Great Atlantic Tea Co

7/30/2019 Great Atlantic Tea Co

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K&E 21017834.1

James H.M. Sprayregen, P.C.Paul M. Basta

Ray C. Schrock

Brian S. Lennon

KIRKLAND & ELLIS LLP

601 Lexington AvenueNew York, New York 10022

Telephone: (212) 446-4800

Facsimile: (212) 446-4900

- and -

James J. Mazza, Jr.


300 North LaSalle

Chicago, Illinois 60654Telephone: (312) 862-2000

Facsimile: (312) 862-2200

Counsel to the Debtors and Debtors in Possession

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

)

In re: ) Chapter 11

)THE GREAT ATLANTIC & PACIFIC TEA

COMPANY, INC., et al.

)

)

Case No. 10-24549 (RDD)

)Debtors. ) Jointly Administered

)

NOTICE OF FILING EXHIBITS TO THE PLAN

SUPPLEMENT FOR THE DEBTORS JOINT PLAN OF REORGANIZATION

PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE

PLEASE TAKE NOTICE that The Great Atlantic & Pacific Tea Company, Inc.

(A&P) and certain of its affiliates, as debtors and debtors in possession (collectively, the

Debtors),1 hereby file certain exhibits to the Plan Supplement for the Debtors Joint Plan of

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtors federal tax identification

number, are: The Great Atlantic & Pacific Tea Company, Inc. (0974); 2008 Broadway, Inc. (0986); AAL

Realty Corporation (3152); Adbrett Corporation (5661); Amsterdam Trucking Corporation (1165); APW

Supermarket Corporation (7132); APW Supermarkets, Inc. (9509); Bergen Street Pathmark, Inc. (1604); Best

10-24549-rdd Doc 3190 Filed 01/19/12 Entered 01/19/12 22:32:59 Main DocumentPg 1 of 149

1024549120119000000000008

Docket #3190 Date Filed: 1/19/20


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2

K&E 21017834.1

Reorganization Pursuant to Chapter 11 of the United States Bankruptcy Code, dated

December 19, 2011 [Docket No. 3063] (the Plan):2

Exhibit A Exit Facility Term Sheet Exhibit B Form of Management Services Agreement Exhibit C Form ofReplacement Second Lien Notes Indenture

PLEASE TAKE FURTHER NOTICE that the Debtors reserve the right to alter,

amend, modify or supplement any document in the Plan Supplement as provided by the Plan;

provided that if any document in the Plan Supplement is altered, amended, modified or

supplemented in any material respect, the Debtors will file a blackline of such document with the

Bankruptcy Court.

Cellars DC Inc. (2895); Best Cellars Inc. (9550); Best Cellars Licensing Corp. (2896); Best Cellars

Massachusetts, Inc. (8624); Best Cellars VA Inc. (1720); Bev, Ltd. (9046); Bormans Inc. (9761); Bridge Stuart,

Inc. (8652); Clay-Park Realty Co., Inc. (0902); Compass Foods, Inc. (0653); East Brunswick Stuart, LLC

(9149); Farmer Jacks of Ohio, Inc. (5542); Food Basics, Inc. (1210); Gramatan Foodtown Corp. (5549); Grape

Finds At DuPont, Inc. (9455); Grape Finds Licensing Corp. (7091); Grapefinds, Inc. (4053); Greenlawn Land

Development Corp. (7062); Hopelawn Property I, Inc. (6590); Kohls Food Stores, Inc. (2508); Kwik Save Inc.

(8636); Lancaster Pike Stuart, LLC (9158); LBRO Realty, Inc. (1125); Lo-Lo Discount Stores, Inc. (8662); Mac

Dade Boulevard Stuart, LLC (9155); McLean Avenue Plaza Corp. (5227); Milik Service Company, LLC

(0668); Montvale Holdings, Inc. (6664); North Jersey Properties, Inc. VI (6586); Onpoint, Inc. (6589);

Pathmark Stores, Inc. (9612); Plainbridge, LLC (5965); SEG Stores, Inc. (4940); Shopwell, Inc. (3304);Shopwell, Inc. (1281); Spring Lane Produce Corp. (5080); Super Fresh/Sav-A-Center, Inc. (0228); Super Fresh

Food Markets, Inc. (2491); Super Market Service Corp. (5014); Super Plus Food Warehouse, Inc. (9532);

Supermarkets Oil Company, Inc. (4367); The Food Emporium, Inc. (3242); The Old Wine Emporium of

Westport, Inc. (0724); The South Dakota Great Atlantic & Pacific Tea Company, Inc (4647); Tradewell Foods

of Conn., Inc. (5748); Upper Darby Stuart, LLC (9153); and Waldbaum, Inc. (8599). The location of the

Debtors corporate headquarters is Two Paragon Drive, Montvale, New Jersey 07645.

2 Capitalized terms used but not defined herein shall have the meanings set forth in the Plan.



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3

K&E 21017834.1

New York, New York /s/ Ray C. Schrock

Dated: January 19, 2011 James H.M. Sprayregen, P.C.Paul M. Basta

Ray C. Schrock

Brian S. LennonKIRKLAND & ELLIS LLP

601 Lexington Avenue

New York, New York 10022-4611Telephone: (212) 446-4800

Facsimile: (212) 446-4900

- and -

James J. Mazza Jr.


300 North LaSalleChicago, Illinois 60654

Telephone: (312) 862-2000Facsimile: (312) 862-2200

Counsel to the Debtors and Debtors in Possession



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K&E 21017834.1

Exhibit A

Exit Facility Term Sheet



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1(NY) 27011/200/EXIT.FINANCING/COMMITMENT/A&P.Exit.Term.Sheet.doc

Exhibit A

THE GREAT ATLANTIC & PACIFIC TEA COMPANY$400,000,000 EXIT SENIOR SECURED ASSET-BASED REVOLVING CREDIT FACILITY

Summary of Principal Terms and ConditionsJanuary 17, 2012

This Summary of Principal Terms and Conditions is delivered with a commitment letter of even dateherewith (the Commitment Letter) from JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, CreditSuisse AG and Credit Suisse Securities (USA) LLC to the Company in connection with the proposed ExitFacilities. Capitalized terms used herein and not otherwise defined herein shall have the meanings attributed tosuch terms in the Commitment Letter.

I. PartiesBorrowers: The Great Atlantic & Pacific Tea Company, Inc. (the Company),

the other borrowers under the DIP Credit Agreement (as definedbelow) and certain other domestic subsidiaries of the Company to bemutually agreed (collectively with the Company, the Borrowers).1

As used herein, DIP Credit Agreement means the Third Amendedand Restated Superpriority Debtor-in-Possession Credit Agreementdated as of January 13, 2011 (as amended, modified or supplementedfrom time to time) by and among the Company, the subsidiaryborrowers party thereto (as debtors in possession in the Cases underChapter 11 of the Bankruptcy Code), the lenders party thereto andJPMorgan Chase Bank, N.A. (JPMorgan Chase Bank) asadministrative agent and collateral agent (the facilities thereunder, theDIP Credit Facilities).

Joint Lead Arrangersand Joint Bookrunners: J.P. Morgan Securities LLC ( JPMorgan) and Credit Suisse

Securities (USA) LLC (CS Securities and, together withJPMorgan in such capacity, the Lead Arrangers).

Administrative Agent: JPMorgan Chase Bank (in such capacity, together with its permittedsuccessors and assigns, the ABL Administrative Agent).

Syndication Agent: CS Securities.

ABL Lenders: A syndicate of banks, financial institutions and other entities(including JPMorgan Chase Bank and Credit Suisse) arranged bythe Lead Arrangers and reasonably acceptable to the Company otherthan Disqualified Competitors (collectively, the ABL Lenders).

1Note: If a holding company (the Parent) is formed above the Company in connection with the Plan, the Parent andeach of its other domestic subsidiaries will become a guarantor and pledge its respective assets (including in the case ofthe Parent, the equity of the Company and any of its other domestic subsidiaries) to secure the Exit Facilities, allfinancial reporting and metrics will relate to the Parents consolidated group and a customary negative covenant relatingto limitations on the activities of the holding company Parent will be added.



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II. ABL Revolving Credit FacilityType and Amount of Facility: Exit senior secured asset-based revolving credit facility (the ABL

Revolving Facility) in the amount of $400,000,000 (the ABLRevolving Commitment and the loans thereunder, the ABLLoans).

Revolver Availability: The ABL Revolving Facility shall be available on a revolving basisduring the period commencing on the Closing Date and ending onthe Termination Date (as defined below), it being understood andagreed that on the Closing Date, the Borrowers shall borrow anamount at least equal to the Maximum NY Mortgage Amount (asdefined below) (the amount of loan equal to Maximum NYMortgage Amount referred to herein as the ABL NY MortgageLoan). ABL Loans bearing interest at the Alternate Base Rate (asdefined in Annex I hereto) shall be available on a same day basis.

