CREDIT AGREEMENT AND WAIVER

EX-10.1 2 dex101.htm SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT Second Amendment to Amended and Restated Credit Agreement

Exhibit 10.1

 

EXECUTION COPY

 

SECOND AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT AND WAIVER

 

THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND WAIVER (this “Amendment”), dated as of August 5, 2005, is by and among THE PANTRY, INC., a Delaware corporation, (the “Borrower”), those Domestic Subsidiaries of the Borrower identified as a “Guarantor” on the signature pages hereto (individually a “Guarantor” and collectively the “Guarantors”), the Lenders party hereto, and WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).

 

WITNESSETH

 

WHEREAS, the Borrower, the Guarantors, the several banks and other financial institutions as may from time to time become parties thereto, and the Administrative Agent have entered into that certain Amended and Restated Credit Agreement dated as of March 12, 2004 (as previously amended, modified or supplemented 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 meaning ascribed thereto in the Credit Agreement);

 

WHEREAS, the Borrower has requested certain amendments to the Credit Agreement as more fully set forth herein;

 

WHEREAS, the Borrower has notified the Administrative Agent and the Lenders that (1) Events of Default exist under the Credit Agreement as a result of the failure of the representations contained in Sections 3.3 and 3.18 of the Credit Agreement to be true and correct when made as such representations relate to financial statements and related certificates delivered by the Borrower for Fiscal Years 2003 and 2004; (2) Events of Default exist under the Credit Agreement as a result of the failure of the representation contained in Section 3.20 of the Credit Agreement to be true and correct when made as such representation relates to Indebtedness incurred pursuant to the Sale Leaseback Transaction and certain other sale leaseback transactions entered into by the Credit Parties prior to the date hereof, previously characterized as Operating Leases, that have been re-characterized as Capital Leases (collectively, with the Sale Leaseback Transaction, the “Existing Sale Leaseback Transactions”); (3) Events of Default exist under the Credit Agreement as a result of the Borrower’s failure to deliver quarterly and annual financial statements and related certificates which fairly present, in all material respects, the financial condition of the Borrower and its Subsidiaries, as required by Sections 5.1(a), (b) and (c) of the Credit Agreement; (4) an Event of Default exists under the Credit Agreement as a result of Borrower’s failure to deliver a notice of Default within the time period provided pursuant to Section 5.1(h) of the Credit Agreement; (5) an Event of Default exists under the Credit Agreement as a result of Borrower’s failure to maintain proper books and records as required pursuant to Section 5.5(a) of the Credit Agreement; (6) Events of Default exist under the Credit

---

Agreement as a result of Borrower’s incurrence of Indebtedness pursuant to the Existing Sale Leaseback Transactions which is not permitted pursuant to Section 6.1 of the Credit Agreement; (7) an Event of Default exists under the Credit Agreement as a result of the guaranty of the Indebtedness incurred pursuant to the Existing Sale Leaseback Transactions, which guaranty is not permitted pursuant to Section 6.4 of the Credit Agreement; (8) an Event of Default exists under the Credit Agreement as a result of the Liens on the assets subject to the Existing Sale Leaseback Transactions, which Liens are not permitted pursuant to Section 6.2 of the Credit Agreement; (the Events of Default referred to in clauses (1)-(8) above, collectively, the “Acknowledged Events of Defaults”); and (9) Events of Default exist under the Credit Agreement as a result of the Borrower’s failure to join certain Domestic Subsidiaries (the “Non-Joined Subsidiaries”) to the Credit Agreement as Additional Credit Parties as required pursuant to Section 5.9 of the Credit Agreement (the “Joinder Events of Default”);

 

WHEREAS, the Borrower has requested that the Required Lenders agree to waive the Acknowledged Events of Default on a one-time basis; and

 

WHEREAS, the Required Lenders have agreed to such amendments and are willing to grant such waivers, 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:

 

ARTICLE I

AMENDMENTS TO CREDIT AGREEMENT

 

1.1 Definition of Applicable Margin. All references to “Leverage Ratio” in the definition of “Applicable Margin” in Section 1.1 of the Credit Agreement are hereby changed to refer to “Consolidated Pro Forma Leverage Ratio”.

 

1.2 Section 6.1(c). Section 6.1(c) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

(c) the Borrower and its Subsidiaries may become and remain liable with respect to Indebtedness in respect of Capital Leases and Indebtedness incurred in the ordinary course of business to finance the cost of acquisition or the cost of construction, improvement or remodeling of an asset used in the business of the Borrower and its Subsidiaries; provided that (i) the principal amount of such Indebtedness does not exceed the sum of 100% of such cost of acquisition plus the reasonable fees and expenses incurred in connection therewith and (ii) any lien or encumbrance securing such Indebtedness is placed on such asset not more than 90 days after its acquisition or the completion of construction, improvement or remodeling, as the case may be;

 

2

---

1.3 Section 6.4. Section 6.4 of the Credit Agreement is hereby amended by adding the following clause (i) thereto and making corresponding grammatical corrections to the remaining clauses of Section 6.4:

 

(i) the Borrower and its Subsidiaries may become and remain liable with respect to Contingent Obligations with respect to Indebtedness of a Credit Party under Permitted Sale Leaseback Transactions.

