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Current Report
Two Paragon Drive
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[X] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
The Great Atlantic & Pacific Tea Company, Inc.(A&P) currently intends to sell all of the 11.7 million shares of Metro inc. (Metro) which it owns prior to the closing of
the previously announced acquisition of Pathmark Stores,
Inc. (Pathmark) through a merger (the Merger) and to
apply the proceeds of the sale to fund the Merger. Assuming that the Metro shares
are sold prior to November 30, 2007, A&P expects to finance the Merger with the proceeds of the Metro shares and borrowings under a reduced Bridge Facility and an increased ABL Facility. The financing sources that
are parties to the financing commitments have delivered to A&P the necessary waivers under the original financing commitments to facilitate this financing structure, subject to the sale of the Metro shares. Attached hereto as exhibits are the
agreement among A&P, A&P Luxembourg S.à.r.l. and TD Securities
Inc. regarding the sale of Metro shares and the agreements with the financing
commitment parties that facilitate this financing structure. A&P and Pathmark have executed a consent and waiver under the merger agreement that memorializes Pathmarks consent to this financing structure and effects other minor waivers identified therein. Each of the financing
commitment waivers, the agreement with TD Securities Inc. and the consent and waiver under the merger agreement contain certain conditions. The summary description of these agreements set forth herein is subject to the terms and conditions of the
agreements.
Item 8.01. Other Events.
On November 5, 2007, A&P issued a press release, captioned A&P Announces Merger Financing Update; Closing Expected in December, attached hereto as Exhibit 99.1 and incorporated
herein by reference.
Item 9.01. Exhibits.
(d) Exhibits. The following exhibits are filed herewith:
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: November 5, 2007
EXHIBIT INDEX
Exhibit 10.1
The Great Atlantic & Pacific Tea Company, Inc.
- and
A&P Luxembourg S. à r. l.
Metro Inc.
We are writing this letter to confirm our agreement as to the basis on which we will make an offer to purchase 11,726,645 Class A Subordinate Voting shares of Metro inc. ("Metro") (less any Shares sold to Metro under its existing
right of first refusal) (the "Shares") held by A&P Luxembourg S. à r. l. ("A&P Luxembourg"), an indirect wholly-owned subsidiary of The Great Atlantic & Pacific Tea Company, Inc. ("A&P").
Provided that Metro publicly announces its financial results for its 2007 fiscal year on either November 21, 2007 or November 22, 2007 (such date being the Release Date), we will make an offer to purchase the Shares in
the form of the letter attached as Schedule A, and will deliver that offer to you during the period commencing on the trading day following the Release Date and ending on November 28, 2007 (the "Window"), provided that (i) on or about November 5,
2007, and in any event prior to the Window, you publicly announce your intention to sell the Shares and to engage us as your exclusive agent for that purpose, and (ii) prior to the Window, Metro has released you from your obligations under section
3.2 of the Investor Agreement dated as of August 15, 2005 between you and Metro.
We may choose not to submit an offer to you to purchase the Shares or withdraw an offer that you have not then accepted in writing and terminate our obligations hereunder, if and only if (i) there occurs any material adverse
change in the business, affairs, operations, assets or liabilities (contingent or otherwise) of Metro or there is discovered any previously undisclosed material fact or material change, which in our opinion, could reasonably be expected to have a
material adverse effect on the marketability of the Shares, (ii) there should develop, occur or come into effect or existence any event, action, state, condition or major financial occurrence of national or international consequence affecting the
United States or Canada or any outbreak or escalation of national or international hostilities or any crisis or calamity or act of terrorism or similar event affecting the United States or Canada or any governmental action, law, inquiry or other
occurrence of any nature which, in our reasonable opinion, materially adversely affects or may materially adversely affect the
Member of TD Bank Financial Group
- 2 -
marketability of the Shares, or (iii) any inquiry, investigation or other proceeding is commenced, announced or threatened or any order is issued under or pursuant to any relevant statute or by any stock exchange or other
regulatory authority (unless based upon our activities or alleged activities), or there is any change of law, or the interpretation or administration thereof, which, in our reasonable opinion, operates or could operate to prevent, suspend, hinder,
delay, restrict or otherwise have a material adverse effect on the trading in the Shares.
As consideration for our promise to make the offer described above you agree that from the date hereof until the end of the Window you will deal exclusively with us in connection with the sale of the Shares and you will not,
directly or indirectly, through any officer, director, employee, representative or agent, make, solicit, initiate or encourage enquiries from, or the submission of proposals or offers from, or on behalf of, any other person relating to any
acquisition of the Shares.
Nothing in this letter obliges you to accept any offer that we may make.
Member of TD Bank Financial Group
Schedule A
November •, 2007
The Great Atlantic & Pacific Tea Company, Inc.
-and-
A&P Luxembourg s. à r. l.
Attention: Christian W.E. Haub, Executive Chairman
We understand that A&P Luxembourg s. à r. l. (A&P Luxembourg), a wholly-owned subsidiary of The Great Atlantic & Pacific Tea Company, Inc. (A&P) intends to sell [11,726,645] Class A Subordinate
Voting shares of Metro inc. ("Metro") [this number will be reduced by any Shares sold to Metro] (the "Shares"). As we discussed, TD Securities Inc. (TDSI) is pleased to submit an offer to purchase the Shares on the terms detailed below
and in the attached term sheet (the Offer).