Availability under the ABL Revolving Facility will be subject to theRevolving Borrowing Base referred to below. Excess RevolverAvailability means, at any time, an amount equal to (i) (x) thelesser of the ABL Revolving Commitment and the RevolvingBorrowing Base (such lesser amount, the Line Cap) minus (y) thesum of the aggregate outstanding amount of borrowings under theABL Revolving Facility plus the undrawn amount of outstandingLetters of Credit issued for the account of the Borrowers that havenot been cash collateralized by the Borrowers (collectively, theAggregate Revolving Credit Extensions).

Letters of Credit: $250,000,000 of the ABL Revolving Facility shall be available forthe issuance of letters of credit (the Letters of Credit) byJPMorgan Chase Bank and any other ABL Lender, reasonably

acceptable to the ABL Administrative Agent and the Company, thatagrees to act as an issuing bank (collectively, in such capacity, theIssuing Lenders). No Letter of Credit shall have an expiration dateafter the earlier of (a) one year after the date of issuance and (b) five(5) business days prior to the Maturity Date (as defined below),provided that any Letter of Credit may provide for the renewalthereof for additional periods (which shall in no event extendbeyond the date referred to in clause (b) above). It is understood andagreed that letters of credit issued under the DIP Credit Agreementand outstanding on the Closing Date (the Existing Letters ofCredit) shall be deemed to be Letters of Credit under the ABLRevolving Facility.

Drawings under any Letter of Credit shall be reimbursed by theBorrowers (whether with their own funds or with the proceeds ofABL Loans, subject to the satisfaction (or waiver) of the applicableconditions precedent to Revolving Loan borrowings) within one (1)business day of notice. To the extent that the Borrowers do not soreimburse the Issuing Lenders, the ABL Lenders under the ABLRevolving Facility shall be irrevocably and unconditionallyobligated to reimburse the Issuing Lenders on a pro rata basis.



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Revolving Borrowing Base: The Revolving Borrowing Base will equal the sum of:

(a) the lesser of (i) 75% of the Eligible Inventory (to be definedin the ABL Credit Agreement) (valued at the lower of cost (FIFO)or market) of the Loan Parties (as defined below) and (ii) theproduct of 90% multiplied by the net orderly liquidation valuepercentage identified in the most recent reasonably acceptableinventory appraisal multiplied by the Loan Parties EligibleInventory (valued at the lower of cost (FIFO) or market),plus

(b) 90% of the Loan Parties Eligible Credit Card AccountsReceivable (to be defined in the ABL Credit Agreement),plus

(c) 85% of the Loan Parties Eligible Coinstar AccountsReceivable (to be defined in the ABL Credit Agreement),plus

(d) 85% of the Loan Parties Eligible Third Party InsuranceProvider Accounts Receivable (to be defined in the ABL CreditAgreement),plus

(e) 85% multiplied by the net orderly liquidation value of theLoan Parties Scripts (to be defined in the ABL Credit Agreement)as set forth in the most recent reasonably acceptable scriptsappraisal,plus

(f) 65% multipliedby the fair market value of the Loan PartiesEligible Owned Real Estate (to be defined in the ABL CreditAgreement but excluding Eligible Owned Real Estate located inNew York (the New York Owned Real Estate)) identified in themost recent reasonably acceptable real estate appraisal,plus

(g) the lesser of (i) the maximum amount secured by themortgages on the New York Owned Real Estate (the MaximumNY Mortgage Amount) and (ii) 65% multipliedby the fair marketvalue of the New York Owned Real Estate identified in the mostrecent reasonably acceptable real estate appraisal,plus

(h) 100% of unrestricted cash and cash equivalents on depositin an investment account at the ABL Administrative Agent subjectto a blocked account control agreement in favor of the ABLAdministrative Agent, less

(i) Reserves (to be defined in the ABL Credit Agreement)established by the ABL Administrative Agent in its PermittedDiscretion, which Reserves (and the establishment thereof) shall besubstantially similar to the reserves permitted (and establishmentprocess) under the DIP Credit Agreement, as modified to reflect thestructural differences between the two credit facilities, including theLoan Parties emergence from the Cases, and subject to suchchanges as may be mutually agreed by the Company and the ABLAdministrative Agent. Permitted Discretion means adetermination made in good faith and in the exercise of reasonable



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(from the perspective of a secured asset based lender) businessjudgment.

Eligibility: Except as otherwise mutually agreed, the eligibility criteria for

Eligible Credit Card Accounts Receivable, Eligible Coinstar Accounts

Receivable, Eligible Third Party Insurance Provider Accounts

Receivable, Eligible Inventory and Eligible Owned Real Estate will

be substantially similar to the eligibility criteria set forth in the DIPCredit Agreement, as modified to reflect the structural differences

between the two credit facilities, including the Loan Parties

emergence from the Cases, and subject to such changes as may be

mutually agreed by the Company and the ABL Administrative Agent.

Mortgages on eligible owned real estate shall be required on the

Closing Date.

In addition, the ABL Administrative Agent retains the right, from

time to time, in its Permitted Discretion, to establish additional

standards of eligibility and Reserves against eligibility and to adjust

Reserves (in each case without duplication of other eligibility criteria

or Reserves) substantially in accordance with standards set forth in theDIP Credit Agreement, as modified to reflect the structural differences

between the two credit facilities, including the Loan Parties

emergence from the Cases, and subject to such changes as may be

mutually agreed by the Company and the ABL Administrative Agent;

provided that the initial Reserves shall be substantially similar to the

reserves established in connection with the most recent revolving

borrowing base certificate delivered by the Company under the DIP

Credit Agreement, as modified to reflect the structural differences

between the two credit facilities, including the elimination of the

Carve Out Reserves (as defined in the DIP Credit Agreement).

Maturity and TerminationDate: The ABL Loans shall be repaid in full and the ABL Revolving

Commitment shall terminate on the earliest to occur of (i) the datethat is 5 years after the Closing Date (the Maturity Date) and (ii)the acceleration of the ABL Loans and the termination of the ABLRevolving Commitment in accordance with the ABL CreditAgreement (as defined below) (such earlier date, the TerminationDate).

III. Purpose; Certain Payment ProvisionsPurpose: The proceeds of the ABL Revolving Facility shall be used to

finance the working capital needs and for other general corporatepurposes of the Company and its subsidiaries (including investmentsand capital expenditures permitted hereunder); provided that theproceeds of ABL Loans may not be used to prepay the Term Loans(as defined below) (other than in connection with (x) the quarterlyscheduled amortization thereof and (y) a mandatory prepayment ofthe Term Loans arising from a collateral amount shortfall that isotherwise permitted under the ABL Credit Agreement).



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Fees and Interest Rates: As set forth on Annex I.

Mandatory Prepayments: If at any time the Aggregate Revolving Credit Extensions exceed theLine Cap (including as a result of the ABL Administrative Agentestablishing or increasing Reserves in accordance with Eligibilityabove), then the Borrowers will within one (1) business day of noticethereof first prepay outstanding ABL Loans, other than the ABL NYMortgage Loan, second cash collateralize outstanding Letters ofCredit, in an aggregate amount equal to such excess (it beingunderstood and agreed that upon request by the Company followingthe elimination of such excess (e.g., due to increase in the RevolvingBorrowing Base, prepayment of the ABL Loans or otherwise), theABL Administrative Agent shall return the applicable amount of cashcollateral to the Company), and third prepay the outstanding ABL NYMortgage Loan in each case without a permanent reduction in theABL Revolving Commitment.

In addition to the mandatory prepayments described above, the ABLCredit Agreement will contain mandatory prepayment provisions thatwill require a prepayment of ABL Loans outstanding under the ABLRevolving Facility with the net cash proceeds received from aPrepayment Event, in each case subject to exceptions and thresholdsto be mutually agreed. For purposes herein, Prepayment Event shallmean (i) a sale or transfer by any Loan Party of any ABL PriorityCollateral and (ii) the casualty or condemnation of any ABL PriorityCollateral. The mandatory prepayments described in this paragraphshall be applied to prepay outstanding ABL Loans, other than theABL NY Mortgage Loan (without any reduction of the ABLRevolving Commitment).

Voluntary Prepayments: Permitted in whole or in part, with prior written notice to the ABLAdministrative Agent but without premium or penalty, subject tolimitations as to minimum amounts of prepayments (to be mutuallyagreed) and customary indemnification for breakage costs in thecase of prepayment of Eurodollar Loans other than on the last dayof an interest period; provided that, other than in connection withthe termination of the ABL Revolving Commitments in full, aftergiving effect to any such prepayment, the outstanding amount ofABL Loans shall not be less than the Maximum NY MortgageAmount.

Voluntary Reduction ofRevolving Commitment: Permitted, with prior written notice to the ABL Administrative

Agent but without premium or penalty, subject to limitations as toamounts of reductions (to be mutually agreed); provided that, aftergiving effect to such reduction, the aggregate RevolvingCommitment is not less than the Aggregate Revolving CreditExtensions.

