consideration issuable or deliverable upon the exercise of
      Warrants shall be (i) the Market Prices of the number of Warrant Shares
      otherwise to be issued pursuant to the first paragraph of this Section
      6
      or other
      consideration to be paid in settlement of any Warrant for the business day
      immediately preceding the date that the applicable Warrants are exercised and
      surrendered or (ii) in the case of consideration issuable or deliverable upon
      the exercise of Warrants for which there is no Market Price, the Current Market
      Value (as defined below) of such consideration.

     

    Notwithstanding
      the foregoing, in connection with a 100% Series B Exercise, the Company may
      elect, by written notice delivered to the Holder at any time during such twenty
      (20) business day settlement period, to defer the settlement of up to
      fifty-percent (50%) of the exercised Series B Warrants for up to one (1) year
      from the date of such exercise; provided,
      however,
      that the
      deferred portion of such settlement (i) shall thereafter be payable only in
      cash
      and (ii) shall accrue interest at a rate equal to the U.S. prime rate, as the
      same may be published under “Money Rates” in The Wall
      Street Journal
      from time
      to time, from and including the twentieth (20th)
      business
      day following the date of exercise of such Series B Warrants until but excluding
      the date payment of the deferred portion of such settlement, together with
      all
      interest accrued thereon, is received by the Holder (the deferred portion of
      such settlement, together with all interest accrued thereon, “Deferred
      Cash Amount”).
      If the
      Company determines to pay the Deferred Cash Amount, in whole or in part, on
      a
      date (an “Early
      Payment Date”)
      other
      than the first (1st) anniversary of such 100% Series B Warrant Exercise, it
      will
      so notify the Holder in writing (a “Payment
      Notice”)
      at
      least twenty (20) business days prior to the Early Payment Date, and upon
      delivery of such Payment Notice, will be irrevocably bound to pay the Deferred
      Cash Amount on such Early Payment Date.

     

    SECTION
      7.  Payment
      of Taxes.
      The
      Company will pay all documentary stamp taxes and other governmental charges
      (excluding all foreign, federal or state income, franchise, property, estate,
      inheritance, gift or similar taxes) in connection with the issuance or delivery
      of the Warrant Certificates hereunder, as well as all such taxes attributable
      to
      the initial issuance or 

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    delivery
      of any Warrant Shares upon the exercise of Warrants. The Company shall not,
      however, be required to pay any tax that may be payable in respect of any
      subsequent transfer of the Warrants or any transfer involved in the issuance
      and
      delivery of Warrant Shares in a name other than that in which the Warrants
      to
      which such issuance relates were registered, and, if any such tax would
      otherwise be payable by the Company, no such issuance or delivery shall be
      made
      unless and until the person requesting such issuance has paid to the Company
      the
      amount of any such tax, or it is, established to the reasonable satisfaction
      of
      the Company that any such tax has been paid.

     

    SECTION
      8.  Mutilated
      or Missing Warrant Certificates.
      If any
      Warrant Certificate or certificate evidencing Warrant Shares shall be mutilated,
      lost, stolen or destroyed, the Company shall issue, in exchange and substitution
      therefor and upon cancellation of the mutilated Warrant Certificate or other
      certificate, or in lieu of and substitution for the Warrant Certificate or
      other
      certificate lost, stolen or destroyed, a new Warrant Certificate or other
      certificate of like tenor and representing an equivalent number of Warrants
      or
      Warrant Shares. 

     

    SECTION
      9.  Reservation
      of Warrant Shares.
      The
      Company shall at all times reserve and keep available, free from preemptive
      rights, out of the aggregate of its authorized but unissued Common Stock or
      its
      authorized and issued Common Stock held in its treasury, for the purpose of
      enabling it to satisfy any obligation to issue the Warrant Shares upon exercise
      of the Warrants, the maximum number of shares of Common Stock which may then
      be
      deliverable upon the exercise of all outstanding Warrants.

     

    The
      Company or, if appointed, the transfer agent for the Common Stock and each
      transfer agent for any shares of the Company’s
      capital
      stock issuable upon the exercise of any of the Warrants (collectively, the
      “Transfer
      Agent”)
      will be
      irrevocably authorized and directed at all times to reserve such number of
      authorized shares as shall be required for such purpose. The Company shall
      keep
      a copy of this Agreement on file with the Transfer Agent. The Company will
      supply the Transfer Agent with duly executed certificates for such purposes
      and
      will provide or otherwise make available all other consideration that may be
      deliverable upon exercise of the Warrants. The Company will furnish such
      Transfer Agent a copy of all notices of adjustments and certificates related
      thereto, transmitted to each Holder pursuant to Section 12
      hereof.

     

    The
      Company covenants that all the Warrant Shares and other capital stock issued
      upon exercise of the Warrants will, upon issue, be validly authorized and
      issued, fully paid, nonassessable, free of preemptive rights and free from
      all
      taxes, liens, charges and security interests with respect to the issue
      thereof.

     

    The
      Company shall from time to time take all action which may be necessary or
      appropriate so that the Common Stock issuable upon conversion of the Warrant
      Shares following an exercise of the Warrants, will be listed on the principal
      securities exchanges and markets within the United States of America, if any,
      on
      which other shares of the same class of Common Stock of the Company are then
      listed.

     

    SECTION
      10.  Adjustment
      of Exercise Price and Number of Warrant Shares Issuable.
      The
      Exercise Price and the number of shares of Common Stock issuable upon the
      exercise of each Warrant (the “Warrant
      Number”)
      are
      subject to adjustment from time to time 

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    upon
      the
      occurrence of the events enumerated in, or as otherwise provided in, this
Section 10.
      The
      Warrant Number is initially one.

     

    (a)  Adjustment
      for Change in Capital Stock

     

    If
      the
      Company:

     

    (1)  pays
      a
      dividend or makes a distribution on its Common Stock in shares of its Common
      Stock;

     

    (2)  subdivides
      or reclassifies its outstanding shares of Common Stock into a greater number
      of
      shares;

     

    (3)  combines
      or reclassifies its outstanding shares of Common Stock into a smaller number
      of
      shares;

     

    (4)  makes
      a
      distribution on its Common Stock in shares of its capital stock other than
      its
      Common Stock; or

     

    (5)  issues
      by
      reclassification of its Common Stock any shares of its capital
      stock;

     

    then
      the
      Exercise Price in effect immediately prior to such action shall be
      proportionately adjusted so that the holder of any Warrant thereafter exercised
      may receive the aggregate number and kind of shares of capital stock of the
      Company which he or it would have owned immediately following such action if
      such Warrant had been exercised immediately prior to such action.

     

    The
      adjustment shall become effective immediately after the record date in the
      case
      of a dividend or distribution and immediately after the effective date in the
      case of a subdivision,
      combination or reclassification.

     

    If
      after
      an adjustment a holder of a Warrant upon exercise of it may receive shares
      of
      two or more classes of capital stock of the Company, the Company shall determine
      the allocation of the adjusted Exercise Price between the classes of capital
      stock. After such allocation, the exercise privilege and the Exercise Price
      of
      each class of capital stock shall thereafter be subject to adjustment on terms
      comparable to those applicable to Common Stock in this Section.

     

    Such
      adjustment shall be made successively whenever any event listed above shall
      occur. If the occurrence of any event listed above results in an adjustment
      under subsections (b) or (c) below, no further adjustment shall be made
      under this subsection (a).

     

    (b)  Adjustment
      for Rights Issue

     

     

    If
      the
      Company distributes any rights, options or warrants (whether or not immediately
      exercisable)
      to
      all holders of its Common Stock entitling them to purchase shares of Common
      Stock at a price per share less than the Current Market Value per share upon
      exercise 

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    within
      60
      days after the record date relating to such distribution, the Exercise Price
      shall be adjusted in accordance with the formula:

     

    
      	 	 	 	 	
              O +   N x P   

            
	
              E′

            	
              =

            	
              E

            	
              x

            	
                            M   

            
	 	 	 	 	
                   O  +  N   

            

    

     

    where:

     

    
      	
              E′

            	
              =

            	
              the
                adjusted Exercise Price.

            
	 	 	 
	
              E

            	
              =

            	
              the
                then current Exercise Price.

            
	 	 	 
	
              O

            	
              =

            	
              the
                number of shares of Common Stock outstanding on the record date for
                any
                such distribution.

            
	 	 	 
	
              N

            	
              =

            	
              the
                number of additional shares of Common Stock issuable upon exercise
                of such
                rights, options or warrants.

            
	 	 	 
	
              P

            	
              =

            	
              the
                exercise price per share of such rights, options or
                warrants.

            
	 	 	 
	
              M

            	
              =

            	
              the
                Current Market Value per share of Common Stock on the record date
                for any
                such distribution.

            

    

    

     

    The
      adjustment shall be made successively whenever any such rights, options or
      warrants are issued and shall become effective immediately after the record
      date
      for the determination of stockholders entitled to receive the rights, options
      or
      warrants. If at the end of the period during which such rights, options or
      warrants are exercisable, not all rights, options or warrants shall have been
      exercised, the Exercise Price shall be immediately readjusted to what it would
      have been if “N” in the above formula had been the number of shares actually
      issued. No adjustment shall be required under this subsection (b) if at the
      time
      of such distribution the Company makes the same distribution to Holders of
      Warrants as it makes to holders of shares of Common Stock pro rata based on
      the
      number of shares of Common Stock for which such Warrants are exercisable. No
      adjustment shall be made pursuant to this subsection (b) which shall have the
      effect of decreasing the number of Warrant Shares purchasable upon exercise
      of
      each Warrant.

     

    (c)  Adjustment
      for Other Distributions

     

    If
      the
      Company distributes to all holders of its Common Stock (i) any evidences of
      indebtedness
      of the Company or any of its subsidiaries, (ii) any cash or other assets of
      the
      Company or any of its subsidiaries, (iii) shares of its capital stock or any
      other properties or securities or (iv) any rights, options or warrants to
      acquire any of the foregoing or to acquire any other securities of the Company
      (the items described in the foregoing clauses (i)-(iv) being collectively
      referred to as the “Consideration”),
      the
      Exercise Price shall be adjusted in accordance with the formula:

     

     

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    

     

    
      	 	 	 	 	 
	
              E′

            	
              =

            	
              E

            	
              x

            	
              M - F

            
	 	 	 	 	 

    

     

    where:

     

    
      	
              E′

            	
              =

            	
              the
                adjusted Exercise Price.

            
	 	 	 
	
              E

            	
              =

            	
              the
                then current Exercise Price.

            
	 	 	 
	
              M

            	
              =

            	
              the
                Current Market Value per share of Common Stock on the record date
                mentioned below.

            
	 	 	 
	
              F

            	
              =

            	
              the
                fair market value on the record date mentioned below of the Consideration
                distributable to the holder of one share of Common
                Stock.

            

    

    

     

    The
      adjustment shall be made successively whenever any such distribution is made
      and
      shall become
      effective immediately after the record date for the determination of
      stockholders entitled to receive the distribution. If an adjustment is made
      pursuant to this subsection (c) as a result of the issuance of rights, options
      or warrants and at the end of the period during which any such rights, options
      or warrants are exercisable, not all such rights, options or warrants shall
      have
      been exercised, the Exercise Price shall be immediately readjusted as if “F” in
      the above formula was the fair market value on the record date of the
      indebtedness or assets actually distributed upon exercise of such rights,
      options or warrants divided by the number of shares of Common Stock outstanding
      on the record date. No adjustment shall be required under this subsection (c)
      if
      at the time of such distribution the Company makes the same distribution to
      Holders of Warrants as it makes to holders of shares of Common Stock pro rata
      based on the number of shares of Common Stock for which such Warrants are
      exercisable. No adjustment shall be made pursuant to this subsection (c) which
      shall be have the effect of decreasing the number of Warrant Shares purchasable
      upon exercise of each Warrant.

     

    This
      subsection does not apply to any distribution referred to in subsection (a)
      of
      this Section 10 or to rights, options or warrants referred to in
      subsection (b) of this Section 10.

     

    (d)  Current
      Market Value

     

    “Current
      Market Value”
per
      share of Common Stock or of any other security (herein collectively referred
      to
      as a “Security”)
      at any
      date shall be:

     

    (1)  if
      the
      Security is registered under the Exchange Act, the average of the daily Market
      Prices for each business day during the period commencing 5
      business
      days before such date and ending on the date one day prior to such date or,
      if
      the Security has been registered under the Exchange Act for less than 5
      consecutive business days before such date, then the average of the daily Market
      Prices for all of the business days before such date for which daily Market
      Prices are available. If the Market Price is not determinable for at least
      10

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    business
      days in such period, the Current Market Value of the Security shall be
      determined as if the Security was not registered under the Exchange Act;
      or

     

    (2)  if
      the
      Security is not registered under the Securities Exchange Act of 1934, as amended
      (the “Exchange
      Act”),
      (i) the value of the Security determined in good faith by the Board of
      Directors of the Company and certified in a board resolution, based on the
      most
      recently completed arm’s length transaction between the Company and a person
      other than an Affiliate of the Company in which such determination is necessary
      and the closing of which occurs on such date or shall have occurred within
      the
      six months preceding such date, (ii) if no such transaction shall have
      occurred on such date or within such six-month period, the value of the Security
      most recently determined as of a date within the six months preceding such
      date
      by an Independent Financial Expert or (iii) if neither clause (i) nor (ii)
      is applicable, the value of the Security determined as of such date by an
      Independent Financial Expert.

     

    The
      “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 the Company, 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 the Company. If there are no such prices
      on
      a business day, then the Market Price shall not be determinable for such
      business day.

     

    “Independent
      Financial Expert”
shall
      mean a nationally recognized investment banking firm designated by the Company
      and reasonably acceptable to the Holders of a majority of the Warrants
      (i) that does not (and whose directors, officers, employees and Affiliates
      do not) have a direct or indirect material financial interest in the Company,
      (ii) that has not been, and, at the time it is called upon to serve as an
      Independent Financial Expert under this Agreement is not (and none of whose
      directors, officers, employees or Affiliates is) a promoter, director or officer
      of the Company, (iii) that has not been retained by the Company or any
      Holder or Affiliate of a Holder for any purpose, other than to perform an equity
      valuation, within the preceding twelve months, and (iv) that, in the
      reasonable judgment of the Board of Directors of the Company, is otherwise
      qualified to serve as an independent financial advisor. Any such person may
      receive customary compensation and indemnification by the Company for opinions
      or services it provides as an Independent Financial Expert.

     

    “Affiliate”
shall
      mean, with respect to any person, any other person directly or indirectly
      controlling or controlled by or under direct or indirect common control with
      such person. For the purposes of this definition, “control,”
when
      used with respect to any person, means the power to direct the management and
      policies of such person, directly or indirectly, 

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    whether
      through the ownership of voting securities, by contract or otherwise; and the
      terms “controlling”
and
      “controlled”
have
      meanings correlative to the foregoing.

     

    (e)  When
      De
      Minimis Adjustment May Be Deferred

     

    No
      adjustment in the Exercise Price need be made unless the adjustment would
      require an increase or decrease of at least 1% in the Exercise Price. No
      adjustment in the Warrant
      Number need be made unless the adjustment would require an increase or decrease
      of at least 0.5% in the Warrant Number. Any adjustments that are not made shall
      be carried forward and taken into account in any subsequent adjustment,
provided
      that no
      such adjustment shall be deferred beyond the date on which a Warrant is
      exercised.

     

    All
      calculations under this Section
      10
      shall be
      made to the nearest 1/1000th of a share.

     

    (f)  When
      No
      Adjustment Required

     

    If
      an
      adjustment is made upon the establishment of a record date or issuance date
      for
      a distribution or issuance subject to subsections (a), (b) or (c) hereof and
      such distribution or issuance
      is
      subsequently cancelled, the Exercise Price then in effect shall be readjusted,
      effective as of the date when the Board of Directors determines to cancel such
      distribution, to that which would have been in effect if such record date had
      not been fixed.

     

    (g)  Notice
      of Adjustment

     

    Whenever
      the Exercise Price or the Warrant Number is adjusted, the Company shall
      provide
      the
      notices required by Section
      12
      hereof.

     

    (h)  When
      Issuance or Payment May Be Deferred

     

    In
      any
      case in which this Section 10
      shall
      require that an adjustment in the Exercise Price and Warrant Number be made
      effective as of a record date for a specified event, the Company may elect
      to
      defer until the occurrence of such event (i) issuing to the Holder of any
      Warrant exercised after such record date the Warrant Shares and other capital
      stock of the Company, if any, issuable upon such exercise over and above the
      Warrant Shares and other capital stock of the Company, if any, issuable upon
      such exercise on the basis of the Warrant Number prior to such adjustment,
      and
      (ii) paying to such Holder any amount in cash in lieu of a fractional share
      pursuant to Section 11;
      provided,
      however,
      that the
      Company shall deliver to such Holder a due bill or other appropriate instrument
      evidencing such Holder’s right to receive such additional Warrant Shares, other
      capital stock and cash upon the occurrence of the event requiring such
      adjustment.

     

    (i)  Reorganizations

     

    In
      case of
      any capital reorganization, other than in the cases referred to in Sections 10(a),
      (b)
      or
(c)
      hereof,
      or the consolidation or merger of the Company with or into another corporation
      (other than a merger or consolidation which does not result in any
      reclassification of the outstanding shares of Common Stock into shares of other
      stock or other 

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    securities
      or property) (collectively such actions being hereinafter referred to as
“Reorganizations”),
      there
      shall thereafter be deliverable upon exercise of any Warrant (in lieu of the
      number of shares of Common Stock theretofore deliverable) the number of shares
      of stock or other securities or property to which a holder of the number of
      shares of Common Stock that would otherwise have been deliverable upon the
      exercise of such Warrant would have been entitled upon such Reorganization
      if
      such Warrant had been exercised in full immediately prior to such Reorganization
      (and assuming, for this purpose, that the Company were not entitled to settle
      all or any portion of exercised Warrants in cash as provided in Section 6
      hereof).
      In case of any Reorganization, appropriate adjustment, as determined in good
      faith by the Board of Directors of the Company, whose determination shall be
      described in a duly adopted resolution certified by the Company’s Secretary or
      Assistant Secretary, shall be made in the application of the provisions herein
      set forth with respect to the rights and interests of Holders so that the
      provisions set forth herein shall thereafter be applicable, as nearly as
      possible, in relation to any shares or other property thereafter deliverable
      upon exercise of Warrants.

