Document:

REGISTRATION RIGHTS AGREEMENT

 Exhibit 10.2 
  

  
 REGISTRATION RIGHTS AGREEMENT 
  
 dated as of
November 22, 2005 
  
 among 
  
 The Pantry, Inc., 
  
 Kangaroo, Inc., 
  
 R.&H. Maxxon, Inc., 
  
 and 
  
 Merrill Lynch, Pierce, Fenner & Smith Incorporated 
  
 and 
  
 Wachovia Capital Markets, LLC 
  

 REGISTRATION RIGHTS AGREEMENT 
  
 This Registration Rights Agreement is made and entered into this 22nd day of November, 2005, among The Pantry, Inc., a
Delaware corporation (the “Company”), Kangaroo, Inc. and R.&H. Maxxon, Inc. (collectively, the “Guarantors”), and Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wachovia Capital Markets, LLC
(collectively, the “Initial Purchasers”). 
  
 This Agreement is made pursuant to the Purchase Agreement, dated as of November 16, 2005, among the Company, the Guarantors and the Initial Purchasers (the “Purchase Agreement”). The Purchase Agreement provides for
(1) the sale by the Company to the Initial Purchasers of an aggregate of $135,000,000 principal amount at maturity of the Company’s 3.00% Senior Subordinated Convertible Notes due 2012 ($150,000,000 principal amount at maturity if the
Initial Purchasers exercise their option in full) (collectively, the “Securities”) and (2) the sale by the Guarantors to the Initial Purchasers of their guarantees of the Company’s Securities (the
“Guarantees”). In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Company and the Guarantors have agreed to provide to the Initial Purchasers and their direct and indirect transferees the
registration rights set forth in this Agreement. The execution of this Agreement is a condition to the closing under the Purchase Agreement. 
  
 In consideration of the foregoing, the parties hereto agree as follows: 
  
 1. Definitions. 
  
 As used in this Agreement, the following capitalized defined terms shall have the following meanings: 
  
 “1933 Act” shall mean the Securities Act of 1933, as
amended from time to time. 
  
 “1934 Act” shall
mean the Securities Exchange Act of l934, as amended from time to time. 
  
 “1939 Act” shall mean the Trust Indenture Act of 1939, as amended from time to time. 
  
 “Additional Interest” shall have the meaning set forth in Section 2.4 herein. 
  
 “Agreement” shall mean this Registration Rights Agreement,
as it may be amended, modified or supplemented from time to time in accordance with the terms thereof. 
  
 “Closing Date” shall mean the Closing Time as defined in the Purchase Agreement. 
  
 “Common Stock” shall mean any shares of common stock, $.01
par value, of the Company. 
  
 “Company” shall
have the meaning set forth in the preamble and shall also include the Company’s successors. 
  
 “Depositary” shall mean The Depository Trust Company, or any other depositary appointed by the Company, provided, however, that such
depositary must have an address in the Borough of Manhattan, in the City of New York. 
  
 “Effectiveness Period” shall have the meaning set forth in Section 2.1(b) herein. 
  
 “Free Writing Prospectus” shall have the meaning set forth in Rule 405 of the 1933 Act. 
  

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 “Guarantor” or “Guarantors” shall have the meaning set forth in the
preamble and shall also include any Guarantor’s successors. 
  
 “Holder” shall mean an Initial Purchaser, for so long as it owns any Registrable Securities, and each of its successors, assigns and direct and indirect transferees who become owners, beneficial or otherwise, of Registrable
Securities under the Indenture. 
  
 “Indenture”
shall mean the Indenture relating to the Securities, dated as of November 22, 2005, among the Company, the Guarantors and Wachovia Bank, National Association, as trustee, as the same may be amended, supplemented, waived or otherwise modified
from time to time in accordance with the terms thereof. 
  
 “Initial Purchaser” or “Initial Purchasers” shall have the meaning set forth in the preamble. 
  
 “Majority Holders” shall mean Holders holding over 50% of the aggregate principal amount at maturity of Securities outstanding; provided
that, for purposes of this definition, (1) a Holder of shares of Common Stock that constitutes Registrable Securities which were issued upon conversion of Securities shall be deemed to hold an aggregate principal amount at maturity of
Securities (in addition to the principal amount at maturity of any Securities held by such Holder) equal to the principal amount at maturity of Securities which were converted into such shares of Common Stock and (2) such Securities which were
converted into such shares of Common Stock shall be deemed to be outstanding; provided, further, that whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held
by the Company or any Affiliate (as defined in the Indenture) of the Company shall be disregarded in determining whether such consent or approval was given by the Holders of such required percentage amount. 
  
 “Person” shall mean an individual, partnership (general or
limited), corporation, limited liability company, trust or unincorporated organization, or a government or agency or political subdivision thereof. 
  
 “Prospectus” shall mean the prospectus included in a Shelf Registration Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement, including any such prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein or deemed to be incorporated by reference therein. 
  
 “Purchase Agreement” shall have the meaning set forth in the
preamble. 
  
 “Questionnaire” shall have the
meaning set forth in Section 2.1(d) herein. 
  