Terms and Conditions
The Offer is subject to the following terms and conditions:
Member of TD Bank Financial Group
- 2 -
It is a condition of the obligation of TDSI to complete the purchase of the Shares that the foregoing representations and warranties are true at the time of closing and that Metro has waived the provisions of section 3.2 of the
Investor Agreement dated as of August 15, 2005. Your representations and warranties shall survive closing for one year.
Settlement
At closing, A&P will deliver the Shares electronically through [ ] account against payment of the purchase price.
Yours sincerely,
The foregoing is in accordance with our understanding and is agreed this • day of November, 2007.
Member of TD Bank Financial Group
- 3 -
.
Member of TD Bank Financial Group
- 4 -
Block Trade - Bought Deal
Metro Inc. Amount: 11,726,645 Class A Subordinate Voting Shares of Metro inc. (less any Shares sold to Metro) Form of Offering: To be re-offered in Canada without requiring the filing of a prospectus. Sales in the United States on a private placement basis to qualified institutional buyers pursuant to Rule 144A under the U.S.
Securities Act of 1933, as amended, if available. Vendor: A&P Luxembourg s.à r.l., a wholly-owned subsidiary of The Great Atlantic & Pacific Tea Company, Inc. Purchaser: Net Price to Vendor: Settlement Date: TD Securities Inc. $• per Class A Subordinate Voting share1 2007 (T+ 2, but in no event later than November 30, 2007)
Member of TD Bank Financial Group X&37E=H;.YN'?59[GY^1)&`Y)[DY-;G0Y6/8PP89!!'
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M&(2(68@.<@8Z<=:!W1TU%
Exhibit 10.2
November 5, 2007
The Great Atlantic & Pacific Tea Company, Inc.
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
November 5, 2007
Date of Report (Date of earliest event reported)
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
(Exact name of registrant as specified in its charter)
Maryland
1-4141
13-1890974
(State or other jurisdiction of
(Commission file number)
(I.R.S. Employer
incorporation or organization)
Identification No.)
Montvale, New Jersey 07645
(Address of principal executive offices)
(201) 573-9700
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Exhibit No.
Description
10.1
Agreement re: Metro inc., dated as of November 5, 2007 by and among The Great Atlantic & Pacific Tea Company, Inc., A&P Luxembourg S.à.r.l. and TD Securities Inc.
10.2
Agreement Regarding Bridge Facility, dated as of November 5, 2007, by and among The Great Atlantic & Pacific Tea Company, Inc., Bank of America, N.A., Banc of America Bridge LLC, Banc of America Securities LLC, Lehman Brothers Commercial Bank, Lehman Brothers Inc., and Lehman Commercial Paper Inc.
10.3
Agreement Regarding ABL Facility, dated as of November 5, 2007, by and among The Great Atlantic & Pacific Tea Company, Inc. and Bank of America, N.A., Banc of America Bridge LLC, Banc of America Securities LLC, Lehman Brothers Commercial Bank, Lehman Brothers Inc., and Lehman Commercial Paper Inc.
10.4
Agreement, dated as of November 5, 2007, by and among The Great Atlantic
& Pacific Tea Company, Inc., Sand Merger Corp. and Pathmark Stores, Inc.
99.1
Press Release
THE GREAT ATLANTIC & PACIFIC
TEA
COMPANY, INC.
By:
/s/ Allan Richards
Name:
Allan Richards
Title:
Senior Vice President, Human
Resources, Labor Relations, Legal
Exhibit No.
Description
10.1
Agreement re: Metro inc., dated as of November 5, 2007 by and among The Great Atlantic & Pacific Tea Company, Inc., A&P Luxembourg S.à.r.l. and TD Securities Inc.
10.2
Agreement Regarding Bridge Facility, dated as of November 5, 2007, by and among The Great Atlantic & Pacific Tea Company, Inc., Bank of America, N.A., Banc of America Bridge LLC, Banc of America Securities LLC, Lehman Brothers Commercial Bank, Lehman Brothers Inc., and Lehman Commercial Paper Inc.
10.3
Agreement Regarding ABL Facility, dated as of November 5, 2007, by and among The Great Atlantic & Pacific Tea Company, Inc., and Bank of America, N.A., Banc of America Bridge LLC, Banc of America Securities LLC, Lehman Brothers Commercial Bank, Lehman Brothers Inc., and Lehman Commercial Paper Inc.
10.4
Agreement, dated as of November 5, 2007, by and among The Great Atlantic & Pacific Tea Company, Inc., Sand Merger Corp. and Pathmark Stores, Inc.
99.1
Press Release
TD Securities Inc.
66 Wellington Street West
TD Bank Tower, 8th Floor
Toronto, Ontario M5K 1A2
November 5, 2007
2 Paragon Drive
Montvale, N.J. 07645
c/o The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, N.J. 07645
Yours sincerely,
TD SECURITIES INC.
By:
John Prato
Managing Director
We agree.
THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC.
A&P LUXEMBOURG S. à r. l.
By:
/s/ Brenda Galgano
By: /s/ William J. Moss
Brenda Galgano
William J. Moss
Senior Vice President & Chief
Vice President & Treasurer
Financial Officer
FORM OF OFFER
2 Paragon Drive
Montvale, NJ 07645
U.S.A.
c/o The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, NJ 07645
(a)
(b)
(iii)
(iv)
(v)
TD Securities Inc.
By:
John Prato
Managing Director
The Great Atlantic & Pacific Tea Company, Inc
A&P Luxembourg S. à r. l.