IV. Collateral and Other Credit SupportGuaranties: Each Borrower shall unconditionally guarantee all of the

indebtedness, obligations and liabilities of each other Borrower



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arising under or in connection with the ABL Revolving Facility. Inaddition, each direct and indirect domestic subsidiary of the Company(other than the Excluded Subsidiaries (as defined below))(collectively, the Guarantors, and together with the Borrowers, theLoan Parties), other than a Borrower, shall unconditionallyguarantee all of the indebtedness, obligations and liabilities of theBorrowers arising under or in connection with the ABL RevolvingFacility. The Loan Parties shall also unconditionally guarantee all ofthe obligations of each other Loan Party under any interest rateprotection or hedging arrangement or any currency exchange rate orcommodity price hedging arrangements entered into with the ABLAdministrative Agent or an entity that is an ABL Lender at the time ofsuch transaction or any affiliate thereof (the Hedging Agreements)and all of the obligations owed by each Loan Party to the ABLAdministrative Agent or any ABL Lender or an affiliate thereofarising from ACH transactions, cash management services, foreignexchange facilities and credit and debit card transactions (the CashManagement Services). The guarantees in respect of the ABLRevolving Facility will rank pari passu with (i) the guarantees inrespect of the Companys $350,000,000 exit term loan facility (theTerm Loan Facility and, together with the ABL Revolving Facility,the Exit Facilities), (ii) the guarantees in respect of the CompanysPIK-toggle junior lien notes issued on the Closing Date (the PIKToggle Notes) and (iii) the guarantees in respect of the Companysconvertible junior lien notes issued on the Closing Date (theConvertible Notes). Excluded Subsidiaries shall mean (i)immaterial subsidiaries to be as mutually agreed upon (with anyexisting immaterial subsidiaries to be set forth on a schedule on theClosing Date), (ii) any direct or indirect U.S. subsidiary of a direct orindirect non-U.S. subsidiary of the Company, (iii) captive insurancesubsidiaries, if any, (iv) any direct or indirect domestic subsidiary ofthe Company substantially all assets of which are the capital stock orother equity interests of foreign subsidiaries and (v) joint ventures, ifany.

Security: The ABL Revolving Facility, the Hedging Agreements, the CashManagement Services, the Term Loan Facility, the PIK Toggle Notesand the Convertible Notes will be secured by substantially all of theassets of the Loan Parties, whether consisting of real, personal,tangible or intangible property and whether owned on the ClosingDate or thereafter acquired (excluding Excluded Assets (as definedbelow), collectively, the Collateral), including but not limited to: (x)a perfected pledge of all of the outstanding shares of capital stock ofdomestic subsidiaries and first tier foreign subsidiaries of the LoanParties (limited, in the case of voting capital stock of such foreignsubsidiaries and any direct or indirect domestic subsidiary of theBorrower substantially all assets of which are the capital stock orother equity interests of foreign subsidiaries, to 65% of the stock ofsuch subsidiaries) and (y) perfected security interests in, andmortgages on, substantially all tangible and intangible assets of theLoan Parties (including, but not limited to accounts receivable,inventory, equipment, general intangibles, investment property,intellectual property, owned real property, leased real property, cash,



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deposit and securities accounts, commercial tort claims, letter of creditrights, intercompany notes and proceeds of the foregoing), in eachcase subject to exceptions to be mutually agreed, it being understoodand agreed that with respect to leased real property, if landlordconsent is required for the granting of a security interest in such leasedreal property, the Loan Parties shall only be required to usecommercially reasonable efforts to obtain such requisite consent.

Notwithstanding anything to the contrary, the Collateral shall excludethe following: (i) at the option of the Company, any leaseholdinterests (including any requirement to obtain landlord waivers,estoppels and consents) with a value of less than an amount to bemutually agreed; (ii) motor vehicles and other assets subject tocertificates of title, letter of credit rights that are not supportingobligations and immaterial commercial tort claims; (iii) pledges andsecurity interests prohibited by law and permitted agreements(including permitted liens, leases and licenses) after giving effect tothe applicable anti-assignment provisions of the Uniform CommercialCode (other than proceeds and receivables thereof, the assignment ofwhich is expressly deemed effective under the Uniform CommercialCode notwithstanding such prohibition); (iv) any United States intent-to-use trademark application to the extent and for so long as creationof a security interest therein would impair the validity orenforceability of such intent-to-use trademark application; (v) assetsto the extent a security interest in such assets would result in adversetax consequences; (vi) those assets as to which the ABLAdministrative Agent and the Company reasonably determine that theburden or cost of obtaining such a security interest therein or theperfection thereof outweighs the benefit to the ABL Lenders of thesecurity to be afforded thereby and (vii) other types of property to bemutually agreed. The foregoing described in clauses (i), (ii), (iii), (iv),(v), (vi) and (vii) are, collectively, the Excluded Assets.

Such security interests will have the following priority:

(a) in the case of security interests securing the ABL RevolvingFacility, the Hedging Agreements and the Cash ManagementServices (and any guarantees in respect thereof) (collectively, theABL Obligations), (i) first priority, if such security interestsattach to any Collateral other than the Term Priority Collateral (asdefined below) (the ABL Priority Collateral) and (ii) secondpriority (junior to the security interests securing the Term LoanFacility), if such security interests attach to leased real property (theTerm Priority Collateral); provided that the mortgages with

respect to the first priority security interests in the New YorkOwned Real Estate and the second priority security interest inleased real property located in New York granted in respect of theABL Revolving Facility shall (x) only secure the ABL NYMortgage Loan and (y) contain customary last dollar provisions;

(b) in the case of security interests securing the Term LoanFacility (and any guarantees in respect thereof), (i) first priority, ifsuch security interests attach to the Term Priority Collateral and (ii)



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second priority (junior to the security interests securing the ABLObligations), if such security interests attach to ABL PriorityCollateral;

(c) in the case of security interests securing the PIK ToggleNotes (and any guarantees in respect thereof), (i) third priority (juniorto the security interests securing the ABL Obligations and the securityinterests securing the Term Loan Facility), if such security interestsattach to the ABL Priority Collateral and (ii) third priority (junior tothe security interests securing the Term Loan Facility and the securityinterests securing the ABL Obligations), if such security interestsattach to the Term Priority Collateral; and

(d) in the case of security interests securing the ConvertibleNotes (and any guarantees in respect thereof), (i) fourth priority(junior to the security interests securing the ABL Obligations, thesecurity interests securing the Term Loan Facility and the securityinterests securing the PIK Toggle Notes), if such security interestsattach to the ABL Priority Collateral and (ii) fourth priority (junior tothe security interests securing the Term Loan Facility, the securityinterests securing the ABL Obligations and the security interestssecuring the PIK Toggle Notes), if such security interests attach to theTerm Priority Collateral.

For the avoidance of doubt and without limiting any other eligibilitycriteria, any asset that is not subject to a perfected first prioritysecurity interest (subject to certain permitted liens and subject to post-Closing Date periods to be mutually agreed to complete certainperfection actions) in favor of the ABL Administrative Agent shall beexcluded from the Revolving Borrowing Base.

All the above-described pledges, mortgages and security interestsshall be created on terms, and pursuant to documentation, reasonablysatisfactory to the Loan Parties, the ABL Administrative Agent andthe administrative agent (the Term Loan Administrative Agent)under the Term Loan Facility (including, in the case of real property,by customary items such as reasonably satisfactory title insurance).

The lien priority, relative rights and other creditors rights issues inrespect of the ABL Revolving Facility, the Term Loan Facility, thePIK Toggle Notes and the Convertible Notes will be set forth in acustomary intercreditor agreement (the Intercreditor Agreement)that will provide, among other things, that, (i) so long as anyobligations are outstanding under the ABL Revolving Facility (or anyrefinancing, replacement, extension or renewal thereof), the ABLAdministrative Agent will control at all times all remedies and otheractions related to the ABL Priority Collateral and that the securedparties under the Term Loan Facility will be required to providecustomary access to the Term Priority Collateral for purposes ofenforcing or protecting rights in the ABL Priority Collateral and/orprocessing, storing or distributing inventory, (ii) so long as anyobligations are outstanding under the Term Loan Facility (or anyrefinancing, replacement, extension or renewal thereof), the Term



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Loan Administrative Agent will control at all times all remedies andother actions related to the Term Priority Collateral, (iii) the liens onthe Collateral securing the PIK Toggle Notes and the ConvertibleNotes shall be on a silent junior basis and (iv) so long as the ABLRevolving Facility and/or the Term Loan Facility are outstanding, noasset sweep of any kind shall apply under the PIK Toggle Notes or theConvertible Notes.

V. Certain ConditionsInitial Conditions The availability of the ABL Revolving Facility shall be conditioned

upon satisfaction (or waiver) of the following conditions precedent(the date upon which the initial funding of the Exit Facilities occursupon the satisfaction (or waiver) of all such conditions, the ClosingDate) on or before March 31, 2012 (or any date after March 31,2012 but not later than April 30, 2012 if the applicable terminationdate under each Securities Purchase Agreement has been extendedin accordance with its terms):

(a) The Court shall have entered the Financing PapersApproval Order, which order shall (i) be in full force and effect,unstayed and final and non-appealable, (ii) not be subject to amotion to stay, a motion for rehearing or reconsideration or apetition for a writ of certiorari and (iii) not have been amended,supplemented or otherwise modified without the written consent ofthe Lead Arrangers, reversed or vacated.

