SECOND AMENDMENT TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

THIS SECOND AMENDMENT TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of December 20, 2013, is by and among THE PANTRY, INC., a Delaware corporation, (the “Borrower”), the Guarantors (as defined below) party hereto, the Lenders (as defined below) party hereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).

WHEREAS, the Borrower, the domestic subsidiaries of the Borrower who are or may become party thereto (the “Guarantors”), the several banks and other financial institutions as may from time to time become parties thereto (the “Lenders”) and the Administrative Agent have entered into that certain Fourth Amended and Restated Credit Agreement dated as of August 3, 2012 (as amended by that certain First Amendment to the Fourth Amended and Restated Credit Agreement dated as of August 15, 2013 and as further amended, modified, supplemented, restated or amended and restated from time to time, the “Credit Agreement”; capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement);

WHEREAS, the Borrower has requested that the Required Revolving Lenders amend certain provisions of the Credit Agreement as more fully set forth herein; and

WHEREAS, the Required Revolving Lenders have agreed to such amendments, subject to the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1.1    Amendment to Section 6.6(b). Section 6.6(b) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(b)    Consolidated Interest Coverage Ratio. The Consolidated Interest Coverage Ratio, as of the last day of each Fiscal Quarter of the Borrower occurring during the periods indicated below, shall be greater than or equal to the following:

2.1    Closing Conditions.    This Amendment shall become effective as of the date first above written upon satisfaction of the following conditions (in form and substance reasonably acceptable to the Administrative Agent):

(a)    Executed Amendment. Receipt by the Administrative Agent of a copy of this Amendment duly executed by each of the Credit Parties, the Administrative Agent and the Required Revolving Lenders.

(b)    Default. After giving effect to this Amendment, no Default or Event of Default shall exist.

(c)    Fees.

(i)    The Administrative Agent shall have received from the Borrower, for the account of each Lender that executes and delivers a signature page to the Amendment to the Administrative Agent by 12:00 p.m. (EST) on or before December 19, 2013 (each such Lender, a “Consenting Lender”, and collectively, the “Consenting Lenders”), an amendment fee in an amount equal to 15 basis points on the aggregate Revolving Commitments of such Consenting Lender (prior to giving effect to this Amendment); provided that each Consenting Lender hereby agrees to promptly refund such amendment fee to the Borrower if such Consenting Lender does not execute and deliver such Consenting Lender’s signature page to that certain Third Amendment to Fourth Amended and Restated Credit Agreement, substantially in the form of Exhibit A attached hereto.

(ii)    The Administrative Agent shall have received from the Borrower the fees and expenses that are payable in connection with the consummation of the transactions contemplated hereby (including, without limitation, the fees and expenses set forth in that certain Fee Letter, dated December [_], 2013 (the “Fee Letter”), between the Borrower and Wells Fargo Securities, LLC) and King & Spalding LLP shall have received from the Borrower payment of all outstanding fees and expenses previously incurred and invoiced and all fees and expenses incurred and invoiced in connection with this Amendment.

(d)    Miscellaneous. All other documents and legal matters in connection with the transactions contemplated by this Amendment shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel.

3.1    Amended Terms. All references to the Credit Agreement in each of the Credit Documents shall hereafter mean the Credit Agreement as amended by this Amendment. Except as specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms. The amendments to the Credit Agreement set forth in this Amendment shall be effective from and after the date of this Amendment and shall not be applied retroactively.

3.2    Representations and Warranties of Credit Parties. Each of the Credit Parties represents and warrants as follows:

    

(a)    It has taken all necessary action to authorize the execution, delivery and performance of this Amendment.

(b)    This Amendment has been duly executed and delivered by such Person and constitutes such Person’s legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

(c)    No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by such Person of this Amendment.

(d)    The representations and warranties set forth in Article III of the Credit Agreement are true and correct in all material respects (and in all respects if qualified by materiality) as of the date hereof (except for those which expressly relate to an earlier date).

(e)    No Default or Event of Default exists before or after giving effect to this Amendment.