By:
By:
(MRU/A: TSX)
Trade Date:
•, 2007 [Note: To be date of
acceptance of offer]
______________________________
1
The Net Price to Vendor will represent a discount range of 0% to 0.55% off the reference price of the Shares on the TSX on the Trade Date. The Trade Date will occur during the Window. In the event that we cannot agree on a
price prior to the end of the Window, the Net Price to the Vendor will be the volume weighted average trading price of a Class A Subordinate Voting share on the TSX on the last day of the Window less 0.55%.
BANK OF AMERICA, N.A.
LEHMAN BROTHERS COMMERCIAL BANK
BANC OF AMERICA BRIDGE LLC
LEHMAN BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
LEHMAN COMMERCIAL PAPER INC.
9 WEST 57TH STREET
745 SEVENTH AVENUE
NEW YORK, NY 10019
NEW YORK, NY 10019
2 Paragon Drive
Montvale, NJ 07645
Project Pearl
Letter Agreement
Ladies and Gentlemen:
Reference is made to the Commitment Letter, dated March 4, 2007 (together with the Summaries of Terms attached thereto, the Commitment Letter), among Bank of America, N.A. (Bank of America), Banc of America Bridge LLC (Banc of America Bridge), Banc of America Securities LLC (BAS), Lehman Brothers Commercial Bank (LBCB), Lehman Brothers Inc. (Lehman) and Lehman Commercial Paper Inc. (LCPI and, together with Bank of America, Banc of America Bridge, BAS, LBCB and Lehman, each a Commitment Party and, collectively, the Commitment Parties) and The Great Atlantic & Pacific Tea Company, Inc., a Maryland corporation (the Borrower or you). Defined terms used herein are used as defined in the Commitment Letter. The parties to this Letter Agreement hereby agree that the provisions of the Commitment Letter shall only be waived by the Commitment Parties to the extent expressly stated herein and the Commitment Letter shall otherwise remain in full force and effect in accordance with the terms and conditions therein until March 4, 2008 or such earlier time provided therein, and the only conditions precedent to the extension of the Bridge Loans under the Bridge Facility on the Closing Date are those set forth in Annex III to the Commitment Letter, except to the extent waived herein.
The Commitment Parties agree that notwithstanding anything stated in the Commitment Letter, (1) the Commitment Parties hereby waive the conditions precedent to the extension of the Bridge Loans under the Bridge Facility that (a) Borrower provide the Commitment Parties and potential investors with a completed offering memorandum for the offering and sale of Senior Secured Notes not later than 20 days prior to the Closing Date and (b) senior management of the Companies (including the Target) make themselves available prior to the Closing Date for roadshows and other meetings with potential investors for the Senior Secured Notes to market the Senior Secured Notes prior to the Closing Date, and (2) the Commitment Parties hereby waive the requirement that at the Closing Date Borrower and its subsidiaries own, directly or indirectly, any Metro Shares.
The Commitment Parties waivers in the preceding paragraph are expressly conditioned on:
using all of such funds as part of the consideration for the transactions under the Acquisition Agreement;
(ii) the Closing Date occurring by the later of (a) December 4, 2007 and (b) the third business day after the date that the Federal Trade Commission (FTC) accepts an agreement containing a consent order allowing the consummation of the Acquisition and issues a press release publicly announcing such consent order, or, if earlier, the date that the FTC notifies Borrower in writing that it intends not to challenge the Acquisition, provided, however that in no event shall the Closing Date be later than December 31, 2007;
(iii) on or prior to the Closing Date, Borrower having completed and made available to the Bridge Lead Arrangers copies of (a) a preliminary offering memorandum 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 (b) a preliminary prospectus for the offering and sale of convertible debt securities (together with a preliminary prospectus for the offering and sale of common stock to be loaned pursuant to a share lending agreement) containing such disclosures required in a registered public offering on Form S-3 under the Securities Act and as otherwise customary for public offerings of convertible debt securities; and
(iv) (a) Borrower consulting with the Commitment Parties and Target on the appropriate public disclosure by Borrower and/or Target regarding the terms of the financing for the Acquisition and the plans for the repayment or retirement of the debt incurred in connection with the Acquisition, including, without limitation, the sale of Metro Shares and Borrowers plans to potentially issue convertible debt securities to refinance the Bridge Loans and (b) Borrower having made such public disclosure in a Form 8-K filed with the U.S. Securities & Exchange Commission (the SEC) on the date hereof or the business day following the date hereof.
The waivers in the preceding paragraph shall no longer be effective if any of the conditions in this paragraph are not satisfied. If such conditions are satisfied and the Bridge Loans are funded, the collateral documents relating thereto evidencing security interests in owned or leased real property shall be delivered to the Bridge Lead Arrangers but shall not be required to be filed at such time and any taxes, title insurance and endorsements and filing fees relating thereto shall not be required to be paid at such time; provided, however, that if any Bridge Loans are outstanding on January 2, 2008, such filings shall be made (or directed to be made) by the Borrower on such date, and all taxes, title insurance and endorsements and filing fees required in connection therewith shall be paid (or directed to be paid) by the Borrower on such date.
Notwithstanding the foregoing, if all of the Metro Shares have been sold by November 30, 2007 in accordance with condition (i) of the second preceding paragraph and the proceeds of such sale are used as part of the consideration for the Acquisition so that the amounts funded under the Bridge Facility are reduced dollar-for-dollar by the amount of such proceeds, we shall waive the requirement in the Commitment Letter that Borrower own any Metro Shares as of the Closing Date so long as Borrower has satisfied conditions (iii) and (iv) of the second preceding paragraph.