 “Registrable Securities” shall mean all or any of the Securities issued from time to time under the Indenture in registered form, and the shares of Common Stock issued or issuable upon conversion of such Securities;
provided, however, that any such Securities and shares of Common Stock issued or issuable upon conversion of such Securities shall cease to be Registrable Securities when (i) a Shelf Registration Statement with respect to such Securities and
shares of Common Stock issued or issuable upon conversion of such Securities shall have been declared effective under the 1933 Act and such Securities and shares of Common Stock issued or issuable upon conversion of such Securities shall have been
disposed of pursuant to such Shelf Registration Statement, (ii) such Securities and shares of Common 
  

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 Stock issued or issuable upon conversion of such Securities have been sold to the public pursuant to Rule l44 (or any
similar provision then in force, but not Rule 144A) under the 1933 Act, (iii) such Securities and shares of Common Stock issued or issuable upon conversion of such Securities shall have ceased to be outstanding or (iv) such Securities and
shares of Common Stock issued or issuable upon conversion of such Securities may be sold or transferred, other than by the Company’s Affiliates, pursuant to Rule 144(k) (or any similar provision then in force) under the 1933 Act. 
  
 “Registration Expenses” shall mean any and all expenses
incident to performance of or compliance by the Company and the Guarantors with this Agreement, whether or not a Shelf Registration Statement becomes effective, including without limitation: (i) all SEC, stock exchange or National Association
of Securities Dealers, Inc. (the “NASD”) registration and filing fees, including, if applicable, the fees and expenses of any “qualified independent underwriter” (and its counsel) that is required to be retained by any
holder of Registrable Securities in accordance with the rules and regulations of the NASD, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws and compliance with the rules of the NASD,
(iii) all expenses of the Company and the Guarantors in preparing or assisting in preparing, word processing, printing and distributing any Shelf Registration Statement, any Prospectus, any amendments or supplements thereto, any securities
sales agreements and other documents relating to the performance of and compliance with this Agreement, (iv) all fees and expenses incurred in connection with the listing, if any, of any of the Registrable Securities on any securities exchange
or exchanges, (v) all rating agency fees, (vi) the fees and disbursements of counsel for the Company and the Guarantors and of the independent public accountants of the Company and the Guarantors, including the expenses of any special
audits or “comfort” letters required by or incident to such performance and compliance, (vii) the reasonable fees and expenses of the Trustee and its counsel and of the registrar and transfer agent for the Common Stock,
(viii) the reasonable fees and expenses up to $25,000 of one counsel to the Holders in connection with the Shelf Registration, blue sky qualification of the Registrable Securities and any filings with the NASD, which counsel shall be Fried,
Frank, Harris, Shriver & Jacobson LLP or such other counsel as may be selected by the Majority Holders, and (ix) any fees and expenses of any special experts retained by the Company and the Guarantors in connection with any Shelf
Registration Statement, but excluding any underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder. 
  
 “SEC” shall mean the Securities and Exchange Commission or any successor agency or government body
performing the functions currently performed by the United States Securities and Exchange Commission. 
  
 “Shelf Registration” shall mean a registration effected pursuant to Section 2.1 hereof. 
  
 “Shelf Registration Statement” shall mean a
“shelf” registration statement of the Company pursuant to the provisions of Section 2.1 of this Agreement which covers any of the Registrable Securities (including without limitation all Registrable Securities where Holders thereof
have requested such Securities to be included in the Shelf Registration Statement) on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein or deemed to be incorporated by reference therein. 
  
 “Suspension Period” shall have the meaning set forth in
Section 2.5 herein. 
  
 “Trustee” shall mean
the trustee with respect to the Securities under the Indenture. 
  

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 2. Registration Under the 1933 Act. 
  
 2.1 Shelf Registration. 
  
 (a) The Company and the Guarantors shall, at their cost, no later than 90 days after the Closing Date, file with the SEC, and thereafter shall use
reasonable best efforts to cause to be declared effective as promptly as practicable but no later than 210 days after the Closing Date, a Shelf Registration Statement on Form S-3 or other appropriate form relating to the offer and sale of the
Registrable Securities by the Holders that have provided the information pursuant to Section 2.1(d). 
  
 (b) The Company and the Guarantors shall, at their cost, use their reasonable best efforts, subject to Section 2.5, to keep the Shelf Registration
Statement continuously effective, supplemented and amended in order to permit the Prospectus forming part thereof to be usable by Holders for a period of two years from the date the Shelf Registration Statement is declared effective by the SEC, or
for such shorter period that will terminate when all Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or cease to be outstanding or otherwise to be Registrable Securities
(the “Effectiveness Period”). 
  
 (c)
Notwithstanding any other provisions hereof, the Company and the Guarantors shall use their reasonable best efforts to ensure that (i) any Shelf Registration Statement and any amendment thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with the 1933 Act and the rules and regulations thereunder, (ii) any Shelf Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any Prospectus forming part of any Shelf Registration Statement, and any supplement to such
Prospectus (as amended or supplemented from time to time), does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading. 
  
 (d) Notwithstanding any other
provision hereof, no Holder of Registrable Securities may include any of its Registrable Securities in the Shelf Registration Statement pursuant to this Agreement unless the Holder furnishes to the Company a notice and questionnaire in the form
attached as Annex A to the Offering Memorandum (the “Questionnaire”) and such other information in writing as the Company may reasonably request in writing for use in connection with the Shelf Registration Statement or Prospectus
included therein and in any application to be filed with or under state securities laws. In order to be named as a selling securityholder in the Prospectus at the time of effectiveness of the Shelf Registration Statement, each Holder must, before
the effectiveness of the Shelf Registration Statement and no later than the 20th day after the issuance of a press
release by the Company announcing the initial filing of the Shelf Registration Statement (or the filing of the first amendment to the Shelf Registration Statement in the event the Company promptly files the Shelf Registration Statement following the
date of this Agreement), furnish the completed Questionnaire and such other information that the Company may reasonably request in writing, if any, to the Company in writing and the Company will include the information from the completed
Questionnaire and such other information, if any, in the Shelf Registration Statement and the Prospectus in a manner so that upon effectiveness of the Shelf Registration Statement the Holder will be permitted to deliver the Prospectus to purchasers
of the Holder’s Registrable Securities. In connection with all such written requests for information from Holders of Registrable Securities, the Company must notify such Holders of the requirements in the prior sentence. 
  