     

    The
      Company shall not effect any such Reorganization unless prior to or
      simultaneously with the consummation thereof the successor corporation (if
      other
      than the Company) resulting from such Reorganization or other appropriate
      corporation or entity shall expressly assume, by a supplemental Warrant
      Agreement or other acknowledgement executed and delivered to the Holder(s),
      the
      obligation to deliver to each such Holder such shares of stock, securities
      or
      assets as, in accordance with the foregoing provisions, such Holder may be
      entitled to purchase, and all other obligations and liabilities under this
      Agreement.

     

    (j)  Adjustment
      in Number of Shares

     

    Upon
      each
      adjustment of the Exercise Price pursuant to this Section 10,
      each
      Warrant outstanding prior to the making of the adjustment in the Exercise Price
      shall thereafter evidence the right to receive that number of shares of Common
      Stock (calculated to the nearest thousandth) obtained from the following
      formula:

     

    
      	
              N′

            	
              =

            	
              N

            	
              x

            	
              E 

            
	 	 	 	 	
              E′

            
	 	 	 	 	 

    

    where:

     

    
      	
              N′

            	
              =

            	
              the
                adjustment number of Warrant Shares issuable upon exercise of a Warrant,
                assuming for this purpose that exercise required the payment of the
                adjusted Exercise Price.

            
	 	 	 
	
              N

            	
              =

            	
              the
                number of Warrant Shares previously issuable upon exercise of a Warrant,
                assuming for this purpose that exercise required the payment of the
                Exercise Price prior to adjustment.

            
	 	 	 
	
              E′

            	
              =

            	
              the
                adjusted Exercise Price.

            
	 	 	 
	
              E

            	
              =

            	
              the
                Exercise Price prior to
                adjustment.

            

    

    
      
        
        

      

      
        -12-

        
          

        

      

       

    

    

     

    (k)  Form
      of
      Warrants

     

    Irrespective
      of any adjustments in the Exercise Price or the number or kind of shares
      purchasable
      upon the exercise of the Warrants, Warrants theretofore or thereafter issued
      may
      continue to express the same price and number and kind of shares as are stated
      in the Warrants initially issuable pursuant to this Agreement.

     

    (l)  Adjustments
      in Other Securities

     

    If
      as a
      result of any event or for any other reason, any adjustment is made which
      increases the number of shares of Common Stock issuable upon conversion,
      exercise or exchange
      of, or in the conversion or exercise price or exchange ratio applicable to,
      any
      outstanding securities of the Company that are convertible into, or exercisable
      or exchangeable for, Common Stock of the Company, then a corresponding
      adjustment shall be made hereunder to increase the number of shares of Common
      Stock issuable upon exercise of the Warrants, but only to the extent that no
      such adjustment has been made pursuant to Sections
      10(a),
      (b)
      or
(c)
      hereof
      with respect to such event or for such other reason.

     

    (m)  Tender
      Offers; Exchange Offers

     

    In
      the
      event that the Company or any subsidiary of the Company shall purchase shares
      of
      Common
      Stock
      pursuant to a tender offer or an exchange offer for a price per share of Common
      Stock that is greater than the then Current Market Value per share of shares
      of
      Common Stock in effect at the end of the trading day immediately following
      the
      day on which such tender offer or exchange offer expires, then the Company,
      or
      such subsidiary of the Company, shall, within (10) business days of the expiry
      of such tender offer or exchange offer, offer to purchase the Warrants for
      comparable consideration per share of Common Stock based on the number of shares
      of Common Stock which the Holders of such Warrants would receive upon exercise
      of such Warrants (the “Offer”)
      (such
      amount less the Exercise Price in respect of such share, the “Per
      Share Consideration”);
      provided,
      however,
      if a
      tender offer is made for only a portion of the outstanding shares of Common
      Stock, then such offer shall be made for such shares of Common Stock issuable
      upon exercise of the Warrants in the same pro rata proportion; provided,
      further,
      that the
      Company shall not be required to make such an Offer if the Per Share
      Consideration is an amount less than the then-existing Exercise Price per
      share.

     

    The
      Offer
      shall remain open for a period of twenty (20) business days following its
      commencement and no longer, except to the extent that a longer period is
      required by applicable law (the “Offer
      Period”).
      No
      later than five (5) business days after the termination of the Offer Period
      (the
“Purchase
      Date”),
      the
      Company shall purchase such Warrants for the applicable Per Share
      Consideration.

     

    (n)  Other
      Events

     

    If
      any
      event shall occur as to which the other provisions of this Section
      10
      are not
      strictly applicable but the failure to make any adjustment would have the effect
      of depriving holders of the benefit of all or a portion of the exercise rights
      in respect of any Warrant in accordance with the essential intent and principles
      of this Section
      10,
      then, in
      each such case, the 

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    Company
      shall appoint an Independent Financial Expert, which shall give its opinion
      upon
      the adjustment, if any, on a basis consistent with the essential intent and
      principles established in this Section
      10
      necessary
      to preserve, without dilution, such exercise rights. Upon receipt of such
      opinion, the Company will promptly mail a copy thereof to the Holders and shall
      make the adjustments described therein.

     

    (o)  Miscellaneous

     

    For
      purpose of this Section 10
      the term
“shares
      of Common Stock”
shall
      mean (i) shares of any class of stock designated as Common Stock of the
      Company at the date of this Agreement, and (ii) shares of any other class
      of stock resulting from successive changes or reclassification of such shares
      consisting solely of changes in par value, or from par value to no par value,
      or
      from no par value to par value. In the event that at any time, as a result
      of an
      adjustment made pursuant to this Section
      10,
      the
      holders of Warrants shall become entitled to purchase any securities of the
      Company other than, or in addition to, shares of Common Stock, thereafter the
      number or amount of such other securities so purchasable upon exercise of each
      Warrant shall be subject to adjustment from time to time in a manner and on
      terms as nearly equivalent as practicable to the provisions with respect to
      the
      Warrant Shares contained in subsections (a) through (n) of this Section
      10,
      inclusive, and the provisions of Sections
      6,
      7,
      9
      and
11
      with
      respect to the Warrant Shares or the Common Stock shall apply on like terms
      to
      any such other securities.

     

    SECTION
      11.  Fractional
      Interests.
      The
      Company shall not issue fractional Warrant Shares on the exercise of the
      Warrants. If more than one Warrant shall be presented for exercise in full
      at
      the same time by the same holder, the number of full Warrant Shares which shall
      be issuable upon the exercise thereof shall be computed on the basis of the
      aggregate number of the Warrant Shares purchasable on exercise of the Warrants
      so presented. If any fraction of a Warrant Share would, except for the
      provisions of this Section
      11,
      be
      issuable on the exercise of any Warrants (or specified portion thereof), the
      Company shall pay an amount in cash equal to the Market Price of the Warrant
      Share on the business day immediately preceding the exercise of such Warrants,
      multiplied by such fraction.

     

    SECTION
      12.  Notices
      to Warrant Holders.
      Upon any
      adjustment pursuant to Section
      10
      hereof,
      the Company shall promptly thereafter (i) cause to be filed with the
      Company a certificate of an officer of the Company setting forth the Warrant
      Number and Exercise Price after such adjustment and setting forth in reasonable
      detail the method of calculation and the facts upon which such calculations
      are
      based, and (ii) cause to be given to each of the registered Holders of the
      Warrant Certificates at his or its address appearing on the Warrant register
      written notice of such adjustments by first class mail, postage prepaid. Where
      appropriate, such notice may be given in advance and included as a part of
      the
      notice required to be mailed under the other provisions of this Section 12.

     

    In
      case:

     

    (a)  the
      Company shall authorize the issuance to all holders of shares of Common
      Stock
      of rights, options or warrants to subscribe for or purchase shares of Common
      Stock or of any other subscription rights or warrants; or

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    (b)  the
      Company shall authorize the distribution to all holders of shares of Common
      Stock of assets, including, without limitation, cash, evidences of its
      indebtedness, or other securities; or

     

    (c)  of
      any
      reclassification, reorganization, consolidation or merger to which the Company
      is a party and for which approval of any stockholders of the Company is
      required, or of the conveyance or transfer of the properties and assets of
      the
      Company substantially as an entirety, or of any reclassification or change
      of
      Common Stock issuable upon exercise of the Warrants (other than a change in
      par
      value, or from par value to no par value, or from no par value to par value,
      or
      as a result of a subdivision or combination), or a tender offer or exchange
      offer for shares of Common Stock; or

     

    (d)  of
      the
      voluntary or involuntary dissolution, liquidation or winding up of the Company;
      or

     

    (e)  the
      Company proposes to take any action that would require an adjustment to the
      Warrant Number or the Exercise Price pursuant to Section
      10
      hereof;

     

    then
      the
      Company shall cause to be given to each of the registered Holders of the Warrant
      Certificates at his or its address appearing on the Warrant register, at least
      20 days prior to the applicable record date hereinafter specified, or at least
      20 days prior to the date of the event in the case of events for which there
      is
      no record date, by first-class mail, postage prepaid, a written notice of (i)
      the date as of which the holders of record of shares of Common Stock to be
      entitled to receive any such rights, options, warrants or distribution are
      to be
      determined, or (ii) the initial expiration date set forth in any tender
      offer or exchange offer for shares of Common Stock, or (iii) such
      reclassification, reorganization, consolidation, merger, conveyance, transfer,
      dissolution, the date on which liquidation or winding up is expected (to the
      extent reasonably determinable) to become effective or consummated and the
      date
      as of which it is expected (to the extent reasonably determinable) that holders
      of record of shares of Common Stock shall be entitled to exchange such shares
      for securities or other property, if any, deliverable thereupon . The failure
      to
      give the notice required by this Section 12
      or any
      defect therein shall not affect the legality or validity of any distribution,
      right, option, warrant, reclassification, reorganization, consolidation, merger,
      conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
      any action.

     

    Nothing
      contained in this Agreement or in any Warrant Certificate shall be construed
      as
      conferring
      upon
      the Holders of Warrants (prior to the exercise of such Warrants) the right
      to
      vote or to consent or to receive notice as stockholders in respect of the
      meetings of stockholders or the election of Directors of the Company or any
      other matter, or any rights whatsoever as stockholders of the
      Company.

     

    SECTION
      13.  Notices
      to the Company and Warrant Holders.
      All
      notices and other communications provided for or permitted hereunder shall
      be
      made by hand delivery, first-class mail, telex, telecopier, or overnight air
      courier guaranteeing next day delivery:

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    

     

    (a)  if
      to the
      Holders at the addresses provided on the signature pages hereto or otherwise
      reflected
      in the books and records of the Company from time to time; and

     

    (b)  if
      to the
      Company, at Two Paragon Drive, Montvale, New Jersey 07645, Attention: Allan
      Richards.

     

    All
      such
      notices and communications shall be deemed to have been duly given: at the
      time
      delivered by hand, if personally delivered; five (5) business days after being
      deposited in the mail, postage prepaid, if mailed; when answered back if
      telexed; when receipt acknowledged, if telecopied; and the next business day
      after timely delivery to the courier, if sent by overnight air courier
      guaranteeing next day delivery. The parties may change the addresses to which
      notices are to be given by giving five days’ prior notice of such change in
      accordance herewith.

     

    SECTION
      14.  Amendments
      and
      Supplements.
      

     

    (a)  Until
      such
      time as this Agreement has become effective pursuant to Section 16 hereof,
      this
      Agreement may not be amended, or any provision hereof waived, in any manner
      unless such amendment or waiver is in a writing 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 effective. 

     

    (b)  Upon
      the
      effectiveness of this Agreement pursuant to Section 16 hereof, the Company
      may
      thereafter from time to time supplement or amend this Agreement without the
      approval of any Holders of Warrant Certificates in order to cure any ambiguity
      or to correct or supplement any provision contained herein which may be
      defective or inconsistent with any other provision herein, or to make any other
      provisions in regard to matters or questions arising hereunder which the Company
      may deem necessary or desirable and which shall not in any way adversely affect
      the interests of the Holders of Warrant Certificates. An amendment or supplement
      to this Warrant Agreement that has an adverse effect on Holders of Warrants
      shall require the written consent of the Holders of a majority of the
      then-outstanding Warrants excluding Warrants held by the Company.

     

    SECTION
      15.  Successors
      and Assigns.
      All the
      covenants and provisions of this Agreement by or for the benefit of the Company
      shall bind and inure to the benefit of its respective successors and permitted
      assigns hereunder.

     

    SECTION
      16.  Effectiveness.
      Except
      for this Section
      16
      and
Sections
      13,
      14(a),
      15,
      17(a),
      18,
      19,
      20,
      21
      and
22
      hereof,
      which shall be come effective as of the date hereof, this Agreement shall become
      effective only upon the Effective Time.

     

    
      SECTION
        17.  Termination.
        

    

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    

     

    (a)  Notwithstanding
      anything to the contrary set forth herein, this Agreement will automatically
      terminate if the Merger Agreement is terminated in accordance with its own
      terms
      and shall thereafter be null
      and
      void. 

     

    (b)  Upon
      the
      effectiveness of this Agreement pursuant to Section 16 hereof, this Agreement
      shall remain in effect until such time as all Warrants have been exercised
      or
      have expired pursuant to this Agreement.

     

    SECTION
      18.  No
      Rights or Liabilities as Stockholder.
      Nothing
      contained herein shall be construed as conferring upon any Holder any rights
      as
      a stockholder of the Company or as imposing any obligation on such holder to
      purchase any securities or as imposing any liabilities on such holder as a
      stockholder of the Company, whether such obligation or liabilities are asserted
      by the Company or by creditors of the Company.

     

    SECTION
      19.  Governing
      Law.
      This
      Agreement and each Warrant Certificate issued hereunder shall be deemed to
      be a
      contract made under the laws of the State of New York and for all purposes
      shall
      be construed in accordance with the internal laws of said State.

     

    SECTION
      20.  Benefits
      of This Agreement.
      Nothing
      in this Agreement shall be construed to give to any person or corporation other
      than the Company and the registered Holders of the Warrant Certificates any
      legal or equitable right, remedy or claim under this Agreement; but this
      Agreement shall be for the sole and exclusive benefit of the Company and the
      registered Holders of the Warrant Certificates.

     

    SECTION
      21.  Construction;
      Interpretation.
      This
      Agreement shall not be construed for or against any party by reason of the
      authorship or alleged authorship of any provision hereof or by reason of the
      status of the respective parties. This Agreement shall be construed reasonably
      to carry out its intent without presumption against or in favor of any party.
      The natural persons executing this Agreement on behalf of each party have the
      full right, power and authority to do and affirm the foregoing warranty on
      behalf of each party and on their own behalf. The captions on sections are
      provided for purposes of convenience and are not intended to limit, define
      the
      scope of or aid in interpretation of any of the provisions hereof. All pronouns
      and singular or plural references as used herein shall be deemed to have
      interchangeably (where the sense of the sentence requires) a masculine, feminine
      or neuter, and/or singular or plural meaning, as the case may be.

     

    SECTION
      22.  Counterparts.
      This
      Agreement may be executed in any number of counterparts and each of such
      counterparts shall for all purposes be deemed to be an original, and all such
      counterparts shall together constitute but one and the same
      instrument.

     

    

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

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

     

    COMPANY:

    

    THE
      GREAT
      ATLANTIC & PACIFIC TEA 
COMPANY, INC., a Maryland
      corporation

     

    By:
      /s/
      William J. Moss 

          
      Name: William J. Moss

          
      Title: Vice President and Treasurer

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    INVESTORS:

    

    YUCAIPA
      CORPORATE INITIATIVES FUND I, 
L.P., a Delaware limited
      partnership

    

    
      	 	
              By:

            	
              Yucaipa
                Corporate Initiatives Fund I,

LLC

            

    

    Its: General
      Partner

     

    /s/
      Robert P. Berminham

    Name:
      Robert P. Bermingham

    Title:
      Vice President

     

    YUCAIPA
      AMERICAN ALLIANCE 
(PARALLEL) FUND I, L.P., a Delaware
      limited
partnership

    

    
      	 	
              By:

            	
              Yucaipa
                American Alliance Fund I, 
LLC

            

    

    Its: General
      Partner

     

    /s/
      Robert P. Bermingham

    Name:
      Robert P. Bermingham

    Title:
      Vice President

     

    YUCAIPA
      AMERICAN ALLIANCE FUND I, 
L.P., a Delaware limited partnership

    

    
      	 	
              By:

            	
              Yucaipa
                American Alliance Fund I,
LLC

            

    

    Its: General
      Partner

     

    /s/
      Robert P. Bermingham

    Name:
      Robert P. Bermingham

    Title:
      Vice President

     

    Address
      for Notices to the Investors:

    9130
      W.
      Sunset Boulevard

    Los
      Angeles, California 90069

    Attention:
      Robert P. Bermingham

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ANNEX
      I

     

    WARRANTS
      TO BE ISSUED1

     

    
      	
              SERIES
                A WARRANTS

            
	 
	
              Investor

            	
              Series
                A Exchanged Warrants

            	
              Series
                A Warrants

            
	 	 	 
	
              Yucaipa
                Corporate Initiatives Fund I, L.P.

            	
              3,462,652

            	
              1,603,069.37

            
	 	 	 
	
              Yucaipa
                American Alliance Fund I, L.P.

            	
              3,298,674

            	
              1,527,154.12

            
	 	 	 
	
              Yucaipa
                American Alliance (Parallel) Fund I, L.P.

            	
              3,298,674

            	
              1,527,154.12

            
	 	 	 
	
              SERIES
                B WARRANTS

            
	 
	
              Investor

            	
              Series
                B Exchanged Warrants

            	
              Series
                B Warrants

            
	 	 	 
	
              Yucaipa
                Corporate Initiatives Fund I, L.P.

            	
              5,178,953.67

            	
              2,397,648.39

            
	 	 	 
	
              Yucaipa
                American Alliance Fund I, L.P.

            	
              4,933,698.17

            	
              2,284,104.90

            
	 	 	 
	
              Yucaipa
                American Alliance (Parallel) Fund I, L.P.

            	
              4,933,698.17

            	
              2,284,104.90

            

    

    

     

    

     

    

     

    

     

    

      

      
         1 
          Subject
          to adjustment and to transfers made in accordance with the terms of the
          Stockholder Voting Agreement entered into between the Company  and
          the Investors on the date hereof.