In consideration for the foregoing, the Borrower agrees that notwithstanding anything stated in the Commitment Letter, whether or not any or all of Borrowers or its subsidiaries Metro Shares are sold, the total amount of Bridge Loans which the Commitment Parties shall be obligated to fund on the Closing Date (subject to the conditions set forth in the Commitment Letter) shall be equal to (i) $780.0 million, less (ii) the aggregate amount of net proceeds, if any, received by Borrower and its subsidiaries from the sale of any or all Metro Shares between the date hereof and the Closing Date (after giving effect to the underwriting spread) (the Metro Proceeds), less (iii) if the Metro Proceeds are less than $430.0 million (such difference, the Metro Shortfall), an amount equal to the Metro Shortfall that Borrower
2
hereby agrees to borrow under the ABL Facility on the Closing Date, provided that (1) in no case shall Borrower be required to borrow any amount under the ABL Facility if such borrowing would result in Excess Availability (as defined in the ABL Facility) of less than $200.0 million on the Closing Date, and (2) the amounts drawn under the ABL Facility on the Closing Date shall not exceed (x) $200.0 million in the aggregate, less (y) the net proceeds from any stores required to be divested in connection with the Acquisition in an amount not to exceed $25.0 million in the aggregate, and any portion of the Metro Shortfall that Borrower will not borrow under the ABL Facility solely due to this proviso will not be subtracted from the total amount of Bridge Loans which the Commitment Parties are obligated to fund on the Closing Date.
This letter agreement and the contents hereof are confidential and, except for the disclosure hereof or thereof on a confidential basis to your accountants, attorneys and other professional advisors retained in connection with the Transaction, may not be disclosed in whole or in part to any person or entity without our prior written consent; provided, however, it is understood and agreed that you may disclose this letter agreement (a) on a confidential basis to the board of directors and advisors of the Target in connection with their consideration of the Transaction, (b) in filings with the SEC and other applicable regulatory authorities and stock exchanges and (c) after prompt written notice to the Lead Arrangers of any legally required disclosure, as otherwise required by law or in response to a valid court order by a court or other governmental body.
This letter agreement may be executed in counterparts which, taken together, shall constitute one original. Delivery of an executed counterpart of a signature page to this letter agreement by telecopier shall be effective as delivery of a manually executed counterpart thereof.
THIS LETTER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. Each of you and each of the Commitment Parties hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based in contract, tort or otherwise) arising out of or relating to this letter agreement, the Transaction and the other transactions contemplated hereby or the actions of each of the Commitment Parties in the negotiation, performance, administration or enforcement hereof. Each of you and the Commitment Parties hereby irrevocably submits to the non-exclusive jurisdiction of any New York State court or Federal court sitting in the Borough of Manhattan in New York City in respect of any suit, action or proceeding arising out of or relating to the provisions of this letter agreement, the Transaction and the other transactions contemplated hereby and irrevocably agrees that all claims in respect of any such suit, action or proceeding, to the fullest extent permitted under applicable law, may be heard and determined in any such court. Each of you and the Commitment Parties waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceedings brought in any such court, and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
This letter agreement (together with the Commitment Letter) embodies the entire agreement and understanding among each of the Commitment Parties, you and your affiliates with respect to the matters covered herein and supersedes all prior agreements and understandings related to the subject matter hereof. Those matters that are not covered or made clear herein are subject to mutual agreement of the parties.
Nothing herein, express or implied, is intended to or shall confer upon any other third party any legal or equitable right, benefit, standing or remedy of any nature whatsoever under or by reason of this letter agreement.
All amounts payable by you under this letter agreement 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
3
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 agreements of the Commitment Parties under this Letter Agreement with respect to the Bridge Facility will expire at 5:00 p.m. (New York City time) on November 5, 2007, unless you execute this Letter Agreement as provided below to accept such agreements and return it to us prior to that time.
BY SIGNING THIS LETTER AGREEMENT, EACH OF THE PARTIES HERETO HEREBY ACKNOWLEDGES AND AGREES THAT (A) BANK OF AMERICA IS OFFERING TO PROVIDE THE ABL FACILITY SEPARATE AND APART FROM BANC OF AMERICA BRIDGES AND LBCBS 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 AMERICAS OFFER TO PROVIDE THE ABL FACILITY AND (C) BAS AND LEHMANS 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 AMERICAS OFFER TO PROVIDE THE ABL FACILITY AND (2) BANC OF AMERICA BRIDGES AND LBCBS OFFER TO PROVIDE THE BRIDGE FACILITY. YOU MAY, AT YOUR OPTION, ELECT TO ACCEPT THIS LETTER AGREEMENT WITH RESPECT TO ANY OR ALL OF THE FOREGOING.
We are pleased to have the opportunity to work with you in connection with this important financing.
[The remainder of this page intentionally left blank.]