(b) The Loan Parties shall have executed and deliveredreasonably satisfactory definitive financing documentation withrespect to the ABL Revolving Facility, including a credit agreement(the ABL Credit Agreement), security documents, guarantees, theIntercreditor Agreement and other customary legal documentation(collectively, together with the ABL Credit Agreement, the ABLLoan Documents) mutually satisfactory to the Company and theLead Arrangers.

(c) The ABL Lenders, the ABL Administrative Agent and theLead Arrangers shall have received all invoiced costs, fees,expenses (including, without limitation, legal fees and expenses)and other compensation owed pursuant to the terms of the FinancingPapers to the extent earned, due and payable on or before theClosing Date.

(d) The Company shall have received (or shall receivesubstantially concurrently with the effectiveness of the ABLRevolving Facility) (i) $350,000,000 in aggregate principal amountof senior secured term loans under the Term Loan Facility havingthe terms set forth in the Term Loan Facility Term Sheet, (ii)$200,000,000 in aggregate proceeds (net of original issue discount)

from the issuance of the PIK Toggle Notes on the terms set forth inthe Amended and Restated Securities Purchase Agreement (SecondLien Notes) dated as of November 3, 2011, as amended, modified orsupplemented, (iii) $210,000,000 in aggregate proceeds (net of fees)



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from the issuance of the Convertible Notes on the terms set forth inthe Amended and Restated Securities Purchase Agreement(Convertible Third Lien Notes) dated as of November 3, 2011, asamended, modified or supplemented and (iv) $80,000,000 inproceeds from the issuance of common stock of the Company on theterms set forth in the Amended and Restated Securities PurchaseAgreement (Common Stock) dated as of November 3, 2011, asamended, modified or supplemented; provided that the Companymay (x) to the extent the commitments in respect of the Term LoanFacility are less than $350,000,000, replace such shortfall withadditional PIK Toggle Notes, Convertible Notes and/or commonstock, in each case, issued to the Investors, (y) replace all or aportion of the PIK Toggle Notes with additional Convertible Notesand/or common stock, in each case, issued to the Investors and (z)replace all or a portion of the Convertible Notes with additionalcommon stock issued to the Investors, to the extent that, in any suchcase, such replacements, taken as a whole, do not, in the reasonablediscretion of the Lead Arrangers, adversely affect the liquidity orcredit profile of the Company and its subsidiaries (including,without limitation, with respect to scheduled amortizations, fees andinterest charges).

(e) The Plan and the Disclosure Statement shall not beamended, modified or supplemented in any manner that could bereasonably expected to adversely affect the interests of the ABLAdministrative Agent or the ABL Lenders without the writtenconsent of the Lead Arrangers (such consent not to be unreasonablywithheld, delayed or conditioned); it being understood and agreedthat any amendment to the Plan providing for the assumption orincurrence by any Borrower of any material indebtedness or othermaterial liability not otherwise contemplated by the Plan as of thedate hereof shall be deemed to adversely affect the interests of theABL Administrative Agent and the ABL Lenders.

(f) The pro forma capital and ownership structure of the LoanParties shall be substantially as described in the Plan and the LeadArrangers shall be satisfied with the Loan Parties capitalization,structure, equity ownership (including the amount and terms of anyindebtedness and the treatment of minority interests) and allagreements relating thereto and the organizational documents andshareholder arrangements of the Loan Parties, in each case as thesame will exist after giving effect to the consummation of theTransactions. The Lead Arrangers are satisfied with thecapitalization, structure, equity ownership and (to the extentprovided on or prior to the date hereof) agreements relating thereto,in each case as the same is currently proposed to exist after givingeffect to the consummation of the Transactions.

(g) The Plan shall be confirmed pursuant to an order entered bythe Court (the Plan Confirmation Order), which order shall (i) beconsistent with the Financing Papers with respect to any termstherein reasonably related to the ABL Revolving Facility, (ii) be inform and substance satisfactory to the Lead Arrangers in their sole



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discretion with respect to any portions of the order that relate to theABL Revolving Facility, and reasonably satisfactory to the LeadArrangers in all other respects, (iii) be in full force and effect,unstayed, final and non-appealable and not subject to any appeal,motion to stay, motion for rehearing or reconsideration or a petitionfor writ of certiorari, unless waived in writing by the LeadArrangers in their sole discretion and (iv) not have been reversed,vacated, amended, supplemented or otherwise modified in anymanner that could be reasonably expected to adversely affect theinterests of the ABL Administrative Agent or the ABL Lenders.

(h) All conditions precedent to effectiveness of the Plan shallhave been satisfied (and not waived without the consent of the LeadArrangers) to the reasonable satisfaction of the Lead Arrangers, theeffective date of the Plan shall have occurred on or before theClosing Date and the substantial consummation (as defined inSection 1101 of the Bankruptcy Code) of the Plan in accordancewith its terms shall occur substantially contemporaneously with theClosing Date.

(i) The existing indebtedness of the Loan Parties (other thanwith respect to the DIP Credit Facilities, which is addressed in theimmediately succeeding paragraph) shall have been repaid,restructured or reinstated as expressly contemplated by the Plan and,after consummation of the Plan and giving effect to theTransactions, the Loan Parties shall have no outstandingindebtedness, contingent liabilities or claims against them, except asexpressly contemplated by the Plan and/or permitted under the ABLLoan Documents, as applicable.

(j) Prepayment in cash in full of all obligations under the DIPCredit Facilities (other than the Existing Letters of Credit whichshall be rolled into the ABL Revolving Facility and contingentobligations not then due and owing), termination of thecommitments thereunder and termination or release of all liens andsecurity interests granted thereunder on terms reasonablysatisfactory to the ABL Administrative Agent (with suchprepayment in full, termination and release being evidenced by apayoff letter reasonably acceptable to the ABL AdministrativeAgent or, if such letter is not available, appropriate provisions in thePlan Confirmation Order confirming such termination and release).

(k) The Borrowers shall have delivered all documentation andother information required by bank regulatory authorities underapplicable know-your-customer and anti-money laundering rulesand regulations, including, without limitation, the Patriot Act, ineach case at least five (5) business days prior to the Closing Date tothe extent requested 10 business days prior to the Closing Date.

(l) Liens creating a first-priority security interest (subject tocertain permitted liens) in the ABL Priority Collateral and a second-priority security interest (subject to certain permitted liens) in theTerm Priority Collateral in favor of the ABL Administrative Agent



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for the benefit of the holders of the ABL Obligations shall havebeen perfected to the extent required pursuant to the ABL LoanDocuments.

(m) All material governmental and third party approvalsnecessary for the consummation of the Transactions shall have beenobtained and be in full force and effect.

(n) The Lead Arrangers shall have received (i) the auditedconsolidated financial statements of the Company for the two mostrecent fiscal years ended prior to the Closing Date as to which suchaudited financial statements are available, (ii) unaudited interimconsolidated financial statements of the Company for each fiscalfour-week period and quarterly period ended subsequent to the dateof the latest financial statements delivered pursuant to clause (i) ofthis paragraph as to which such financial statements are available,(iii) the Companys most recent projected income statement, balancesheet and cash flows in form reasonably acceptable to the LeadArrangers for the four-year period beginning on the effective date ofthe Plan (set forth on a four-week period basis for the first year andon an annual basis thereafter) and (iv) a pro forma balance sheet ofthe Company, after giving pro forma effect to the Transactions (itbeing understood and agreed that the Lead Arrangers have receivedall financial statements required to be delivered pursuant to clauses(i), (ii) and (iv) above).

(o) The ABL Administrative Agent shall have received suchclosing documents as are customary and reasonable for transactionsof this type, including but not limited to certified copies oforganizational documents, resolutions, good standing certificates ineach Loan Partys jurisdiction of formation, incumbency certificates,flood insurance certificates and related endorsements, customaryopinions of counsel, title insurance policies, insurance certificates,loss payee and additional insured endorsements and financingstatements, all in form and substance reasonably acceptable to theBorrowers, the ABL Administrative Agent and the Lead Arrangers.

(p) The ABL Administrative Agent shall have received acertificate from the chief financial officer of the Company in formand substance reasonably satisfactory to the Lead Arrangers,certifying that the Company and its subsidiaries, on a consolidatedbasis after giving effect to the Transactions, are solvent.

(q) The ABL Administrative Agent shall have receivedappraisals of assets included in the Revolving Borrowing Base fromindependent appraisers reasonably satisfactory to the ABLAdministrative Agent engaged directly by the ABL AdministrativeAgent in form and substance reasonably satisfactory to the ABLAdministrative Agent (it being understood and agreed that theappraisers engaged by the administrative agent under the DIP CreditAgreement are reasonably satisfactory to the ABL AdministrativeAgent).