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    [Form
      of
      Series A Warrant Certificate]

     

    THE
      SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND
      NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
      SUCH SECURITIES GENERALLY MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
      SUCH
      REGISTRATION OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION AND
      PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.

     

    THE
      SECURITIES EVIDENCED HEREBY ARE SUBJECT TO CERTAIN RESTRICTIONS UNDER THE TERMS
      OF THE STOCKHOLDERS’ AGREEMENT DATED AS OF MARCH 4, 2007 (“STOCKHOLDERS’
AGREEMENT”), AS AMENDED FROM TIME TO TIME, BETWEEN THE ISSUER AND THE HOLDER
      HEREOF AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
      IN ACCORDANCE WITH THE TERMS OF THAT AGREEMENT.

     

    No.                                                                                                                                                                     
_____
      _____ Series A
      Warrants2

     

     

    Series
      A Warrant Certificate

     

    THE
      GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.

     

    This
      Warrant Certificate certifies that ___________________, or registered assigns,
      is the registered holder of the number of Warrants (the “Warrants”)
      set
      forth above to purchase Common Stock, $1.00 par value (the “Common
      Stock”),
      of The
      Great Atlantic & Pacific Tea Company, Inc., Inc., a Maryland corporation
      (the “Company”).
      Each
      Warrant entitles the holder upon exercise to receive from the Company that
      number of fully paid and nonassessable shares of Common Stock (each, a
“Warrant
      Share”)
      (and
      such other consideration) which the Holder may at the time be entitled to
      receive upon the exercise of such Warrants, less that number of Warrant Shares
      having an aggregate Market Price (as defined in the Warrant Agreement referred
      to hereafter) on the business day immediately preceding the date the Warrants
      are presented for exercise equal to the aggregate Exercise Price (as defined
      below) that would otherwise have been paid by the Holder for the Warrant Shares.
      The exercise price for each Warrant (the “Exercise
      Price”)
      shall
      initially be $18.36 per share. For the avoidance of doubt, Warrants may be
      exercised solely on a net basis in the manner set forth in the immediately
      preceding sentence, and no holder shall be required, or permitted, to pay any
      cash in connection with the exercise of Warrants. The Warrants may be exercised
      only during the Series A Exercise Period (as defined in the Warrant Agreement).
      The Exercise Price and number of Warrant 

     

     

      
        

      

    

     

    2 
      Amount of Series A Warrants issued to be as set forth on Annex
      I.

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    Shares
      issuable upon exercise of the Warrants are subject to adjustment upon the
      occurrence of certain events, as set forth in the Warrant
      Agreement.

     

    The
      Warrants evidenced by this Warrant Certificate are part of a duly authorized
      issue of Series A Warrants, and are issued or to be issued pursuant to an
      Amended and Restated Warrant Agreement dated as of March 4, 2007 (the
“Warrant
      Agreement”),
      duly
      executed and delivered by the Company, which Warrant Agreement is hereby
      incorporated by reference in and made a part of this instrument and is hereby
      referred to for a description of the rights, limitation of rights, obligations,
      duties and immunities thereunder of the Company and the holders (the words
      “holders” or “holder” meaning the registered holders or registered holder) of
      the Warrants. A copy of the Warrant Agreement may be obtained by the holder
      hereof upon written request to the Company.

     

    The
      holder
      of Warrants evidenced by this Warrant Certificate may exercise such Warrants
      during the Series A Exercise Period under and pursuant to the terms and
      conditions of the Warrant Agreement by surrendering this Warrant Certificate,
      with the form of election to exercise set forth hereon (and by this reference
      made a part hereof), properly completed and executed at the office of the
      Company designated for such purpose. In the event that upon any exercise of
      Warrants evidenced hereby the number of Warrants exercised shall be less than
      the total number of Warrants evidenced hereby, there shall be issued by the
      Company to the holder hereof or his or its registered assignee a new Warrant
      Certificate evidencing the number of Warrants not exercised.

     

    The
      Warrant Agreement provides that upon the occurrence of certain events the number
      of Warrants and the Exercise Price set forth on the face hereof may, subject
      to
      certain conditions, be adjusted. No fractions of a share of Common Stock will
      be
      issued upon the exercise of any Warrant, but the Company will pay the cash
      value
      thereof determined as provided in the Warrant Agreement.

     

    Subject
      to
      the conditions set forth the Warrant Agreement, in lieu of issuing Warrant
      Shares upon exercise of Warrants as set forth above (together with such other
      consideration as may be deliverable upon exercise of such Warrants), the
      Company, in its sole discretion at settlement, shall be entitled to settle
      all
      or any portion of exercised Warrants in cash as provided in the Warrant
      Agreement.

     

    The
      holders of the Warrants are entitled to certain registration rights with respect
      to any Warrant Shares issued in settlement of exercised Warrants. Said
      registration rights are set forth in the Stockholders’ Agreement. By acceptance
      of this Warrant Certificate, the holder hereof agrees that upon issuance of
      Warrant Shares in settlement of exercised Warrants evidenced hereby, he or
      it
      will be bound by the Stockholders’ Agreement as a holder of Registrable
      Securities thereunder. A copy of the Stockholders’ Agreement may be obtained by
      the holder hereof upon written request to the Company.

     

    Warrant
      Certificates, when surrendered at the office of the Company by the registered
      holder thereof in person or by legal representative or attorney duly authorized
      in writing, may be exchanged, in the manner and subject to the limitations
      provided in the Warrant 

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    Agreement,
      but without payment of any service charge, for another Warrant Certificate
      or
      Warrant Certificates of like tenor evidencing in the aggregate a like number
      of
      Warrants.

     

    Subject
      to
      the terms and conditions of the Warrant Agreement and the Stockholders’
Agreement, upon due presentation for registration of transfer of this Warrant
      Certificate at the office of the Company a new Warrant Certificate or Warrant
      Certificates of like tenor and evidencing in the aggregate a like number of
      Warrants shall be issued to the transferee(s) in exchange for this Warrant
      Certificate, subject to the limitations provided in the Warrant Agreement,
      without charge except for any tax or other governmental charge imposed in
      connection therewith.

     

    The
      Company may deem and treat the registered holder(s) thereof as the absolute
      owner(s) of this Warrant Certificate (notwithstanding any notation of ownership
      or other writing hereon made by anyone), for the purpose of any exercise hereof,
      of any distribution to the holder(s) hereof, and for all other purposes, and
      the
      Company shall not be affected by any notice to the contrary. Neither the
      Warrants nor this Warrant Certificate entitles any holder hereof to any rights
      of a stockholder of the Company.

     

    IN
      WITNESS
      WHEREOF, The Great Atlantic & Pacific Tea Company, Inc. has caused this
      Warrant Certificate to be signed by its Chairman of the Board, Chief Executive
      Officer, President or Vice President and by its Secretary or Assistant Secretary
      and has caused its corporate seal to be affixed hereunto or imprinted
      hereon.

     

    
      	
              Dated: 
                _____________,
                2007

            	
              THE
                GREAT ATLANTIC & PACIFIC TEA 
COMPANY, INC., a Maryland
                corporation

            

    

     

     

    By: 
      ______________________________________

           
      Name:

           
      Title:

     

     

    By: 
      ______________________________________

           
      Name:

           
      Title:

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

    FORM
      OF
      ELECTION TO EXERCISE

     

    (To
      Be
      Executed Upon Exercise Of Warrant)

     

    The
      undersigned holder hereby represents that he or it is the registered holder
      of
      this Warrant Certificate, and hereby irrevocably elects to exercise ________
      Warrants represented
      by
      this Warrant Certificate, and receive shares of Common Stock, $1.00 par value,
      of The Great Atlantic & Pacific Tea Company, Inc., and such other
      consideration, if any, to which the undersigned is entitled upon such exercise
      in accordance with the Amended and Restated Warrant Agreement dated as of March
      4, 2007 (the “Warrant
      Agreement”).
      This
      exercise is being effected on a net basis in the manner provided in the Warrant
      Agreement and no cash is, or is required to be, paid in connection with such
      exercise. The undersigned requests that (i) a certificate for shares or other
      securities issued upon this exercise be registered in the name of the
      undersigned or nominee hereinafter set forth, and further that such certificate
      be delivered to the undersigned at the address hereinafter set forth or to
      such
      other person or entity as is hereinafter set forth and (ii) any cash payable
      to
      the undersigned upon this exercise be paid in accordance with the wire transfer
      instructions hereinafter set forth. If the number of Warrants exercised is
      less
      than all of the Warrants represented by this Warrant Certificate, the
      undersigned requests that a new Warrant Certificate representing the remaining
      balance of Warrants be registered in the name of the undersigned or nominee
      hereinafter set forth, and further that such certificate be delivered to the
      undersigned at the address hereinafter set forth or to such other person or
      entity as is hereinafter set forth.

     

    Certificate
      to be registered as follows:

     

    Name: 
      _____________________________________________________________________________________________________________________

     

    Address: 
      ___________________________________________________________________________________________________________________

     

                ______________________________________________________________________________________

     

               
      ______________________________________________________________________________________

     

    Social
      Security or

    Taxpayer
      Identification No.: 
___________________________________________________________________________________________________

     

     

    Certificate
      to be delivered as follows:

     

    
      Name: 
        _____________________________________________________________________________________________________________________

       

      Address: 
        ___________________________________________________________________________________________________________________

       

                  ______________________________________________________________________________________

       

                 
        ______________________________________________________________________________________

    

     

     

    Date: 
      __________________________                                                          
Signature: 
      _____________________________________________________

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

    

     

    Cash
      to
      be paid as follows:

    

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    [Form
      of
      Series B Warrant Certificate]

     

    THE
      SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND
      NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
      SUCH SECURITIES GENERALLY MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
      SUCH
      REGISTRATION OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION AND
      PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.

     

    THE
      SECURITIES EVIDENCED HEREBY ARE SUBJECT TO CERTAIN RESTRICTIONS UNDER THE TERMS
      OF THE STOCKHOLDERS’ AGREEMENT DATED AS OF MARCH 4, 2007 (“STOCKHOLDERS’
AGREEMENT”), AS AMENDED FROM TIME TO TIME, BETWEEN THE ISSUER AND THE HOLDER
      HEREOF AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
      IN ACCORDANCE WITH THE TERMS OF THAT AGREEMENT.

     

     

    No. 
      _______                                                                                                                                                                                          
_____
      Series B Warrants3

     

    Series
      B
      Warrant Certificate

     

    THE
      GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.

     

    This
      Warrant Certificate certifies that ___________________, or registered assigns,
      is the registered holder of the number of Warrants (the “Warrants”)
      set
      forth above to purchase Common Stock, $1.00 par value (the “Common
      Stock”),
      of The
      Great Atlantic & Pacific Tea Company, Inc., a Maryland corporation (the
“Company”).
      Each
      Warrant entitles the holder upon exercise to receive from the Company that
      number of fully paid and nonassessable shares of Common Stock (each, a
“Warrant
      Share”)
      (and
      such other consideration) which the Holder may at the time be entitled to
      receive upon the exercise of such Warrants, less that number of Warrant Shares
      having an aggregate Market Price (as defined in the Warrant Agreement referred
      to hereafter) on the business day immediately preceding the date the Warrants
      are presented for exercise equal to the aggregate Exercise Price (as defined
      below) that would otherwise have been paid by the Holder for the Warrant Shares.
      The exercise price for each Warrant (the “Exercise
      Price”)
      shall
      initially be $32.40 per share. For the avoidance of doubt, Warrants may be
      exercised solely on a net basis in the manner set forth in the immediately
      preceding sentence, and no holder shall be required, or permitted, to pay any
      cash in connection with the exercise of Warrants. The Warrants may be exercised
      only during the Series B Exercise Period (as defined in the Warrant Agreement).
      The Exercise Price and number of Warrant Shares issuable upon exercise of the
      Warrants are subject to adjustment upon the occurrence of certain events, as
      set
      forth in the Warrant Agreement.

     

     

     

      
        

      

    

    
      3
        Amount of
        Series B Warrants issued to be as set forth on Annex I.

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

     

    The
      Warrants evidenced by this Warrant Certificate are part of a duly authorized
      issue of Series B Warrants, and are issued or to be issued pursuant to an
      Amended and Restated Warrant Agreement dated as of March 4, 2007 (the
“Warrant
      Agreement”),
      duly
      executed and delivered by the Company, which Warrant Agreement is hereby
      incorporated by reference in and made a part of this instrument and is hereby
      referred to for a description of the rights, limitation of rights, obligations,
      duties and immunities thereunder of the Company and the holders (the words
      “holders” or “holder” meaning the registered holders or registered holder) of
      the Warrants. A copy of the Warrant Agreement may be obtained by the holder
      hereof upon written request to the Company.

     

    The
      holder
      of Warrants evidenced by this Warrant Certificate may exercise such Warrants
      during the Series B Exercise Period under and pursuant to the terms and
      conditions of the Warrant Agreement by surrendering this Warrant Certificate,
      with the form of election to exercise set forth hereon (and by this reference
      made a part hereof), properly completed and executed at the office of the
      Company designated for such purpose. In the event that upon any exercise of
      Warrants evidenced hereby the number of Warrants exercised shall be less than
      the total number of Warrants evidenced hereby, there shall be issued by the
      Company to the holder hereof or his or its registered assignee a new Warrant
      Certificate evidencing the number of Warrants not exercised.

     

    The
      Warrant Agreement provides that upon the occurrence of certain events the number
      of Warrants and the Exercise Price set forth on the face hereof may, subject
      to
      certain conditions, be adjusted. No fractions of a share of Common Stock will
      be
      issued upon the exercise of any Warrant, but the Company will pay the cash
      value
      thereof determined as provided in the Warrant Agreement.

     

    Subject
      to
      the conditions set forth the Warrant Agreement, in lieu of issuing Warrant
      Shares upon exercise of Warrants as set forth above (together with such other
      consideration as may be deliverable upon exercise of such Warrants), the
      Company, in its sole discretion at settlement, shall be entitled to settle
      all
      or any portion of exercised Warrants in cash as provided in the Warrant
      Agreement.

     

    The
      holders of the Warrants are entitled to certain registration rights with respect
      to any Warrant Shares issued in settlement of exercised Warrants. Said
      registration rights are set forth in the Stockholders’ Agreement. By acceptance
      of this Warrant Certificate, the holder hereof agrees that upon issuance of
      Warrant Shares in settlement of exercised Warrants evidenced hereby, he or
      it
      will be bound by the Stockholders’ Agreement as a holder of Registrable
      Securities thereunder. A copy of the Stockholders’ Agreement may be obtained by
      the holder hereof upon written request to the Company.

     

    Warrant
      Certificates, when surrendered at the office of the Company by the registered
      holder thereof in person or by legal representative or attorney duly authorized
      in writing, may be exchanged, in the manner and subject to the limitations
      provided in the Warrant Agreement, but without payment of any service charge,
      for another Warrant Certificate or Warrant Certificates of like tenor evidencing
      in the aggregate a like number of Warrants.

     

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

    

     

    Subject
      to
      the terms and conditions of the Warrant Agreement and the Stockholders’
Agreement, upon due presentation for registration of transfer of this Warrant
      Certificate at the office of the Company a new Warrant Certificate or Warrant
      Certificates of like tenor and evidencing in the aggregate a like number of
      Warrants shall be issued to the transferee(s) in exchange for this Warrant
      Certificate, subject to the limitations provided in the Warrant Agreement,
      without charge except for any tax or other governmental charge imposed in
      connection therewith.

     

    The
      Company may deem and treat the registered holder(s) thereof as the absolute
      owner(s) of this Warrant Certificate (notwithstanding any notation of ownership
      or other writing hereon made by anyone), for the purpose of any exercise hereof,
      of any distribution to the holder(s) hereof, and for all other purposes, and
      the
      Company shall not be affected by any notice to the contrary. Neither the
      Warrants nor this Warrant Certificate entitles any holder hereof to any rights
      of a stockholder of the Company.

     

    IN
      WITNESS
      WHEREOF, The Great Atlantic & Pacific Tea Company, Inc. has caused this
      Warrant Certificate to be signed by its Chairman of the Board, Chief Executive
      Officer, President or Vice President and by its Secretary or Assistant Secretary
      and has caused its corporate seal to be affixed hereunto or imprinted
      hereon.

     

    
       

      
        	
                Dated: 
                  _____________,
                  2007

              	
                THE
                  GREAT ATLANTIC & PACIFIC TEA 
COMPANY, INC., a Maryland
                  corporation

              

      

       

       

      By: 
        ______________________________________

             
        Name:

             
        Title:

       

       

      By: 
        ______________________________________

             
        Name:

             
        Title:

    

     

    
      
        
        

      

      
        B-3

        
          

        

      

      
        
        

      

    

    FORM
      OF
      ELECTION TO EXERCISE

     

    (To
      Be
      Executed Upon Exercise Of Warrant)

     

    The
      undersigned holder hereby represents that he or it is the registered holder
      of
      this Warrant Certificate, and hereby irrevocably elects to exercise ________
      Warrants represented
      by
      this Warrant Certificate, and receive shares of Common Stock, $1.00 par value,
      of The Great Atlantic & Pacific Tea Company, Inc., and such other
      consideration, if any, to which the undersigned is entitled upon such exercise
      in accordance with the Amended and Restated Warrant Agreement dated as of March
      4, 2007 (the “Warrant
      Agreement”).
      This
      exercise is being effected on a net basis in the manner provided in the Warrant
      Agreement and no cash is, or is required to be, paid in connection with such
      exercise. The undersigned requests that (i) a certificate for shares or other
      securities issued upon this exercise be registered in the name of the
      undersigned or nominee hereinafter set forth, and further that such certificate
      be delivered to the undersigned at the address hereinafter set forth or to
      such
      other person or entity as is hereinafter set forth and (ii) any cash payable
      to
      the undersigned upon this exercise be paid in accordance with the wire transfer
      instructions hereinafter set forth. If the number of Warrants exercised is
      less
      than all of the Warrants represented by this Warrant Certificate, the
      undersigned requests that a new Warrant Certificate representing the remaining
      balance of Warrants be registered in the name of the undersigned or nominee
      hereinafter set forth, and further that such certificate be delivered to the
      undersigned at the address hereinafter set forth or to such other person or
      entity as is hereinafter set forth.