 From and after the date that the Registration Statement is first declared
effective by the SEC, upon receipt of a completed Questionnaire and such other information that the Company may reasonably request in writing, if any, the Company and the Guarantors will use their reasonable best efforts, but in 
  

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 any event within 20 Business Days of such receipt, to file any amendments or supplements to the Shelf Registration
Statement necessary for such Holder to be named as a selling securityholder in the Prospectus contained therein to permit such Holder to deliver the Prospectus to purchasers of the Holder’s Securities (subject to the Company’s and the
Guarantors’ right to suspend the Shelf Registration Statement as described in Section 2.5 below) and, if the Company files a post-effective amendment to the Shelf Registration Statement, use its reasonable best efforts to cause such
post-effective amendment to be declared effective as promptly as reasonably practicable, provided that if under applicable law the Company has more than one option as to the type or manner of making any such filing, it make the required filing or
filings in the manner or of the type that is reasonable expected to result in the earliest availability of the Prospectus for making resales of Registrable Securities. The Shelf Registration Statement shall include the disclosures required by Rule
430B of the 1933 Act in order to enable the Company and the Guarantors to add selling securityholders onto the Shelf Registration Statement pursuant to the filing of prospectus supplements. The Company and the Guarantors shall not be required to
file more than one post-effective amendment to the Shelf Registration Statement in any calendar quarter for all such Holders. 
  
 Holders that do not deliver a completed written Questionnaire and such other information, as provided for in this Section 2.1(d), will not be named
as selling securityholders in the Prospectus. Each Holder named as a selling securityholder in the Prospectus agrees to promptly furnish to the Company all information required to be disclosed in order to make information previously furnished to the
Company by the Holder not materially misleading and any other information regarding such Holder and the distribution of such Holder’s Registrable Securities as the Company may from time to time reasonably request in writing. 
  
 (e) Each Holder agrees not to sell any Registrable Securities pursuant to the
Shelf Registration Statement without delivering, or causing to be delivered, a Prospectus to the purchaser thereof to the extent required by law. 
  
 The Company and the Guarantors further agree to supplement or amend the Shelf Registration Statement if required by the rules, regulations or instructions
applicable to the registration form used by the Company and the Guarantors, if required by the 1933 Act, and to furnish to the Holders of Registrable Securities copies of any such supplement or amendment promptly after its being used or filed with
the SEC. 
  
 2.2 Expenses. The Company and the Guarantors
shall pay all Registration Expenses in connection with the registration pursuant to Section 2.1. Each Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such
Holder’s Registrable Securities pursuant to the Shelf Registration Statement. 
  
 2.3 Effectiveness. A Shelf Registration Statement pursuant to Section 2.1 hereof will not be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that if,
after it has been declared effective, the offering of Registrable Securities pursuant to a Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or
court, such Shelf Registration Statement will be deemed not to have been effective during the period of such interference, until the offering of Registrable Securities pursuant to such Shelf Registration Statement may legally resume. 
  
 2.4 Interest. In the event that (a) a Shelf Registration
Statement is not filed with the SEC on or before the 90th calendar day following the Closing Date, (b) a Shelf Registration Statement is not declared effective on or prior to the 210th calendar day following the Closing Date, (c) after
effectiveness, subject to Section 2.5, the Shelf Registration Statement fails to be effective or usable by the Holders 
  

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 without being succeeded within five business days by a post-effective amendment or a report filed with the SEC pursuant
to the 1934 Act that cures the failure to be effective or usable or (d) the Shelf Registration Statement is unusable by the Holders for any reason, and the aggregate number of days in any consecutive three-month or twelve-month period for which
the Shelf Registration Statement shall not be usable exceeds the Suspension Period (as defined in Section 2.5 hereof) (each such event being a “Registration Default”), additional interest (“Additional Interest”) will
accrue at a rate per annum of one-quarter of one percent (0.25%) of the principal amount of the Securities for the first 90-day period from the day following the Registration Default, and thereafter at a rate per annum of one-half of one percent
(0.50%) of the principal amount of the Securities, provided that in no event shall Additional Interest accrue at a rate per annum exceeding one half of one percent (0.50%) of the issue price of the Securities. Upon the cure of all Registration
Defaults then continuing, the accrual of Additional Interest will automatically cease and the interest rate borne by the Securities will revert to the original interest rate at such time. Additional Interest shall be computed based on the actual
number of days elapsed in each 90-day period in which the Shelf Registration Statement is not effective or is unusable. Holders who have converted Securities into Common Stock will not be entitled to receive any Additional Interest with respect to
such Common Stock or the issue price of the Securities converted. 
  
