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                                                                    Exhibit 10.3

                              AMENDED AND RESTATED
                               SECURITY AGREEMENT

     THIS AMENDED AND RESTATED SECURITY AGREEMENT (this "Security Agreement"),
is entered into as of April 14, 2003, among THE PANTRY, INC., a Delaware
corporation (the "Borrower"), the Domestic Subsidiaries of the Borrower
(individually a "Guarantor" and collectively the "Guarantors"; the Guarantors,
together with the Borrower, individually an "Obligor" and collectively the
"Obligors") and WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as
Administrative Agent under the Credit Agreement referred to below (in such
capacity, the "Administrative Agent") for the several banks and other financial
institutions as may from time to time become parties to such Credit Agreement
(individually a "Secured Party" and collectively the "Secured Parties").

                                    RECITALS

     WHEREAS, pursuant to that certain Amended and Restated Credit Agreement
dated as of January 28, 1999 (as amended, modified, extended, renewed or
replaced, the "Existing Credit Agreement"), among the Borrower, the lenders
party thereto, and the Administrative Agent, the Secured Parties agreed to make
loans and issue letters of credit upon the terms and subject to the conditions
set forth therein;

     WHEREAS, pursuant to that certain Amended and Restated Credit Agreement
dated as of the date hereof (as amended, modified, extended, renewed or replaced
from time to time, the "Credit Agreement"), among the Borrower, the Guarantors,
the Secured Parties party thereto, and the Administrative Agent, the Secured
Parties have agreed to refinance the Existing Credit Agreement and make Loans
and issue Letters of Credit upon the terms and subject to the conditions set
forth therein;

     WHEREAS, in connection with the Existing Credit Agreement, the Borrower
entered into that certain Company Security Agreement dated as of October 23,
1997 and certain of the Guarantors entered into those certain Subsidiary
Security Agreements and Subsidiary Trademark Security Agreements each dated as
of January 28, 1999 (as amended, modified, extended, renewed or replaced, the
"Existing Security Agreements"); and

     WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Secured Parties to make their respective
Loans and to issue Letters of Credit under the Credit Agreement that the
Obligors shall have executed and delivered this Security Agreement (which amends
and restates the Existing Security Agreements) to the Administrative Agent for
the ratable benefit of the Secured Parties.

     NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

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     1.   Definitions.

          (a) Unless otherwise defined herein, capitalized terms used herein
     shall have the meanings ascribed to such terms in the Credit Agreement, and
     the following terms which are defined in the Uniform Commercial Code from
     time to time in effect in the State of New York (the "UCC") are used herein
     as so defined: Accessions, Accounts, As-Extracted Collateral, Chattel
     Paper, Commercial Tort Claims, Consumer Goods, Control, Deposit Accounts,
     Documents, Electronic Chattel Paper, Equipment, Farm Products, Fixtures,
     General Intangibles, Goods, Instruments, Inventory, Investment Property,
     Letter-of-Credit Rights, Manufactured Homes, Proceeds, Securities
     Intermediary, Security Entitlement, Software, Supporting Obligations and
     Tangible Chattel Paper. For purposes of this Security Agreement, (i) the
     term "Secured Party" shall include (X) any Affiliate of any Secured Party
     which has entered into a Hedging Agreement with any Obligor and (Y) any
     Person that was a Secured Party (or an Affiliate of a Secured Party) under
     the Credit Agreement at the time it entered into a Hedging Agreement that
     has ceased to be a Secured Party under the Credit Agreement, and (ii) the
     term "Hedging Agreement" shall mean any Hedging Agreement between any
     Secured Party and any Obligor that is permitted by the terms of the Credit
     Agreement.

          (b) In addition, the following term shall have the following meaning:

          "Secured Obligations": (a) all of the Credit Party Obligations,
     howsoever evidenced, created, incurred or acquired, whether primary,
     secondary, direct, contingent, or joint and several and (b) all expenses
     and charges, legal and otherwise, incurred by the Administrative Agent
     and/or the Secured Parties in collecting or enforcing any Credit Party
     Obligations or in realizing on or protecting any security therefor,
     including without limitation the security granted hereunder.

     2.   Grant of Security Interest in the Collateral.

          (a) To secure the prompt payment and performance in full when due,
     whether by lapse of time, acceleration, mandatory prepayment or otherwise,
     of the Secured Obligations, each Obligor hereby grants to the
     Administrative Agent, for the ratable benefit of the Secured Parties, a
     continuing security interest in any and all right, title and interest of
     such Obligor in and to the following, whether now owned or existing or
     owned, acquired, or arising hereafter (collectively, the "Collateral"):

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               (i)  all Accounts;

               (ii) all cash and Cash Equivalents;

               (iii) all Chattel Paper;

               (iv) those certain Commercial Tort Claims set forth on Schedule
                    2(a) attached hereto (as such Schedule may be updated from
                    time to time by the Obligors);

               (v)  all Copyright Licenses;

               (vi) all Copyrights;

               (vii) all Deposit Accounts;

               (viii) all Documents;

               (ix) all Equipment;

               (x)  all Fixtures;

               (xi) all General Intangibles;

               (xii) all Goods;

               (xiii) all Instruments;

               (xiv) all Inventory;

               (xv) all Investment Property;

               (xvi) all Letter-of-Credit Rights;

               (xvii) all Material Contracts and all such other agreements,
                    contracts, leases, licenses, tax sharing agreements or
                    hedging arrangements now or hereafter entered into by an
                    Obligor, as such agreements may be amended or otherwise
                    modified from time to time (collectively, the "Assigned
                    Agreements"), including without limitation, (A) all rights
                    of an Obligor to receive moneys due and to become due under
                    or pursuant to the Assigned Agreements, (B) all rights of an
                    Obligor to receive proceeds of any insurance, indemnity,
                    warranty or guaranty with respect to the Assigned
                    Agreements, (C) claims of an Obligor for damages arising out
                    of or

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                    for breach of or default under the Assigned Agreements and
                    (D) the right of an Obligor to terminate the Assigned
                    Agreements, to perform thereunder and to compel performance
                    and otherwise exercise all remedies thereunder;

               (xviii) all Patent Licenses;

               (xix) all Patents;

               (xx) all Payment Intangibles;

               (xxi) all Trademark Licenses;

               (xxii) all Trademarks;

               (xxiii) all Software;

               (xxiv) all Supporting Obligations;

               (xxv) all books, records, ledger cards, files, correspondence,
                    computer programs, tapes, disks, and related data processing
                    software (owned by such Obligor or in which it has an
                    interest) that at any time evidence or contain information
                    relating to any Collateral or are otherwise necessary or
                    helpful in the collection thereof or realization thereupon;

               (xxvi) all other personal property of any kind or type whatsoever
                    owned by such Obligor; and

               (xxvii) to the extent not otherwise included, all Accessions,
                    Proceeds and products of any and all of the foregoing.

               Notwithstanding the foregoing, nothing in this Section 2 or
     otherwise in this Security Agreement shall constitute a grant by any
     Obligor of a security interest in any contract, document, instrument,
     general intangible, lease, license or other right of any kind to the extent
     such agreement was entered into prior to the date of this Security
     Agreement and to the extent such a grant of a security interest would,
     after giving effect to the provisions of subsections 9-406, 9-407 and 9-408
     of the UCC, constitute a breach or violation of any term thereof.

          (b) The Obligors and the Administrative Agent, on behalf of the
     Secured Parties, hereby acknowledge and agree that the security interest
     created hereby in the Collateral (i) constitutes continuing collateral
     security for all of the Secured Obligations,

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     whether now existing or hereafter arising and (ii) is not to be construed
     as an assignment of any Intellectual Property.