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(r) Compliance with all applicable requirements of RegulationsU, T and X of the Board of Governors of the Federal ReserveSystem.

(s) Minimum unrestricted cash and cash equivalents of theLoan Parties (after giving effect to the Transactions, excluding cashin stores and in-transit cash) and Excess Revolver Availability ofnot less than an amount to be mutually agreed.

(t) The ABL Administrative Agent shall have received aborrowing base certificate as of a date as recent as reasonablypracticable, with customary supporting documentation andsupplemental reporting to be mutually agreed upon between theABL Administrative Agent and the Company.

(u) The ABL Administrative Agent or its designee shall haveconducted a reasonably satisfactory field examination of theaccounts receivable, inventory and related working capital mattersand financial information of the Company and its subsidiaries andof the related data processing and other systems.

(v) Maximum First Lien Leverage Ratio and maximum TotalLeverage Ratio (each to be defined in the ABL Credit Agreement)not to exceed levels to be mutually agreed.

On-Going Conditions: The making of each extension of credit shall be conditioned uponthe satisfaction (or waiver) of the following conditions: (a) theaccuracy in all material respects of all representations andwarranties in the ABL Loan Documents (including, withoutlimitation, the material adverse change and litigationrepresentations); (b) there being no default or event of default inexistence at the time of, or immediately after giving effect to themaking of, such extension of credit, (c) after giving effect to theextensions of credit request, the Aggregate Revolving CreditExtensions shall not exceed the Line Cap and (d) if the AggregateRevolving Credit Extensions shall be less than the Maximum NYMortgage Amount as a result of the mandatory prepayment pursuantto Mandatory Prepayment above, the Borrowers shall pay allmortgages recording taxes and other similar taxes payable under allapplicable mortgages in connection such extension of credit. Asused herein and in the ABL Loan Documents a material adversechange shall mean any event, development or circumstance thathas had or could reasonably be expected to have a material adverseeffect, and a material adverse effect shall mean a material adverseeffect on (i) the business, assets, operations, or financial conditionof the Company and its subsidiaries taken as a whole; provided thatnothing disclosed in (1) the Companys Annual Report on Form 10-K for the year ended February 26, 2011, (2) Quarterly Report onForm 10-Q for each quarter ended since February 26, 2011, as filedprior to the date hereof, (3) any filings on Form 8-K made throughthe date hereof and/or (4) the Disclosure Statement, shall, in anycase, in and of itself and based solely on facts as disclosed therein(without giving effect to any developments not disclosed therein),



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be deemed to constitute a material adverse effect), (ii) the ability ofthe Loan Parties (taken as a whole) to perform any of their materialobligations under the ABL Loan Documents to which they areparty, (iii) the ABL Administrative Agents liens (on behalf of itselfand the ABL Lenders) on the Collateral (other than in respect ofimmaterial Collateral) or the priority of such liens or (iv) the rightsof the ABL Administrative Agent, the Issuing Lenders and the ABLLenders under the ABL Loan Documents.

VI. Certain Documentation MattersThe ABL Loan Documents shall contain the following (but noother) representations, warranties, covenants and events of defaultcustomary for exit financings of this type (which shall be, in eachcase, subject to materiality qualifiers, exceptions, thresholds andlimitations to be mutually agreed upon):

Representations andWarranties: Financial statements; no material adverse change since the Closing

Date; organization, existence and good standing, authorization andvalidity; due execution and delivery; compliance with law andagreements; corporate power and authority; enforceability of ABLLoan Documents; governmental approvals, no conflict with law ordebt obligations or creation of liens; no unstayed litigation; nodefault; solvency; ownership of property; intellectual property; noburdensome restrictions; taxes; insurance; Federal Reserveregulations; ERISA; Investment Company Act; subsidiaries;environmental matters; labor matters; accuracy of disclosure;attachment and perfection of liens under the ABL Loan Documents.

Affirmative Covenants: Delivery of fiscal four-week, quarterly and annual financialstatements and compliance certificates, annual projections (whichprojections shall be made on a four-week period basis within 30 daysof the beginning of each year), monthly collateral reporting (includingaccounts receivable agings and inventory reports), monthly borrowingbase certificates (provided that delivery of the borrowing basecertificate and related collateral reporting will be required on a weeklybasis at any time after the Excess Revolver Availability is less than20% of the ABL Revolving Commitment until the Excess RevolverAvailability has exceeded a percentage to be mutually agreed of theABL Revolving Commitment for a period of consecutive days to bemutually agreed, at which time such delivery will again be requiredon a monthly basis) and copies of appraisals of the leased realproperty delivered by the Company to the Term Loan AdministrativeAgent in connection with the Term Loan Facility; and othercustomary information reasonably requested by the ABLAdministrative Agent (other than information subject to attorneyclient privilege or confidentiality obligations owed to a third party);payment of material obligations; continuation of business (taken asa whole) and maintenance of existence and material rights andprivileges (taken as a whole); compliance with laws; maintenance ofmaterial property (ordinary wear and tear excepted) and insuranceconsistent with customary industry practice; maintenance of books



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and records; right of the ABL Administrative Agent to inspectproperty and books and records (including periodic fieldexaminations and inventory, real estate and scripts appraisals, in eachcase as set forth below); notices of defaults, material litigation andother material events; compliance with environmental laws; promptimplementation of all recommended actions in the Phase IIenvironmental reports provided to the ABL Administrative Agentprior to the date hereof (the Existing Phase II Reports), any otheractions as may be required to be in material compliance withenvironmental law or address any material Environmental Liabilityand any material recommendations by an environmental consultantto be engaged by the Company (which consultant shall bereasonably acceptable to the ABL Administrative Agent); within 60days of the Closing Date (which timeframe may be extended foradditional periods by the ABL Administrative Agent in its PermittedDiscretion), completion of document delivery and reportingrequirements as set forth in the Existing Phase II Reports; within 90days of the Closing Date (which timeframe may be extended foradditional periods by the ABL Administrative Agent in its PermittedDiscretion), preparation and implementation, at the Company's solecost and expense, of asbestos operation and maintenance plans atproperties identified in the Existing Phase II Reports; cashmanagement and depository banks; casualty and condemnation;benefits plans payments; additional subsidiaries; covenant toguarantee obligations and give security; further assurances as tosecurity; and use of proceeds and letters of credit.

Financial Covenant: Minimum Fixed Charge Coverage Ratio (to be defined in the ABLCredit Agreement), of 1.10:1, tested at all times after the ExcessRevolver Availability is less than 15% of the ABL RevolvingCommitment until the Excess Revolver Availability has exceeded apercentage to be mutually agreed of the ABL RevolvingCommitment for a period of consecutive days to be mutuallyagreed.

For purposes of determining compliance with the financialcovenant, any cash equity contribution directly or indirectly made tothe Company after the end of any fiscal quarter after the ClosingDate and on or prior to the day that is 10 business days after the dayon which financial statements are required to be delivered for suchfiscal quarter will, at the request of the Company, be included in thecalculation of Consolidated EBITDA (to be defined in the ABLCredit Agreement) solely for the purposes of determiningcompliance with the financial covenant at the end of such fiscalquarter and applicable subsequent periods which include such fiscalquarter (and not for any other purpose under the ABL CreditAgreement) (any such equity contribution so included in thecalculation of Consolidated EBITDA, a Specified EquityContribution); provided, that (a) in each four consecutive fiscalquarter period, there shall be at least two fiscal quarters in respect ofwhich no Specified Equity Contribution is made, (b) no more thanfive Specified Equity Contributions may be made during the term oftheABL Revolving Facility, (c) the amount of any Specified Equity



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Contribution shall be no greater than 100% of the amount requiredto cause the Borrowers to be in compliance with the financialcovenant and (d) the proceeds of any such Specified EquityContribution shall have been contributed to the Company directly orindirectly as cash equity.

Negative Covenants: Limitations (subject to exceptions, thresholds, limitations and

materiality, as appropriate, to be negotiated) on: indebtedness

(including guarantee obligations); preferred stock of subsidiaries;

liens; mergers, consolidations, liquidations and dissolutions; sales of

assets and other fundamental changes; restricted payments

(including dividends and other payments in respect of capital stock

of the Company); investments (including acquisitions), loans and

advances; sale and leaseback transactions; swap agreements;

optional prepayments in respect of the Term Loan Facility (except

that such prepayments may be made subject to (i) there being no

ABL Loans outstanding, other than the ABL NY Mortgage Loan, (ii)

the Borrowers being in pro forma compliance with a Fixed Charge

Coverage Ratio of 1.25:1 and (iii) pro forma Excess Revolver

Availability during the prior 6 month period being greater than 30%of the ABL Revolving Commitment); mandatory prepayments in

respect of the Term Loan Facility arising from a collateral amount

shortfall (except that such prepayments may be made, subject to pro

forma Excess Revolver Availability during the prior 90-day period

being greater than 30% of the ABL Revolving Commitment);

optional payments in respect of subordinated debt, unsecured bonds

and junior lien debt and modifications of debt instruments

governing any such debt, including cash interest payments on the

PIK Toggle Notes (except that cash interest payments on the PIK

Toggle Notes may be made from the Available Retained ECF

Amount to the extent that (i) there are no ABL Loans outstanding,other than the ABL NY Mortgage Loan, (ii) the Cash Pay Leverage

Ratio (to be defined in the ABL Credit Agreement) is less than 2.00:1

and (iii)the Borrowers are in pro forma compliance with the

financial covenant (assuming for this purpose that such financial

covenant was applicable at such time); transactions with affiliates;

changes in fiscal year (absent consent of the ABL Administrative

Agent); negative pledge clauses; and amendment of material

documents.