4
Very truly yours, | |||||
BANK OF AMERICA, N.A. | |||||
By: | /s/ Stephan Jaegar | ||||
Name: | Stephan Jaeger | ||||
Title: | Managing Director | ||||
BANC OF AMERICA BRIDGE LLC | |||||
By: | /s/ Stephan Jaegar | ||||
Name: | Stephan Jaeger | ||||
Title: | Managing Director | ||||
BANC OF AMERICA SECURITIES LLC | |||||
By: | /s/ Stephan Jaegar | ||||
Name: | Stephan Jaeger | ||||
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 |
5
The provisions of this Letter Agreement with | |||||
respect to the ABL Facility are Accepted and | |||||
Agreed to as of November 5, 2007: | |||||
THE GREAT ATLANTIC & PACIFIC TEA | |||||
COMPANY, INC. | |||||
By: | /s/ William J. Moss | ||||
Name: | William J. Moss | ||||
Title: | Vice President and Treasurer | ||||
The provisions of this Letter Agreement with | |||||
respect to the Bridge Facility are Accepted and | |||||
Agreed to as of November 5, 2007: | |||||
THE GREAT ATLANTIC & PACIFIC TEA | |||||
COMPANY, INC. | |||||
By: | /s/ William J. Moss | ||||
Name: | William J. Moss | ||||
Title: | Vice President and Treasurer |
6
Exhibit 10.3
BANK
OF AMERICA, N.A. BANC OF AMERICA BRIDGE LLC BANC OF AMERICA SECURITIES LLC 9 WEST 57TH STREET NEW YORK, NY 10019 |
LEHMAN BROTHERS COMMERCIAL BANK LEHMAN BROTHERS INC. LEHMAN COMMERCIAL PAPER INC. 745 SEVENTH AVENUE NEW YORK, NY 10019 |
November 5, 2007
The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, NJ 07645
Project
Pearl Letter Agreement |
Ladies and Gentlemen:
Reference is made to the Commitment Letter, dated March 4, 2007 (together with the Summaries of Terms attached thereto, the Commitment Letter), among Bank of America, N.A. (Bank of America), Banc of America Bridge LLC (Banc of America Bridge), Banc of America Securities LLC (BAS), Lehman Brothers Commercial Bank (LBCB), Lehman Brothers Inc. (Lehman) and Lehman Commercial Paper Inc. (LCPI and, together with Bank of America, Banc of America Bridge, BAS, LBCB and Lehman, each a Commitment Party and, collectively, the Commitment Parties) and The Great Atlantic & Pacific Tea Company, Inc., a Maryland corporation (the Borrower or you). Defined terms used herein are used as defined in the Commitment Letter. The parties to this Letter Agreement hereby agree that the Commitment Letter shall only be modified to the extent expressly stated herein and shall otherwise remain in full force and effect in accordance with the terms and conditions therein until March 4, 2008 or such earlier time provided therein.
The Commitment Parties agree that notwithstanding anything stated in the Commitment Letter, (1) the aggregate commitments of the Commitment Parties under the ABL Facility shall be increased to $675 million consisting of a $547,100,000 revolver, a $45,000,000 last out revolver advance and a term loan up to $82,900,000; (2) the allocation of proceeds from collateral as among the several ABL Facilities shall be on a basis consistent with that previously disclosed to the Borrower, (3) availability on the Closing Date, by function of reserve calculations, advance rates or otherwise, shall not be less favorable to the Borrower than availability calculated on the basis provided for in the Commitment Letter, and (4) interest for the several ABL Facilities shall be on a basis consistent with that previously disclosed to the Borrower, and in any event no more than 0.25% higher than comparable interest rates provided for in the Commitment Letter. In addition, for the avoidance of doubt, the Commitment Parties hereby waive any perceived or actual conditions precedent (insofar as they relate to the ABL Facility) that (a) Borrower provide the Commitment Parties with a completed offering memorandum for the offering and sale of Senior Secured Notes not later than 20 days prior to the Closing Date and (b) senior management of the Companies (including the Target) make themselves available prior to the Closing Date for roadshows and other meetings with potential investors for the Senior Secured Notes to market the Senior Secured Notes prior to the Closing Date, (c) at the Closing Date Borrower and its subsidiaries, including A&P Bermuda Limited, own, directly or indirectly, at least 10.9 million Metro Shares and (d) Borrower receive $780 million in gross proceeds from the advance of the Bridge Loans or the issuance and sale by Borrower of the Senior Secured Notes.
The Commitment Parties agreements in the preceding paragraph are expressly conditioned on (a) Borrowers receiving gross proceeds from the advance of the Bridge Loans or other securities of Borrower in accordance with the sixth paragraph of that certain letter agreement of even date herewith among the Borrower and the Commitment Parties (the Bridge Letter Agreement), and (b) with
respect to the amendments in the first sentence of the immediately preceding paragraph, either (i) the sale of securities by the Borrower as contemplated by condition (i) of the Bridge Letter Agreement, or (ii) if securities are not sold by Borrower as contemplated by condition (i) of the Bridge Letter Agreement, the repayment, retirement or refinancing in full of the Bridge Loans.
This letter agreement and the contents hereof are confidential and, except for the disclosure hereof or thereof on a confidential basis to your accountants, attorneys and other professional advisors retained in connection with the Transaction, may not be disclosed in whole or in part to any person or entity without our prior written consent; provided, however, it is understood and agreed that you may disclose this letter agreement (a) on a confidential basis to the board of directors and advisors of the Target in connection with their consideration of the Transaction, (b) in filings with the SEC and other applicable regulatory authorities and stock exchanges and (c) after prompt written notice to the Lead Arrangers of any legally required disclosure, as otherwise required by law or in response to a valid court order by a court or other governmental body.