     3.   Provisions Relating to Accounts, Contracts and Agreements.

          (a) Anything herein to the contrary notwithstanding, each of the
     Obligors shall remain liable under each of its Accounts, contracts and
     agreements to observe and perform all the conditions and obligations to be
     observed and performed by it thereunder, all in accordance with the terms
     of any agreement giving rise to each such Account or the terms of such
     contract or agreement. Neither the Administrative Agent nor any Secured
     Party shall have any obligation or liability under any Account (or any
     agreement giving rise thereto), contract or agreement by reason of or
     arising out of this Security Agreement or the receipt by the Administrative
     Agent or any Secured Party of any payment relating to such Account,
     contract or agreement pursuant hereto, nor shall the Administrative Agent
     or any Secured Party be obligated in any manner to perform any of the
     obligations of an Obligor under or pursuant to any Account (or any
     agreement giving rise thereto), contract or agreement, to make any payment,
     to make any inquiry as to the nature or the sufficiency of any payment
     received by it or as to the sufficiency of any performance by any party
     under any Account (or any agreement giving rise thereto), contract or
     agreement, to present or file any claim, to take any action to enforce any
     performance or to collect the payment of any amounts which may have been
     assigned to it or to which it may be entitled at any time or times.

          (b) Upon the occurrence and during the continuation of an Event of
     Default, the Administrative Agent shall have the right, but not the
     obligation, to make test verifications of the Accounts in any manner and
     through any medium that it reasonably considers advisable, and the Obligors
     shall furnish all such assistance and information as the Administrative
     Agent may reasonably require in connection with such test verifications.
     Upon the occurrence and during the continuation of an Event of Default, the
     Administrative Agent's request and at the expense of the Obligors, the
     Obligors shall cause independent public accountants or others satisfactory
     to the Administrative Agent to furnish to the Administrative Agent reports
     showing reconciliations, aging and test verifications of, and trial
     balances for, the Accounts. Subject to Section 2(a), the Administrative
     Agent in its own name or in the name of others may communicate with account
     debtors on the Accounts to verify with them to the Administrative Agent's
     satisfaction the existence, amount and terms of any Accounts.

     4. Representations and Warranties. Each Obligor hereby represents and
warrants to the Administrative Agent, for the benefit of the Secured Parties,
that so long as any of the Secured Obligations remain outstanding (other than
contingent indemnity or reimbursement obligations) or any Credit Document or
Hedging Agreement is in effect, and until all of the Commitments shall have been
terminated:

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          (a) Chief Executive Office; Books & Records; Legal Name; State of
     Formation. As of the Closing Date, each Obligor's chief executive office
     and chief place of business are (and for the prior four months has been)
     located at the locations set forth on Schedule 3.5-3 to the Credit
     Agreement and as of the Closing Date each Obligor keeps its books and
     records at such locations. As of the Closing Date, each Obligor's exact
     legal name is as shown in this Security Agreement and its state of
     formation is (and for the prior four months has been) the location set
     forth on Schedule 3.1-1 to the Credit Agreement. No Obligor has in the four
     months preceding the Closing Date changed its name, been party to a merger,
     consolidation or other change in structure or used any tradename not
     disclosed on Schedule 4(a) attached hereto.

          (b) Location of Tangible Collateral. The location of all tangible
     Collateral owned by each Obligor is set forth in the Perfection Certificate
     delivered in accordance with the Credit Agreement.

          (c) Ownership. Each Obligor is the legal and beneficial owner of its
     Collateral and has the right to pledge, sell, assign or transfer the same.

          (d) Security Interest/Priority. This Security Agreement creates a
     valid security interest in favor of the Administrative Agent, for the
     ratable benefit of the Secured Parties, in the Collateral of such Obligor
     and, when properly perfected by filing, the granting of Control to the
     Administrative Agent or otherwise, shall constitute a valid first priority,
     perfected security interest in such Collateral, to the extent such security
     interest can be perfected by filing or otherwise under the UCC or by filing
     an appropriate notice with the United States Patent and Trademark Office or
     the United States Copyright Office, free and clear of all Liens except for
     Permitted Liens.

          (e) Consents. Except for (i) the filing or recording of UCC financing
     statements, (ii) the filing of appropriate notices with the United States
     Patent and Trademark Office and the United States Copyright Office or (iii)
     obtaining Control to perfect the Liens created by this Security Agreement,
     no consent or authorization of, filing with, or other act by or in respect
     of, any arbitrator or Governmental Authority and no consent of any other
     Person (including, without limitation, any stockholder, member or creditor
     of such Obligor), is required (A) for the grant by such Obligor of the
     security interest in the Collateral granted hereby or for the execution,
     delivery or performance of this Security Agreement by such Obligor or (B)
     for the perfection of such security interest or the exercise by the
     Administrative Agent of the rights and remedies provided for in this
     Security Agreement.

          (f) Types of Collateral. None of the Collateral consists of, or is the
     Proceeds of, As-Extracted Collateral, Consumer Goods, Farm Products,
     Manufactured Homes or standing timber (as used in the UCC).

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<PAGE>

          (g) Accounts. With respect to the Accounts of the Obligors: (i) to the
     extent an Account arises out of goods sold and/or services furnished, (A)
     the goods sold and/or services furnished giving rise to each Account, are
     not subject to any security interest or Lien except the first priority,
     perfected security interest granted to the Administrative Agent herein and
     Permitted Liens and (B) such Account arises out of a bona fide transaction
     for goods sold and delivered (or in the process of being delivered) by an
     Obligor or for services actually rendered by an Obligor, which transaction
     was conducted in the ordinary course of the Obligor's business or otherwise
     permitted by the Credit Agreement; (ii) no Account of an Obligor is
     evidenced by any Instrument or Chattel Paper unless such Instrument or
     Chattel Paper, except (x) those representing an obligation of less than
     $50,000, or (y) as to which notice has been given to the Administrative
     Agent and at the request of Administrative Agent, the same has been
     endorsed over and delivered to, or submitted to the Control of the
     Administrative Agent; (iii) each Account and the papers and documents of
     the applicable Obligor relating thereto are genuine and in all material
     respects what they purport to be; (iv) the amount of each Account as shown
     on the applicable Obligor's books and records, and on all invoices and
     statements which may be delivered to the Administrative Agent with respect
     thereto, is due and payable to the applicable Obligor and is not in any way
     contingent; (v) no Account is evidenced by judgment, there are no set-offs,
     counterclaims or disputes existing or asserted with respect to any Account
     that in the aggregate could reasonably be expected to have a Material
     Adverse Effect, and no Obligor has made any agreement with any account
     debtor for any deduction from any Account except for deductions made in the
     ordinary course of its business; (vi) there has been no development or
     event which individually or in the aggregate has had or could be reasonably
     expected to have an adverse effect on the validity or enforcement of any
     Account or tend to reduce the amount payable thereunder as shown on the
     applicable Obligor's books and records and all invoices and statements
     delivered to the Administrative Agent with respect thereto, which
     development or event could reasonably be expected to have a Material
     Adverse Effect; and (vii) the right to receive payment under each Account
     is assignable except where the account debtor with respect to such Account
     is the United States government or any State government or any agency,
     department or instrumentality thereof, to the extent the assignment of any
     such right to payment is prohibited or limited by applicable law,
     regulations, administrative guidelines or contract.

          (h) Inventory. Except as set forth on Schedule 4 attached hereto, no
     Inventory of an Obligor is held by a third party pursuant to consignment,
     sale or return, sale on approval or similar arrangement.

          (i) Intellectual Property.

               (i) Schedule 3.21 to the Credit Agreement includes all
          Intellectual Property owned by the Obligors as of the date hereof.

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               (ii) All Intellectual Property owned by each Obligor i is valid,
          subsisting, unexpired, enforceable and has not been abandoned, and
          each Obligor is legally entitled to use each of its tradenames.

               (iii) Except as set forth in Schedule 3.21 to the Credit
          Agreement, none of the Intellectual Property owned by the Obligors is
          the subject of any licensing or franchise agreement.

               (iv) No holding, decision or judgment has been rendered by any
          Governmental Authority which would limit, cancel or question the
          validity of any Intellectual Property of the Obligors.

               (v) To the knowledge by each Obligor no action or proceeding is
          pending seeking to limit, cancel or question the validity of any
          Intellectual Property of the Obligors, or which, if adversely
          determined, would have a material adverse effect on the value of any
          such Intellectual Property.

               (vi) All filed applications pertaining to the Intellectual
          Property of each Obligor have been duly and properly filed, and all
          registrations or letters pertaining to such Intellectual Property have
          been duly and properly filed and issued, and all of such Intellectual
          Property is valid and enforceable.