 The Company and the Guarantors shall notify the Trustee within ten business days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid. Additional Interest shall be paid by
depositing with the Trustee, in trust, for the benefit of the Holders of Registrable Securities, on or before the applicable semiannual interest payment date, immediately available funds in sums sufficient to pay the Additional Interest then due.
The Additional Interest due shall be payable on each interest payment date to the record Holder of Registrable Securities entitled to receive the interest payment to be paid on such date as set forth in the Indenture. Each obligation to pay
Additional Interest shall be deemed to accrue from and including the day following the Registration Default to but excluding the day on which the Registration Default is cured. 
  
 A Registration Default under clause (a) above shall be cured on the date that the Registration Statement is filed with
the SEC. A Registration Default under clause (b) above shall be cured on the date that the Registration Statement is declared effective by the SEC. A Registration Default under clauses (c) or (d) above shall be cured on the date an
amended Registration Statement is declared effective by the SEC or the Company and the Guarantors otherwise declare the Registration Statement and the Prospectus useable, as applicable. The Company and the Guarantors will have no liabilities for
monetary damages with respect to any Registration Default for which Additional Interest is expressly provided for herein. 
  
 All obligations of the Company and the Guarantors set forth in this Section 2.4 that are outstanding with respect to any Registrable Securities at
the time such Securities cease to be Registrable Securities shall survive until such time as all obligations with respect to such Securities have been satisfied in full. 
  
 The Company and the Guarantors agree with the Initial Purchasers and for the benefit of the Holders that the Additional
Interest provided for in this Section 2.4 constitutes a reasonable estimate of the damages that may be incurred by Holders of Registrable Securities and do not constitute a penalty. 
  
 2.5 Suspension. The Company and the Guarantors may suspend the use of any Prospectus, without incurring or accruing
any obligation to pay Additional Interest pursuant to Section 2.4 hereof, for a period not to exceed 30 calendar days in any three-month period, or an aggregate of 90 calendar days in any twelve-month period (each, a “Suspension
Period”), if the Board of Directors of the Company shall have determined in good faith that because of valid business reasons (not including avoidance of the Company’s and the Guarantors’ obligations hereunder), including without
limitation proposed or pending corporate developments and similar events or because of filings with the SEC, it is in the best interests of 
  

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 the Company and the Guarantors to suspend such use, and prior to suspending such use the Company provides the Holders
with written notice of such suspension, which notice need not specify the nature of the event giving rise to such suspension. Each Holder shall keep confidential any communications received by it from the Company regarding the suspension of the use
of the Prospectus, except as required by applicable law. 
  
 3.
Registration Procedures. 
  
 In connection with the
obligations of the Company and the Guarantors with respect to the Shelf Registration, the Company and the Guarantors shall: 
  
 (a) prepare and file with the SEC a Shelf Registration Statement, within the relevant time period specified in Section 2, on Form S-3 or another
appropriate form under the 1933 Act, which form (i) shall be selected by the Company, (ii) shall be available for the sale of the Registrable Securities by the selling Holders thereof, (iii) shall comply as to form in all material
respects with the requirements of the applicable form and include or incorporate by reference all financial statements required by the SEC to be filed therewith or incorporated by reference therein, and (iv) shall comply in all material
respects with the applicable requirements of Regulation S-T under the 1933 Act, if any, and use reasonable best efforts to cause such Shelf Registration Statement to become effective and remain effective in accordance with Section 2 hereof;

  
 (b) prepare and file with the SEC such amendments and
post-effective amendments to the Shelf Registration Statement as may be necessary under applicable law to keep the Shelf Registration Statement effective for the Effectiveness Period, subject to Section 2.5; and cause each Prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provision then in force) under the 1933 Act and comply during the Effectiveness Period with the provisions of the 1933 Act,
the 1934 Act and the rules and regulations thereunder required to enable the disposition of all Registrable Securities covered by the Shelf Registration Statement in accordance with the intended method or methods of distribution by the selling
Holders thereof; 
  
 (c) upon the occurrence of any event that
would cause the Shelf Registration Statement or the Prospectus contained therein (x) to contain a material misstatement or omission or (y) not to be effective and usable for resale of Registrable Securities for any reason during the
Effectiveness Period, obtain the prompt withdrawal of any order suspending the effectiveness thereof, shall file promptly, and in any event within five business days, subject to Section 2.5, an appropriate amendment to the Shelf Registration
Statement, or file a report with the SEC pursuant to Section 13, 14 or 15(d) of the 19334 Act, in the case of clause (x), correcting any such misstatement or omission, and, in the case of either clause (x) or (y), use its reasonable best
efforts to cause such amendment to be declared effective and the Shelf Registration Statement and the related Prospectus to become usable for resale of Registrable Securities during the Effectiveness Period as soon as practicable thereafter;

  
 (d) (i) notify each Holder of Registrable Securities of
the filing, by issuing a press release, of a Shelf Registration Statement with respect to the Registrable Securities; (ii) furnish to each Holder of Registrable Securities that has provided the information required by Section 2.1(d) and to
each underwriter of an underwritten offering of Registrable Securities, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder
or underwriter may reasonably request, including financial statements and schedules and, if the Holder so requests, all exhibits in order to facilitate the unrestricted sale or other disposition of the Registrable Securities; and (iii) subject
to Section 2.5 hereof and to any notice by the Company in accordance with Section 3(f) hereof of the existence of any fact of the kind described in Sections 3(f)(ii), (iii), (iv), (v) or (vi) hereof, hereby consent to the use of
the Prospectus or 
  