     

    
       

      Certificate
        to be registered as follows:

       

      Name: 
        _____________________________________________________________________________________________________________________

       

      Address: 
        ___________________________________________________________________________________________________________________

       

                  ______________________________________________________________________________________

       

                 
        ______________________________________________________________________________________

       

      Social
        Security or

      Taxpayer
        Identification No.: 
___________________________________________________________________________________________________

       

       

      Certificate
        to be delivered as follows:

       

      
        Name: 
          _____________________________________________________________________________________________________________________

         

        Address: 
          ___________________________________________________________________________________________________________________

         

                    ______________________________________________________________________________________

         

                   
          ______________________________________________________________________________________

      

       

       

      Date: 
        __________________________                                                          
Signature: 
        _____________________________________________________

    

    
      
        
        

      

      
        B-4

        
          

        

      

      
        
        

      

    

     

    Cash
      to
      be paid as follows:

     

    

     

     

     

    B-5Exhibit 10.1

    

    Exhibit
      10.1

    

    

    
      	
              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

            

    

    

    

    

    March
      4,
      2007

    The
      Great
      Atlantic & Pacific Tea Company, Inc.

    2
      Paragon
      Drive

    Montvale,
      NJ 07645

     

    Project
      Pearl

    Commitment
      Letter

    $615,000,000
      ABL Facility

    $780,000,000
      Senior Secured Bridge Facility

    Ladies
      and
      Gentlemen:

     

    You
      have
      advised 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”)
      that
      The Great Atlantic & Pacific Tea Company, Inc., a Maryland corporation (the
“Borrower”
or
      “you”),
      intends to acquire (the “Acquisition”),
      directly or indirectly through one or more subsidiaries, all or substantially
      all of the issued and outstanding capital stock, or all or substantially all
      of
      the assets, of Pathmark Stores, Inc., a Delaware corporation (the “Target”).
      The
      Borrower, the Target and their respective subsidiaries are sometimes herein
      collectively referred to as the "Companies".
      For
      purposes of this Commitment Letter, “LBCB,”
      “LCPI”
and
      “Lehman”
shall
      mean LBCB, LCPI or Lehman, as the case may be, and/or any of their respective
      affiliates, as they shall determine to be appropriate to provide the services
      contemplated herein.

     

    You
      have
      also advised us that you intend to finance the Acquisition, the costs and
      expenses related to the Transaction (as hereinafter defined), the repayment
      of
      certain existing indebtedness of the Companies (the “Refinancing”)
      and the
      ongoing working capital and other general corporate purposes of the Companies
      after consummation of the Acquisition from the following sources (and that
      no
      financing other than the financing described herein will be required in
      connection with the Transaction): (a) a senior secured revolving credit facility
      of $615.0 million (the “ABL
      Facility”);
      (b) up to $780.0 million in
      gross
      proceeds from the issuance and sale by the Borrower of fixed
      rate
      or a combination of fixed and floating rate senior secured notes (the
“Senior
      Secured Notes”)
      or,
      alternatively,
      up to
      $780.0 million of senior secured loans (such senior secured loans,
      the
“Bridge
      Loans”
      and,
      together
      with any rollover loans and exchange notes related thereto,
      the
“Bridge
      Advances”)
      under a
      bridge facility (the “Bridge
      Facility”
      and,
      together
      with the ABL Facility,
      the
“Facilities”)
      made
      available to the Borrower as interim financing to senior secured notes or other
      securities of the Companies which may be issued after the Closing Date for
      the
      purpose of refinancing all or a portion of the outstanding Bridge Loans; (c)
      shares of common stock, par value $1.00 per share, of the Borrower in an amount
      no less than $169.0 million (the “Equity
      Consideration”);
      and
      (d) proceeds from the sale of up to 7.1 million Class A subordinate shares
      of
      Metro, Inc. or, if such sale results in net cash proceeds of less than $190
      million, additional shares of common stock or preferred stock of the Borrower
      in
      an amount equal to the difference between $190.0 million and the net cash
      proceeds generated by such sale. The Acquisition, the Refinancing, the entering
      into and funding of the ABL Facility, the issuance and sale of the Senior
      Secured Notes or the entering into and funding of the Bridge Facility, the
      Equity Consideration, the sale of the Metro, Inc. equity securities and/or
      Borrower equity securities and all related transactions are hereinafter
      collectively referred to as the “Transaction”.
      The
      currently projected sources and uses of funds for financing the Transaction
      are
      as set forth on Schedule I hereto.

     

    1.  Commitments.
      (a) In
      connection with the foregoing, Bank of America (the “Initial
      ABL Lender”)
      is
      pleased to advise you of its commitment to provide the full principal amount
      of

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    the
      ABL
      Facility upon and subject to the terms and conditions set forth in this letter
      and in the summary of terms attached as Annex I and III hereto (collectively,
      the “Senior
      Financing Summary of Terms”).
      In
      addition, Bank of America is pleased to advise you of its willingness to act
      (either directly or through one of its affiliates or divisions) as the sole
      and
      exclusive administrative agent (in such capacity the “ABL
      Administrative Agent”)
      for the
      ABL Facility. BAS is pleased to advise you of its willingness, as sole lead
      arranger and sole book running manager (in such capacity, the “ABL
      Lead Arranger”)
      for the
      ABL Facility, to form a syndicate of financial institutions and institutional
      lenders (including the Initial ABL Lender) (collectively, the “ABL
      Lenders”)
      in
      consultation with you for the ABL Facility. In addition, BAS is pleased to
      advise you of its willingness to act as the sole and exclusive syndication
      agent
      and documentation agent for the ABL Facility, and will perform the duties and
      exercise the authority customarily performed by it in such roles.

     

    (b)
      In
      connection with the foregoing, each of Banc of America Bridge and LBCB (each
      an
“Initial
      Bridge Lender”
and
      collectively the “Initial
      Bridge Lenders”
and,
      together with the Initial ABL Lender, the “Initial
      Lenders”)
      is
      pleased to advise you of its several, but not joint, commitment to provide,
      upon
      and subject to the terms and conditions set forth in this letter and in the
      summary of terms attached as Annex II and III hereto (collectively, the
“Bridge
      Summary of Terms”
and,
      together with the Senior Financing Summary of Terms, the “Summaries
      of Terms”
and,
      together with this letter agreement, the “Commitment
      Letter”),
      60%
      and 40%, respectively, of the aggregate principal amount of the Bridge Facility.
      BAS and Lehman are pleased to advise you of their willingness, as joint lead
      arrangers and joint book running managers (it being understood that BAS shall
      appear on the “left” and Lehman shall appear on the “right” of any Information
      Memorandum or other offering materials in connection with the Bridge Facility)
      (in such capacities, the “Bridge
      Lead Arrangers”
and,
      together with the ABL Lead Arranger, the “Lead
      Arrangers”)
      for the
      Bridge Facility, to form a syndicate of financial institutions and institutional
      lenders (including the Initial Bridge Lenders) (collectively, the “Bridge
      Lenders”
and,
      together with the ABL Lenders, collectively, the “Lenders”)
      in
      consultation with you for the Bridge Facility. In addition, Banc of America
      Bridge is pleased to advise you of its willingness to act (either directly
      or
      through one of its affiliates or divisions) as the sole and exclusive
      administrative agent (in such capacity the “Bridge
      Administrative Agent”
and,
      together with the ABL Administrative Agent, the “Administrative
      Agents”)
      for the
      Bridge Facility, and LCPI is pleased to advise you of its willingness to act
      as
      the sole and exclusive syndication agent for the Bridge Facility, and each
      will
      perform the duties and exercise the authority customarily performed by it in
      such a role. 

     

    (c)
      If you
      accept this Commitment Letter as provided below in respect of the ABL Facility,
      the date of the initial funding under the ABL Facility, and/or if you accept
      this Commitment Letter as provided below in respect of the Bridge Facility,
      the
      date of the initial funding of the Bridge Facility (or of the issuance and
      sale
      of the Senior Secured Notes in lieu of funding the Bridge Facility), in each
      case is referred to herein as the “Closing
      Date”,
      and the
      consummation of such initial funding or issuance and sale is referred to herein
      as the “Closing”.

     

    (d)
      All
      capitalized terms used and not otherwise defined herein shall have the same
      meanings as specified therefor in the Summaries of Terms. 

     

    2.  Conditions
      to Financing.
      The
      commitment of Bank of America in respect of the ABL Facility, the commitment
      of
      Banc of America Bridge and LBCB in respect of the Bridge Facility and the
      undertaking of BAS, Lehman and LCPI to provide the services described herein
      are
      each subject to the satisfaction of the conditions precedent set forth in Annex
      III hereto in addition to your acceptance of the separate confidential fee
      letter addressed to you dated the date hereof from the Commitment Parties (the
      “Fee
      Letter”).

     

    3.  Syndication.
      The Lead
      Arrangers intend to commence syndication of each of the Facilities promptly
      after your acceptance of the terms of this Commitment Letter and the Fee Letter
      related to each such Facility, and the commitment of Bank of America, Banc
      of
      America Bridge or LBCB hereunder, as the case may be, related to each such
      Facility shall be reduced dollar-for-dollar as and when corresponding
      commitments are received from the ABL Lenders or Bridge Lenders, as the case
      may
      be; provided that, notwithstanding the foregoing, the respective commitments
      of
      Bank of America, Banc of America Bridge or LBCB hereunder, as the case may
      be,
      shall not be so reduced to the extent 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    that
      any
      ABL Lender or Bridge Lender, as the case may be, to whom commitments are
      syndicated fails to fund its commitment at Closing. You agree to assist
      actively, and to use your commercially reasonable efforts to cause the Target
      to
      assist actively, the Lead Arrangers in achieving a Successful Syndication (as
      defined in the Fee Letter), in the case of the ABL Facility, and Banc of America
      Bridge and LBCB, in the case of the Bridge Facility. Such assistance shall
      include (a) your providing and causing your advisors to provide, and using
      your
      commercially reasonable efforts to cause the Target and its advisors to provide,
      the Commitment Parties upon request with all information reasonably deemed
      necessary by the Lead Arrangers to complete such syndication, including, but
      not
      limited to, information, evaluations and projections prepared by Companies
      and
      your and their advisors, or on your or their behalf, or as may be reasonably
      requested by the Lead Arrangers, relating to the Transaction, (b) your
      assistance in the preparation of one or more information memoranda
      (collectively, the “Information
      Memoranda”)
      to be
      used in connection with the syndication of each such Facility, (c) using your
      commercially reasonable efforts to ensure that the syndication efforts of the
      Lead Arrangers benefit materially from your existing lending relationships,
      (d)
      using your commercially reasonable efforts to obtain third-party collateral
      appraisals and commercial finance audits at least 30 days prior to the Closing
      Date, and (e) otherwise assisting the Lead Arrangers in their syndication
      efforts, including by making your officers and advisors, and using your
      commercially reasonable efforts to make the officers and advisors of the Target,
      available from time to time to attend and make presentations regarding your
      and
      the Target’s business and prospects at one or more meetings of prospective
      Lenders. 

     

    It
      is
      understood and agreed that the Lead Arrangers (as applicable) will manage and
      control all aspects of the syndication of each Facility in consultation with
      you, including decisions as to the selection of prospective Lenders and any
      titles offered to proposed Lenders, when commitments will be accepted and the
      final allocations of the commitments among the Lenders. It is understood that
      no
      Lender participating in either Facility will receive compensation from you
      in
      order to obtain its commitment, except on the terms contained herein and in
      the
      Summaries of Terms or otherwise mutually agreed. You agree that no other agents,
      co-agents or arrangers will be appointed and no other titles awarded, in each
      case in connection with the Facilities, unless otherwise agreed by you and
      the
      Lead Arrangers (as applicable). It is also understood and agreed that the amount
      and distribution of the fees among the Lenders will be at the sole discretion
      of
      the Lead Arrangers (as applicable).

     

    Your
      agreements in this Section 3 shall continue and survive until the completion
      of
      a Successful Syndication of the Facilities (as determined by the Lead Arrangers
      (as applicable)) notwithstanding the Closing of the Facilities.

     

    4.  Information
      Requirements.
      You
      hereby represent, warrant and covenant that (a) all information, other than
      Projections (as defined below), that has been or is hereafter made available
      to
      the Lead Arrangers or any of the Lenders by you or any of your representatives
      (or on your or their behalf) or, to the best of your knowledge, by the Target
      or
      its subsidiaries or representatives (on its behalf) in connection with any
      aspect of the Transaction (the “Information”)
      is, as
      of each date furnished, and will be, when taken as a whole, complete and correct
      in all material respects and does not and will not, when taken as a whole,
      contain any untrue statement of a material fact or omit to state a material
      fact
      necessary to make the statements contained therein not misleading and (b) all
      financial projections concerning the Companies that have been or are hereafter
      made available to the Lead Arrangers or any of the Lenders by you or any of
      your
      representatives (or on your behalf) or, to the best of your knowledge, by the
      Target or its subsidiaries or representatives (or on its behalf) (the
      "Projections"),
      as of
      the date such Projections have been or are hereafter made available, have been
      or will be prepared in good faith based upon reasonable assumptions. You agree
      to furnish us with such Information and Projections as we may reasonably request
      and to supplement the Information and the Projections from time to time so
      that
      the representation, warranty and covenant in the immediately preceding sentence
      is and remains correct on the Closing Date and on such later date on which
      a
      Successful Syndication of the Facilities is completed. In issuing their
      respective commitments and in arranging and syndicating each of the Facilities,
      you recognize and confirm that each of the Commitment Parties is and will be
      using and relying on the Information and the Projections without independent
      verification thereof. In addition, you agree to furnish us with drafts of any
      registration statement and/or proxy statement prepared in connection with the
      Transaction and all correspondence to or from the SEC related
      thereto.

     

    
      
        
        

      

      
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    You
      hereby
      acknowledge that (a) the Commitment Parties will make available Information
      and
      Projections (collectively, “Company
      Materials”)
      to the
      proposed syndicates of Lenders by posting the Company Materials on IntraLinks
      or
      another similar electronic system (the “Platform”)
      and (b)
      certain of the proposed Lenders may be “public-side” Lenders (i.e., Lenders that
      do not wish to receive material non-public information with respect to the
      Companies or their securities) (each, a “Public
      Lender”).
      You
      hereby agree that: (a) you will use commercially reasonable efforts to identify
      that portion of the Company Materials that may be distributed to the Public
      Lenders and include a reasonably detailed term sheet among such Company
      Materials and that all Company Materials that are to be made available to Public
      Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum,
      shall mean that the word “PUBLIC” shall appear prominently on the first page
      thereof; (b) by marking Company Materials “PUBLIC,” you shall be deemed to have
      authorized each of the Commitment Parties and the proposed Lenders to treat
      such
      Company Materials as not containing any material non-public information with
      respect to the Companies or their securities for purposes of United States
      federal and state securities laws, it being understood that certain of such
      Company Materials may be subject to confidentiality requirements of the
      definitive loan documentation; (c) all Company Materials marked “PUBLIC” are
      permitted to be made available through a portion of the Platform designated
      “Public Investor”; and (d) each of the Commitment Parties shall be entitled to
      treat any Company Materials that are not marked “PUBLIC” as being suitable only
      for posting on a portion of the Platform not designated “Public Investor”.

     

    5.  Fees
      and Indemnities.
      By
      executing this Commitment Letter, you agree to reimburse the Commitment Parties
      from time to time on demand, upon presentation of supporting documentation
      (including actual legal invoices), for all reasonable documented out-of-pocket
      fees and expenses (including, but not limited to, (i) the reasonable fees,
      disbursements and other charges of Fried Frank Harris Shriver & Jacobson
      LLP, as counsel to the Commitment Parties, Riemer & Braunstein LLP, as
      counsel to Bank of America and BAS, and of any special and local counsel to
      the
      Commitment Parties or the Lenders retained by us or on our behalf and (ii)
      reasonable due diligence expenses, including, without limitation, fees and
      expenses related to field examinations, audits and appraisals) incurred in
      connection with the Facilities, the syndication thereof and the preparation
      of
      the definitive documentation therefor, and with any other aspect of the
      Transaction, any similar transaction and any of the other transactions
      contemplated hereby, whether or not definitive documentation is executed or
      delivered or the Transaction is consummated, unless otherwise mutually agreed.
      You also agree to pay the Commitment Parties such arrangement, underwriting,
      agency, funding and other fees in amounts to be agreed upon in connection with
      the financing contemplated by this Commitment Letter.

     

    You
      also
      agree to indemnify and hold harmless each Commitment Party and each Lender
      and
      each of their respective affiliates and their respective officers, directors,
      employees, agents, advisors and other representatives (each
      an
“Indemnified
      Party”)
      from
      and against (and will reimburse each Indemnified Party as the same are incurred
      for) any and all claims, damages, losses, liabilities and expenses (including,
      without limitation, the reasonable fees, disbursements and other charges of
      counsel) that may be incurred by or asserted or awarded against any Indemnified
      Party, in each case arising out of or in connection with or by reason of
      (including, without limitation, in connection with any investigation, litigation
      or proceeding or preparation of a defense in connection therewith) (a) any
      aspect of the Transaction or any similar transaction and any of the other
      transactions contemplated thereby or (b) the Facilities and any other
      financings, or any use made or proposed to be made with the proceeds thereof,
      except to the extent such claim, damage, loss, liability or expense is found
      in
      a final, non-appealable judgment by a court of competent jurisdiction to have
      resulted from such Indemnified Party’s gross negligence or willful misconduct,
provided,
      however,
      that in
      the event a final, non-appealable judgment is made to the effect that such
      claim, damage, loss, liability or expense resulted from such Indemnified Party’s
      gross negligence or willful misconduct, such Indemnified Party will be
      responsible for all damages, losses, liabilities and expenses assessed against
      the Indemnified Party as set forth in such final, non-appealable judgment and
      will remit to you or the Companies, as the case may be, any amounts previously
      reimbursed under this Section 5 prior to the entry of such final, non-appealable
      judgment. In the case of an investigation, litigation or proceeding to which
      the
      indemnity in this paragraph applies, such indemnity shall be effective whether
      or not such investigation, litigation or proceeding is brought by you, your
      equityholders or creditors or an Indemnified Party, whether or not an
      Indemnified Party is otherwise a party thereto and whether or not any aspect
      of
      the Transaction is consummated. You also agree that no Indemnified Party shall
      have any liability (whether direct or indirect, in contract or tort or
      otherwise) to 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    you
      or
      your subsidiaries or affiliates or to your or their respective equity holders
      or
      creditors arising out of, related to or in connection with any aspect of the
      Transaction, except to the extent of direct (as opposed to special, indirect,
      consequential or punitive) damages determined in a final non-appealable judgment
      by a court of competent jurisdiction to have resulted from such Indemnified
      Party’s gross negligence or willful misconduct. It is further agreed that each
      Commitment Party shall only have liability to you (as opposed to any other
      person), and that such Commitment Party shall be liable solely in respect of
      its
      own commitment to the Facilities on a several, and not joint, basis with any
      other Lender. Notwithstanding any other provision of this Commitment Letter,
      no
      Indemnified Party shall be liable for any damages arising from the use by others
      of information or other materials obtained through electronic telecommunications
      or other information transmission systems, except to the extent such damages
      are
      found in a final, non-appealable judgment by a court of competent jurisdiction
      to have resulted from such Indemnified Party’s gross negligence or willful
      misconduct.