This letter agreement may be executed in counterparts which, taken together, shall constitute one original. Delivery of an executed counterpart of a signature page to this letter agreement by telecopier shall be effective as delivery of a manually executed counterpart thereof.
THIS LETTER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. Each of you and each of the Commitment Parties hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based in contract, tort or otherwise) arising out of or relating to this letter agreement, the Transaction and the other transactions contemplated hereby or the actions of each of the Commitment Parties in the negotiation, performance, administration or enforcement hereof. Each of you and the Commitment Parties hereby irrevocably submits to the non-exclusive jurisdiction of any New York State court or Federal court sitting in the Borough of Manhattan in New York City in respect of any suit, action or proceeding arising out of or relating to the provisions of this letter agreement, the Transaction and the other transactions contemplated hereby and irrevocably agrees that all claims in respect of any such suit, action or proceeding, to the fullest extent permitted under applicable law, may be heard and determined in any such court. Each of you and the Commitment Parties waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceedings brought in any such court, and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
This letter agreement (together with the Commitment Letter and the other matters previously disclosed to Borrower) embodies the entire agreement and understanding among each of the Commitment Parties, you and your affiliates with respect to the matters covered herein and supersedes all prior agreements and understandings related to the subject matter hereof. Those matters that are not covered or made clear herein are subject to mutual agreement of the parties
Nothing herein, express or implied, is intended to or shall confer upon any other third party any legal or equitable right, benefit, standing or remedy of any nature whatsoever under or by reason of this letter agreement.
All respective agreements of the Commitment Parties under this Letter Agreement with respect to the ABL Facility will expire at 5:00 p.m. (New York City time) on November 5, 2007, unless you execute this Letter Agreement as provided below to accept such agreements and return it to us prior to that time.
BY SIGNING THIS LETTER AGREEMENT, EACH OF THE PARTIES HERETO HEREBY ACKNOWLEDGES AND AGREES THAT (A) BANK OF AMERICA IS OFFERING TO
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PROVIDE THE ABL FACILITY SEPARATE AND APART FROM BANC OF AMERICA BRIDGES AND LBCBS 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 AMERICAS OFFER TO PROVIDE THE ABL FACILITY AND (C) BAS AND LEHMANS 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 AMERICAS OFFER TO PROVIDE THE ABL FACILITY AND (2) BANC OF AMERICA BRIDGES AND LBCBS OFFER TO PROVIDE THE BRIDGE FACILITY. YOU MAY, AT YOUR OPTION, ELECT TO ACCEPT THIS LETTER AGREEMENT WITH RESPECT TO ANY OR ALL OF THE FOREGOING.
We are pleased to have the opportunity to work with you in connection with this important financing.
[The remainder of this page intentionally left blank.]
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Very truly yours, | |
BANK OF AMERICA, N.A. | |
By: | /s/ James G. Rose Jr. |
Name: James G. Rose Jr. | |
Title: Managing Director | |
BANC OF AMERICA BRIDGE LLC | |
By: | /s/ James G. Rose Jr. |
Name: James G. Rose Jr. | |
Title: Managing Director | |
BANC OF AMERICA SECURITIES LLC | |
By: | /s/ James G. Rose Jr. |
Name: James G. Rose Jr. | |
Title: Managing Director | |
LEHMAN BROTHERS COMMERCIAL BANK | |
By: | /s/ Brian McNany |
Name: Brian McNany | |
Title: Authorized Signatory | |
LEHMAN BROTHERS INC. | |
By: | /s/ Michael C. Moravec |
Name: Michael C. Moravec | |
Title: Managing Director | |
LEHMAN COMMERCIAL PAPER INC. | |
By: | /s/ Michael C. Moravec |
Name: Michael C. Moravec | |
Title: Managing Director |
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The provisions of this Letter Agreement with respect to the ABL Facility are Accepted and Agreed to as of November 5, 2007: |
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
By: | /s/ William J. Moss |
Name: William J. Moss | |
Title: Vice President and Treasurer |
The provisions of this Letter Agreement with respect to the Bridge Facility are Accepted and Agreed to as of November 5, 2007: |
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
By: | /s/ William J. Moss |
Name: William J. Moss | |
Title: Vice President and Treasurer |
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Exhibit 10.4
Pathmark Stores, Inc.
200 Milik Street
Carteret, New Jersey 07008
November 5, 2007
The Great Atlantic & Pacific
Tea Company, Inc.
Two Paragon Drive
Montvale, New Jersey 07645
Attention: Allan Richards
Re: Waiver, Consent and Notice
Ladies and Gentlemen:
Reference is made to that certain Agreement and Plan of Merger, dated March 4, 2007, among The Great Atlantic & Pacific Tea Company, Inc., a Maryland corporation (Parent), Sand Merger Corp., a Delaware corporation (Merger Sub), and Pathmark Stores, Inc., a Delaware corporation (the Company), as amended by that certain Letter Agreement re: Payment for Fractional Shares, dated June 27, 2007, among the Company, Parent and Merger Sub (as so amended, the Merger Agreement). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Merger Agreement.