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 any amendment or supplement thereto by each of the selling Holders of Registrable Securities that has provided the
information required by Section 2.1(d) and each of the underwriters, if any, in connection with the offering and sale of the Registrable Securities; 
  
 (e) use reasonable best efforts to register or qualify the Registrable Securities under all applicable state securities or “blue sky” laws of
such jurisdictions as any Holder of Registrable Securities covered by a Shelf Registration Statement and each underwriter of an underwritten offering of Registrable Securities shall reasonably request, and do any and all other acts and things which
may be reasonably necessary or advisable to enable each such Holder and underwriter to consummate the disposition in each such jurisdiction of such Registrable Securities owned by such Holder; provided, however, that the Company and the Guarantors
shall not be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), or (ii) take any action which would subject
it to general service of process or taxation in any such jurisdiction where it is not then so subject; 
  
 (f) notify promptly each Holder of Registrable Securities under a Shelf Registration that has provided the information required by Section 2.1(d)
and, if requested by such Holder, confirm such advice in writing promptly (i) when the Shelf Registration Statement has become effective and when any post-effective amendments thereto became effective, (ii) of any request by the SEC or any
other federal or state governmental authority for post-effective amendments and supplements to a Shelf Registration Statement or Prospectus or for additional information relating thereto, (iii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order or injunction suspending the effectiveness or enjoining the use of a Shelf Registration Statement or any Prospectus or the initiation of any proceedings for that purpose, (iv) of the existence of
any fact or the happening of any event during the Effectiveness Period which makes any statement of a material fact made in such Shelf Registration Statement or the related Prospectus untrue or which requires the making of any changes in such Shelf
Registration Statement or Prospectus in order to make the statements therein not misleading, (v) of the receipt by the Company or any Guarantor of any notification with respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose and (vi) of any determination by the Company and the Guarantors that a post-effective amendment to such Shelf Registration Statement
would be appropriate; 
  
 (g) furnish one counsel for the Holders
of Registrable Securities copies of any comment letters received from the SEC or any other request by the SEC or any state securities authority for amendments or supplements to a Shelf Registration Statement and Prospectus or for additional
information; 
  
 (h) use reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of a Shelf Registration Statement at the earliest possible moment, and if at any time any state securities commission or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Registrable Securities under state securities or blue sky laws, use reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest possible moment; 
  
 (i) furnish to each Holder of Registrable Securities that has provided the
information required by Section 2.1(d), and each underwriter, if any, without charge, at least one conformed copy of the Shelf Registration Statement, as first filed with the SEC, and any amendment thereto, including documents incorporated by
reference therein or exhibits thereto as such Person may request in writing; 
  
 (j) cooperate with the selling Holders of Registrable Securities and the underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends (other than as required by applicable law); and enable such 
  

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 Registrable Securities to be in such denominations (consistent with the provisions of the Indenture) and registered in
such names as the selling Holders or the underwriters, if any, may reasonably request at least three business days prior to the closing of any sale of Registrable Securities; 
  
 (k) upon the occurrence of any event or the discovery of any facts, each as contemplated by Sections 3(f)(ii), (iii), (iv),
(v) and (vi) hereof, as promptly as practicable after the occurrence of such an event, use reasonable best efforts to prepare a supplement or post-effective amendment to the Shelf Registration Statement or the related Prospectus or any
document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities, such Prospectus will not contain at the time of such delivery any untrue statement of a
material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or will remain so qualified (at such time as such public disclosure is otherwise made
or the Company and the Guarantors determine that such disclosure is not necessary, in each case to correct any misstatement of a material fact or to include any omitted material fact, the Company and the Guarantors agree promptly to notify each
Holder of such determination and to furnish each Holder such number of copies of the Prospectus as amended or supplemented, as such Holder may reasonably request); 
  
 (l) no less than three business days prior to the filing of any Shelf Registration Statement, any Prospectus, any amendment
to a Shelf Registration Statement or amendment or supplement to a Prospectus (other than amendments and supplements that do nothing more than name Holders and provide information with respect thereto), provide copies of such document to the Initial
Purchasers on behalf of such Holders; 
  
 (m) provide CUSIP
numbers for all Registrable Securities not later than the effective date of the Shelf Registration Statement and provide the Trustee with printed certificates for the Registrable Securities and Holders of Common Stock that are Registrable Securities
with certificates for Common Stock, in each case in a form eligible for deposit with the Depositary; 
  
 (n) (i) cause the Indenture to be qualified under the 1939 Act in connection with the registration of the Registrable Securities not later than the
effective date of the Shelf Registration Statement, (ii) cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the 1939 Act,
and (iii) execute, and use reasonable best efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner; 
  
 (o) enter into such customary
agreements and take all other customary and appropriate actions in order to expedite or facilitate the disposition of such Registrable Securities including but not limited to: 
  
 (i) obtain opinions of counsel to the Company and the Guarantors and updates thereof addressed to each
selling Holder and the underwriters, if any, covering the matters set forth in the opinion of such counsel delivered on the Closing Date; 
  
 (ii) obtain “comfort” letters and updates thereof from the Company’s and the Guarantors’ independent certified public
accountants (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements are, or are required to be, included in the Shelf
Registration Statement) addressed to the underwriters, if any, and use reasonable efforts to have such letter addressed to the selling Holders of Registrable Securities (to the extent consistent with 
  

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 Statement on Auditing Standards No. 72 of the American Institute of Certified Public Accounts), such
letters substantially in the form and covering the matters covered in the comfort letter delivered on the Closing Date; and 
  
 (iii) if an underwriting agreement is entered into, cause the same to set forth indemnification provisions and procedures substantially
equivalent to the indemnification provisions and procedures set forth in Section 4 hereof with respect to the underwriters and all other parties to be indemnified pursuant to said Section or, at the request of any underwriters, in the form
customarily provided to such underwriters in similar types of transactions. 
  