Unless a default or event of default has occurred and is continuing

or would result therefrom, the ABL Loan Documents will permit

Permitted Acquisitions (to be defined in the ABL Credit

Agreement) and certain other investments to be mutually agreed,

subject to (i) pro forma Excess Revolver Availability during the

prior 6 month period being greater than 25% of the ABL Revolving

Commitment and (ii) pro forma compliance with the financial

covenant (assuming for this purpose that such financial covenant

was applicable at such time).



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Cash Dominion: As soon as practicable and in no event more than 90 days followingthe Closing Date (which date may be extended for additionalperiods by the ABL Administrative Agent in its PermittedDiscretion), the Loan Parties will be subject to springing cashdominion from such date for the term of the ABL RevolvingFacility, and, from and after such date, funds deposited into anydepository account (except as set forth below) of a Loan Party willbe swept on a daily basis into a concentration account maintainedwith the ABL Administrative Agent, and at any time after theExcess Revolver Availability is less than the greater of (x) 17.5% ofthe Line Cap and (y) $50,000,000, such deposited amounts shall beused to reduce ABL Loans outstanding under the ABL RevolvingFacility, other than the ABL NY Mortgage Loan, until the ExcessRevolver Availability has exceeded the greater of a percentage to bemutually agreed of the Line Cap and a dollar amount to be mutuallyagreed for a period of consecutive days to be mutually agreed, inwhich case, the ABL Administrative Agent shall return and/or grantaccess to any funds not applied in accordance with this sentence.The concentration account shall at all times be maintained with theABL Administrative Agent. The appropriate and customarydocumentation, including shifting control blocked account and/orlockbox agreements reasonably acceptable to the ABLAdministrative Agent (a Qualified Account), will be required forall depository accounts of the Loan Parties. Notwithstanding theforegoing, the following deposit accounts (collectively, ExcludedAccounts) shall be excluded from the foregoing requirements: (i)payroll, trust, employee benefit and tax accounts, (ii) local storeaccounts having available balances of less than an agreed-uponamount, individually, (iii) other accounts (other than certainaccounts to be mutually agreed) having balances not in excess of anamount to be mutually agreed in the aggregate at any time, (iv)accounts used for disbursement to (or debit against by) stateredemption authorities for refundable bottle deposits proceeds, (v)accounts used for disbursement to (or debit against by) state lotteryorganizations for lottery sale proceeds, (vi) accounts used fordisbursement to (or debit against by) transit authorities for transitcard sale proceeds; and (vii) zero balance accounts from whichbalances are swept daily to a Qualified Account.

Events of Default: Nonpayment of principal when due; nonpayment of interest, fees orother amounts after five (5) business days; representations andwarranties are incorrect in any material respect; violation ofcovenants (subject, in the case of certain affirmative covenants, to agrace period of 30 days from notice from the ABL AdministrativeAgent thereof); cross-default to occurrence of a default whichpermits acceleration (whether or not resulting in acceleration) underindebtedness above an amount to be mutually agreed; bankruptcyevents; certain ERISA events; material judgments (in excess ofinsurance) which remain undischarged for 45 days; any of the ABLLoan Documents shall cease to be in full force and effect (other thanin accordance with its terms) or any Loan Party thereto shall so assert;any interests created by the security documents shall cease to beenforceable and of the same priority purported to be created thereby



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(other than in respect of immaterial Collateral); and a change ofcontrol (to be defined in the ABL Credit Agreement).

Voting: Amendments, waivers and consents with respect to the ABL LoanDocuments shall require the approval of the Company and ABLLenders holding not less than a majority of the ABL RevolvingCommitment, except that (a) the consent of each ABL Lenderdirectly adversely affected thereby shall be required with respect to(i) reductions in the amount or extensions of the scheduled date ofmaturity of any loan or reductions in the amount or extension of thepayment date for, any required mandatory payments arising fromthe Aggregate Revolving Credit Extensions exceeding the Line Cap,(ii) reductions in the rate of interest or any fee or extensions of anydue date thereof (provided that waivers of defaults or events ofdefaults or waivers of default interest shall not be deemed to be areduction in the rate of interest or any fee under the ABL LoanDocuments) and (iii) increases in the amount or extensions of theexpiry date of any such ABL Lenders commitment; (b) the consentof each ABL Lender shall be required to (i) modify the pro ratasharing requirements of the ABL Loan Documents, (ii) permit anyLoan Party to assign its rights under the ABL Credit Agreement(other than as a result of mergers, consolidations, liquidations ordissolutions permitted by the ABL Credit Agreement), (iii) reduceany of the voting percentages, (iv) release any Guarantor, except asotherwise permitted in the ABL Loan Documents, (v) release all orsubstantially all of the Collateral or (vi) increase the advance ratesset forth in the definition of Revolving Borrowing Base or to addadditional categories of assets to the definition of RevolvingBorrowing Base; (c) the consent of ABL Lenders holding more than66-2/3% of the aggregate amount of the ABL RevolvingCommitment shall be required to make any other amendments to thedefinition of Revolving Borrowing Base, in each case in a manneradverse to the interests of the ABL Lenders or in a manner thatwould make more credit available to the Borrowers. The ABL LoanDocuments shall include provisions regarding the customary abilityof the ABL Administrative Agent and the Borrowers to modify theABL Loan Documents to cure ambiguities, inaccuracies andmistakes, in each case, on terms, and subject to conditions,reasonably acceptable to the Borrowers and the ABL AdministrativeAgent.

Notwithstanding the foregoing, the ABL Loan Documents shallcontain customary amend and extend provisions (on terms to bemutually agreed by the ABL Administrative Agent and theCompany) pursuant to which the Borrowers may, with the consentof the ABL Administrative Agent (such consent not to beunreasonably withheld or delayed), extend the ABL RevolvingCommitment of the consenting ABL Lenders with only the consentof the respective extending ABL Lenders; it being understood andagreed that each ABL Lender shall have the opportunity toparticipate in such extension on the same terms and conditions aseach other ABL Lender; provided, that it is understood that no



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existing ABL Lender will have any obligation to commit to anysuch extension.

In connection with any proposed amendment, waiver or othermodification to the ABL Revolving Facility (a Proposed Change)requiring the consent of all ABL Lenders, all directly adverselyaffected ABL Lenders or 66-2/3% of ABL Lenders, if the consent tosuch Proposed Change of ABL Lenders whose consent is required isnot obtained, but the consent of ABL Lenders with a majority of theABL Revolving Commitment is obtained (any such ABL Lenderwhose consent is required but is not obtained, a Non-ConsentingLender), then the Borrowers may, at their sole expense and effort,upon notice to such Non-Consenting Lender and the ABLAdministrative Agent, require such Non-Consenting Lender toassign and delegate, without recourse (in accordance with andsubject to all restrictions otherwise applicable to assignments underthe ABL Revolving Facility), all its interests, rights and obligationsunder the ABL Loan Documents to an assignee that shall assumesuch obligations (which assignee may be another ABL Lender, if anABL Lender accepts such assignment); provided, that, such Non-Consenting Lender shall have received payment of an amount equalto the outstanding principal of its ABL Loans, accrued interestthereon, accrued fees and all other amounts then due and owing to itunder the ABL Loan Documents from the assignee (to the extent ofsuch outstanding principal and accrued interest and fees) or theBorrowers (in the case of all other amounts).

Assignments andParticipations: The ABL Lenders shall be permitted to assign all or a portion of

their ABL Loans and Revolving Commitment to another person(other than a Disqualified Competitors) with the prior writtenconsent, not to be unreasonably withheld, of (a) the Company;provided that consent of the Company shall not be required if(i) such assignment is made to another ABL Lender or an affiliate orapproved fund of an ABL Lender or (ii) an event of default hasoccurred and is continuing, (b) the ABL Administrative Agent and(c) if any Revolving Commitment is being assigned, the IssuingLenders. In the case of partial assignments (other than to anotherABL Lender, to an affiliate of an ABL Lender or an approved fund),the minimum assignment amount shall be $5,000,000, unlessotherwise agreed by the Company and the ABL AdministrativeAgent. The ABL Lenders shall also be permitted to sellparticipations in their ABL Loans. Participants shall have the samebenefits as the ABL Lenders from which they acquired theirparticipations with respect to yield protection and increased costprovisions. Voting rights of participants shall be limited to thosematters with respect to which the affirmative vote of all ABLLenders or all affected ABL Lenders (if applicable) would berequired. Pledges of ABL Loans in accordance with applicable lawshall be permitted without restriction.