               (vii) No Obligor has made any assignment or agreement in conflict
          with the security interest of the Administrative Agent in the
          Intellectual Property of each Obligor hereunder.

          (j) Documents, Instruments and Chattel Paper. All Documents,
     Instruments and Chattel Paper evidencing or constituting Collateral are, to
     the Obligors' knowledge, complete, valid, and genuine.

          (k) Equipment. With respect to each Obligor's Equipment: (i) such
     Obligor has good and marketable title thereto; and (ii) all such Equipment
     is in normal operating condition and repair, ordinary wear and tear alone
     excepted, and is suitable for the uses to which it is customarily put in
     the conduct of such Obligor's business.

     5. Covenants. Each Obligor covenants that, so long as any of the Secured
Obligations remain outstanding (other than contingent indemnity or reimbursement
obligations) or any Credit Document or Hedging Agreement is in effect, and until
all of the Commitments shall have been terminated, such Obligor shall:

          (a) Other Liens. Defend the Collateral against the claims and demands
     of all other parties claiming an interest therein and keep the Collateral
     free from all Liens, except for Permitted Liens. If an Obligor proposes to
     obtain financing permitted under Section 6.1(c) of the Credit Agreement
     with respect to any asset acquired after the

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     Closing Date (a "Purchase Money Financing"), the Administrative Agent will
     either (i) with respect to such asset, subordinate the Lien and security
     interest created hereunder to the Lien securing the Purchase Money
     Financing by a subordination agreement reasonably acceptable to the
     Administrative Agent and the provider thereof or (ii) if the Obligor has
     not been able, after reasonable effort, to get the provider of such
     Purchase Money Financing to agree to subordination, the Administrative
     Agent will release the Lien and security interest granted hereunder in such
     asset.

          (b) Sales and Sale and Lease-Backs of Collateral. Neither the
     Administrative Agent nor any Secured Party authorizes any Obligor to, and
     no Obligor shall, sell, exchange, transfer, assign, lease or otherwise
     dispose of the Collateral or any interest therein, except as permitted
     under the Credit Agreement; provided that in the event the Obligor makes an
     asset sale or sale and lease-back transaction permitted by the Credit
     Agreement and the assets subject to such asset sale or sale and lease-back
     transaction constitute Collateral, the Administrative Agent shall release
     the Collateral that is the subject of such asset sale to the Obligor free
     and clear of any Lien and security interest under this Security Agreement
     or any other Credit Document concurrently with the consummation of such
     asset sale or sale and lease-back transaction.

          (c) Preservation of Collateral. Keep the Collateral in good order,
     condition and repair in all material respects, ordinary wear and tear
     excepted; not use the Collateral in violation of the provisions of this
     Security Agreement or any other agreement relating to the Collateral or any
     policy insuring the Collateral or any applicable Requirement of Law; not
     permit any Collateral to be or become a fixture to real property or an
     accession to other personal property unless the Administrative Agent has a
     valid, perfected and first priority security interest for the benefit of
     the Secured Parties in such real or personal property; and not, without the
     prior written consent of the Administrative Agent, alter or remove any
     identifying symbol or number on its Equipment.

          (d) Possession or Control of Certain Collateral. If (i) any amount
     payable under or in connection with any of the Collateral shall be or
     become evidenced by any Instrument, Tangible Chattel Paper or Supporting
     Obligation or (ii) if any Collateral shall be stored or shipped subject to
     a Document or (iii) if any Collateral shall consist of Investment Property
     in the form of certificated securities, in the case of either clause (i) or
     (ii), in an amount of $50,000 or more, immediately notify the
     Administrative Agent of the existence of such Collateral and, upon the
     request of the Administrative Agent, deliver such Instrument, Chattel
     Paper, Supporting Obligation, Document or Investment Property to the
     Administrative Agent, duly endorsed in a manner satisfactory to the
     Administrative Agent, to be held as Collateral pursuant to this Security
     Agreement. If any Collateral shall consist of Deposit Accounts, Electronic
     Chattel Paper, Letter-of-Credit Rights or uncertificated Investment
     Property, execute and deliver (and, with respect to any Collateral
     consisting of uncertificated Security Entitlements or Investment Property,
     cause the Securities Intermediary or the issuer, as applicable, with
     respect to such Investment Property to execute and deliver) to the
     Administrative Agent all control agreements, assignments,

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     instruments or other documents as reasonably requested by the
     Administrative Agent for the purposes of obtaining and maintaining Control
     of such Collateral.

          (e) Changes in Corporate Structure or Location. Not, without providing
     10 days prior written notice to the Administrative Agent and without filing
     (or confirming that the Administrative Agent has filed) such financing
     statements and amendments to any previously filed financing statements as
     the Administrative Agent may require, (i) alter its corporate existence,
     (ii) change its state of incorporation or formation or the location where
     it maintains its books and records or (iii) change its registered corporate
     name.

          (f) Inspection. Allow the Administrative Agent or its representatives
     to visit and inspect the Collateral as set forth in Section 5.5 of the
     Credit Agreement.

          (g) Perfection of Security Interest. Mark its books and records to
     reflect the security interest of the Administrative Agent in the
     Collateral. Each Obligor hereby authorizes the Administrative Agent to
     prepare and file such financing statements (including continuation
     statements) or amendments thereof or supplements thereto or other
     instruments as the Administrative Agent may from time to time deem
     necessary or appropriate in order to perfect and maintain the security
     interests granted hereunder in accordance with the UCC. To the extent
     permitted by applicable law, each Obligor hereby agrees that a carbon,
     photographic or other reproduction of this Security Agreement or any such
     financing statement is sufficient for filing as a financing statement by
     the Administrative Agent without notice thereof to such Obligor wherever
     the Administrative Agent may reasonably determine is appropriate. Each
     Obligor shall also execute and deliver to the Administrative Agent such
     agreements, assignments or instruments (including affidavits, notices,
     reaffirmations and amendments and restatements of existing documents, as
     the Administrative Agent may reasonably request) and do all such other
     things as the Administrative Agent may reasonably deem necessary or
     appropriate (i) to assure to the Administrative Agent its security
     interests hereunder are perfected, including (A) such financing statements
     (including continuation statements) or amendments thereof or supplements
     thereto or other instruments as the Administrative Agent may from time to
     time reasonably request in order to perfect and maintain the security
     interests granted hereunder in accordance with the UCC and any other
     personal property security legislation in the appropriate state(s) or
     province(s), (B) with regard to Copyrights, a Notice of Grant of Security
     Interest in Copyrights for filing with the United States Copyright Office
     in the form of Schedule 5(f)(i) attached hereto, (C) with regard to
     Patents, a Notice of Grant of Security Interest in Patents for filing with
     the United States Patent and Trademark Office in the form of Schedule
     5(f)(ii) attached hereto and (D) with regard to Trademarks, a Notice of
     Grant of Security Interest in Trademarks for filing with the United States
     Patent and Trademark Office in the form of Schedule 5(f)(iii) attached
     hereto, (ii) to consummate the transactions contemplated hereby and (iii)
     to otherwise protect and assure the Administrative Agent of its rights and
     interests hereunder. To that end, each Obligor hereby irrevocably makes,
     constitutes and appoints the Administrative

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     Agent, its nominee or any other person whom the Administrative Agent may
     designate, as such Obligor's attorney-in-fact with full power and for the
     limited purpose to sign in the name of such Obligor any notices or any
     similar documents which in the Administrative Agent's reasonable discretion
     would be necessary or appropriate in order to perfect and maintain
     perfection of the security interests granted hereunder, such power, being
     coupled with an interest, being and remaining irrevocable so long as any of
     the Secured Obligations remain outstanding (other than any such obligations
     which by the terms thereof are stated to survive termination of the Credit
     Documents) or any Credit Document or Hedging Agreement (to the extent the
     obligations of such Obligor thereunder constitute Secured Obligations) is
     in effect, and until all of the Commitments shall have terminated. In the
     event for any reason the law of any jurisdiction other than New York
     becomes or is applicable to the Collateral of any Obligor or any part
     thereof, or to any of the Secured Obligations, such Obligor agrees to
     execute and deliver all such instruments and to do all such other things as
     the Administrative Agent in its reasonable discretion reasonably deems
     necessary or appropriate to preserve, protect and enforce the security
     interests of the Administrative Agent under the law of such other
     jurisdiction (and, if an Obligor shall fail to do so promptly upon the
     request of the Administrative Agent, then the Administrative Agent may
     execute any and all such requested documents on behalf of such Obligor
     pursuant to the power of attorney granted hereinabove).