(f)    The Security Documents continue to create a valid security interest in, and Lien upon, the Collateral, in favor of the Administrative Agent, for the benefit of the Lenders and the Bank Product Providers, which security interests and Liens are perfected in accordance with the terms of the Security Documents and prior to all Liens other than Permitted Liens.

(g)    The existing Credit Party Obligations are not reduced or modified by this Amendment and are not subject to any offsets, defenses or counterclaims.

3.3    Reaffirmation of Credit Party Obligations. Each Credit Party hereby ratifies the Credit Agreement and acknowledges and reaffirms (a) that it is bound by all terms of the Credit Agreement applicable to it and (b) that it is responsible for the observance and full performance of its respective Credit Party Obligations.

3.4    Credit Document. This Amendment shall constitute a Credit Document under the terms of the Credit Agreement.

3.5    Expenses. The Borrower agrees to pay all reasonable costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including without limitation, subject to the terms of the Fee Letter, the reasonable fees and expenses of the Administrative Agent’s legal counsel.

3.6    Further Assurances. The Credit Parties agree to promptly take such action, upon the request of the Administrative Agent, as is necessary to carry out the intent of this Amendment.

3.7    Entirety. This Amendment and the other Credit Documents embody the entire agreement between the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof.

3.8    Counterparts; Telecopy. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart to this Amendment by telecopy or other facsimile shall be effective as an original and shall constitute a representation that an original will be delivered.

3.9    Survival. Except as expressly modified and amended in this Amendment, all of the terms and provisions and conditions of each of the Credit Documents shall remain unchanged.

3.10    Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

3.11    GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO AGREES THAT SECTIONS 5‑1401 AND 5‑1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL APPLY TO THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS.

3.12    Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The jurisdiction, services of process and waiver of jury trial provisions set forth in Sections 9.13 and 9.16 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.

IN WITNESS WHEREOF the Borrower, the Administrative Agent and the Lenders have caused this Amendment to be duly executed on the date first above written.

THIS THIRD AMENDMENT TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of [_______], 2013, is by and among THE PANTRY, INC., a Delaware corporation, (the “Borrower”), the Guarantors (as defined below) party hereto, the Lenders (as defined below) party hereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).

WHEREAS, the Borrower, the domestic subsidiaries of the Borrower who are or may become party thereto (the “Guarantors”), the several banks and other financial institutions as may from time to time become parties thereto (the “Lenders”) and the Administrative Agent have entered into that certain Fourth Amended and Restated Credit Agreement dated as of August 3, 2012 (as amended by that certain First Amendment to the Fourth Amended and Restated Credit Agreement dated as of August 15, 2013, Second Amendment to the Fourth Amended and Restated Credit Agreement dated as of December 20, 2013 and as further amended, modified, supplemented, restated or amended and restated from time to time, the “Credit Agreement”; capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement);

WHEREAS, the Borrower has requested that the Required Lenders amend certain provisions of the Credit Agreement as more fully set forth herein; and

WHEREAS, the Required Lenders have agreed to such amendments, subject to the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1.1    New Definitions. The following definition is hereby added to Section 1.1 of the Credit Agreement in the appropriate alphabetical order:

“Captive Insurance Entity” shall mean any captive insurance company established for the purpose of insuring the Borrower and its Subsidiaries and that is or will be subject to regulation as an insurance subsidiary.

1.2    Amendments to Definitions. The following sentence is hereby added to the end of the definition of “Subsidiary”:

Notwithstanding the foregoing, in no event shall the Captive Insurance Entity be considered a Subsidiary.

1.3    Amendment to Section 6.3. The following clause (i) is hereby added to Section 6.3 at the end of such section, with the appropriate punctuation and grammatical changes being made thereto:

(i)    Investments in the Captive Insurance Entity in an amount not to exceed $2,000,000 in the aggregate at any time outstanding.