     

    6.  Confidentiality;
      Arm’s Length Relationship.
      This
      Commitment Letter and the Fee Letter and the contents hereof and thereof 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 Commitment Letter (including
      the Summaries of Terms) (but not the Fee Letter) (a) on a confidential
      basis to the board of directors and advisors of the Target in connection with
      their consideration of the Transaction, (b) after your acceptance of this
      Commitment Letter and the Fee Letter, in filings with the Securities and
      Exchange Commission 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.

     

    You
      acknowledge that each of the Commitment Parties or their affiliates may be
      providing financing or other services to parties whose interests may conflict
      with yours. Each of the Commitment Parties, agree that they will not furnish
      confidential information obtained from you to any of their other customers
      and
      that they will treat confidential information relating to you, the Companies
      and
      your and their respective affiliates with the same degree of care as they treat
      their own confidential information. Each of the Commitment Parties further
      advises you that it will not make available to you confidential information
      that
      they have obtained or may obtain from any other customer. In connection with
      the
      services and transactions contemplated hereby, you agree that each of the
      Commitment Parties is permitted to access, use and share with any of its bank
      or
      non-bank affiliates, agents, advisors (legal or otherwise) or representatives,
      any information concerning you, the Companies or any of your or its respective
      affiliates that is or may come into the possession of such Commitment Party
      or
      any of such affiliates.

     

    In
      connection with all aspects of each transaction contemplated by the Commitment
      Letter, you acknowledge and agree, and acknowledge your affiliates’
understanding, that: (a) the Facilities and any related arranging or other
      services described in the Commitment Letter is an arm’s-length commercial
      transaction between you and your affiliates, on the one hand, and the Commitment
      Parties, on the other hand, and you are capable of evaluating and understanding
      and understand and accept the terms, risks and conditions of the transactions
      contemplated by the Commitment Letter; (b) in connection with the process
      leading to such transaction, the Commitment Parties each is and has been acting
      solely as a principal and is not the financial advisor, agent or fiduciary,
      for
      you or any of your affiliates, stockholders, creditors or employees or any
      other
      party; (c) none of the Commitment Parties has assumed or will assume an
      advisory, agency or fiduciary responsibility in your or your affiliates’ favor
      with respect to any of the transactions contemplated hereby or the process
      leading thereto (irrespective of whether any Commitment Party has advised or
      is
      currently advising you or your affiliates on other matters) and none of the
      Commitment Parties has any obligation to you or your affiliates with respect
      to
      the transactions contemplated hereby except those obligations expressly set
      forth in this letter; (d) the Commitment Parties and their respective affiliates
      may be engaged in a broad range of transactions that involve interests that
      differ from yours and your affiliates and the Commitment Parties have no
      obligation to disclose any of such interests by virtue of any advisory, agency
      or fiduciary relationship; and (e) the Commitment Parties have not provided
      any
      legal, accounting, regulatory or tax advice with respect to any of the
      transactions contemplated hereby and you have consulted your own legal,
      accounting, regulatory 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    and
      tax
      advisors to the extent you have deemed appropriate. You hereby waive and
      release, to the fullest extent permitted by law, any claims that you may have
      against the Commitment Parties with respect to any breach or alleged breach
      of
      agency or fiduciary duty.

     

    Each
      of
      the Commitment Parties hereby notifies you that, pursuant to the requirements
      of
      the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26,
      2001), as amended, each of them may be required to obtain, verify and record
      information that identifies you, which information includes your name and
      address and other information that will allow such Commitment Party as
      applicable, to identify you in accordance with such Act.

     

    7.  Survival
      of Obligations.
      The
      provisions of numbered paragraph 4 (until a Successful Syndication shall have
      occurred) and paragraphs 5 and 6 (regardless of whether any definitive
      documentation for the Facilities shall be executed and delivered) shall remain
      in full force and effect notwithstanding the termination of this Commitment
      Letter or any commitment or undertaking of any Commitment Party
      hereunder.

     

    8.  Miscellaneous.
      This
      Commitment Letter and the Fee Letter may be executed in counterparts which,
      taken together, shall constitute one original. Delivery of an executed
      counterpart of a signature page to this Commitment Letter or the Fee Letter
      by
      telecopier shall be effective as delivery of a manually executed counterpart
      thereof.

     

    THIS
      COMMITMENT LETTER AND THE FEE LETTER 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 Commitment Letter (including,
      without limitation, the Summaries of Terms), the Fee Letter, the Transaction
      and
      the other transactions contemplated hereby and thereby 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
      Commitment Letter (including, without limitation, the Summaries of Terms),
      the
      Fee Letter, the Transaction and the other transactions contemplated hereby
      and
      thereby 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
      Commitment Letter (together with the Summaries of Terms and the Fee Letter)
      embodies the entire agreement and understanding among each of the Commitment
      Parties, you and your affiliates with respect to the Facilities and supersedes
      all prior agreements and understandings relating to the subject matters hereof,
      other than the Engagement Letter, dated November 13, 2006, among you, BAS and
      Lehman. Those matters that are not covered or made clear herein or in the
      Summaries of Terms or the Fee Letter are subject to mutual agreement of the
      parties. No party has been authorized by any of the Commitment Parties to make
      any oral or written statements that are inconsistent with this Commitment
      Letter.

     

    Except
      as
      otherwise provided in the following paragraph, this Commitment Letter is not
      assignable by any party without the prior written consent of the other parties
      hereto and is intended to be solely for the benefit of the parties hereto and
      the Indemnified 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
      Commitment Letter.

     

    
      
        
        

      

      
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    Each
      of
      the Commitment Parties reserves the right to employ the services of its
      affiliates in providing services contemplated by this Commitment Letter and
      to
      allocate, in whole or in part, to its affiliates certain fees payable to it
      in
      such manner as it and its affiliates may agree in their sole discretion. You
      also agree that each Commitment Party may at any time and from time to time
      assign all or any portion of its commitment hereunder to one or more of its
      adequately capitalized affiliates subject to the limitations set forth in this
      Commitment Letter.

     

    All
      amounts payable by you under this Commitment Letter will be made in U.S. dollars
      and, in any case, shall not be subject to counterclaim or set-off for, or be
      otherwise affected by, any claim or dispute relating to any other matter. In
      addition, all such payments shall be made without deduction for any taxes,
      levies, imposts, duties, deductions, charges or withholdings imposed by any
      national, state or provincial taxing authority, or will be grossed up by you
      for
      such amounts.

     

    All
      respective commitments and undertakings of the Commitment Parties under this
      Commitment Letter with respect to the ABL Facility will expire at 5:00 p.m.
      (New
      York City time) on March 6, 2007, unless you execute this Commitment Letter
      as
      provided below and the Fee Letter as provided therein to accept such commitments
      and return both of them to us prior to that time. All respective commitments
      and
      undertakings of the Commitment Parties under this Commitment Letter with respect
      to the Bridge Facility will also expire at that time unless you sign this
      Commitment Letter as provided below and the Fee Letter as provided therein
      to
      accept such commitments and return each of them to us prior to that time.
      Thereafter, all accepted commitments and undertakings of the Commitment Parties
      hereunder will expire on the earliest of (a) March 4, 2008, unless the
      Closing Date occurs on or prior thereto, (b) the closing of the
      Acquisition, (i) in the case of the ABL Facility, without the use of the ABL
      Facility and (ii) in the case of the Bridge Facility, without use of the Bridge
      Facility, and (c) the acceptance by the Target of an offer for all or any
      substantial part of the capital stock or property and assets of the Target
      other
      than as part of the Transaction. 

     

    BY
      SIGNING
      THIS COMMITMENT LETTER, EACH OF THE PARTIES HERETO HEREBY ACKNOWLEDGES AND
      AGREES THAT (A) BANK OF AMERICA IS OFFERING TO 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 COMMITMENT LETTER (AND THE APPLICABLE
      PROVISIONS OF THE FEE LETTER) 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.]

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

     

    If
      the
      foregoing is in accordance with your understanding, please sign and return
      this
      Fee Letter to us.

    

    
      	 	
               

              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/ Laurie Perper

                
                  Name: 
                    Laurie Perper

                  Title:   
                    Senior Vice President

                   

                   

                

              

            
	 	
              LEHMAN
                COMMERCIAL PAPER INC.

               

               

              
                
                  By: 
                    /s/ Laurie Perper

                  
                    Name: 
                      Laurie Perper

                    Title:   
                      Senior Vice President

                  

                

                 

              

            

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    
      	
              The
                provisions of this Commitment Letter with respect to the ABL Facility
                are
                Accepted and Agreed to as of March 4, 2007:

               

            	 
	
              THE
                GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.

               

               

              By: 
                /s/ William J. Moss

                     
                Name:  William J. Moss

                     
                Title:    Treasurer

               

            	 
	
              The
                provisions of this Commitment Letter with respect to the Bridge Facility
                are Accepted and Agreed to as of March 4, 2007:

               

            	 
	
              THE
                GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.

               

               

              
                By: 
                  /s/ William J. Moss

                       
                  Name:  William J. Moss

                       
                  Title:    Treasurer

              

               

            	 

    

    

    

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    CURRENTLY
      PROJECTED
SOURCES
      AND USES OF FUNDS1

    (all
      amounts $ millions)

     

    
      	
              Sources

            	 	 	 	
              Uses

            	 	 	 
	 	 	 	 	 	 	 	 
	
              Excess
                Cash

            	 	
              $

            	
              88.1

            	 	 	
              Purchase
                of Target Equity

            	 	
              $

            	
              673.6

            	 
	
              Proceeds
                from Sale of Metro Shares or common stock or preferred stock of
                Borrower

            	 	 	
              190.0

            	 	 	
              Refinancing
                of Target Debt

            	 	 	
              455.1

            	 
	
              ABL
                Facility ($615)

            	 	 	
              119.6

            	 	 	
              Assumed
                Debt of Target (Leases)

            	
               

            	 	
              166.7

            	 
	
              Senior
                Secured Notes or Bridge Facility

            	 	 	
              780.0

            	 	 	
              Retired
                Debt of Borrower

            	 	 	
              134.9

            	 
	
              Assumed
                Debt of Target (Leases)

            	 	 	
              166.7

            	 	 	
              Series
                A Warrants

            	 	 	
              40.2

            	 
	
              Equity
                Consideration

            	 	 	
              188.6

            	 	 	
              Series
                B Warrants

            	 	 	
              70.2

            	 
	
              Series
                C Warrants

            	 	 	
              40.2

            	 	 	
              Estimated
                Transaction Fees and Expenses

            	 	 	
              102.7

            	 
	
              Series
                D Warrants

            	 	 	
              70.2

            	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	
              Total
                Sources

            	 	
              $

            	
              1,643.4

            	 	 	
              Total
                Uses

            	 	
              $

            	
              1,643.4

            	 
	 	 	 	 	 	 	 	 	 	 	 

    

    

    

    

    

    

      

      
        1 
          These sources and uses of funds are based on current projections, and the
          actual
          sources and uses may differ based on the cash resources and total debt
          of the
          Borrower and the Target in existence on the Closing Date. Any increases
          in
          Target debt permitted pursuant to the Acquisition Agreement will be
          assumed.

         

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    

    ANNEX
      I

     

    SUMMARY
      OF PRINCIPAL TERMS AND CONDITIONS

    $615,000,000
      ABL FACILITY

     

    Capitalized
      terms not otherwise defined herein have the same meanings as

    specified
      in the Commitment Letter to which this Annex I is attached.

     

    
      	
              Borrower:

            	
              The
                Great Atlantic & Pacific Tea Company, Inc. and certain of its
                subsidiaries to be mutually agreed (the “Borrower”).

            
	 	 
	
              Guarantors:

            	
              All
                material domestic subsidiaries of Borrower shall guarantee the obligations
                of the Borrower.

            
	 	 
	
              Sole
                Lead Arranger and Sole Book Runner:

            	
              Banc
                of America Securities LLC (“BAS”
                and, in such capacity, the “ABL
                Lead Arranger”)
                will act as sole lead arranger and sole book running
                manager.

            
	 	 
	
              Administrative
                and Collateral Agent:

            	
              Bank
                of America, N.A. through its Retail Finance Group will act as sole
                and
                exclusive administrative agent for the ABL Lenders (in such capacity,
                the
                “ABL
                Administrative Agent”)
                and as sole and exclusive collateral agent for the ABL Lenders (in
                such
                capacity, the “ABL
                Collateral Agent”
                and, together with the ABL Administrative Agent, the “ABL
                Agent”).

            
	 	 
	
              ABL
                Facility:

            	
              A
                $615.0 million (the “Loan
                Cap”)
                fully underwritten senior secured revolving credit facility (the
                “ABL
                Facility”),
                consisting of a $575.0 million revolver (the “Revolver”)
                and up to a $40.0 million last out revolver advance (the "Last
                Out Revolver Tranche").
                The Last Out Revolver Tranche may be drawn at any time, and shall
                be
                required to be drawn if outstanding loans under the Revolver equal
                or
                exceed $100.0 million (the proceeds of which shall be used to repay
                the
                outstanding loans under the Revolver). After the Last Out Revolver
                Tranche
                has been drawn (in whole or in part), it may thereafter be repaid
                only as
                set forth below.

              The
                Revolver shall have a sub-limit of $300.0 million for the issuance
                of
                standby and documentary letters of credit. Loans to the Borrower
                shall be
                limited to amounts available based on the Borrowing Base (but in
                no event
                in excess of the Loan Cap).

            
	 	 
	
              Increase
                Option:

            	
              Provided
                that there is no default or event of default then existing or would
                arise
                therefrom, the Borrower, at its option, may request that the ABL
                Facility
                be increased by an amount not to exceed $100.0 million. Any or all
                of the
                existing Lenders shall initially have the right of first refusal
                (but not
                the obligation) to increase their respective commitments to satisfy
                the
                Borrower’s requested increase of the ABL Facility. If the Lenders are
                unwilling to increase their commitments by an amount equal to the
                requested increase, BAS, in consultation with the Borrower, will
                use its
                reasonable efforts to obtain one or more financial institutions which
                are
                not then lenders (which financial institution may be suggested by
                the
                Borrower) to become party to the loan documentation and to provide
                a
                commitment to the extent necessary to satisfy the Borrower’s requested
                increase in the ABL Facility, provided that any such additional lender(s)
                shall be reasonably satisfactory to the ABL Agent and the Borrower.
                The
                Borrower shall pay the Agent and the Lenders fees which are customary
                and
                appropriate for the exercise of the Increase
                Option.

            

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

     

    
      	
              Lenders:

            	
              Bank
                of America, N.A. (the “Bank”)
                and a syndicate of financial institutions arranged by ABL Agent and
                BAS in
                consultation with the Borrower.

            
	 	 
	
              Purpose:

            	
              To
                finance a portion of the Acquisition and to finance other general
                corporate purposes and working capital of the Borrower and its
                subsidiaries, including debt repayment, capital expenditures, permitted
                acquisitions, permitted distributions, stock repurchases, and the
                issuance
                of standby and documentary letters of credit. The ABL Facility may
                be used
                to pay cash consideration to holders of up to 10% of Target’s shares of
                common stock outstanding immediately prior to the Closing Date who
                have
                exercised dissenters’ rights in accordance with the terms of the
                Acquisition Agreement.

            
	 	 
	
              Closing
                Date:

            	
              A
                mutually agreed upon date to be determined but in any event on or
                before
                March 4, 2008.

            
	 	 
	
              Maturity:

            	
              Five
                years from the Closing.

            
	 	 
	
              Security:

            	
              The
                ABL Facility (and all cash management services and other bank products
                provided to any of the Borrower or Guarantors by the ABL Agent or
                its
                affiliates) will be secured by a first priority (subject to exceptions
                to
                be mutually agreed) perfected security position on all real and personal
                property of the Borrower and Guarantors, including, without limitation,
                all inventory, accounts, prescription lists, owned real property
                (to the
                extent the granting of such security interest would not require the
                Borrower’s 93⁄8% Senior Quarterly Interest Bonds due 2039 (“QUIBS”)
                to be equally and ratably secured by such security interest in accordance
                with Section 1008(d) of the Borrower’s indenture, dated as of January 1,
                1991, governing the QUIBS), material leased real properties of the
                Borrower and the Target (other than for leased material real properties
                for which landlord consent is required and not obtained following
                the
                Borrower’s good faith efforts; provided
                such good faith efforts shall not require any accommodation to the
                landlord including accepting any increase in rent), investment property
                (including the capital stock of all subsidiaries, other than A&P
                Bermuda Limited and A&P Luxembourg S.á.r.l.), contract rights,
                documents, supporting obligations and letter-of-credit rights,
                instruments, money, cash, cash equivalents, securities and other
                property
                of any kind, deposit accounts, credits, and balances with any financial
                institution with which the Borrower maintains deposits, commercial
                tort
                claims, all books, records and other property related to or referring
                to
                any of the foregoing, including books, records, account ledgers,
                data
                processing records, computer software and other property, and proceeds
                of
                any of the foregoing, including, but not limited to, proceeds of
                any
                insurance policies, and claims against third parties, excluding the
                Borrower’s Class A subordinate shares of Metro, Inc. (the “Metro
                Shares”),
                the Bridge Collateral (defined below) and
                other

            

    

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    

     

    
      	 	
              exceptions
                to be mutually agreed (collectively, the “ABL
                Collateral”).