Yield Protection: The ABL Loan Documents shall contain customary provisions(a) protecting the ABL Lenders against increased costs or loss of



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yield resulting from changes in reserve, tax, capital adequacy andother requirements of law, including customary coverage for Dodd-Frank and Basel III, and from the imposition of or changes inwithholding or other taxes, (b) providing for the removal and/ortermination of the ABL Revolving Commitments of an ABL Lenderthat fails to fund ABL Loans when required under the ABL LoanDocuments and (c) indemnifying the ABL Lenders for breakagecosts (other than lost profits) incurred in connection with, amongother things, any prepayment of a Eurodollar Loan (as defined inAnnex I) on a day other than the last day of an interest period withrespect thereto.

The Company may require any ABL Lender that has requestedpayment of any increased cost to assign and delegate, withoutrecourse (in accordance with and subject to all restrictions otherwiseapplicable to assignments under the ABL Revolving Facility), all itsinterests, rights and obligations under the ABL Loan Documents toan assignee that shall assume such obligations (which assignee maybe another ABL Lender, if an ABL Lender accepts suchassignment).

Field Examinations: One field examination per 12-month period may be conducted at thereasonable expense of the Borrowers; provided that (x) the numberand frequency of field examinations shall be increased to two fieldexaminations per 12-month period at any time after the ExcessRevolver Availability is less than 40% of the ABL RevolvingCommitment until the Excess Revolver Availability has exceeded apercentage to be mutually agreed of the ABL RevolvingCommitment for a period of consecutive days to be mutually agreedand (y) there shall be no limitation on the number or frequency ofsuch field examinations if an event of default shall have occurredand is continuing.

Appraisals: One appraisal per 12-month period may be conducted on inventory,owned real estate and scripts; provided that (x) the number andfrequency of such appraisals shall be increased to two appraisals per12-month period at any time after the Excess Revolver Availabilityis less than 40% of the ABL Revolving Commitment until theExcess Revolver Availability has exceeded a percentage to bemutually agreed of the ABL Revolving Commitment for a period ofconsecutive days to be mutually agreed and (y) there shall be nolimitation on the number or frequency of such appraisals if an eventof default shall have occurred and is continuing.

Expenses andIndemnification: The Borrowers shall pay (a) all reasonable documented out-of-

pocket expenses of the ABL Administrative Agent and the LeadArrangers associated with the syndication of the ABL RevolvingFacility and the preparation, execution, delivery and administrationof the ABL Loan Documents and any amendment or waiver withrespect thereto (in the case of legal fees and expenses, limited to thereasonable and documented fees, disbursements and other chargesof one primary counsel designated by the ABL Administrative



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Agent (and appropriate local counsel in applicable localjurisdictions, but limited to one local counsel in each suchjurisdiction) for the Lead Arrangers and the ABL AdministrativeAgent), (b) all reasonable and documented out-of-pocket expensesof the ABL Administrative Agent and the ABL Lenders (includingthe fees, disbursements and other charges of counsel) in connectionwith the enforcement of the ABL Loan Documents; provided thatthe reimbursement of the charges of such counsel shall be limited toone counsel for the group (which shall be designated by the ABLAdministrative Agent) (and (i) appropriate local counsel inapplicable local jurisdictions, but limited to one local counsel for thegroup in each such jurisdiction (which shall be designated by theABL Administrative Agent) and (ii) solely in the case of a conflictof interest, one additional counsel in each relevant jurisdiction forgroup members who are similarly situated) and (c) subject toreimbursement limitations otherwise described herein, all reasonablefees and documented out-of-pocket expenses associated withcollateral monitoring, collateral reviews and appraisals,environmental reviews and reasonable fees and documented expensesof other advisors and professionals engaged by the ABLAdministrative Agent or the Lead Arrangers in consultation with theCompany.

The ABL Administrative Agent, the Lead Arrangers and the ABL

Lenders (and their affiliates and their respective officers, directors,

employees, advisors and agents) will have no liability for, and will

be indemnified and held harmless against, any actual loss, liability,

cost or expense incurred in respect of the financing contemplated

hereby or the use or the proposed use of proceeds thereof; provided

that the Company and its subsidiaries shall have no obligation to

indemnify any indemnified person against any such loss, liability

cost or expense (x) to the extent they are found by a final judgmentof a court of competent jurisdiction to arise from the gross

negligence, bad faith or willful misconduct or a material breach of

the funding obligation under the ABL Credit Agreement of such

indemnified party (or its affiliates, officers, directors, employees,

advisors and agents) or (y) to the extent arising from any dispute

solely among indemnified persons other than (i) any claims against

the ABL Administrative Agent or Lead Arrangers acting in such

capacity or in fulfilling such role or any similar role under the ABL

Revolving Facility and (ii) any claims arising out of any act or

omission on the part of the Company or its subsidiaries. No person

party to the ABL Loan Documents shall be responsible or liable to

any other party to the ABL Loan Documents for any indirect,

special, consequential or punitive damages; provided that nothing

contained in this sentence shall limit the indemnity obligations of the

Company and its subsidiaries to the extent set forth in this paragraph.

Governing Law: The ABL Loan Documents will be governed by the internal laws ofthe State of New York (without regard to principles of conflicts of lawthat would require the application of the law of another jurisdiction).



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Counsel to the ABLAdministrative Agentand the Lead Arrangers: Davis Polk & Wardwell LLP.



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Annex I

Interest and Certain Fees

Interest Rate Options: The Borrowers may elect that the loans comprising each borrowing of ABLLoans bear interest at a rate per annum equal to (a) the Alternate Base Rate(such loans herein referred to as ABR Loans) plus the Applicable Marginor (b) the Adjusted LIBO Rate (such loans herein referred to as EurodollarLoans)plus the Applicable Margin.

As used herein:

Alternate Base Rate or ABR means the greatest of (a) the prime rate ofinterest announced from time to time by JPMorgan Chase Bank or its parent(which is not necessarily the lowest rate charged to any customer), changingwhen and as said prime rate changes (the Prime Rate), (b) the federalfunds effective rate from time to timeplus 0.50% and (c) the Adjusted LIBORate for a one month interest period appearing on the Reuters PageLIBOR01 (or on any successor or substitute page) on such dayplus 1.00%.

Adjusted LIBO Rate means the rate (adjusted for statutory reserverequirements for eurocurrency liabilities) for eurodollar deposits for a periodequal to one or two weeks, one, two, three or six months (or nine or twelvemonths if available to all ABL Lenders) (as selected by the Borrowers)appearing on Reuters Page LIBOR01 (or on any other service providingcomparable rate quotations) at approximately 11:00 a.m., London time, two(2) business days prior to the first day of the applicable interest period.

Applicable Margin means 1.50% in the case of ABR Loans and 2.50% inthe case of Eurodollar Loans.

Interest Payment Dates: In the case of ABR Loans, interest shall be payable in arrears on the first dayof each quarter, upon any prepayment due to acceleration and at final maturity.

In the case of Eurodollar Loans, interest shall be payable in arrears on the lastday of each interest period and, in the case of an interest period longer thanthree months, quarterly,upon any prepayment and at final maturity.

Commitment Fee: A commitment fee equal to 0.50% per annum on the average daily unusedportion of the ABL Revolving Commitment, payable monthly in arrears to theABL Administrative Agent for the ratable benefit of the ABL Lenders fromthe Closing Date until termination of the ABL Revolving Commitment.

Letter of Credit Fees: Letter of Credit: A letter of credit fee, equal to the Applicable Margin forEurodollar Loans, on the daily maximum amount to be drawn under all Lettersof Credit, payable quarterly in arrears to the ABL Lenders (including theIssuing Lenders) ratably.

Fronting Fee: A fronting fee of 0.125% per annum of the face amount ofeach Letter of Credit issued shall be payable to the Issuing Lender of suchLetter of Credit, together with any customary and reasonable documentaryand processing charges in accordance with the Issuing Lenders standardschedule for such charges provided, upon request, to the Company with



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respect to the issuance, amendment, cancellation, negotiation or transfer ofeach letter of credit and each drawing made thereunder.

Default Rate: After any event of default and delivery of notice by the ABL AdministrativeAgent, the applicable interest rate for all Loans will be increased by 2% and alloverdue interest, fees and other amounts (other than overdue principal) shallbear interest at 2% above the rate applicable to ABR Loans. Overdue principalshall bear interest at 2% above the rate otherwise applicable.

Rate and Fee Basis: All per annum rates shall be calculated on the basis of a year of 360 days (or365/366 days, in the case of ABR Loans) for actual days elapsed.