By its execution hereof, each of the Company, Parent and Merger Sub hereby agree as follows:
(1) | Notwithstanding anything to the contrary set forth in the Merger Agreement, each of Parent and Merger Sub hereby waives, for all purposes under the Merger Agreement, compliance by the Company with its obligations under Section 3.3(a)(iii)(A) of the Merger Agreement to use commercially reasonable efforts to obtain the consents set forth therein. | |
(2) | The Company hereby consents to the amendments and modifications to the Financing Commitments set forth in each of (a) that certain Letter Agreement re: Metro inc., dated as of the date hereof (the Metro Letter Agreement), by and among Parent, A&PLuxembourg S.à.r.l. (A&P Luxembourg) and TD Securities Inc., attached hereto as Exhibit A; (b) that certain Letter Agreement re: Bridge Facility, dated as of the date hereof, by and among Parent, Bank of America, N.A., Banc of America Bridge LLC, Banc of America Securities LLC, Lehman Brothers Commercial Bank, Lehman Brothers Inc., and Lehman Commercial Paper Inc., attached hereto as Exhibit B; and (c) that certain Letter Agreement re: ABL Facility, dated as of the date hereof, by and among Parent, Bank of America, N.A., Banc of America Bridge LLC, Banc of America Securities LLC, Lehman Brothers Commercial Bank, Lehman Brothers Inc., and Lehman Commercial Paper Inc., attached hereto as Exhibit C, each of which shall from and after | |
Each of Parent, Merger Sub and the Company further acknowledges and agrees that, except as expressly modified hereby, the Merger Agreement shall continue in full force and effect in accordance with its terms and that nothing set
forth herein shall constitute a waiver of any failure of any party to comply with any obligation, covenant, agreement or condition set forth in the Merger Agreement at any time prior to the date hereof.
(Signature pages follow)
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Exhibit A
Exhibit B
Exhibit C
the date hereof constitute additional Financing Commitments for all purposes under the
Merger Agreement.
(3)
In the event that the sale of all of the Class A Subordinate Voting Shares of Metro, Inc. held by Parent, A&P Luxembourg or any of Parents other subsidiaries (the Metro
Shares), as contemplated by the Metro Letter Agreement or otherwise, is consummated, Parent and Merger Sub hereby agree that: (a) Parent shall draw upon the Bridge Facility (as such term is defined in
the Financing Commitments) for the purpose of consummating the transactions contemplated by the Merger Agreement; (b) the first proviso in Section 2.2 of the Merger Agreement shall be deleted; (c) the term Marketing Period shall cease to be applicable for all purposes under the Merger Agreement; and (d) the Closing shall occur no later than December 4, 2007 unless otherwise consented to in writing by
the Company (which consent shall not be unreasonably withheld or delayed).
(4)
In accordance with the provisions of Section 6.11(b) of the Merger Agreement, Parent hereby requests that the Company, in lieu of commencing the Debt Tender Offer, issue substantially simultaneously with the Effective Time a
notice of redemption pursuant to Section 3.03 of the Indenture, subject to the terms and conditions set forth in Section 6.11(b) of the Merger Agreement.
(5)
Each of Parent, Merger Sub and the Company hereby acknowledges and agrees, for all purposes under the Merger Agreement, that all obligations of Parent and Merger Sub with respect to the Preemptive Rights Charter Amendment,
including under Sections 6.2(a), 6.4(b) and 6.10(a) and any condition to the consummation of the transactions contemplated by the Merger Agreement to be satisfied by obtaining the Preemptive Rights Charter Amendment, have been satisfied by the
filing and continued effectiveness of the Articles of Amendment and Restatement of the Articles of Incorporation of Parent, as filed with State Department of Assessments and Taxation of the State of Maryland on September 6, 2007, and no further
action is required by Parent or Merger Sub with respect to such obligations.
(6)
Notwithstanding anything to the contrary set forth in the Merger Agreement, each of Parent, Merger Sub and the Company hereby agrees, for all purposes under the Merger Agreement, including Section 3.2(a) thereof, that Mellon
Investor Services LLC, a New Jersey limited liability company, shall be appointed to be the Exchange Agent.
Sincerely,
PATHMARK STORES, INC.
By: /s/ Marc A. Strassler
Name: Marc A. Strassler
Title: Senior Vice President, Secretary and
General
Counsel
Acknowledged, agreed and accepted
as of the date first written above:
THE GREAT ATLANTIC &
PACIFIC TEA COMPANY, INC.
By:
/s/ Brenda Galgano
Name: Brenda Galgano
Title: Senior Vice President and Chief
SAND MERGER CORP.
By:
/s/ Christoper McGarry
Name: Christopher McGarry
Title: President
Metro Letter Agreement
See Exhibit 10.1
Bridge Facility Letter Agreement
See Exhibit 10.2
ABL Facility Letter Agreement
See Exhibit 10.3
Exhibit 99.1
News
The Great Atlantic & Pacific Tea Company, Inc.
2 Paragon Drive
Montvale, NJ 07645
Investor contact: William J. Moss
Vice President, Treasurer
(201) 571-4019
Press contact: Richard P. De Santa
Senior Director, Communications
(201) 571-4495
A&P ANNOUNCES MERGER FINANCING UPDATE;
CLOSING EXPECTED IN DECEMBER
MONTVALE, NJ November 5, 2007 The Great Atlantic & Pacific Tea Company, Inc. (A&P, NYSE Symbol: GAP) announced today an update regarding the expected sources of financing for its previously announced acquisition of Pathmark Stores, Inc. (Pathmark, NASDAQ Symbol: PTMK) (the Merger). A&P and Pathmark have circulated to their stockholders a joint proxy statement prospectus dated October 9, 2007 (the Proxy Statement) with respect to their respective special stockholder meetings scheduled for November 8, 2007. As previously disclosed, A&P has a commitment from a group of lenders to provide a $615 million secured revolving credit facility (the ABL Facility) and a $780 million bridge credit facility (the Bridge Facility). This commitment remains in full force and effect.