              In
                addition, the ABL Facility (and all cash management services and
                other
                bank products provided to any of the Borrower or Guarantors by the
                ABL
                Agent or its affiliates) will be secured by a second priority (subject
                to
                exceptions to be mutually agreed) perfected security position on
                all of
                the collateral securing the Bridge Facility on a first priority basis,
                as
                set forth in the Bridge Summary of Terms (collectively, the “Bridge
                Collateral”
                and, together with the ABL Collateral, the “Collateral”),
                excluding a security interest in any voting stock of (or other ownership
                or profit interests in) A&P Bermuda Limited or the Metro
                Shares.

              All
                proceeds from the liquidation of the ABL Collateral from the Borrower
                and
                the Guarantors shall be first applied to obligations other than the
                Last
                Out Revolver Tranche, and after payment of such obligations will
                be
                applied to the Last Out Revolver Tranche. 

              All
                of the above described pledges, security interests, and mortgages
                shall be
                created on terms, and pursuant to documentation based upon the Borrower’s
                existing credit facility (the “Existing
                Credit Facility”),
                with such additions and modifications thereto as the ABL Agent and
                the
                Borrower may reasonably agree to reflect the proposed transaction,
                including, without limitation, an intercreditor agreement with the
                Bridge
                Lenders as contemplated in the Bridge Summary of Terms.

            
	 	 
	
              Borrowing
                Base:

            	
              The
                aggregate amount of loans made and letters of credit issued under
                the
                Revolver (including the Last Out Revolver Tranche) shall at no time
                exceed
                the lesser of the Loan Cap or the Borrowing Base. 

              The
                Borrowing Base shall be calculated as follows:

              The
                sum of (i) the Inventory Advance Rate multiplied by the net appraised
                recovery value of Eligible Inventory, plus (ii) the Receivables Advance
                Rate multiplied by the face amount of Eligible Credit Card Receivables,
                plus (iii) the Script List Advance Rate multiplied by the most recent
                forced liquidation appraised value of Eligible Prescription Lists,
                plus
                (iv) the Coinstar Advance Rate multiplied by the face amount of Eligible
                Coinstar Receivables, plus (v) the Prescription Advance Rate multiplied
                by
                the face amount of Eligible Prescription Receivables, plus (vi) the
                Real
                Estate Advance Rate multiplied by the most recent forced liquidation
                appraised value of Eligible Real Estate, plus (vii) at the election
                of the
                Borrower to be exercised by written notice at least 15 business days
                prior
                to the Closing Date, for the twelve month period after the Closing
                Date
                only, the lesser of (A) the Leasehold Advance Rate multiplied by
                the most
                recent forced liquidation appraised value of Eligible Leaseholds,
                or (B)
                the Leasehold Cap, minus (viii) a Closing Date Reserve of $200.0
                million
                (which reserve shall be eliminated immediately following the consummation
                of the Acquisition), minus (ix) such reserves as the ABL Agent may
                establish from time to time on a basis consistent with the Existing
                Credit
                Facility, with such additions and modifications thereto as the ABL
                Agent
                and the

            

    

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    

    

     

    
      	 	
              Borrower
                may reasonably agree to reflect the proposed transaction. In no event
                shall the amounts advanced against (x) Eligible Prescription Lists
                exceed
                20% of the Borrowing Base, or (y) Eligible Real Estate and Eligible
                Leaseholds, in the aggregate, exceed 30% of the Borrowing
                Base.

               

              The
                initial reserves and the definitions of “Eligible
                Inventory”,
                “Eligible
                Credit Card Receivables”,
                “Eligible
                Prescription Lists”,
                “Eligible
                Coinstar Receivables”,
                “Eligible
                Prescription Receivables”,
                “Eligible
                Real Estate”
                and “Eligible
                Leaseholds”
                shall, to the extent defined in the Existing Credit Facility, be
                based
                upon the Existing Credit Facility, with such additions and modifications
                thereto as the ABL Agent and the Borrower may reasonably agree to
                reflect
                the proposed transaction, and otherwise shall be mutually established
                following completion of an appraisal of the inventory, prescription
                lists,
                leasehold interests and real estate and a commercial finance examination.
                After the Closing Date, the ABL Agent may establish additional reserves
                or
                change any reserves on terms similar to those in the Existing Credit
                Facility, with such additions and modifications thereto as the ABL
                Agent
                and the Borrower may reasonably agree to reflect the proposed transaction.
                

               

              Prior
                to the completion of a commercial finance audit and inventory appraisals
                satisfactory to the ABL Agent, (i) for the Revolver (excluding the
                Last
                Out Revolver Tranche), the Inventory Advance Rate against the Target's
                inventory shall be 54% and (ii) for the Last Out Revolver Tranche,
                the
                Inventory Advance Rate against the Target's inventory, when combined
                with
                the Inventory Advance Rate for the Revolver, shall be 59%. After
                the
                completion of a commercial finance audit and inventory appraisals
                satisfactory to the ABL Agent and for all times for the Borrower’s
                Eligible Inventory, (i) for the Revolver (excluding the Last Out
                Revolver
                Tranche), the Inventory Advance Rate shall be 90% and (ii) for the
                Last
                Out Revolver Tranche, the Inventory Advance Rate, when combined with
                the
                Inventory Advance Rate for the Revolver, shall be 95%. 

               

              For
                the Revolver and the Last Out Revolver Tranche the Receivables Advance
                Rate shall be 90%, the Coinstar Advance Rate shall be 85% and (i)
                for the
                Revolver (excluding the Last Out Revolver Tranche), the Prescription
                Advance Rate shall be 85% and (ii) for the Last Out Revolver Tranche,
                the
                Prescription Advance Rate, when combined with the Prescription Advance
                Rate for the Revolver, shall be 90%. 

               

              Prior
                to the completion of prescription lists appraisals satisfactory to
                the ABL
                Agent, the Script List Advance Rate against the Target's Eligible
                Prescription List shall be 68%. After the completion of prescription
                lists
                appraisals satisfactory to the ABL Agent and for all times for the
                Borrower's Eligible Prescription Lists, the Script List Advance Rate
                shall
                be 85%. 

              Prior
                to the completion of real estate appraisals satisfactory to the ABL
                Agent,
                (i) for the Revolver (excluding the Last Out Revolver Tranche), the
                Real
                Estate Advance Rate against the Target's
                Eligible

            

    

    

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    

    

     

    
      	 	
              Real
                Estate shall be 50% and (ii) for the Last Out Revolver Tranche, the
                Real
                Estate Advance Rate against the Target's Eligible Real Estate, when
                combined with the Real Estate Advance Rate for the Revolver, shall
                be 60%,
                provided that the maximum amount advanced against Eligible Real Estate
                shall not exceed $60.0 million in the aggregate. After the completion
                of
                real estate appraisals satisfactory to the ABL Agent and at all times
                for
                the Borrower's Eligible Real Estate (i) for the Revolver (excluding
                the
                Last Out Revolver Tranche), the Real Estate Advance Rate shall be
                50% and
                (ii) for the Last Out Revolver Tranche, the Real Estate Advance Rate,
                when
                combined with the Real Estate Advance Rate for the Revolver, shall
                be
                60%.

               

              The
                Leasehold Advance Rate shall be 40%. The Leasehold Cap shall be (a)
                $50.0
                million for the first nine months after the Closing Date, (b) $37.5
                million for the tenth month after the Closing Date, (c) $25.0 million
                for
                the eleventh month after the Closing Date, (d) $12.5 million for
                the
                twelfth month after the Closing Date, and (d) $0
                thereafter.

            
	 	 
	
              Borrowing
                Options:

               

            	
              Borrowings
                under the Revolver shall be at the Alternate Base Rate (being the
                higher
                of the Prime Rate established by Bank of America, N.A. from time
                to time
                or the Federal Funds Effective Rate plus 0.50%) plus the Applicable
                Margin
                ("Prime
                Rate Loan")
                or the LIBOR Rate plus the Applicable Margin ("LIBOR
                Rate Loan").
                LIBOR Rates will be quoted for one, two, three, or six months (and,
                if
                available to all Lenders, nine or twelve months). Prime Rate Loans
                shall
                require same business day’s notice. LIBOR Rate Loans shall require three
                business days’ advance notice. Interest on Prime Rate Loans will be due
                and payable quarterly in arrears. Interest on LIBOR Rate Loans will
                be
                payable at the end of each applicable interest period or quarterly
                in
                arrears, whichever is earlier. All interest shall be based on a 360-day
                year (or 365/366 in the case of Prime Rate Loans) and actual days
                elapsed.

            
	 	 
	
              Swing
                Line Option:

            	
              Swing
                line loans (“Swing
                Line Loans”)
                will be made available by the Bank on a same day basis in an aggregate
                amount not to exceed $50.0 million. All Swing Line Loans shall bear
                interest at the Prime Rate plus the Applicable Margin. Each Lender
                will
                acquire an irrevocable and unconditional pro rata participation in
                each
                Swing Line Loan. Any such Swing Line Loan(s) will reduce availability
                under the Revolver on a dollar for dollar basis.

            
	 	 
	
              Applicable
                Margin:

            	
              At
                Closing, the Applicable LIBOR/Prime Rate Margin will be set at Level
                III
                of the first grid set forth below (if, prior to the Closing Date,
                the
                Borrower elects to include Eligible Leaseholds as a category in the
                Borrowing Base) or of the second grid set forth below (if, prior
                to the
                Closing Date, the Borrower elects not to include Eligible Leaseholds
                as a
                category in the Borrowing Base). Commencing six months after the
                Closing
                Date, the Applicable Margin will be based upon the applicable pricing
                grid
                below, based upon Excess Availability (to be defined in the definitive
                loan documents) as set forth below (dollars
                in millions):

            

    

    

    

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              Pricing
                Grid For such Period that Eligible Leaseholds are included in the
                Borrowing Base: 

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Level

            	 	
              Minimum
                Excess Availability

            	 	
              Revolver
                LIBOR Applicable Margin

            	 	
              Last
                Out Revolver Tranche LIBOR Applicable Margin

            	 	
              Revolver
                Prime Rate Applicable Margin

            	 	
              Last
                Out Revolver Tranche Prime Rate Applicable Margin

            	 	
              Revolver
                Unused Fee

            	 	
              Last
                Out Revolver Tranche Unused Fee

            	 
	
              I

            	 	 	
              3$325.0

            	 	 	
              1.25

            	
              %

            	 	
              2.50

            	
              %

            	 	
              0.25

            	
              %

            	 	
              1.00

            	
              %

            	 	
              0.25

            	
              %

            	 	
              0.50

            	
              %

            
	
              II

            	 	 	
              3$225.0,
                <$325.0

            	 	 	
              1.50

            	
              %

            	 	
              2.75

            	
              %

            	 	
              0.25

            	
              %

            	 	
              1.25

            	
              %

            	 	
              0.25

            	
              %

            	 	
              0.50

            	
              %

            
	
              III

            	 	 	
              3$125.0,
                <$225.0

            	 	 	
              1.75

            	
              %

            	 	
              3.00

            	
              %

            	 	
              0.25

            	
              %

            	 	
              1.50

            	
              %

            	 	
              0.25

            	
              %

            	 	
              0.50

            	
              %

            
	
              IV

            	 	 	
              <$125.0

            	 	 	
              2.00

            	
              %

            	 	
              3.25

            	
              %

            	 	
              0.50

            	
              %

            	 	
              1.75

            	
              %

            	 	
              0.25

            	
              %

            	 	
              0.375

            	
              %

            

    

    

     

    
      	
              Pricing
                Grid for any Period that Eligible Leaseholds are not included in
                the
                Borrowing Base: 

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Level

            	 	
              Minimum
                Excess Availability

            	 	
              Revolver
                LIBOR Applicable Margin

            	 	
              Last
                Out Revolver Tranche LIBOR Applicable Margin

            	 	
              Revolver
                Prime Rate Applicable Margin

            	 	
              Last
                Out Revolver Tranche Prime Rate Applicable Margin

            	 	
              Revolver
                Unused Fee

            	 	
              Last
                Out Revolver Tranche Unused Fee

            	 
	
              I

            	 	 	
              3$325.0

            	 	 	
              1.00

            	
              %

            	 	
              2.50

            	
              %

            	 	
              0.00

            	
              %

            	 	
              1.00

            	
              %

            	 	
              0.25

            	
              %

            	 	
              0.50

            	
              %

            
	
              II

            	 	 	
              3$225.0,
                <$325.0

            	 	 	
              1.25

            	
              %

            	 	
              2.75

            	
              %

            	 	
              0.00

            	
              %

            	 	
              1.25

            	
              %

            	 	
              0.25

            	
              %

            	 	
              0.50

            	
              %

            
	
              III

            	 	 	
              3$125.0,
                <$225.0

            	 	 	
              1.50

            	
              %

            	 	
              3.00

            	
              %

            	 	
              0.00

            	
              %

            	 	
              1.50

            	
              %

            	 	
              0.25

            	
              %

            	 	
              0.50

            	
              %

            
	
              IV

            	 	 	
              <$125.0

            	 	 	
              1.75

            	
              %

            	 	
              3.25

            	
              %

            	 	
              0.25

            	
              %

            	 	
              1.75

            	
              %

            	 	
              0.25

            	
              %

            	 	
              0.375

            	
              %

            
	 

    

    

    
      	
              Letter
                of Credit Issuer:

            	
              Bank
                of America, N.A. or any of its affiliates.

            
	 	 
	
              Letter
                of Credit Fees:

            	
              Standby
                Letter of Credit Fees shall be set at the greater of the Revolver
                LIBOR
                Applicable Margin minus 0.25% or 1.00% per annum. Documentary Letter
                of
                Credit Fees will be set at 50% of the Revolver LIBOR Applicable Margin.
                In
                addition, the Borrower shall pay the Issuer customary fees for the
                negotiation and amendment of each Letter of Credit as agreed between
                the
                Borrower and the Issuer from time to time. Borrower shall pay the
                Issuer,
                for its own account, a fronting fee equal to 1/8 of 1% on the aggregate
                outstanding stated amount of all Letters of Credit, payable quarterly
                in
                arrears.

            
	 	 
	
              Default
                Pricing:

            	
              2.00%
                above the then Applicable Margin upon written demand at the election
                of
                the Majority Lenders following a payment or bankruptcy event of
                default.

            
	 	 
	
              Underwriting
                Fee:

            	
              Payable
                to the ABL Agent and the ABL Lead Arranger in the amounts and at
                the times
                as set forth in a Fee Letter of even date.

            
	 	 
	
              Agent’s
                Fee:

            	
              Payable
                to the ABL Agent in the amounts and at the times as set forth in
                a Fee
                Letter of even date.

            
	 	 
	
              Unused
                Fee:

            	
              An
                unused fee will be charged against the average daily undrawn amount
                of
                each of the Revolver and the Last Out Revolver Tranche, payable quarterly
                in an amount equal to the amount set forth in the definition of Applicable
                Margin.

            

    

    

    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

    

    

     

    
      	
              Mandatory
                Prepayments:

            	
              (A)
                If at any time the aggregate amount of outstanding loans, unreimbursed
                letter of credit drawings and undrawn letters of credit under the
                ABL
                Facility exceeds the lesser of the Loan Cap and the Borrowing Base
                in
                effect at such time, then the Borrower will immediately repay outstanding
                loans and cash collateralize letters of credit in an aggregate amount
                equal to such excess, with such payments to be first applied to the
                Revolver and after the Revolver has been paid in full, the Last Out
                Revolver Tranche. 

               

              (B)
                Upon the occurrence and during the continuance of a Cash Control
                Trigger,
                all proceeds of ABL Collateral shall be deposited in a Concentration
                Account maintained by the ABL Agent and will be promptly applied
                by the
                ABL Agent on a daily basis to repay outstanding loans, and if an
                Event of
                Default then exists, to cash collateralize letters of credit.

               

              (C)
                All proceeds from the sale or disposition of any ABL Collateral (other
                than in the ordinary course of business) shall be paid to the ABL
                Agent
                and applied by the ABL Agent to the outstanding obligations in a
                manner
                based upon the terms of the Existing Credit Facility, with such additions
                and modifications thereto as the ABL Agent and the Borrower may reasonably
                agree to reflect the proposed transaction. 

               

              (D)
                The application of proceeds from mandatory prepayments shall not
                reduce
                the commitments under the ABL Facility and such proceeds may be reborrowed
                subject to the terms of the definitive loan
                documentation.

            
	 	 
	
              Prepayments/Commitment
                Reduction:

            	
              The
                Borrower may prepay the amounts owed under the Revolver and reduce
                or
                terminate the total commitments under the Revolver from time to time
                in
                minimum amounts to be mutually agreed without penalty or premium.
                If the
                amounts owed on account of loans made under the ABL Facility are
                less than
                $75.0 million for five consecutive business days, the Borrower may
                prepay
                amounts owed under the Last Out Revolver Tranche. If the Last Out
                Revolver
                Tranche is prepaid in whole or in part, any borrowings under the
                ABL
                Facility thereafter requested shall, if loans under the Revolver
                then
                equal or exceed $100.0 million, be again made under the Last Out
                Revolver
                Tranche (the proceeds of which shall be used to repay the outstanding
                loans under the Revolver) until the Last Out Revolver Tranche is
                again
                fully borrowed before any further borrowings are made under the Revolver.
                The Borrower may also repay in full the Last Out Revolver Tranche
                and
                terminate the commitments therefor if at the time of such payment
                and
                termination (a) there are no loans outstanding under the ABL Facility
                (other than under the Last Out Revolver Tranche), (b) there is Excess
                Availability in an amount not less than 20% of the Borrowing Base
                for the
                Revolver, and (c) the Borrower has demonstrated to the ABL Agent
                on a pro
                forma basis, average Excess Availability for the next 12 months will
                not
                be less that 20% of the Borrowing Base for the Revolver. The Borrower
                may,
                prior to the Closing Date or at any time thereafter, upon prior notice
                to
                the ABL Agent cause the Borrowing Base to be modified by the termination
                of Eligible Leaseholds as a Borrowing Base category, as long as no
                overadvance would result therefrom. Any such termination,
                once

            

    

    

    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

    

    

     

    
      	 	
              made,
                may not be reversed and no further advances shall thereafter be made
                against Eligible Leaseholds.