          (h) Collateral Held by Warehouseman, Bailee, etc. If any Collateral
     with a book value of $1,000,000 or more is at any time in the possession or
     control of a warehouseman, bailee or any agent or processor of such
     Obligor, (i) notify the Administrative Agent of such possession, (ii)
     notify such Person of the Administrative Agent's security interest for the
     benefit of the Secured Parties in such Collateral, (iii) instruct such
     Person to hold all such Collateral for the Administrative Agent's account
     subject to the Administrative Agent's instructions and (iv) obtain an
     acknowledgment from such Person that it is holding such Collateral for the
     benefit of the Administrative Agent.

          (i) Treatment of Accounts. (i) Not grant or extend the time for
     payment of any Account, or compromise or settle any Account for less than
     the full amount thereof, or release any person or property, in whole or in
     part, from payment thereof, or allow any credit or discount thereon, other
     than as normal and customary in the ordinary course of an Obligor's
     business and (ii) maintain at its principal place of business a record of
     Accounts consistent with customary business practices.

          (j) Covenants Relating to Inventory.

               (i) Maintain, keep and preserve its Inventory in good salable
          condition at its own cost and expense, subject to policies and
          procedures relating to obsolete, defective, damaged, or slow-moving
          items and items held for return that are normal and customary in the
          ordinary course of any Obligor's business.

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               (ii) Comply with all reporting requirements set forth in the
          Credit Agreement with respect to Inventory.

               (iii) If any of the Inventory with a book value in excess of
          $100,000 is at any time evidenced by a document of title, immediately
          upon request by the Administrative Agent, deliver such document of
          title to the Administrative Agent.

          (k)  Covenants Relating to Copyrights.

               (i) Employ the Copyright for each material Work with such notice
          of copyright as may be required by law to secure copyright protection.

               (ii) Not do any act or knowingly omit to do any act whereby any
          Copyright may become invalidated and (A) not do any act, or knowingly
          omit to do any act, whereby any Copyright material to the conduct of
          its business may become injected into the public domain; (B) notify
          the Administrative Agent immediately if it knows, or has reason to
          know, that any Copyright material to the conduct of its business may
          become injected into the public domain or of any adverse determination
          or development (including, without limitation, the institution of, or
          any such determination or development in, any proceeding in any court
          or tribunal in the United States or any other country) regarding an
          Obligor's ownership of any such Copyright or its validity; (C) take
          all necessary steps as it shall deem appropriate under the
          circumstances, to maintain and pursue each application (and to obtain
          the relevant registration) and to maintain each registration of each
          Copyright owned by an Obligor, which any Obligor reasonably determines
          are material to the conduct of its business, including, without
          limitation, filing of applications for renewal where necessary; and
          (D) promptly notify the Administrative Agent of any material
          infringement of any Copyright of an Obligor of which it becomes aware
          (with respect to Copyrights that an Obligor reasonably determines is
          material to the conduct of its business) and take such actions as it
          shall reasonably deem appropriate under the circumstances to protect
          such Copyright, including, where appropriate, the bringing of suit for
          infringement, seeking injunctive relief and seeking to recover any and
          all damages for such infringement.

               (iii) Not make any assignment or agreement in conflict with the
          security interest in the Copyrights of each Obligor hereunder.

          (l)  Covenants Relating to Patents and Trademarks.

               (i) (A) Continue to use each Trademark, which any Obligor
          reasonably determines is material to the conduct of its business, in
          order to maintain such Trademark in full force free from any claim of
          abandonment for non-use, (B) maintain as in the past the quality of
          products and services offered

                                       12

<PAGE>

          under such Trademark, (C) employ such Trademark with the appropriate
          notice of registration, (D) not adopt or use any mark which is
          confusingly similar or a colorable imitation of such Trademark unless
          the Administrative Agent, for the ratable benefit of the Secured
          Parties, shall obtain a perfected security interest in such mark
          pursuant to this Security Agreement, and (E) not (and not permit any
          licensee or sublicensee thereof to) do any act or knowingly omit to do
          any act whereby any such Trademark may become invalidated.

               (ii) Not do any act, or omit to do any act, whereby any Patent,
          which any Obligor reasonably determines is material to the conduct of
          its business, may become abandoned or dedicated.

               (iii) Promptly notify the Administrative Agent if it knows, or
          has reason to know, that any application or registration relating to
          any Patent or Trademark material to the conduct of its business may
          become abandoned or dedicated, or of any adverse determination or
          development (including, without limitation, the institution of, or any
          such determination or development in, any proceeding in the United
          States Patent and Trademark Office or any court or tribunal in any
          country) regarding an Obligor's ownership of any such Patent or
          Trademark or its right to register the same or to keep, maintain and
          use the same.

               (iv) Whenever an Obligor, either by itself or through an agent,
          employee, licensee or designee, shall file an application for the
          registration of any Patent or Trademark with the United States Patent
          and Trademark Office or any similar office or agency in any other
          country or any political subdivision thereof, such Obligor shall
          report such filing to the Administrative Agent within five Business
          Days after the last day of the fiscal quarter in which such filing
          occurs. Upon request of the Administrative Agent, an Obligor shall
          execute and deliver any and all agreements, instruments, documents and
          papers as the Administrative Agent may request to evidence the
          Administrative Agent's and the Secured Parties' security interest in
          any Patent or Trademark and the goodwill and General Intangibles of
          such Obligor relating thereto or represented thereby.

               (v) Take all reasonable and necessary steps, including, without
          limitation, in any proceeding before the United States Patent and
          Trademark Office, or any similar office or agency in any other country
          or any political subdivision thereof, to maintain and pursue each
          material application, to obtain the relevant registration and to
          maintain each registration of the Patents and Trademarks, which any
          Obligor reasonably determines is material to the conduct of its
          business, including, without limitation, filing of applications for
          renewal, affidavits of use and affidavits of incontestability.

               (vi) Promptly notify the Administrative Agent and the Secured
          Parties after it learns that any Patent or Trademark included in the
          Collateral, which any

                                       13

<PAGE>

          Obligor reasonably determines is material to the conduct of its
          business, is infringed, misappropriated or diluted by a third party
          and, if such Patent or Trademark is necessary or desirable for the
          conduct of any Obligor's business and if consistent with good business
          judgment, then promptly sue for infringement, misappropriation or
          dilution, to seek injunctive relief where appropriate and to recover
          any and all damages for such infringement, misappropriation or
          dilution, or take such other actions as it shall reasonably deem
          appropriate under the circumstances to protect such Patent or
          Trademark.

               (vii) Not make any assignment or agreement in conflict with the
          security interest in the Patents or Trademarks of any Obligor
          hereunder.

          (m) New Patents, Copyrights and Trademarks. Promptly provide the
     Administrative Agent with (i) a listing of all applications, if any, for
     new Copyrights, Patents or Trademarks (together with a listing of the
     issuance of registrations or letters on present applications) which new
     applications and issued registrations of letters shall be subject to terms
     and conditions hereunder, and (ii) (A) with respect to Copyrights, a duly
     executed Notice of Grant of Security Interest in Copyrights, (B) with
     respect to Patents, a duly executed Notice of Grant of Security Interest in
     Patents, (C) with respect to Trademarks, a duly executed Notice of Grant of
     Security Interest in Trademarks or (D) such other duly executed documents
     as the Administrative Agent may request in a form acceptable to counsel for
     the Administrative Agent and suitable for recording to evidence the
     security interest in the Copyright, Patent or Trademark which is the
     subject of such new application.