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Exhibit B


THE GREAT ATLANTIC & PACIFIC TEA COMPANY$350,000,000 EXIT SENIOR SECURED TERM LOAN FACILITY

Summary of Principal Terms and ConditionsJanuary 17, 2012

This Summary of Principal Terms and Conditions is delivered with a commitment letter of even dateherewith (the Commitment Letter) from JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, CreditSuisse AG and Credit Suisse Securities (USA) LLC to the Company in connection with the proposed ExitFacilities. Capitalized terms used herein and not otherwise defined herein shall have the meanings attributedto such terms in the Commitment Letter.

I. PartiesBorrower: The Great Atlantic & Pacific Tea Company, Inc. (the Borrower).2

Joint Lead Arrangersand Joint Bookrunners: J.P. Morgan Securities LLC ( JPMorgan) and Credit Suisse

Securities (USA) LLC (CS Securities and, together withJPMorgan in such capacity, the Lead Arrangers).

Administrative Agent: JPMorgan Chase Bank (JPMorgan Chase Bank) (in such capacity,together with its permitted successors and assigns, the Term LoanAdministrative Agent).

Syndication Agent: CS Securities.

Term Lenders: A syndicate of banks, financial institutions and other entities(including JPMorgan Chase Bank) arranged by the Lead Arrangersand reasonably acceptable to the Borrower other than Disqualified

Competitors (collectively, the Term Lenders).

II. Term Loan FacilityType and Amount of Facility: Exit senior secured term loan facility (the Term Loan Facility) in

the amount of $350,000,000 (the loans thereunder, the TermLoans).

Term Loan Availability: The Term Loans shall be made available to the Borrower in a singledrawing on the Closing Date (as defined below).

Maturity and Termination

Date; Amortization: The Term Loan Facility will mature on the earliest to occur of(i) the date that is 5 years after the Closing Date (the MaturityDate) and (ii) the acceleration of the Term Loans in accordancewith the Term Loan Credit Agreement (as defined below) (such

2Note: If a holding company (the Parent) is formed above the Borrower in connection with the Plan, the Parent andeach of its other domestic subsidiaries will become a guarantor and pledge its respective assets (including in the case ofthe Parent, the equity of the Borrower and any of its other domestic subsidiaries) to secure the Exit Facilities, allfinancial reporting and metrics will relate to the Parents consolidated group and a customary negative covenant relatingto limitations on the activities of the holding company Parent will be added.



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earlier date, the Termination Date). The Term Loan Facility willbe subject to quarterly amortization of principal (in equalinstallments), with 1% of the original principal amount of the TermLoan Facility to be payable each year, and the balance payable uponthe Termination Date.

III. Purpose; Certain Payment ProvisionsPurpose: The proceeds of the Term Loan Facility shall be used to

consummate the Transactions.

Fees and Interest Rates: As set forth on Annex I.

Mandatory Prepayments: The Term Loan Credit Agreement will contain mandatoryprepayment provisions that will require a prepayment of amountsoutstanding under the Term Loan Facility, in each case, subject toexceptions and thresholds to be mutually agreed and, as to clauses (i)and (ii) below, a reinvestment right (x) with respect to clause (i) inrespect of (I) liquor stores, (II) a leased real property previouslyidentified to the Lead Arrangers and to be set forth in a schedule to theTerm Loan Credit Agreement and (III) other assets in an aggregateamount not to exceed $35,000,000 and (y) with respect to clause (ii)in an unlimited amount, in each case if such net cash proceeds arereinvested within 12 months of receipt (or, if committed to bereinvested during such period, actually reinvested within the later ofsuch 12 months or 180 days of such commitment): (i) within three (3)business days of receipt of net cash proceeds from a sale or transfer bythe Borrower or its domestic subsidiaries of any Term PriorityCollateral, (ii) within three (3) business days of receipt of net cashinsurance proceeds or condemnation awards paid to Loan Parties inrespect of any Term Priority Collateral; (iii) within three (3) businessdays of receipt of net cash proceeds from the issuance of anyindebtedness (other than permitted indebtedness); and (iv) 50% ofExcess Cash Flow (to be defined in the Term Loan Credit Agreement)(commencing with the fiscal year ending February 2013) with step-downs to be mutually agreed. It is understood and agreed that anyamount remaining after the application set forth in the immediatelypreceding sentence in respect of clauses (i) and (ii) above shall beapplied to prepay ABL Loans, cash collateralize Letters of Credit andpermanently reduce the ABL Revolving Commitment in the order ofpriority set forth in the ABL Term Sheet for mandatory prepaymentsfor asset sales of ABL Priority Collateral.

In addition, if at any time the aggregate amount of Term Loansexceeds the Collateral Amount, then the Borrower will within five (5)business days of notice prepay Term Loans in an aggregate amountequal to such excess.

All mandatory prepayments described in this section shall be appliedin direct order of maturity.

Voluntary Prepayments: Permitted in whole or in part, with prior written notice to the TermLoan Administrative Agent but without premium or penalty (other



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than the Prepayment Fee described in Annex I hereto), subject tolimitations as to minimum amounts of prepayments (to be mutuallyagreed) and customary indemnification for breakage costs in thecase of prepayment of Eurodollar Loans other than on the last dayof an interest period. Voluntary prepayments shall be applied asdirected by the Borrower.

IV. Collateral and Other Credit SupportGuaranties: Each direct and indirect domestic subsidiary of the Borrower (other

than the Excluded Subsidiaries (as defined below)) (collectively, theGuarantors, and together with the Borrower, the Loan Parties)shall unconditionally guarantee all of the indebtedness, obligationsand liabilities of the Borrower arising under or in connection with theTerm Loan Facility. The guarantees in respect of the Term LoanFacility will rank pari passu with (i) the guarantees in respect of theABL Revolving Facility, (ii) the guarantees in respect of theBorrowers PIK-toggle junior lien notes issued on the Closing Date(the PIK Toggle Notes) and (iii) the guarantees in respect of theBorrowers convertible junior lien notes issued on the Closing Date(the Convertible Notes). Excluded Subsidiaries shall mean (i)immaterial subsidiaries to be mutually agreed (with any existingimmaterial subsidiaries to be set forth on a schedule on the ClosingDate), (ii) any direct or indirect U.S. subsidiary of a direct or indirectnon-U.S. subsidiary of the Borrower, (iii) captive insurancesubsidiaries, if any, (iv) any direct or indirect domestic subsidiary ofthe Borrower substantially all assets of which are the capital stock orother equity interests of foreign subsidiaries and (v) joint ventures, ifany.

Security: The Term Loan Facility, the ABL Revolving Facility, the HedgingAgreements (as defined below), the Cash Management Services (asdefined below), the PIK Toggle Notes and the Convertible Notes willbe secured by substantially all of the assets of the Loan Parties,whether consisting of real, personal, tangible or intangible propertyand whether owned on the Closing Date or thereafter acquired(excluding Excluded Assets (as defined below), collectively, theCollateral), including but not limited to: (x) a perfected pledge of allof the outstanding shares of capital stock of domestic subsidiaries andfirst tier foreign subsidiaries of the Loan Parties (limited, in the caseof voting capital stock of such foreign subsidiaries and any direct orindirect domestic subsidiary of the Borrower substantially all assetsof which are the capital stock or other equity interests of foreignsubsidiaries, to 65% of the stock of such subsidiaries) and (y)perfected security interests in, and mortgages on, substantially alltangible and intangible assets of the Loan Parties (including, but notlimited to accounts receivable, inventory, equipment, generalintangibles, investment property, intellectual property, owned realproperty, leased real property, cash, deposit and securities accounts,commercial tort claims, letter of credit rights, intercompany notes andproceeds of the foregoing), in each case subject to exceptions to bemutually agreed, it being understood and agreed that with respect toleased real property, if landlord consent is required for the granting of



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a security interest in such leased real property, the Loan Parties shallonly be required to use commercially reasonable efforts to obtain suchrequisite consent. As used herein, Hedging Agreements shall meanthe obligations under any interest rate protection or hedgingarrangement or any currency exchange rate or commodity pricehedging arrangements entered into with the ABL AdministrativeAgent (as defined below) or an entity that is a lender under the ABLRevolving Facility (ABL Lender) at the time of such transactionor any affiliate thereof and Cash Management Services shall meanall of the obligations owed by each Loan Party to the ABLAdministrative Agent or any ABL Lender or an affiliate thereofarising from ACH transactions, cash management services, foreignexchange facilities and credit and debit card transactions.

Notwithstanding anything to the contrary, the Collateral shall excludethe following: (i) at the option of the Borrower, any leaseholdinterests (including any requirement to obtain landlord waivers,estoppels and consents) with a value of less than an amount to bemutually agreed; (ii) motor vehicles and other assets subject tocertificates of title, letter of credit rights that are not supportingobligations and immaterial commercial tort claims; (iii) pledges andsecurity interests prohibited by law and permitted agreements(including permitted liens, leases and licenses) after giving effect tothe applicable anti-assignment provisions of the Uniform CommercialCode (other than proceeds and receivables thereof, the assignment ofwhich is expressly deemed effective under the Uniform CommercialCode notwithstanding such prohibition); (iv) any U