However, in order to minimize the amount of indebtedness at closing, lower A&Ps post-Merger interest expense and allow A&P to consummate the Merger at the earliest possible date following satisfaction of all conditions contained in the Merger Agreement, A&P intends to sell all of its 11.7 million shares of Metro Inc. (Metro) prior to the closing of the Merger. Assuming that the Metro shares are sold prior to November 30, 2007, A&P expects to use the proceeds, together with borrowings under a reduced Bridge Facility and a portion of its increased $675 million ABL Facility to finance the Merger. Based upon the closing price of the Metro shares on the Toronto Stock Exchange on November 2, 2007, the value of the Metro shares totaled approximately $435 million. The net effect on A&Ps interest expense from the associated reduction of indebtedness would be a decrease of approximately $45 million from the annual interest expense assumed in the fiscal year 2006 Unaudited Pro Forma Condensed Combined Financial Information set forth in the Proxy Statement. The commitment parties have delivered to
A&P the necessary waivers to facilitate this financing structure, subject to the sale of the Metro shares.
A&P expects that any amounts borrowed under the Bridge Facility to close the Merger will be refinanced shortly thereafter with the proceeds of an offering of senior secured notes, a convertible debt offering, or a combination thereof.
Although A&P currently intends to sell the Metro shares, there can be no assurances that A&P will be successful in doing so. A&P has entered into a commitment with TD Securities Inc. (TD) whereby TD has agreed to offer to purchase, on or prior to November 28, 2007, all of the Metro shares, at a price to be determined based on the market price for the Metro shares on the Toronto Stock Exchange on the trade date, subject to among other things there not having occurred a material adverse change in Metro that materially adversely affects the marketability of the Metro shares. If A&P cannot sell the Metro shares, it intends to finance the Merger utilizing the committed financing previously described, including borrowing under the Bridge Facility or an offering of senior secured notes in lieu thereof.
A&P currently expects the Merger to close by the end of December 2007.
About The Great Atlantic & Pacific Tea Company, Inc.
Founded in 1859, A&P is one of the nations first supermarket chains. A&P operates 337 stores in eight states and the District of Columbia under the following trade names: A&P, Waldbaums, The Food Emporium, Super Foodmart, Super Fresh, Sav-A-Center and Food Basics. Additional information about A&P may be found at its web site, www.aptea.com.
About Pathmark Stores Inc.
Pathmark is a regional supermarket chain currently operating 140 supermarkets in the New York, New Jersey and Philadelphia metropolitan areas. Additional information about Pathmark may be found at its web site, www.pathmark.com.
This release contains forward-looking statements about the future performance of A&P and Pathmark, which are based on managements assumptions and beliefs in light of the information currently available to it. A&P and Pathmark assume no obligation to update the information contained herein. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements including, but not limited to: statements about the anticipated closing of the merger and the expected future business and financial performance of A&P and Pathmark resulting from and following the merger; competitive practices and pricing in the food industry
generally and particularly in A&Ps and Pathmarks principal markets; A&Ps and Pathmarks relationships with their employees and the terms of future collective bargaining agreements; the costs and other effects of legal and administrative cases and proceedings; the nature and extent of continued consolidation in the food industry; changes in the financial markets which may affect A&Ps and Pathmarks cost of capital and the ability of A&P and Pathmark to access capital; supply or quality control problems with A&Ps and Pathmarks vendors; and changes in economic conditions which affect the buying patterns of A&Ps and Pathmarks customers.
Additional Information and Where to Find It
In connection with the acquisition of Pathmark by A&P, A&P filed with the SEC a registration statement on Form S-4, containing a joint proxy statement/prospectus and A&P intends to file other relevant materials regarding the proposed transaction with the SEC. The final joint proxy statement/prospectus has been mailed to the stockholders of A&P and Pathmark. INVESTORS AND SECURITY HOLDERS OF A&P AND PATHMARK ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT A&P, PATHMARK AND THE MERGER. The registration statement and joint proxy statement/prospectus and other relevant materials (when they become available), and any other documents filed by A&P and Pathmark with the SEC, may be obtained free of charge at the SECs web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents (when they are available) filed with the SEC by A&P by directing a request to: The Great Atlantic & Pacific Tea Company, Inc., 2 Paragon Drive, Montvale, NJ 07645, Attn: Investor Relations. Investors and security holders may obtain free copies of the documents filed with the SEC by Pathmark by contacting Pathmark Stores, Inc., 200 Milik Street, Carteret, NJ 07008, Attn. Investor Relations.
A&P, Pathmark and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies in connection with the merger. Information about the executive officers and directors of Pathmark and the number of shares of Pathmarks common stock beneficially owned by such persons is set forth in the proxy statement for Pathmarks 2007 Annual Meeting of Stockholders which was filed with the SEC on May 11, 2007. Information about the executive officers and directors of A&P and the number of shares of A&Ps common stock beneficially owned by such persons is set forth in the proxy statement for A&Ps 2007 Annual Meeting of Stockholders which was filed with the SEC on May 25, 2007. Investors may obtain additional information regarding the direct and indirect interests of Pathmark, A&P and their respective executive officers and directors in the merger by reading the joint proxy statement/prospectus regarding the merger.
This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
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