          (n) Commercial Tort Claims; Notice of Litigation. (i) Promptly forward
     to the Administrative Agent written notification of any and all Commercial
     Tort Claims of any Obligor, including, but not limited to, any and all
     actions, suits, and proceedings before any court or Governmental Authority
     by or affecting such Obligor or any of its Subsidiaries and (ii) execute
     and deliver such statements, documents and notices and do and cause to be
     done all such things as may be required by the Administrative Agent, or
     required by law, including all things which may from time to time be
     necessary under the UCC to fully create, preserve, perfect and protect the
     priority of the Administrative Agent's security interest in any Commercial
     Tort Claims.

          (o) Fixtures. At all times maintain the Collateral as personal
     property and not affix any of the Collateral to any real property (except
     real property in which the Administrative Agent has a valid, perfected and
     first priority security interest) in a manner which would change its nature
     from personal property to real property or a Fixture.

          (p) Insurance. Insure, repair and replace the Collateral of such
     Obligor as set forth in the Credit Agreement. Subject to the provisions of
     the Credit Agreement, all

                                       14

<PAGE>

     insurance proceeds shall be subject to the security interest of the
     Administrative Agent hereunder.

          (q) New Licenses and Leases. Use its commercially reasonable best
     efforts to ensure that any material license or any material lease obtained
     or entered into by such Obligor after the Closing Date does not contain
     legally enforceable restrictions on the granting of a security interest
     therein.

     6. License of Patents, Trademarks, Copyrights, etc. The Obligors hereby
assign, transfer and convey to the Administrative Agent, effective upon the
occurrence of any Event of Default, the nonexclusive right and license to use
all Trademarks, tradenames, Copyrights, Patents or technical processes owned or,
to the extent this license can be granted without violation of the Obligor's
license thereof, used by any Obligor that relate to the Collateral and any other
collateral granted by the Obligors as security for the Secured Obligations,
together with any goodwill associated therewith, all to the extent necessary to
enable the Administrative Agent to use, possess and realize on the Collateral
and to enable any successor or assign to enjoy the benefits of the Collateral.
This right and license shall inure to the benefit of all successors, assigns and
transferees of the Administrative Agent and its successors, assigns and
transferees, whether by voluntary conveyance, operation of law, assignment,
transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right and
license is granted free of charge, without requirement that any monetary payment
whatsoever be made to the Obligors.

     7. Special Provisions Regarding Inventory. Notwithstanding anything to the
contrary contained in this Security Agreement, each Obligor may, unless and
until an Event of Default occurs and is continuing and the Administrative Agent
instructs such Obligor otherwise, without further consent or approval of the
Administrative Agent, use, consume, sell, lease and exchange its Inventory in
the ordinary course of its business as presently conducted, whereupon, in the
case of such a sale or exchange, the security interest created hereby in the
Inventory so sold or exchanged (but not in any Proceeds arising from such sale
or exchange) shall cease immediately without any further action on the part of
the Administrative Agent.

     8. Performance of Obligations; Advances by Administrative Agent. On failure
of any Obligor to perform any of the covenants and agreements contained herein,
the Administrative Agent may, at its sole option and sole discretion, perform or
cause to be performed the same and in so doing may expend such sums as the
Administrative Agent may reasonably deem advisable in the performance thereof,
including, without limitation, the payment of any insurance premiums, the
payment of any taxes, a payment to obtain a release of a Lien or potential Lien,
expenditures made in defending against any adverse claim and all other
expenditures which the Administrative Agent may make for the protection of the
security interest hereof or may be compelled to make by operation of law. All
such sums and amounts so expended shall be repayable by the Obligors on a joint
and several basis promptly upon timely notice thereof and demand therefor, shall
constitute additional Secured Obligations and shall bear interest from the date
said amounts are expended at the default rate for Alternate Base Rate Loans set
forth in Section 2.11 of the Credit Agreement. No such performance of any
covenant

                                       15

<PAGE>

or agreement by the Administrative Agent on behalf of any Obligor, and no such
advance or expenditure therefor, shall relieve the Obligors of any default under
the terms of this Security Agreement, the other Credit Documents or any Hedging
Agreement. The Administrative Agent may make any payment hereby authorized in
accordance with any bill, statement or estimate procured from the appropriate
public office or holder of the claim to be discharged without inquiry into the
accuracy of such bill, statement or estimate or into the validity of any tax
assessment, sale, forfeiture, tax lien, title or claim except to the extent such
payment is being contested in good faith by an Obligor in appropriate
proceedings and against which adequate reserves are being maintained in
accordance with GAAP.

     9.   Events of Default.

     The occurrence of an event which under the Credit Agreement would
constitute an Event of Default shall be an event of default hereunder (an "Event
of Default").

     10.  Remedies.

          (a) General Remedies. Upon the occurrence of an Event of Default and
     during continuation thereof, the Administrative Agent and the Secured
     Parties shall have, in addition to the rights and remedies provided herein,
     in the Credit Documents, in any Hedging Agreement or by law (including, but
     not limited to, levy of attachment, garnishment and the rights and remedies
     set forth in the Uniform Commercial Code of the jurisdiction applicable to
     the affected Collateral), the rights and remedies of a secured party under
     the UCC (regardless of whether the UCC is the law of the jurisdiction where
     the rights and remedies are asserted and regardless of whether the UCC
     applies to the affected Collateral), and further, the Administrative Agent
     may, with or without judicial process or the aid and assistance of others,
     (i) to the extent permitted by applicable law, enter on any premises on
     which any of the Collateral may be located and, without resistance or
     interference by the Obligors, take possession of the Collateral, (ii)
     subject to Section 10(c) with respect to leased properties, dispose of any
     Collateral on any such premises, (iii) require the Obligors to assemble and
     make available to the Administrative Agent at the expense of the Obligors
     any Collateral at any place and time designated by the Administrative Agent
     which is reasonably convenient to both parties, (iv) remove any Collateral
     from any such premises for the purpose of effecting sale or other
     disposition thereof, and/or (v) without demand and without advertisement,
     notice, hearing or process of law, all of which each of the Obligors hereby
     waives to the fullest extent permitted by applicable law, at any place and
     time or times, sell and deliver any or all Collateral held by or for it at
     public or private sale, by one or more contracts, in one or more parcels,
     for cash, upon credit or otherwise, at such prices and upon such terms as
     the Administrative Agent deems advisable, in its sole discretion (subject
     to any and all mandatory legal requirements). Neither the Administrative
     Agent's compliance with any applicable state or federal law in the conduct
     of such sale, nor its disclaimer of any warranties relating to the
     Collateral, shall be considered to adversely affect the commercial
     reasonableness of such sale. In addition to all other sums due the
     Administrative Agent and the Secured Parties

                                       16

<PAGE>

     with respect to the Secured Obligations, the Obligors shall pay the
     Administrative Agent and each of the Secured Parties all reasonable
     documented costs and expenses incurred by the Administrative Agent or any
     such Secured Party, including, but not limited to, reasonable attorneys'
     fees and court costs, in obtaining or liquidating the Collateral, in
     enforcing payment of the Secured Obligations, or in the prosecution or
     defense of any action or proceeding by or against the Administrative Agent
     or the Secured Parties or the Obligors concerning any matter arising out of
     or connected with this Security Agreement, any Collateral or the Secured
     Obligations, including, without limitation, any of the foregoing arising
     in, arising under or related to a case under the Bankruptcy Code. To the
     extent the rights of notice cannot be legally waived hereunder, each
     Obligor agrees that any requirement of reasonable notice shall be met if
     such notice is personally served on or mailed, postage prepaid, to the
     Borrower in accordance with the notice provisions of Section 9.2 of the
     Credit Agreement at least 10 days before the time of sale or other event
     giving rise to the requirement of such notice. The Administrative Agent and
     the Secured Parties shall not be obligated to make any sale or other
     disposition of the Collateral regardless of notice having been given. To
     the extent permitted by applicable law, any Secured Party may be a
     purchaser at any such sale. To the extent permitted by applicable law, each
     of the Obligors hereby waives all of its rights of redemption with respect
     to any such sale. Subject to the provisions of applicable law, the
     Administrative Agent and the Secured Parties may postpone or cause the
     postponement of the sale of all or any portion of the Collateral by
     announcement at the time and place of such sale, and such sale may, without
     further notice, to the extent permitted by law, be made at the time and
     place to which the sale was postponed, or the Administrative Agent and the
     Secured Parties may further postpone such sale by announcement made at such
     time and place.