            
	 	 
	
              Cash
                Management:

            	
              The
                Borrower shall maintain a concentration account with the Bank throughout
                the term of the ABL Facility. All collections and proceeds from collateral
                will be deposited either directly into the ABL Agent’s account with the
                Bank or as otherwise provided in the Existing Credit Facility, with
                such
                additions and modifications thereto as the ABL Agent and the Borrower
                may
                reasonably agree to reflect the proposed transaction. The Borrower
                shall
                establish cash management provisions reasonably acceptable to the
                ABL
                Agent based upon the terms of the Existing Credit Facility, with
                such
                additions and modifications thereto as the ABL Agent and the Borrower
                may
                reasonably agree to reflect the proposed transaction, provided that
                the
                Borrower shall not be obligated to obtain control agreements with
                any
                depository which is not an institution into which the collections
                and
                proceeds of collateral are concentrated. The ABL Agent shall not
                exercise
                control over cash unless and until Excess Availability is less than
                or
                equal to $75.0 million (the “Cash
                Control Trigger”)
                or (b) an event of default exists. In the event that Excess Availability
                exceeds the Cash Control Trigger for 30 consecutive days, or if the
                event
                of default is cured or waived, the ABL Agent shall relinquish control
                over
                cash until another Cash Control Trigger Event or event of default
                occurs,
                provided that in no event shall the ABL Agent be obligated to release
                cash
                control more than a number of times to be mutually
                agreed.

            
	 	 
	
              Financial
                Covenants:

            	
              Excess
                Availability shall not, at any time, be less than 10% of the Borrowing
                Base (calculated based on the advance rates for the Last Out Revolver
                Tranche). 

            
	 	 
	
              Representations
                and Warranties:

            	
              Based
                upon the terms of the Existing Credit Facility, with such additions
                and
                modifications thereto as the ABL Agent and the Borrower may reasonably
                agree to reflect the proposed transaction.

            
	 	 
	
              Other
                Covenants:

            	
              Affirmative
                and negative covenants based upon the terms of the Existing Credit
                Facility, with such additions and modifications thereto as the ABL
                Agent
                and the Borrower may reasonably agree to reflect the proposed transaction
                (with carveouts, baskets and materiality thresholds to be mutually
                agreed)

              ABL
                Agent will have the right to conduct periodic commercial finance
                exams and
                appraisals at the Borrower’s expense. As long as Excess Availability is
                (i) greater than $250.0 million, the ABL Agent may undertake one
                such exam
                and appraisal in any twelve month period, (ii) less than or equal
                to
                $250.0 million but greater than or equal to $100.0 million, the ABL
                Agent
                may undertake two such exams and appraisals in any twelve month period,
                and (iii) less than $100.0 million, the ABL Agent may undertake three
                such
                exams and appraisals in any twelve month period; provided
                that,
                the provisions of this clause (iii) shall not apply to real estate
                appraisals or prescription lists appraisals, to the end that only
                one or
                two such appraisals (as applicable) may be undertaken at the Borrower's
                expense prior to the occurrence of an Event of Default. In addition
                to the
                foregoing, the

            

    

    

    
      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

    

    

     

    
      	 	
              Agent
                may undertake additional exams and appraisals at any time at its
                own
                expense and may undertake such exams and appraisals as it deemed
                necessary, at the Borrower’s expense, after the occurrence of an Event of
                Default. 

            
	 	 
	
              Events
                of Default:

            	
              Events
                of Default based upon the terms of the Existing Credit Facility,
                with such
                additions and modifications thereto as the ABL Agent and the Borrower
                may
                reasonably agree to reflect the proposed transaction (with carveouts,
                baskets, and materiality thresholds to be mutually
                agreed).

            
	 	 
	
              Conditions
                Precedent:

            	
              Those
                specified in Annex III to the Commitment Letter.

            
	 	 
	
              Expenses:

            	
              Reasonable
                expenses for syndication, commercial finance exams, appraisals and
                reasonable legal fees and expenses of counsel for the ABL Agent and
                other
                out of pocket expenses of the ABL Agent and the ABL Lead Arranger
                will be
                paid by the Borrower whether or not the ABL Facility is
                closed.

            
	 	 
	
              Indemnification:

            	
              The
                Borrower agrees to indemnify and hold the ABL Lead Arranger, the
                ABL
                Agent, and the Lenders and their respective shareholders, directors,
                agents, officers, subsidiaries and affiliates harmless from and against
                any and all damages, actual out of pocket losses, settlement payments,
                obligations, liabilities, claims, actions or causes of action, and
                reasonable costs and expenses incurred, suffered, sustained or required
                to
                be paid by an indemnified party by reason of or resulting from the
                transactions contemplated hereby except to the extent resulting from
                the
                gross negligence, bad faith or willful misconduct of any indemnified
                party. In all such litigation, or the preparation therefor, the Lead
                Arrangers, the ABL Agent and the Lenders shall be entitled to select
                their
                respective counsel (provided that, with respect to Lenders which
                are not
                the ABL Agent, such Lenders shall be limited to one counsel, absent
                a
                conflict of interest) and, in addition to the foregoing indemnity,
                the
                Borrower agrees to pay the reasonable fees and expenses of such
                counsel.

            
	 	 
	
              Assignments
                and Participations:

            	
              The
                Lenders will be permitted to grant participations or assignments
                of their
                loans and commitments. Any Lender will be permitted to assign a portion
                of
                Revolver (or Last Out Revolver Tranche) to another eligible lending
                institution (to be defined in the definitive documentation) in minimum
                amounts of $10.0 million, subject to customary provisions of participation
                or assignment transactions. Except during the continuance of an event
                of
                default, the Borrower shall have the right to consent to any such
                assignment, such consent not to be unreasonably withheld or delayed.
                

            
	 	 
	
              Voting
                Rights:

            	
              Lenders
                holding at least a majority of all of the outstanding commitments
                (the
                "Majority
                Lenders")
                for all amendments and waivers, provided
                that certain events shall require consent of all Lenders directly
                affected
                thereby. 

            
	 	 
	
              ABL
                Agent’s Counsel:

            	
              Riemer
                & Braunstein, LLP.

            
	 	 
	
              Governing
                Law:

            	
              New
                York.

            

    

    

    

    

    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

    

    ANNEX
      II-A

    SUMMARY
      OF PRINCIPAL TERMS AND CONDITIONS

     

    $780,000,000
      SENIOR SECURED BRIDGE FACILITY

     

    Capitalized
      terms not otherwise defined herein have the same meanings as

    specified
      therefor in the Commitment Letter to which this Annex II-A is
      attached.

     

    
      	
              Borrower:

            	
              Same
                Borrower as in the ABL Summary of Terms.

            
	 	 
	
              Guarantors:

            	
              Same
                Guarantors as in the ABL Summary of Terms. The Bridge Loans will
                be
                guaranteed on a senior secured basis by the Guarantors. Any Guarantor
                no
                longer required to guarantee the ABL Facility in accordance with
                the terms
                thereof will be automatically released from its obligations to guarantee
                the Bridge Loans.

            
	 	 
	
              Joint
                Lead Arrangers and Joint Book Managers:

            	
              Banc
                of America Securities LLC (“BAS”)
                and Lehman Brothers Inc. (“Lehman”)
                will act as joint lead arrangers and joint book running managers
                for the
                Bridge Facility (in such capacity, the “Bridge
                Lead Arrangers”).

            
	 	 
	
              Initial
                Bridge Lenders:

            	
              Banc
                of America Bridge LLC or an affiliate thereof (“Banc
                of America Bridge”),
                Lehman Brothers Commercial Bank (“LBCB”
                and, together with Banc of America Bridge, the “Initial
                Bridge Lenders”)
                and other financial institutions and institutional lenders acceptable
                to
                the Bridge Lead Arrangers (the “Bridge
                Lenders”).

            
	 	 
	
              Administrative
                and Collateral Agent:

            	
              Banc
                of America Bridge will act as sole and exclusive administrative agent
                for
                the Bridge Lenders (in such capacity, the “Bridge
                Administrative Agent”)
                and as sole and exclusive collateral agent for the Bridge Lenders
                (in such
                capacity, the “Bridge
                Collateral Agent”).

            
	 	 
	
              Syndication
                Agent:

            	
              Lehman
                Commercial Paper Inc. (“LCPI”)
                will act as sole and exclusive syndication agent for the Bridge Facility
                (in such capacity, the “Bridge
                Syndication Agent”).

            
	 	 
	
              Bridge
                Facility:

            	
              Up
                to $780.0 million of senior secured bridge loans (the “Bridge
                Loans”).
                The Bridge Loans will be available to the Borrower in one drawing
                upon
                consummation of the Acquisition.

            
	 	 
	
              Security:

            	
              The
                Borrower and each of its Subsidiaries will grant the Bridge Collateral
                Agent,
                for
                the benefit of the Bridge Lenders, valid and perfected first priority
                (subject to certain exceptions to be set forth in the loan documentation)
                liens and security interests in general intangibles (including payment
                intangibles, software, trademarks and other intellectual property),
                65% of
                the voting stock of (or other ownership or profit interests in) A&P
                Bermuda Limited (which will own, directly or indirectly, at least
                10.9
                million Metro Shares at the Closing Date) and all proceeds and products
                of
                the foregoing (collectively, the “Bridge
                Collateral”).
                In addition, in the event of bankruptcy and insolvency defaults,
                the
                Borrower and each applicable Subsidiary will grant the Bridge Collateral
                Agent, for the benefit of the Bridge Lenders, valid and perfected
                first
                priority (subject to certain exceptions to be set forth in the loan
                documentation) liens and security
                interests

            

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

     

    
      	 	
              in
                the Metro Shares.

               

              In
                addition, the Borrower and each of its Subsidiaries will grant the
                Bridge
                Collateral Agent,
                for
                the benefit of the Bridge Lenders, valid and perfected second priority
                (subject to certain exceptions to be set forth in the loan documentation)
                liens and security interests in all of the collateral securing the
                ABL
                Facility on a first priority basis, as set forth in ABL Summary of
                Terms
                (collectively, the “ABL
                Collateral”
                and, together with the Bridge Collateral, the “Collateral”).

               

              The
                liens and security interests granted to the Bridge Collateral Agent
                for
                the benefit of the Bridge Lenders in the ABL Collateral will be subject
                to
                a first priority lien in favor of Bank of America, N.A. through its
                Retail
                Finance Group, in its capacity as collateral agent (the “ABL
                Collateral Agent”)
                for the benefit of the ABL Lenders, pursuant to the Intercreditor
                Agreement referred to below.

            
	 	 
	
              Intercreditor
                Agreement:

            	
              The
                Bridge Collateral Agent and the ABL Collateral Agent will enter into
                an
                intercreditor agreement (the “Intercreditor
                Agreement”)
                in form and substance reasonably satisfactory to the Bridge Administrative
                Agent and the ABL Agent, BAS and Lehman providing, among other things,
                that (i) the lien of the Bridge Collateral Agent for the benefit
                of the
                Bridge Lenders in the ABL Collateral shall be subordinate to the lien of
                the ABL Collateral Agent in such ABL Collateral for the benefit of
                the
                lenders under the ABL Facility, (ii) the Bridge Collateral Agent
                and the
                Bridge Lenders shall have limited voting rights with respect to releases
                of ABL Collateral and (iii) prior to the termination of the Bridge
                Facility and the repayment in full of all Bridge Advances, the Bridge
                Collateral Agent and the Bridge Lenders shall have the exclusive
                right to
                administer, perform and enforce (or not enforce) the terms of the
                security
                documents with respect to the Bridge Collateral, subject to certain
                limited rights of access on behalf of the ABL Collateral Agent on
                behalf
                of the lenders under the ABL Facility. 

            
	 	 
	
              Ranking:

            	
              The
                Bridge Loans will be senior secured obligations of the
                Borrower,
                ranking equally in right of payment with all of Borrower’s existing and
                future senior secured obligations and senior to all of Borrower’s future
                subordinated obligations. The Guarantees will be senior secured
                obligations of each Guarantor,
                ranking equally with all existing and future senior secured obligations
                of
                such Guarantor and senior in right of payment to any future subordinated
                obligations of such Guarantor. The Bridge Loans and the Guarantees
                will be
                effectively subordinated to all indebtedness which may become outstanding
                under the ABL Facility with respect to the ABL Collateral, to the
                extent
                of the value of those assets.

            
	 	 
	
              Purpose:

            	
              To
                finance a portion of the Acquisition, to refinance certain existing
                debt
                of the Borrower, the Target and their respective subsidiaries and
                to pay
                related fees and expenses.

            
	 	 
	
              Closing
                Date:

            	
              March
                4, 2008.

            

    

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    

     

    
      	
              Interest
                Rate:

            	
              Interest
                shall be payable quarterly in arrears at a rate per annum equal to
                the
                three month LIBOR in effect from time to time plus the Applicable
                Margin.
                The Applicable Margin for Bridge Loans shall be 575 basis points
                and will
                increase by an additional 50 basis points at the end of each subsequent
                three-month period for so long as the Bridge Loans are outstanding;
                provided that the interest rate shall not exceed 12.00% per annum
                (the
                “Total
                Cap”).
                Notwithstanding the foregoing, following the occurrence of a payment
                or
                bankruptcy event of default, the applicable interest rate shall be
                increased by an additional 2.00% per annum.

            
	 	 
	
              Maturity:

            	
              Twelve
                months from the date of initial advance (the “Bridge
                Loan Maturity Date”
or
                “Rollover
                Date”).

            
	 	 
	
              Optional
                Prepayment:

            	
              The
                Bridge Loans may be prepaid prior to the Bridge Loan Maturity Date,
                without premium or penalty, in whole or in part, upon written notice,
                at
                the option of the Borrower, at any time, together with accrued interest
                to
                the prepayment date.

            
	 	 
	
              Mandatory
                Prepayments:

            	
              The
                Borrower will prepay the Bridge Loans, without premium or penalty,
                together with accrued interest to the prepayment date, with any of
                the
                following: (i) the net proceeds from the issuance of any debt securities
                or equity securities of the Borrower, the Target or any of their
                respective subsidiaries; (ii) subject to customary exceptions to
                be agreed
                and only to the extent such amounts are not required to be paid to
                the ABL
                Lenders under the ABL Facility, the net proceeds from any other
                indebtedness incurred by the Borrower or any of the Borrower’s
                subsidiaries; and (iii) subject to customary exceptions to be agreed
                and
                only to the extent such amounts are not required to be paid to the
                ABL
                Lenders under the ABL Facility, the net proceeds from asset sales
                (including, without limitation, the sale or disposition of any Bridge
                Collateral or any of the Metro Shares) by the Borrower or any of
                the
                Borrower’s subsidiaries, subject to the right of the Borrower, in the case
                of sales of stores, warehouses and other assets in the ordinary course
                of
                business and consistent with past practice in an aggregate amount
                not to
                exceed $25.0 million per year, to reinvest such proceeds within 15
                months
                or commit to reinvest such proceeds within 12 months and, if so committed
                to reinvestment, reinvest within 180 days after such
                commitment.

            
	 	 
	
              Change
                of Control:

            	
              In
                the event of a Change of Control, each Bridge Lender will have the
                right
                to require the Borrower, and the Borrower must offer, to prepay the
                outstanding principal amount of the Bridge Loans, plus accrued and
                unpaid
                interest thereon to the date of prepayment without any premium (other
                than, in the case of Exchange Notes the interest rate for which has
                been
                fixed in accordance with the terms set forth in Annex II-C, a prepayment
                fee equal to 1.00% of such outstanding principal amount). Prior to
                making
                any such offer, the Borrower will, within 30 days of the Change of
                Control, repay all obligations under the ABL Facility or obtain any
                required consent of the ABL Lenders under the ABL Facility to make
                such
                prepayment of the Bridge Loans.

            
	 	 
	
              Conversion
                into Rollover Loans:

            	
              If
                the Bridge Loans have not been previously prepaid in full for cash
                on or
                prior to the Bridge Loan Maturity Date,
                the
                principal amount of

            

    

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    

    

     

    
      	 	
              the
                Bridge Loans outstanding on the Rollover Date may,
                subject to the conditions precedent set forth in Annex II-B,
                be
                refinanced by senior secured rollover loans with a maturity of seven
                years
                from the Rollover Date (the “Rollover
                Loans”
                and,
                together with the Bridge Loans,
                the
                “Bridge
                Advances”)
                and otherwise having the terms set forth in Annex II-B. On or after
                the
                Rollover Date,
                the
                Bridge Lenders will have the right to exchange the notes evidencing
                the
                outstanding Rollover Loans advanced by them having an aggregate principal
                amount exceeding $50.0 million to the Borrower for Exchange Notes
                of the
                Borrower having the terms set forth in Annex II-C.

            
	 	 
	
              Conditions
                Precedent to Initial Funding:

            	
              Those
                specified in Annex III to the Commitment Letter.

            
	 	 
	
              Covenants:

            	
              Usual
                and customary for financing transactions of this type, including
                without
                limitation (a) a negative pledge on the Metro Shares and the capital
                stock
                of A&P Bermuda Limited and A&P Luxembourg S.á.r.l., and (b)
                affirmative covenants similar to those contained in the ABL Facility
                and
                negative covenants customary for high yield financings of issuers
                of
                similar credit quality (which would be intended to be based on negative
                covenants contained in the proposed offering of Senior Secured Notes)
                (with such additions and modifications thereto as the Bridge Lead
                Arrangers and the Borrower may reasonably agree to reflect the proposed
                transaction).

            
	 	 
	
              Representations
                and Warranties,
                Events of Default,
                Waivers and Consents:

            	
              Similar
                to those contained in the ABL Facility (with such additions and
                modifications thereto as the Bridge Lead Arrangers and the Borrower
                may
                reasonably agree to reflect the proposed transaction) (except that
                only a
                cross
                acceleration default shall apply with respect to defaults under the
                ABL
                Facility or other material indebtedness).