 

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

 

(a) Consolidated Pro Forma Leverage Ratio. The Consolidated Pro Forma Leverage Ratio, as of the last day of each Fiscal Quarter of the Borrower occurring during the periods indicated below, shall be less than or equal to the following:

 

Period		Ratio
Closing Date through September 29, 2004		4.75 to 1.00
September 30, 2004 through September 28, 2005		5.00 to 1.00
September 29, 2005 through September 27, 2006		4.75 to 1.00
September 28, 2006 through September 26, 2007		4.50 to 1.00
September 27, 2007 through September 24, 2008		4.25 to 1.00
September 25, 2008 and thereafter		4.00 to 1.00

 

1.5 Section 6.6(c). The introductory paragraph of Section 6.6(c) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

(c) Consolidated Capital Expenditures. Consolidated Capital Expenditures made during any Fiscal Year of the Borrower shall be less than or equal to the greater of (i) 35% of Consolidated Pro Forma EBITDA as of the end of the immediately preceding Fiscal Year or (ii) the amount set forth below with respect to such Fiscal Year:

 

ARTICLE II

WAIVER

 

2.1 Waiver of Events of Default.

 

Notwithstanding the provisions of the Credit Agreement to the contrary, the Lenders hereby waive, on a limited, one-time basis, (a) the Acknowledged Events of Default under the Credit Agreement, in each case, on or prior to the date hereof and (b) the Joinder Events of Default on or prior to the date hereof, so long as each Non-Joined Subsidiary shall be joined to the Credit Agreement as an Additional Credit Party as required pursuant to Section 5.9 of the Credit Agreement within 30 days of the date of this Amendment.

 

This Amendment shall be effective only to the extent specifically set forth herein and shall not (i) be construed as a waiver of any breach or default other than as specifically waived

 

3

---

herein nor as a waiver of any breach or default of which the Lenders have not been informed by the Borrower, (ii) affect the right of the Lenders to demand compliance by the Borrower with all terms and conditions of the Credit Agreement in all other instances, (iii) be deemed a waiver of any transaction or future action on the part of the Borrower requiring the Lenders’ or the Required Lenders’ consent or approval under the Credit Agreement, or (iv) except as waived hereby with respect to the Acknowledged Events of Default and the Joinder Events of Default, be deemed or construed to be a wavier or release of, or a limitation upon, the Administrative Agent’s or the Lenders’ exercise of any rights or remedies under the Credit Agreement or any other document executed or delivered in connection therewith, whether arising as a consequence of any Event of Default which may now exist or otherwise, all such rights and remedies hereby being expressly reserved.

 

ARTICLE III

CONDITIONS TO EFFECTIVENESS

 

3.1 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 and the Required Lenders.

 

(b) Fees. Receipt by the Administrative Agent of all fees and expenses of the Administrative Agent in connection with the arrangement, preparation, execution and delivery of this Amendment, including, without limitation, the fees and expenses of Moore & Van Allen PLLC.

 

ARTICLE IV

MISCELLANEOUS

 

4.1 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.

 

4.2 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.

 

4

---

(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 as of the date hereof (except for those which expressly relate to an earlier date).

 

(e) No Default or Event of Default (other than the Acknowledged Events of Default and the Joinder Events of Default) exists before or after giving effect to this Amendment.

 

4.3 Acknowledgment of Guarantors. The Guarantors acknowledge and consent to all of the terms and conditions of this Amendment and agree that this Amendment and all documents executed in connection herewith do not operate to reduce or discharge the Guarantors’ obligations under the Credit Documents.

 

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

 

4.5 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.

 

4.6 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 shall be effective as an original and shall constitute a representation that an original will be delivered.

 

4.7 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.

 

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

 

5

---

4.9 GOVERNING LAW. THIS AMENDMENT AND WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. EACH OF THE CREDIT PARTIES 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.

 

4.10 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 9.14 and 9.17 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.

 

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

 

6

---

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

 

BORROWER:						THE PANTRY, INC.,
						a Delaware corporation
						By:		/s/ Daniel J. Kelly
						Name:		Daniel J. Kelly
						Title:		Chief Financial Officer, Vice President– Finance and Secretary

 

GUARANTORS:						R & H MAXXON, INC.,
						a South Carolina corporation
						By:		/s/ Daniel J. Kelly
						Name:		Daniel J. Kelly
						Title:		Executive Vice President and Assistant Secretary
						KANGAROO, INC.,
						a Georgia corporation
						By:		/s/ Daniel J. Kelly
						Name:		Daniel J. Kelly
						Title:		Executive Vice President and Assistant Secretary

 

The Pantry, Inc.