          (b) Remedies Relating to Accounts. Upon the occurrence of an Event of
     Default and during the continuation thereof, whether or not the
     Administrative Agent has exercised any or all of its rights and remedies
     hereunder, the Administrative Agent shall have the right, subject to
     applicable law, to enforce any Obligor's rights against any account debtors
     and obligors on such Obligor's Accounts. Each Obligor acknowledges and
     agrees that the Proceeds of its Accounts remitted to or on behalf of the
     Administrative Agent in accordance with the provisions of this Section
     shall be solely for the Administrative Agent's own convenience in
     administering the provisions of this Security Agreement and that such
     Obligor shall not have any right, title or interest in such Proceeds or in
     any such other amounts except as expressly provided herein. To the extent
     required by the Administrative Agent, each Obligor agrees to execute any
     document or instrument, and to take any action, necessary under applicable
     law (including the Federal Assignment of Claims Act) in order for the
     Administrative Agent to exercise its rights and remedies (or be able to
     exercise its rights and remedies at some future date) with respect to any
     Accounts of such Obligor where the account debtor is a Governmental
     Authority. The Administrative Agent and the Secured Parties shall have no
     liability or responsibility to any Obligor for acceptance of a check, draft
     or other order for payment of money bearing the legend "payment in full" or
     words of similar import or any other restrictive legend or endorsement or
     be responsible for determining the correctness of any

                                       17

<PAGE>

     remittance. Each Obligor hereby agrees to indemnify the Administrative
     Agent and the Secured Parties from and against all liabilities, damages,
     losses, actions, claims, judgments, costs, expenses, charges and reasonable
     attorneys' fees suffered or incurred by the Administrative Agent or the
     Secured Parties (each, an "Indemnified Party") because of the maintenance
     of the foregoing arrangements except as relating to or arising out of the
     gross negligence or willful misconduct of an Indemnified Party or its
     officers, employees or agents. In the case of any investigation, litigation
     or other proceeding, the foregoing indemnity shall be effective whether or
     not such investigation, litigation or proceeding is brought by an Obligor,
     its directors, shareholders or creditors or an Indemnified Party or any
     other Person or any other Indemnified Party is otherwise a party thereto.

          (c) Access. In addition to the rights and remedies hereunder, upon the
     occurrence of an Event of Default and during the continuation thereof, the
     Obligors shall provide the Administrative Agent with access to the
     Collateral, without cost or charge to the Administrative Agent, and the
     reasonable use of the same, together with materials, supplies, books and
     records of the Obligors for the purpose of collecting and liquidating the
     Collateral, or for preparing for sale and conducting the sale of the
     Collateral, whether by foreclosure, auction or otherwise (except to the
     extent such activities are specifically restricted by the terms of any
     lease; provided, if the foregoing activities are specifically restricted by
     the terms of any lease, the Obligors shall promptly take all reasonable
     steps to move the Collateral at such lease location to a new location
     satisfactory to the Administrative Agent). In addition, the Administrative
     Agent may remove Collateral, or any part thereof, from such premises and/or
     any records with respect thereto, in order to effectively collect or
     liquidate such Collateral. If the Administrative Agent exercises its right
     to take possession of the Collateral, each Obligor shall also at its
     expense perform any and all other steps reasonably requested by the
     Administrative Agent to preserve and protect the security interest hereby
     granted in the Collateral, such as placing and maintaining signs indicating
     the security interest of the Administrative Agent, appointing overseers for
     the Collateral and maintaining inventory records.

          (d) Nonexclusive Nature of Remedies. Failure by the Administrative
     Agent or the Secured Parties to exercise any right, remedy or option under
     this Security Agreement, any other Credit Document, any Hedging Agreement
     or as provided by law, or any delay by the Administrative Agent or the
     Secured Parties in exercising the same, shall not operate as a waiver of
     any such right, remedy or option. No waiver hereunder shall be effective
     unless it is in writing, signed by the party against whom such waiver is
     sought to be enforced and then only to the extent specifically stated,
     which in the case of the Administrative Agent or the Secured Parties shall
     only be granted as provided herein. To the extent permitted by law, neither
     the Administrative Agent, the Secured Parties, nor any party acting as
     attorney for the Administrative Agent or the Secured Parties, shall be
     liable hereunder for any acts or omissions or for any error of judgment or
     mistake of fact or law other than their gross negligence or willful
     misconduct hereunder. The rights and remedies of the Administrative Agent
     and the Secured Parties under this Security

                                       18

<PAGE>

     Agreement shall be cumulative and not exclusive of any other right or
     remedy which the Administrative Agent or the Secured Parties may have.

          (e) Retention of Collateral. IN addition to the rights and remedies
     hereunder, upon the occurrence and continuance of an Event of Default, the
     Administrative Agent may, after providing the notices required by Sections
     9-620 and 9-621 (or similar provision) of the UCC (or any successor
     sections of the UCC) or otherwise complying with the requirements of
     applicable law of the relevant jurisdiction, accept or retain the
     Collateral in satisfaction of the Secured Obligations. Unless and until the
     Administrative Agent shall have provided such notices, however, the
     Administrative Agent shall not be deemed to have retained any Collateral in
     satisfaction of any Secured Obligations for any reason.

          (f) Deficiency. In the event that the proceeds of any sale, collection
     or realization are insufficient to pay all amounts to which the
     Administrative Agent or the Secured Parties are legally entitled, the
     Obligors shall be jointly and severally liable for the deficiency, together
     with interest thereon at the default rate for Alternate Base Rate Loans set
     forth in Section 2.11 of the Credit Agreement, together with the reasonable
     costs of collection and the reasonable fees of any attorneys employed by
     the Administrative Agent to collect such deficiency. Any surplus remaining
     after the full payment and satisfaction of the Secured Obligations shall be
     returned to the Obligors or to whomsoever a court of competent jurisdiction
     shall determine to be entitled thereto.

          (g) Other Security. To the extent that any of the Secured Obligations
     are now or hereafter secured by property other than the Collateral
     (including, without limitation, real property and securities owned by an
     Obligor), or by a guarantee, endorsement or property of any other Person,
     then the Administrative Agent shall have the right to proceed against such
     other property, guarantee or endorsement upon the occurrence of any Event
     of Default, and the Administrative Agent have the right, in its sole
     discretion, to determine which rights, security, Liens, security interests
     or remedies the Administrative Agent shall at any time pursue, relinquish,
     subordinate, modify or take with respect thereto, without in any way
     modifying or affecting any of them or any of the Administrative Agent's and
     the Secured Parties' rights or the Secured Obligations under this Security
     Agreement, under any other of the Credit Documents or under any Hedging
     Agreement (to the extent the obligations of such Obligor thereunder
     constitute Secured Obligations).

     11.  Rights of the Administrative Agent.

          (a) Power of Attorney. In addition to other powers of attorney
     contained herein, each Obligor hereby designates and appoints the
     Administrative Agent, on behalf of the Secured Parties, and each of its
     designees or agents, as attorney-in-fact of such Obligor, irrevocably and
     with power of substitution, with authority to take any or all of

                                       19

<PAGE>

     the following actions upon the occurrence and during the continuation of an
     Event of Default:

               (i) to demand, collect, settle, compromise, adjust, give
          discharges and releases, all as the Administrative Agent may
          reasonably determine with respect to the Collateral;

               (ii) to commence and prosecute any actions at any court for the
          purposes of collecting any Collateral and enforcing any other right in
          respect thereof;

               (iii) to defend, settle, adjust or compromise any action, suit or
          proceeding brought and, in connection therewith, give such discharge
          or release as the Administrative Agent may deem reasonably appropriate
          with respect to the Collateral;

               (iv) to receive, open and dispose of mail addressed to an Obligor
          and endorse checks, notes, drafts, acceptances, money orders, bills of
          lading, warehouse receipts or other instruments or documents
          evidencing payment, shipment or storage of the goods giving rise to
          the Collateral of such Obligor, or securing or relating to such
          Collateral, on behalf of and in the name of such Obligor;

               (v) to sell, assign, transfer, make any agreement in respect of,
          or otherwise deal with or exercise rights in respect of, any
          Collateral or the goods or services which have given rise thereto, as
          fully and completely as though the Administrative Agent were the
          absolute owner thereof for all purposes;

               (vi) to adjust and settle claims under any insurance policy
          relating to the Collateral;

               (vii) to execute and deliver all assignments, conveyances,
          statements, financing statements, continuation statements, security
          agreements, affidavits, notices and other agreements, instruments and
          documents that the Administrative Agent may determine necessary in
          order to perfect and maintain the security interests and Liens granted
          in this Security Agreement and in order to fully consummate all of the
          transactions contemplated herein;

               (viii) to institute any foreclosure proceedings that the
          Administrative Agent may deem appropriate;

                                       20

<PAGE>

               (ix) to do and perform all such other acts and things as the
          Administrative Agent may reasonably deem to be necessary, proper or
          convenient in connection with the Collateral; and

               (x) to execute any document or instrument, and to take any
          action, necessary under applicable law (including the Federal
          Assignment of Claims Act) in order for the Administrative Agent to
          exercise its rights and remedies (or to be able to exercise its rights
          and remedies at some future date) with respect to any Account of an
          Obligor where the account debtor is a Governmental Authority.