            
	 	 
	
              Right
                to Assign
Bridge
                Loans:

            	
              The
                Bridge Lenders shall have the right to assign their interest in the
                Bridge
                Loans in whole or in part in compliance with applicable law to any
                third
                parties only with the prior written consent of the Bridge Lead Arrangers.
                In addition, the Initial Bridge Lenders may share their respective
                commitments with any third party only with the prior written consent
                of
                the Bridge Lead Arrangers. Notwithstanding the foregoing, if the
                Initial
                Bridge Lenders hold less than 51% of the aggregate amount of Bridge
                Advances, the Initial Bridge Lenders shall be deemed to hold 51%
                of the
                aggregate amount of Bridge Advances such that the Initial Bridge
                Lenders
                can at all times approve any amendment or waiver of the provisions
                of the
                loan agreement and other definitive credit documentation, except
                any such
                amendment or waiver requiring the consent of all Bridge Lenders holding
                Bridge Advances.

            
	 	 
	
              Governing
                Law:

            	
              New
                York.

            
	 	 
	
              Expenses:

            	
              The
                Borrower will pay all reasonable costs and expenses associated with
                the
                preparation, due diligence, administration, syndication and enforcement
                of
                all loan documentation, including, without limitation, the legal
                fees of
                the Bridge Lead Arrangers’ counsel, regardless of whether or not the
                Bridge Facility is closed. The Borrower will also pay the expenses
                of each
                Bridge Lender in connection with
                the

            

    

     

     

    

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    

    

     

    
      	 	
              enforcement
                of any of the loan documentation related to the Bridge
                Facility.

            
	 	 
	
              Counsel
                to Bridge Lead Arranger:

            	
              Fried
                Frank Harris Shriver & Jacobson LLP.

            
	 	 
	
              Fees:

            	
              As
                provided in the Fee Letter.

            

    

    

    

    

    

    

    

    

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    

      ANNEX
        II-B

      SUMMARY
        OF PRINCIPAL TERMS AND CONDITIONS

       

      $780,000,000
        SENIOR SECURED ROLLOVER FACILITY

       

      Capitalized
        terms not otherwise defined herein have the same meanings as

      specified
        therefor in the Commitment Letter to which this Annex II-B is
        attached.

       

      
        	
                Borrower:

              	
                Same
                  Borrower as in ABL Summary of Terms and Bridge Summary of
                  Terms.

              
	 	 
	
                Guarantors:

              	
                Same
                  Guarantors as in ABL Summary of Terms and Bridge Summary of Terms.
                  The
                  Rollover Loans will be guaranteed on the same basis as the Bridge
                  Loans.

              
	 	 
	
                Rollover
                  Facility:

              	
                Senior
                  secured subordinated rollover loans (the “Rollover
                  Loans”)
                  in an initial principal amount equal to 100% of the outstanding
                  principal
                  amount of the Bridge Loans on the Rollover Date. Subject to the
                  conditions
                  precedent set forth below, the Rollover Loans will be available
                  to the
                  Borrower in one drawing on the Rollover Date. The Rollover Loans
                  will be
                  governed by the definitive documents for the Bridge Loans and,
                  except as
                  set forth below, shall have the same terms as the Bridge
                  Loans.

              
	 	 
	
                Security:

              	
                Same
                  as Bridge Loans.

              
	 	 
	
                Ranking:

              	
                Same
                  as Bridge Loans.

              
	 	 
	
                Interest
                  Rate:

              	
                At
                  the Rollover Date, the interest rate on the Rollover Loans will
                  be a rate
                  per annum equal to the three month LIBOR in effect on the Rollover
                  Date
                  plus the Applicable margin on Bridge Loans in effect on the Rollover
                  Date.
                  For each three-month period after the Rollover Date the interest
                  rate
                  shall increase by 0.50%.

                 

                The
                  interest rate on the Rollover Loans shall not exceed the Total
                  Cap.
                  Notwithstanding the foregoing, following the occurrence of a payment
                  or
                  bankruptcy event of default, the applicable interest rate shall
                  be
                  increased by an additional 2.00% per annum.

                Interest
                  on the Rollover Loans will be payable quarterly in
                  arrears.

              
	 	 
	
                Maturity:

              	
                Seven
                  years from the Rollover Date (the “Rollover
                  Maturity Date”).

              
	 	 
	
                Optional
                  Prepayment:

              	
                For
                  so long as the Rollover Loans have not been exchanged for Exchange
                  Notes
                  as provided in Annex II-C, they may be prepaid at the option of
                  the
                  Borrower, in whole or in part, at any time, together with accrued
                  and
                  unpaid interest to the prepayment date (but without premium or
                  penalty).

              
	 	 
	
                Conditions
                  Precedent to any Rollover Loans:

              	
                The
                  ability of the Borrower to refinance any Bridge Loans with Rollover
                  Loans
                  is subject to the following conditions being satisfied:

                (a) at
                  the time of any such refinancing, there shall exist no
                  Event

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	 	
                of
                  Default or event which, with notice and/or lapse of time, could
                  become an
                  Event of Default;

                 

                (b) 
                  all
                  fees due to the Bridge Lead Arrangers and the Initial Bridge Lenders
                  shall
                  have been paid in full; and

                 

                (c) 
                  no
                  order, decree, injunction or judgment enjoining any such refinancing
                  or
                  the provision of any Rollover Loans shall be in effect.

              
	 	 
	
                Assignments
                  and Participations:

              	
                The
                  Bridge Lenders shall have the right to assign their interest in
                  any
                  Rollover Loans in whole or in part in compliance with applicable
                  law to
                  any third parties only with the prior written consent of the Bridge
                  Lead
                  Arrangers. The Bridge Lenders will be permitted to sell participations
                  with voting rights limited to significant matters such as changes
                  in
                  amount, rate and maturity date.

              
	 	 
	
                Rollover
                  Covenants and Events of Default:

              	
                From
                  and after the Rollover Date, the covenants and events of default
                  applicable to the Rollover Loans will conform to those applicable
                  to the
                  Exchange Notes.

              
	 	 
	
                Governing
                  Law:

              	
                New
                  York.

              
	 	 
	
                Expenses:

              	
                Same
                  as the Bridge Loans.

              
	 	 
	
                Fees:

              	
                As
                  provided in the Fee Letter.

              

      

      

    

    

     

    

     

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    ANNEX
      II-C

    SUMMARY
      OF PRINCIPAL TERMS AND CONDITIONS

     

    $780,000,000
      SENIOR SECURED EXCHANGE NOTES

     

    Capitalized
      terms not otherwise defined herein have the same meanings as

    specified
      therefor in the Commitment Letter to which this Annex II-C is
      attached.

     

    
      	
              Borrower:

            	
              Same
                Borrower as in ABL Summary of Terms and Bridge Summary of
                Terms.

            
	 	 
	
              Guarantors:

            	
              Same
                Guarantors as in ABL Summary of Terms and Bridge Summary of
                Terms.

            
	 	 
	
              Exchange
                Notes:

            	
              At
                any time on or after the Rollover Date,
                the
                notes evidencing the Rollover Loans due to the Bridge Lenders having
                a
                minimum aggregate principal amount of $50.0 million may,
                at
                the option of such Bridge Lenders,
                be
                exchanged for an equal principal amount of senior secured exchange
                notes
                of the Borrower (the “Exchange
                Notes”).
                The Borrower will issue Exchange Notes under an indenture that complies
                with the Trust Indenture Act of 1939,
                as
                amended (the “Indenture”).
                The Borrower will appoint a trustee reasonably acceptable to the
                Bridge
                 Lead Arranger. The terms of the Exchange Notes will be substantially
                negotiated at the closing of the Bridge Loans and are intended to
                be based
                generally on the terms of the proposed offering of Senior Secured
                Notes.
                The Indenture will include provisions customary for an indenture
                governing
                publicly traded high yield debt securities for issuers of similar
                credit
                quality. Except as expressly set forth herein,
                the
                Exchange Notes shall have the same terms as the Rollover
                Loans.

            
	 	 
	
              Interest
                Rate; Redemption:

            	
              Each
                Exchange Note will bear interest at a fixed rate equal to the then
                applicable interest rate in effect on the Rollover Loans for which
                it is
                exchanged (plus 50 basis points if the Exchange Notes do not bear
                registration rights as described below under “Registration Rights”), but
                in no event in excess of 12.00% per annum (if they bear registration
                rights as described below) or 12.50% per annum (if they do not bear
                such
                registration rights). The Exchange Notes will be noncallable until
                the
                fourth anniversary of the Closing Date and will be callable thereafter
                at
                par plus accrued interest plus a premium equal to one-half of the
                coupon
                declining ratably to par on the date that is two years prior to maturity
                of the Exchange Notes. The Borrower may redeem up to 35% of the aggregate
                principal amount of the Exchange Notes, at a price of 100% plus the
                applicable coupon, together with accrued and unpaid interest, if
                any, to
                the redemption date, with the net proceeds of one or more equity
                offerings; provided,
                however, that the minimum outstanding principal amount of the Exchange
                Notes after such repurchase is not less than 65% of the amount of
                the
                original issue. The Exchange Notes will provide for mandatory repurchase
                offers customary for publicly traded high yield debt
                securities.

            
	 	 
	
              Registration
                Rights:

            	
              At
                the Borrower’s option, the Exchange Notes will bear the following
                registration rights: 

            

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

     

    
      	 	
              Within
                180 days after each issuance of Exchange Notes, the Borrower shall
                file
                with the Securities and Exchange Commission a shelf registration
                statement
                and/or an exchange offer registration statement with respect to an
                offer
                to exchange the Exchange Notes for publicly registered notes having
                identical terms and the Borrower shall use its commercially reasonable
                efforts to cause such registration statement to be declared effective
                by
                the 270th day following each such issuance and, with respect to a
                shelf
                registration statement, keep such shelf registration statement effective,
                with respect to resales of the Exchange Notes, for the greater of
                (a) two
                years or (b) as long as it is required by the Initial Bridge Lenders
                to
                resell the Exchange Notes. Upon failure to comply with the requirements
                of
                the registration rights agreement (a “Registration
                Default”),
                the Borrower shall pay liquidated damages to each holder of Exchange
                Notes
                with respect to the first 90-day period immediately following the
                occurrence of the first Registration Default in an amount equal to
                0.25%
                per annum on the principal amount of Exchange Notes held by such
                holder.
                The amount of the liquidated damages will increase by an additional
                0.25%
                per annum on the principal amount of Exchange Notes with respect
                to each
                subsequent 90-day period until all Registration Defaults have been
                cured
                or otherwise become inapplicable, up to a maximum amount of liquidated
                damages for all Registration Defaults of 1.00% per
                annum.

            
	 	 
	
              Governing
                Law:

            	
              New
                York.

            

    

    

    

    

     

    

     

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

     

     

    

    ANNEX
      III

    CONDITIONS
      PRECEDENT*

     

    
      	
              The
                commitments under the Commitment Letter, the closing and the initial
                extension of credit under the ABL Facility and the extension of the
                Bridge
                Loans under the Bridge Facility will be subject to the satisfaction
                of the
                following conditions precedent as applicable:

            
	 
	
              (a)  Prior
                to and during the syndication of the Facilities and the offering
                of the
                Senior Secured Notes, there shall be no offering, placement or arrangement
                of any equity securities, debt securities or bank financing by or
                on
                behalf of any of the Companies or any of their respective affiliates
                (other than (i) the Senior Secured Notes and (ii) pursuant to the
                Target’s
                existing credit agreement (including the “accordion” feature thereof) or,
                as an alternative to the accordion feature of the Target’s existing credit
                agreement, in mortgages not in excess of $40.0 million encumbering
                real
                property of the Target, in each case as permitted by the Acquisition
                Agreement (defined below)) that could reasonably be expected to,
                in the
                discretion of the Lead Arrangers, disrupt or materially interfere
                with the
                orderly syndication of the Facilities and the offering of the Senior
                Secured Notes.

            
	 
	
              (b)  Since
                the date of the Acquisition Agreement, no change, event or circumstance
                has occurred that has had a Company Material Adverse Effect (as defined
                in
                the Acquisition Agreement) that is continuing and no change, event
                or
                circumstance has occurred and is continuing that would reasonably
                be
                expected to have a Company Material Adverse Effect. 

            
	 
	
              (c) The
                Acquisition shall have been consummated in accordance with the Agreement
                and Plan of Merger dated as of the date of the Commitment Letter
                regarding
                the Acquisition (together with the disclosure letters related thereto,
                the
                “Acquisition
                Agreement”),
                and no provision of the Acquisition Agreement shall have been waived,
                amended or otherwise modified in a manner materially adverse to the
                Lenders without the prior written consent of the Lead Arrangers.
                The Lead
                Arrangers shall be reasonably satisfied in all material respects
                with the
                terms of any agreements that are material to the interests of the
                Lenders
                and are to be entered into in connection with the Acquisition Agreement.
                The Lead Arrangers acknowledge that the draft of the Acquisition
                Agreement
                dated March 2, 2007 is satisfactory to the Lead Arrangers. No agreement,
                order or decree has been entered into or issued requiring one or
                more of
                the Companies to hold separate (including by trust or otherwise),
                divest,
                dispose of or sell any of their respective businesses or assets with
                aggregated Allocated Amounts (as defined in the Acquisition Agreement)
                in
                excess of the Threshold Amount (as defined in the Acquisition
                Agreement).

            
	 
	
              (d) (i)
                In the case of the Bridge Loans, all conditions to drawing under
                the ABL
                Facility on the Closing Date shall have been satisfied, and (ii)
                in the
                case of the ABL Facility, the Borrower shall have received $780.0
                million
                in gross proceeds from the advance of the Bridge Loans or the issuance
                and
                sale by the Borrower of the Senior Secured Notes.

            
	 
	
              (e) The
                Borrower shall use commercially reasonable efforts to obtain a rating
                for
                the Senior Secured Notes from each of Moody’s and
                S&P.

            
	 
	
              (f) The
                Lead Arrangers and the Lenders shall have received (i) such audited,
                unaudited, pro forma and other financial statements, schedules and
                information of the Borrower and its subsidiaries and the Target and
                its
                subsidiaries of the type that would be required in a registered public
                offering on Form S-1 under the Securities Act and/or that would be
                necessary for such investment banks to receive customary “comfort”
                (including “negative assurance” comfort) from independent accountants of
                the Borrower and the Target in connection with the offering of the
                Senior
                Secured Notes (but excluding information required by Regulation S-X
                Rule
                3-10 to the extent not available after your use of commercially reasonable
                efforts); and (ii) forecasts prepared by management of the Companies,
                each
                in the same form as the Projections, on a monthly basis for the first
                year
                following the Closing Date and on an annual basis for each year thereafter
                during the term of the Facilities.

            

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              (g) (x)
                In the case of the ABL Facility and the Bridge Facility, the Companies
                shall have completed and made available to the Lead Arrangers and
                potential Lenders one or more Information Memoranda (including a
                separate
                information memorandum for both public and private investors) to
                be used
                in connection with the syndication of the Facilities a reasonable
                amount
                of time after the date of the Commitment Letter, (y) in the case
                of the
                Bridge Facility, not later than 20 days prior to the Closing Date,
                the
                Companies shall have completed and made available to the Lead Arrangers
                and potential investors copies of one or more offering memoranda
                for the
                offering and sale of the Senior Secured Notes containing such disclosures
                of the type that would be required in a registered public offering
                on Form
                S-1 under the Securities Act (with such exceptions as are mutually
                agreed)
                and as otherwise customary for Rule 144A offerings of securities
                similar
                to the Senior Secured Notes, and (z) senior management of the Companies
                (including the Target) shall have made themselves available for rating
                agency presentations and roadshows and other meetings with potential
                lenders in the ABL Facility and potential investors for the Senior
                Secured
                Notes as required by the Lead Arrangers in their reasonable judgment
                to
                syndicate the ABL Facility and to market the Senior Secured
                Notes.

            
	 
	
              (h) The
                negotiation, execution and delivery of mutually satisfactory definitive
                documentation with respect to the Facilities (the “Facilities
                Documentation”),
                providing for valid and perfected (subject to certain exceptions
                to be set
                forth in the loan documentation) liens and security interests in
                the
                collateral securing the ABL Facility and the Bridge Facility or the
                Senior
                Secured Notes, as the case may be, including without limitation customary
                certificates and opinions. The Facilities Documentation shall not
                contain
                any conditions precedent to the funding of the Facilities on the
                Closing
                Date other than the conditions expressly set forth in the Commitment
                Letter or this Annex III thereto.

            

    

    

     

    Notwithstanding
      anything in the Commitment Letter, Annexes I, II or III thereto, the Fee Letter
      or any other letter agreement or other undertaking concerning the financing
      of
      the Transactions to the contrary, (i)
      the
      only representations relating to the Borrower, the Target, their subsidiaries
      and their businesses the making of which shall be a condition to availability
      of
      the Facilities on the Closing Date shall be (A) such of the representations
      made
      by the Target in the Acquisition Agreement as are material to the interests
      of
      the Lenders, but only to the extent that you have the right to terminate your
      obligations under the Acquisition Agreement as a result of a breach of such
      representations in the Acquisition Agreement and (B) the Specified
      Representations (as defined below) and
      (ii) the
      terms of the Facilities Documentation shall be in a form such that they do
      not
      impair availability of the Facilities on the Closing Date if the conditions
      set
      forth in the Commitment Letter and this Annex III are satisfied (it being
      understood that, to the extent any Collateral (other than (x) the pledge
      and perfection of the security interests in capital stock of U.S. subsidiaries
      held by the Borrower or any Guarantor and (y) other assets pursuant to
      which a lien may be perfected by the filing of a financing statement under
      the
      Uniform Commercial Code) is not provided on the Closing Date after your use
      of
      commercially reasonable efforts to do so, the delivery of Collateral shall
      not
      constitute a condition precedent to the availability of the Facilities on the
      Closing Date but shall be required to be delivered after the Closing Date
      pursuant to arrangements to be mutually agreed. For purposes hereof,
“Specified
      Representations”
means
      representations and warranties relating to legal existence, corporate power
      and
      authority, the due authorization and execution and enforceability of the
      Facilities Documentation, Federal Reserve margin regulations, solvency, the
      Investment Company Act, status of the ABL Facility as senior debt and, to the
      extent set forth above, validity and perfection of security interests granted
      in
      the Collateral.

     

    

    
      
        

      

      
        * 
          Capitalized
          terms not otherwise defined herein have the same meanings as specified
          in the
          Commitment Letter to which this Annex I is attached.

         

         

         

         

         

         

        2

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