 The above shall be done solely in connection with the underwritten offering of Registrable Securities off of such Shelf Registration Statement pursuant to an underwriting or similar agreement as and to the extent required thereunder, and
reasonably requested by any of the parties thereto; 
  
 (p) if
reasonably requested in connection with a disposition of Registrable Securities, make available for inspection during business hours by representatives of the Holders of the Registrable Securities, any underwriters participating in any disposition
pursuant to a Shelf Registration Statement, and any counsel or accountant retained by any of the foregoing, all financial and other records, pertinent corporate documents and properties of the Company and the Guarantors reasonably requested by any
such persons, and cause the respective officers, directors, employees, and any other agents of the Company and any Guarantor to supply all information reasonably requested by any such representative, underwriter, special counsel or accountant in
connection with a Shelf Registration Statement, and make such representatives of the Company and the Guarantors available for discussion of such documents as shall be reasonably requested by the Initial Purchasers, in each case as is customary for
“due diligence” investigations; provided that, to the extent the Company, in its reasonable discretion, agrees to disclose non-public information, such information shall be kept confidential by the recipient thereof and shall be used
solely for the purposes of exercising rights under this Agreement and such person shall not engage in trading any securities of the Company until such material non-public information becomes properly publicly available, unless (i) disclosure of
such information is required by court or administrative order or is necessary to respond to inquiries of regulatory authorities, (ii) disclosure of such information is required by law (including any disclosure requirements pursuant to federal
securities laws in connection with the filing of any Registration Statement or the use of any Prospectus referred to in this Agreement), (iii) such information becomes generally available to the public other than as a result of a disclosure or
failure to safeguard by any such person or (iv) such information becomes available to any such person from a source other than the Company and such source is not bound by a confidentiality agreement, and provided further, that the foregoing
inspection and information gathering shall, to the greatest extent possible, be coordinated on behalf of all Holders and the other parties entitled thereto by special counsel to the Holders; 
  
 (q) a reasonable time prior to filing the Shelf Registration Statement, any
Prospectus forming a part thereof, any amendment to the Shelf Registration Statement or amendment or supplement to such Prospectus (other than amendments and supplements that do nothing more than name Holders and provide information with respect
thereto), provide copies of such document to the Holders of Registrable Securities that have provided the information required by Section 2.1(d), to the Initial Purchasers, to special counsel for the Holders and to the underwriter or
underwriters of an underwritten offering of Registrable Securities, if any, make such changes in any such document prior to the filing thereof as the Initial Purchasers, the counsel to the Holders or the underwriter or underwriters reasonably
request within three business days of delivery of such copies and not file any such document in a form to which the Majority Holders, the Initial Purchasers on behalf of the Holders of Registrable Securities, special counsel for the Holders of
Registrable Securities or any underwriter shall not have previously been advised and furnished a copy of or to which the Majority Holders, the Initial Purchasers on behalf of the Holders of 
  

 10 

 Registrable Securities, counsel to the Holders of Registrable Securities or any underwriter shall reasonably object
within three business days of delivery of such copies, and make the representatives of the Company and the Guarantors available for discussion of such document as shall be reasonably requested by the Holders of Registrable Securities, the Initial
Purchasers on behalf of such Holders, counsel for the Holders of Registrable Securities or any underwriter; 
  
 (r) if requested by any selling Holder or the underwriters, if any, incorporate in the Shelf Registration Statement or Prospectus, pursuant to a
supplement or post-effective amendment if necessary, such information as such selling Holder or underwriter, if any, may reasonable request to have included therein with respect to the name or names of such selling Holder, the number of shares of
Common Stock or principal amount of Securities owned by such Holder, the plan of distribution of the Registrable Securities (as required by Item 508 of Regulation S-K), the principal amount of Securities or number of shares of Common Stock
being sold, the purchase price being paid therefor, and any other terms of the offering of the Registrable Securities to be sold in such offering; 
  
 (s) use reasonable best efforts to cause all Registrable Securities to be listed on any securities exchange or inter-dealer quotation system on which
similar debt securities issued by the Company are then listed if requested by the Majority Holders or if requested by the underwriter or underwriters of an underwritten offering of Registrable Securities, if any; 
  
 (t) if the Securities are rated, use reasonable best efforts to cause the
Registrable Securities to be rated by the appropriate rating agencies; 
  
 (u) otherwise comply with all applicable rules and regulations of the SEC and make available to its security holders, as soon as reasonably practicable, an earnings statement covering at least 12 months which shall satisfy the provisions of
Section 11(a) of the 1933 Act and Rule 158 thereunder; and 
  
 (v) cooperate and assist in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter and its counsel (including any “qualified independent underwriter” that is
required to be retained in accordance with the rules and regulations of the NASD). 
  
 Without limiting Section 2.1(d), the Company and the Guarantors may (as a condition to such Holder’s participation in the Shelf Registration) require each Holder of Registrable Securities to furnish to the
Company and the Guarantors such information regarding the Holder and the proposed distribution by such Holder of such Registrable Securities as the Company and the Guarantors may from time to time reasonably request in writing. 
  