     This power of attorney is a power coupled with an interest and shall be
     irrevocable for so long as any of the Secured Obligations remain
     outstanding (other than contingent indemnity or reimbursement obligations)
     or any Credit Document or Hedging Agreement is in effect, and until all of
     the Commitments shall have been terminated. The Administrative Agent shall
     be under no duty to exercise or withhold the exercise of any of the rights,
     powers, privileges and options expressly or implicitly granted to the
     Administrative Agent in this Security Agreement, and shall not be liable
     for any failure to do so or any delay in doing so. The Administrative Agent
     shall not be liable for any act or omission or for any error of judgment or
     any mistake of fact or law in its individual capacity or its capacity as
     attorney-in-fact except acts or omissions resulting from its gross
     negligence or willful misconduct. This power of attorney is conferred on
     the Administrative Agent solely to protect, preserve and realize upon its
     security interest in the Collateral.

          (b) Assignment by the Administrative Agent. The Administrative Agent
     may from time to time assign the Secured Obligations and any portion
     thereof and/or the Collateral and any portion thereof, and the assignee
     shall be entitled to all of the rights and remedies of the Administrative
     Agent under this Security Agreement in relation thereto.

          (c) The Administrative Agent's Duty of Care. Other than the exercise
     of reasonable care to assure the safe custody of the Collateral while being
     held by the Administrative Agent hereunder, the Administrative Agent shall
     have no duty or liability to preserve rights pertaining thereto, it being
     understood and agreed that the Obligors shall be responsible for
     preservation of all rights in the Collateral, and the Administrative Agent
     shall be relieved of all responsibility for the Collateral upon
     surrendering it or tendering the surrender of it to the Obligors. The
     Administrative Agent shall be deemed to have exercised reasonable care in
     the custody and preservation of the Collateral in its possession if the
     Collateral is accorded treatment substantially equal to that which the
     Administrative Agent accords its own property, which shall be no less than
     the treatment employed by a reasonable and prudent agent in the industry,
     it being understood that the Administrative Agent shall not have
     responsibility for taking any necessary steps to preserve rights against
     any parties with respect to any of the Collateral. In the event of a

                                       21

<PAGE>

     public or private sale of Collateral pursuant to Section 9 hereof, the
     Administrative Agent shall have no obligation to clean-up, repair or
     otherwise prepare the Collateral for sale.

     12. Application of Proceeds. Upon the occurrence and during the
continuation of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Collateral, when received by the
Administrative Agent or any of the Secured Parties in cash or its equivalent,
will be applied in reduction of the Secured Obligations in the order set forth
in Section 2.13(b) of the Credit Agreement, and each Obligor irrevocably waives
the right to direct the application of such payments and proceeds and
acknowledges and agrees that the Administrative Agent shall have the continuing
and exclusive right to apply and reapply any and all such payments and proceeds
in the Administrative Agent's sole discretion (but subject in all events to
Section 2.13(b) of the Credit Agreement), notwithstanding any entry to the
contrary upon any of its books and records.

     13. Costs of Counsel. If at any time hereafter, whether upon the occurrence
of an Event of Default or not, the Administrative Agent employs counsel to
prepare or consider amendments, waivers or consents with respect to this
Security Agreement, or to take action or make a response in or with respect to
any legal or arbitral proceeding relating to this Security Agreement or relating
to the Collateral, or to protect the Collateral or exercise any rights or
remedies under this Security Agreement or with respect to the Collateral, then
the Obligors agree to promptly pay upon demand any and all such reasonable
documented costs and expenses of the Administrative Agent, all of which costs
and expenses shall constitute Secured Obligations hereunder.

     14.  Continuing Agreement.

          (a) Upon this Security Agreement becoming effective in accordance with
     the terms hereof and of the other Credit Documents, the Existing Security
     Agreements shall be deemed amended and restated by this Security Agreement.
     This Security Agreement shall be a continuing agreement in every respect
     and shall remain in full force and effect so long as any of the Secured
     Obligations remain outstanding (other than contingent indemnity or
     reimbursement obligations) or any Credit Document or Hedging Agreement is
     in effect, and until all of the Commitments shall have been terminated.
     Upon such payment and termination, this Security Agreement shall be
     automatically terminated and the Administrative Agent and the Secured
     Parties shall, upon the request and at the expense of the Obligors,
     forthwith release all of their Liens and security interests hereunder and
     shall execute and deliver all UCC termination statements and/or other
     documents reasonably requested by the Obligors evidencing such termination.
     Notwithstanding the foregoing all releases and indemnities provided
     hereunder shall survive termination of this Security Agreement.

          (b) This Security Agreement shall continue to be effective or be
     automatically reinstated, as the case may be, if at any time payment, in
     whole or in part, of any of the Secured Obligations is rescinded or must
     otherwise be restored or returned by the

                                       22

<PAGE>

     Administrative Agent or any Secured Party as a preference, fraudulent
     conveyance or otherwise under any bankruptcy, insolvency or similar law,
     all as though such payment had not been made; provided that in the event
     payment of all or any part of the Secured Obligations is rescinded or must
     be restored or returned, all reasonable costs and expenses (including
     without limitation any reasonable legal fees and disbursements) incurred by
     the Administrative Agent or any Secured Party in defending and enforcing
     such reinstatement shall be deemed to be included as a part of the Secured
     Obligations.

     15. Amendments; Waivers; Modifications. This Security Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 9.1 of the Credit Agreement.

     16. Successors in Interest; Release. This Security Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Obligor, its successors and assigns and shall inure, together with the rights
and remedies of the Administrative Agent and the Secured Parties hereunder, to
the benefit of the Administrative Agent and the Secured Parties and their
successors and permitted assigns; provided, however, that none of the Obligors
may assign its rights or delegate its duties hereunder without the prior written
consent of each Secured Party or the Required Secured Parties, as required by
the Credit Agreement. To the fullest extent permitted by law, each Obligor
hereby releases the Administrative Agent and each Secured Party, each of their
respective officers, employees and agents and each of their respective
successors and assigns, from any liability for any act or omission relating to
this Security Agreement or the Collateral, except for any liability arising from
the gross negligence or willful misconduct of the Administrative Agent or such
Secured Party or their respective officers, employees and agents.

     17. Notices. All notices required or permitted to be given under this
Security Agreement shall be in conformance with Section 9.2 of the Credit
Agreement.

     18. Counterparts. This Security Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Security Agreement to produce or
account for more than one such counterpart.

     19. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning,
construction or interpretation of any provision of this Security Agreement.

     20. Governing Law; Submission to Jurisdiction and Service of Process;
Waivers. THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. Each of the Obligors agrees that Sections
5-1401 and 5-1402 of the General Obligations law of the State of New York shall
apply to this Security Agreement. Each Obligor agrees not to assert any claim
against the Administrative Agent, any Secured Party (including the Issuing
Secured

                                       23

<PAGE>

Party), any of their Affiliates, or any of their respective directors, officers,
employees, attorneys or agents, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise relating
to any of the transactions contemplated herein or in any other Credit Document.
The terms of Sections 9.14 and 9.17 of the Credit Agreement are incorporated
herein by reference, mutatis mutandis, and the parties hereto agree to such
terms.

