On March 5, 2007, The Great Atlantic & Pacific Tea Company, Inc. (the “Company”) announced that it and its wholly owned subsidiary, Sand Merger Corp. (“Merger Sub”), had entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Pathmark Stores, Inc. (“Pathmark”), dated as of March 4, 2007, pursuant to which the Company, through Merger Sub, would acquire all of the shares of Pathmark for approximately $1.3 billion in cash, stock and debt assumption or retirement.

          Concurrently with the execution of the Merger Agreement, on March 4, 2007, the Company and Yucaipa Corporate Initiatives Fund I, LP, Yucaipa American Alliance Fund I, LP and Yucaipa American Alliance (Parallel) Fund I, LP, funds affiliated with The Yucaipa Companies LLC (collectively, “Yucaipa”), entered into the following agreements: the Pathmark Stores, Inc. Stockholder Voting Agreement (the “Yucaipa Voting Agreement”), the Yucaipa Stockholder Agreement (the “Yucaipa Stockholder Agreement”), and the Amended and Restated Warrant Agreement (the “Yucaipa Warrant Agreement”).

          In addition to the foregoing agreements, on March 4, 2007, Tengelmann Warenhandelsgesellschaft KG (“Tengelmann”), currently the Company’s majority shareholder, and Pathmark entered into The Great Atlantic & Pacific Tea Company, Inc. Voting Agreement (the “Tengelmann Voting Agreement”) and Tengelmann and the Company entered into the Stockholder Agreement (the “Tengelmann Stockholder Agreement”).

Agreement and Plan of Merger

          Under the terms of the Merger Agreement, Merger Sub will be merged with and into Pathmark, with Pathmark continuing as the surviving corporation and a wholly-owned subsidiary of the Company. At the effective time of the merger, each issued and outstanding share of Pathmark common stock will be converted into the right to receive $9.00 in cash without interest and 0.12963 of a validly issued, fully paid and nonassessable share of Company common stock.

          The Merger Agreement contains representations and warranties that the parties have made to each other as of specific dates. Except for its status as a contractual document that establishes and governs the legal relations among the parties with respect to the merger described therein, the Merger Agreement is not intended to be a source of factual, business or operational information about the parties. The representations and warranties contained in the Merger Agreement were made only for purposes of that agreement and as of specific dates, were solely for the benefit of the parties to that agreement, and may be subject to limitations agreed between those parties, including being qualified by disclosures between those parties. Those representations and warranties may have been made to allocate risks among the parties to the Merger Agreement, including where the parties do not have complete knowledge of all facts, instead of establishing matters as facts. Furthermore, those representations and warranties may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. The assertions embodied in such representations and warranties are qualified by information contained in disclosure letters that the parties exchanged in connection with signing the Merger Agreement. Accordingly, investors and security holders should not rely