 Each Holder agrees that, upon receipt of any notice from the Company of the
happening of any event or the discovery of any facts, each of the kind described in Section 3(f)(ii), (iii), (iv), (v) or (vi) hereof, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to the
Prospectus included in the Shelf Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(k) hereof or written notice from the Company that the Shelf Registration
Statement is again effective and no amendment or supplement is needed, and, if so directed by the Company, such Holder will deliver to the Company (at its expense) all copies in such Holder’s possession, other than permanent file copies then in
such Holder’s possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. 
  
 In the event that a Registration Default has occurred and is continuing, the Company and the Guarantors shall not file any Registration Statement with
respect to any securities (within the meaning of Section 2(1) of the 1933 Act) of the Company or any of its subsidiaries other than Registrable Securities. 
  

 11 

 If any of the Registrable Securities covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the underwriter or underwriters and manager or managers that will manage such offering will be selected by the Majority Holders of such Registrable Securities included in such offering and shall be acceptable to the Company.
No Holder of Registrable Securities may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by
the persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting
arrangements. 
  
 4. Indemnification; Contribution.
(a) The Company and the Guarantors agree to indemnify and hold harmless the Initial Purchasers, each Holder, each Person who participates as an underwriter (any such Person being an “Underwriter”) and each Person, if any, who controls
any Initial Purchaser, Holder or Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows: 
  
 (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Shelf Registration Statement (or any amendment or supplement thereto) pursuant to which Registrable Securities were registered under the 1933 Act, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material
fact contained in any Prospectus (or any amendment or supplement thereto) or any Free Writing Prospectus or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or arising out of any material misstatement or omission in the information conveyed to an investor at the time it made its investment decision; 
  
 (ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 4(d) below) any such settlement is effected with the written consent of the Company; and 
  
 (iii) against any and all out of pocket expense whatsoever,
as incurred (including the fees and disbursements of counsel chosen by any indemnified party), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or
(ii) above; 
  
 provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company
and the Guarantors by or on behalf of any Holder or Underwriter expressly for use in a Shelf Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto) or any Free Writing Prospectus; provided,
further, that this indemnity provision shall not apply to any loss, liability, claim, damage or expense if the Company has complied with its legal and contractual obligations 
  

 12 

 to provide a Prospectus to each Holder and the Holder fails to deliver at or prior to the written confirmation of sale
the most recent Prospectus furnished to such Holder by the Company and such Prospectus, as amended or supplemented as of the time of such confirmation of sale, would have corrected such untrue statement or omission or alleged untrue statement or
omission of a material fact and delivery thereof was required by law. 
  
 (b) Each Holder severally, but not jointly, agrees to indemnify and hold harmless the Company and the Guarantors, the Initial Purchasers, each Underwriter and the other selling Holders, and each of their respective directors and officers,
and each Person, if any, who controls the Company or any Guarantor , the Initial Purchasers, any Underwriter or any other selling Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity contained in Section 4(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Shelf
Registration Statement (or any amendment thereto) or any Prospectus included therein (or any amendment or supplement thereto) or any Free Writing Prospectus in reliance upon and in conformity with written information with respect to such Holder
furnished to the Company by or on behalf of such Holder expressly for use in the Shelf Registration Statement (or any amendment thereto) or such Prospectus (or any amendment or supplement thereto) or any Free Writing Prospectus; provided, however,
that no such Holder shall be liable for any claims hereunder in excess of the amount of net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Shelf Registration Statement. 
  
 (c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure so to notify an indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this
Section 4 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of
such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. 
  
 (d) If at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 4(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. 
  

 13 

 (e) If the indemnification provided for in this Section 4 is for any reason unavailable to or
insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, in such proportion as is appropriate to reflect (i) the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other
from the registration of the Registrable Securities pursuant to the Shelf Registration Statement, or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party or party on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. 
  
 The relative benefits received by the Company and the Guarantors on the one hand and by the Holders and the Initial Purchasers on the other hand shall be
deemed to be in the same respective proportions as the total net proceeds for the offering of the Registrable Securities (before deducting expenses) received by the Company and the Guarantors and the total Initial Purchasers’ discount received
by the Initial Purchasers bear to the initial issue price of $1,000 aggregate principal amount at maturity of the Registrable Securities. 
  
 The relative fault of the Company and the Guarantors on the one hand and the Holders and the Initial Purchasers on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors, the Holders or the
Initial Purchasers and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. 
  
 The Company, the Guarantors, the Holders and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this
Section 4 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in
this Section 4. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 4 shall be deemed to include any out-of-pocket legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission. 
  
 Notwithstanding the provisions of this Section 4, no Initial Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Securities sold by it were offered
exceeds the amount of any damages which such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 
  
 No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 
  
 For purposes of this Section 4, each Person, if any, who controls an Initial Purchaser or Holder within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Initial Purchaser or Holder, and each director of the Company or any Guarantor, and each Person, if any, who controls the Company or any Guarantor within the
meaning of Section 15 of 
  

 14 

 the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The Initial
Purchasers’ respective obligations to contribute pursuant to this Section 4 are several in proportion to the principal amount of Securities set forth opposite their respective names in Schedule A to the Purchase Agreement and not joint.