     21. Severability. If any provision of this Security Agreement is determined
to be illegal, invalid or unenforceable, such provision shall be fully severable
and the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

     22. Entirety. This Security Agreement, the other Credit Documents and the
Hedging Agreements represent the entire agreement of the parties hereto and
thereto, and supersede all prior agreements and understandings, oral or written,
if any, including any commitment letters or correspondence relating to the
Credit Documents, the Hedging Agreements or the transactions contemplated herein
and therein.

     23. Survival. All representations and warranties of the Obligors hereunder
shall survive the execution and delivery of this Security Agreement, the other
Credit Documents and the Hedging Agreements, the delivery of the Notes and the
making of the Loans and the issuance of the Letters of Credit under the Credit
Agreement.

     24. Obligations of Obligors.

          (a) Each of the Guarantors is entering into this Security Agreement in
     consideration of the financial accommodation to be provided by the Secured
     Parties under the Credit Agreement, for the mutual benefit, directly and
     indirectly, of each of the Obligors and in consideration of the joint and
     several undertakings of each of the Guarantors under the Guaranty provided
     pursuant to Article X of the Credit Agreement, and each Guarantor is
     granting the security interests in the Collateral of such Guarantor
     pursuant to this Security Agreement in support of its obligations under the
     Guaranty.

          (b) Notwithstanding any provision to the contrary contained herein or
     in any other of the Credit Documents, to the extent the obligations of an
     Obligor shall be adjudicated to be invalid or unenforceable for any reason
     (including, without limitation, because of any applicable state or federal
     law relating to fraudulent conveyances or transfers) then the obligations
     of such Obligor hereunder shall be limited to the maximum amount that is
     permissible under applicable law (whether federal or state and including,
     without limitation, the Bankruptcy Code).

                  [remainder of page intentionally left blank]

                                       24

<PAGE>

     Each of the parties hereto has caused a counterpart of this Security
Agreement to be duly executed and delivered as of the date first above written.

OBLIGORS:                                THE PANTRY, INC.,
                                         a Delaware corporation


                                         By:    /s/ Daniel J. Kelly
                                                --------------------------------
                                         Name:  Daniel J. Kelly
                                         Title: Chief Financial Officer,
                                                Vice-President Finance and
                                                Secretary


                                         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

<PAGE>

     Accepted and agreed to as of the date first above written.

                                         WACHOVIA BANK, NATIONAL ASSOCIATION
                                         as Administrative Agent


                                         By:    /s/ Douglas S. Boothe
                                                --------------------------------
                                         Name:  Douglas S. Boothe
                                         Title: Director

<PAGE>

                                  SCHEDULE 2(a)

                             COMMERCIAL TORT CLAIMS

<PAGE>

                                  SCHEDULE 4(a)

                             NAME CHANGES/CHANGES IN
                         CORPORATE STRUCTURE/TRADENAMES

<PAGE>

                                SCHEDULE 5(f)(i)

                                    NOTICE OF
                           GRANT OF SECURITY INTEREST
                                  IN COPYRIGHTS

United States Copyright Office

Gentlemen:

     Please be advised that pursuant to the Amended and Restated Security
Agreement dated as of April 14, 2003 (as the same may be amended, modified,
extended or restated from time to time, the "Security Agreement") by and among
the Obligors thereto (each an "Obligor" and collectively, the "Obligors") and
Wachovia Bank, National Association, as Administrative Agent (the
"Administrative Agent") for the lenders referenced therein (the "Secured
Parties"), the undersigned Obligor has granted a continuing security interest in
and continuing Lien upon, the copyrights and copyright applications shown below
to the Administrative Agent for the ratable benefit of the Secured Parties:

                                   COPYRIGHTS

                                 Description of
Copyright No.                       Copyright                 Date of Copyright
-------------                    --------------               -----------------

                             COPYRIGHT APPLICATIONS

                             Description of Copyright         Date of Copyright
Copyright Application No.          Applied For                   Application
-------------------------    ------------------------         -----------------

<PAGE>

     The Obligors and the Administrative Agent, on behalf of the Secured
Parties, hereby acknowledge and agree that the security interest in the
foregoing copyrights and copyright applications (i) may only be terminated in
accordance with the terms of the Security Agreement and (ii) is not to be
construed as an assignment of any copyright or copyright application.

                                         Very truly yours,

                                         ---------------------------------------
                                         [Obligor]


                                         By:
                                            ------------------------------------
                                         Name:
                                              ----------------------------------
                                         Title:
                                               ---------------------------------

Acknowledged and Accepted:

WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent


By:
   -----------------------------------------
Name:
     ---------------------------------------
Title:
      --------------------------------------

<PAGE>

                                SCHEDULE 5(f)(ii)

                                    NOTICE OF
                           GRANT OF SECURITY INTEREST
                                   IN PATENTS

United States Patent and Trademark Office

Gentlemen:

     Please be advised that pursuant to the Amended and Restated Security
Agreement dated as of April 14, 2003 (the "Security Agreement") by and among the
Obligors thereto (each an "Obligor" and collectively, the "Obligors") and
Wachovia Bank, National Association, as Administrative Agent (the
"Administrative Agent") for the lenders referenced therein (the "Secured
Parties"), the undersigned Obligor has granted a continuing security interest in
and continuing Lien upon, the patents and patent applications shown below to the
Administrative Agent for the ratable benefit of the Secured Parties:

                                     PATENTS

                                  Description of
Patent No.                            Patent                     Date of Patent
---------                         --------------                 --------------

                               PATENT APPLICATIONS

                               Description of Patent             Date of Patent
Patent Application No.              Applied For                    Application
---------------------          ---------------------             -------------

<PAGE>

     The Obligors and the Administrative Agent, on behalf of the Secured
Parties, hereby acknowledge and agree that the security interest in the
foregoing trademarks and trademark applications (i) may only be terminated in
accordance with the terms of the Security Agreement and (ii) is not to be
construed as an assignment of any trademark or trademark application.

                                              Very truly yours,


                                              ----------------------------------
                                              [Obligor]


                                              By:
                                                 -------------------------------
                                              Name:
                                                   -----------------------------
                                              Title:
                                                    ----------------------------

Acknowledged and Accepted:

WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent


By:
   -----------------------------------------
Name:
     ---------------------------------------
Title:
      --------------------------------------

                                       -2-

<PAGE>

                               SCHEDULE 5(f)(iii)

                                    NOTICE OF
                           GRANT OF SECURITY INTEREST
                                  IN TRADEMARKS

United States Patent and Trademark Office

Gentlemen:

     Please be advised that pursuant to the Amended and Restated Security
Agreement dated as of April 14, 2003 (the "Security Agreement") by and among the
Obligors thereto (each an "Obligor" and collectively, the "Obligors") and
Wachovia Bank, National Association, as Administrative Agent (the
"Administrative Agent") for the lenders referenced therein (the "Secured
Parties"), the undersigned Obligor has granted a continuing security interest in
and continuing Lien upon, the trademarks and trademark applications shown below
to the Administrative Agent for the ratable benefit of the Secured Parties:

                                   TRADEMARKS

                                 Description of
Trademark No.                      Trademark                   Date of Trademark
------------                     --------------                -----------------

                             TRADEMARK APPLICATIONS

                            Description of Trademark           Date of Trademark
Trademark Application No.         Applied For                     Application
------------------------    ------------------------           -----------------

<PAGE>

     The Obligors and the Administrative Agent, on behalf of the Secured
Parties, hereby acknowledge and agree that the security interest in the
foregoing patents and patent applications (i) may only be terminated in
accordance with the terms of the Security Agreement and (ii) is not to be
construed as an assignment of any patent or patent application.

                                         Very truly yours,


                                         ---------------------------------------
                                         [Obligor]


                                         By:
                                            ------------------------------------
                                         Name:
                                              ----------------------------------
                                         Title:
                                               ---------------------------------

Acknowledged and Accepted:

WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent


By:
   -----------------------------------------
Name:
     ---------------------------------------
Title:
      --------------------------------------

                                      -1-