1.4    Amendment to Section 6.10. Section 6.10 of the Credit Agreement is hereby amended by adding the following clause (f) at the end of such Section, and making the appropriate punctuation and grammatical changes thereto as follows:

and (f) payments of insurance premiums by any Credit Party to the Captive Insurance Entity.

1.5    Amendment to Article VI. A new Section 6.18 is hereby added to the end of Article VI of the Credit Agreement to read as follows:

(a) The Borrower will not, at any time, own less than 100% of the Capital Stock of the Captive Insurance Entity and (b) the Captive Insurance Entity shall not engage in any business, or have any operations or liabilities, other than providing insurance services in the nature of a “captive” insurance company and activities related thereto.

2.1    Closing Conditions.    This Amendment shall become effective as of the date first above written upon satisfaction of the following conditions (in form and substance reasonably acceptable to the Administrative Agent):

(a)    Executed Amendment. Receipt by the Administrative Agent of a copy of this Amendment duly executed by each of the Credit Parties, the Administrative Agent and the Required Lenders.

(b)    Default. After giving effect to this Amendment, no Default or Event of Default shall exist.

(c)    Miscellaneous. All other documents and legal matters in connection with the transactions contemplated by this Amendment shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel.

3.1    Amended Terms. All references to the Credit Agreement in each of the Credit Documents shall hereafter mean the Credit Agreement as amended by this Amendment. Except as specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms. The amendments to the Credit Agreement set forth in this Amendment shall be effective from and after the date of this Amendment and shall not be applied retroactively.

3.2    Representations and Warranties of Credit Parties. Each of the Credit Parties represents and warrants as follows:

    

(a)    It has taken all necessary action to authorize the execution, delivery and performance of this Amendment.

(b)    This Amendment has been duly executed and delivered by such Person and constitutes such Person’s legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

(c)    No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by such Person of this Amendment.

(d)    The representations and warranties set forth in Article III of the Credit Agreement are true and correct in all material respects (and in all respects if qualified by materiality) as of the date hereof (except for those which expressly relate to an earlier date)

(e)    No Default or Event of Default exists before or after giving effect to this Amendment.

(f)    The Security Documents continue to create a valid security interest in, and Lien upon, the Collateral, in favor of the Administrative Agent, for the benefit of the Lenders and the Bank Product Providers, which security interests and Liens are perfected in accordance with the terms of the Security Documents and prior to all Liens other than Permitted Liens.

(g)    The existing Credit Party Obligations are not reduced or modified by this Amendment and are not subject to any offsets, defenses or counterclaims.

3.3    Reaffirmation of Credit Party Obligations. Each Credit Party hereby ratifies the Credit Agreement and acknowledges and reaffirms (a) that it is bound by all terms of the Credit Agreement applicable to it and (b) that it is responsible for the observance and full performance of its respective Credit Party Obligations.

3.4    Credit Document. This Amendment shall constitute a Credit Document under the terms of the Credit Agreement.

3.5    Expenses. The Borrower agrees to pay all reasonable costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including without limitation, subject to the terms of the Fee Letter, the reasonable fees and expenses of the Administrative Agent’s legal counsel.

3.6    Further Assurances. The Credit Parties agree to promptly take such action, upon the request of the Administrative Agent, as is necessary to carry out the intent of this Amendment.

3.7    Entirety. This Amendment and the other Credit Documents embody the entire agreement between the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof.

3.8    Counterparts; Telecopy. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart to this Amendment by telecopy or other facsimile shall be effective as an original and shall constitute a representation that an original will be delivered.

3.9    Survival. Except as expressly modified and amended in this Amendment, all of the terms and provisions and conditions of each of the Credit Documents shall remain unchanged.

3.10    Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

3.11    GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO AGREES THAT SECTIONS 5‑1401 AND 5‑1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL APPLY TO THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS.

3.12    Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The jurisdiction, services of process and waiver of jury trial provisions set forth in Sections 9.13 and 9.16 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.

IN WITNESS WHEREOF the Borrower, the Administrative Agent and the Lenders have caused this Amendment to be duly executed on the date first above written.