Second Amendment and Waiver

---

ADMINISTRATIVE AGENT

AND LENDERS:

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):
						ARES IV CLO LTD.
						By:		Ares CLO Management IV, L.P.
						Its:		Investment Manager
						By:		Ares CLO GP IV, LLC
						Its:		Managing Member
						By:		/s/ Seth J. Brufsky
						Name:		Seth J. Brufsky
						Title:		Vice President

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):
						BRYN MAWR CLO, Ltd.
						By:		Deerfield Capital Management LLC as its Collateral Manager
						By:		/s/ Dale Burrow
						Name:		Dale Burrow
						Title:		Sr. Vice President

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):
						Credit Industriel et Commercial
						By:		/s/ Anthony Rock		/s/ Marcus Edward
						Name:		Anthony Rock		Marcus Edward
						Title:		Vice President		Vice President

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):
						FOREST CREEK CLO, Ltd
						By: Deerfield Capital Management LLC as its Collateral Manager
						By:		/s/ Dale Burrow
						Name:		Dale Burrow
						Title:		Sr. Vice President

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):
						FOXE BASIN CLO 2003, LTD.
						By: GSO Capital Partners LP as Collateral Manager
						By:		/s/ Daniel H. Smith
						Name:		Daniel H. Smith
						Title:		Authorized Signatory

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):						Franklin CLO I, Limited
						By:		/s/ Alex Guang Yu
						Name:		Alex Guang Yu
						Title:		Authorized Signatory

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):						Franklin CLO II, Limited
						By:		/s/ Alex Guang Yu
						Name:		Alex Guang Yu
						Title:		Authorized Signatory

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):						Franklin CLO III, Limited
						By:		/s/ Alex Guang Yu
						Name:		Alex Guang Yu
						Title:		Authorized Signatory

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):						FRANKLIN CLO IV, LIMITED
						By:		/s/ Alex Guang Yu
						Name:		Alex Guang Yu
						Title:		Authorized Signatory

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):						FRANKLIN TEMPLETION LIM DURATION INCOME TRUST
						By:		/s/ Richard Hsu
						Name:		Richard Hsu
						Title:		Vice President

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):						Franklin Floating Rate Master Series
						By:		/s/ Richard Hsu
						Name:		Richard Hsu
						Title:		Vice President

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):						FRANKLIN FLOATING RATE DAILY ACCESS FUND
						By:		/s/ Richard Hsu
						Name:		Richard Hsu
						Title:		Vice President

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):						GSC PARTNERS GEMINI FUND LIMITED
						By:		GSCP (NJ), L.P., as Collateral Monitor
						By:		GSCP (NJ), INC., its General Partner
						By:		/s/ Seth Katzenstein
						Name:		Seth Katzenstein
						Title:		Authorized Signatory
								GSC Partners

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):						INDOSUEZ CAPITAL FUNDING VI LIMITED
						By:		Lyon Capital Management LLC, As Collateral Manager
						By:		/s/ Alexander B. Kenna
						Name:		Alexander B. Kenna
						Title:		Portfolio Manager

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):						ING PRIME RATE TRUST
						By:		ING Investment Management Co. as its investment manager
						By:		/s/ Theodore M. Haag
						Name:		Theodore M. Haag
						Title:		Vice President
						ING SENIOR INCOME FUND
						By:		ING Investment Management Co. as its investment manager
						By:		/s/ Theodore M. Haag
						Name:		Theodore M. Haag
						Title:		Vice President

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):						Kitty Hawk Trust
						By:		Morgan Stanley Investment Management Inc. as Investment Manager
						By:		/s/ Christina Jamieson
						Name:		Christina Jamieson
						Title:		Executive Director

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):						LANDMARK CDO LTD
						By		Aladdin Capital Management LLC, as Manager
						By:		/s/ Angela Bozorgmir
						Name:		Angela Bozorgmir
						Title:		Director

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):						LCM I LIMITED PARTNERSHIP
						By:		Lyon Capital Management LLC, As Collateral Manager
						By:		/s/ Alexander B. Kenna
						Name:		Alexander B. Kenna
						Title:		Portfolio Manager

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):						LCM III, Ltd.
						By:		Lyon Capital Management LLC, As Collateral Manager
						By:		/s/ Alexander B. Kenna
						Name:		Alexander B. Kenna
						Title:		Portfolio Manager

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

---

LENDERS (continued):

 

---

LENDERS (continued):

 

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver

---

LENDERS (continued):

 

 

The Pantry, Inc.

Second Amendment and Waiver