  
 5. Miscellaneous. 
  
 5.1 Rule 144 and Rule 144A. For so long as the Company is subject to
the reporting requirements of Section 13 or 15(d) of the 1934 Act, the Company covenants that it will file the reports required to be filed by it under Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC
thereunder. If the Company ceases to be so required to file such reports, the Company covenants that it will upon the request of any Holder of Registrable Securities (a) make publicly available such information as is necessary to permit sales
pursuant to Rule 144 under the 1933 Act, (b) deliver such information to a prospective purchaser as is necessary to permit sales pursuant to Rule 144A under the 1933 Act and take such further action as any Holder of Registrable Securities may
reasonably request for such purpose, and (c) take such further action that is reasonable in the circumstances, in each case, to the extent required from time to time to enable such Holder to sell its Registrable Securities without registration
under the 1933 Act within the limitation of the exemptions provided by (i) Rule 144 under the 1933 Act, as such Rule may be amended from time to time, (ii) Rule 144A under the 1933 Act, as such Rule may be amended from time to time, or
(iii) any similar rules or regulations hereafter adopted by the SEC. Upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 5.1 shall be deemed to require the Company to register any of its securities (other than the Common Stock) under the 1934 Act. 
  
 5.2 No Inconsistent Agreements. The Company and the Guarantors have not entered into and the Company and the
Guarantors will not after the date of this Agreement enter into any agreement which is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not and will not for the term of this Agreement in any way conflict with the rights granted to the holders of any of the Company’s or any Guarantors’ other issued and outstanding securities under any
such agreements. 
  
 5.3 Adjustments Affecting Registrable
Securities. The Company and the Guarantors shall not, directly or indirectly, intentionally take any action with respect to the Registrable Securities as a class that would adversely affect the ability of the Holders of Registrable Securities to
include such Registrable Securities in a registration undertaken pursuant to this Agreement. 
  
 5.4 Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions
hereof may not be given unless the Company and the Guarantors have obtained the written consent of Holders of at least a majority of the outstanding Registrable Securities (with Holders of Securities deemed to be the Holders, for purposes of this
Section 5.4, of the number of outstanding shares of Common Stock into which such Registrable Securities are or could be convertible on the date that consent would be required) affected by such amendment, modification, supplement, waiver or
departure. Notwithstanding the foregoing, this Agreement may be amended by a written agreement among the Company, the Guarantors and the Initial Purchasers, without the consent of the Holders of the Registrable Securities, in order to cure any
ambiguity or to correct or supplement any provision contained herein, provided that no such amendment shall adversely affect the interest of the Holders of Registrable Securities. Each Holder of Registrable Securities outstanding at the time of any
amendment, modification, waiver or consent pursuant to this Section 5.4, shall be bound by such amendment, modification, waiver or consent, whether or not any notice or writing indicating such amendment, modification, waiver or consent is
delivered to such Holder. 
  

 15 

 5.5 Notices. All notices and other communications provided for or permitted hereunder shall be
made in writing by hand delivery, registered first-class mail, facsimile, or any courier guaranteeing overnight delivery (a) if to a Holder, at the most current address given by such Holder to the Company in a Questionnaire or by means of a
notice given in accordance with the provisions of this Section 5.5, which address initially is the address set forth in the Purchase Agreement with respect to the Initial Purchasers; and (b) if to the Company or any Guarantor, initially at
the Company’s address set forth in the Purchase Agreement, and thereafter at such other address of which notice is given in accordance with the provisions of this Section 5.5. 
  
 All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally
delivered; two business days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged, if sent by facsimile; and on the next business day if timely delivered to an overnight courier. 
  
 Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustee under the Indenture, at the address specified in such Indenture. 
  
 A document or notice shall be deemed to have been furnished to the Holders of the Registrable Securities if it is provided to the registered holders of
the Registrable Securities at the address set forth above and to any Holder that has expressly provided to the Company an address for notices. 
  
 5.6 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of
the terms of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement, and such person shall be entitled to receive the benefits hereof. The obligations herein of any Guarantor shall be terminated upon the merger or consolidation of such
Guarantor with the Company or any other Guarantor. The Initial Purchasers (in their capacity as Initial Purchasers) shall have no liability or obligation to the Company or the Guarantors with respect to any failure by a Holder, other than such
Initial Purchaser, to comply with, or breach by any Holder, other than such Initial Purchaser, of, any of the obligations of such Holder under this Agreement. 
  

5.7 Third Party Beneficiaries. The Initial Purchasers (even if the Initial Purchasers are not Holders of Registrable Securities) shall be third
party beneficiaries to the agreements made hereunder between the Company and the Guarantors, on the one hand, and the Holders, on the other hand, and shall have the right to enforce such agreements directly to the extent they deem such enforcement
necessary or advisable to protect their rights or the rights of Holders hereunder. Each Holder of Registrable Securities shall be a third party beneficiary to the agreements made hereunder between the Company and the Guarantors, on the one hand, and
the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights hereunder. 
  

 16 

 5.8 Specific Enforcement. Without limiting the remedies available to the Initial Purchasers and
the Holders, the Company and the Guarantors acknowledge that any failure by the Company and the Guarantors to comply with their obligations under Section 2.1 hereof may result in material irreparable injury to the Initial Purchasers or the
Holders for which there is no adequate remedy at law, that it may not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may seek such relief as may be required
to specifically enforce the Company’s obligations under Section 2.1 hereof. The Company and the Guarantors further agree to waive the defense in any action for specific performance that a remedy at law would be adequate. 
  
 5.9 Restriction on Resales. Until the expiration of two years after
the original issuance of the Securities, the Company and the Guarantors will not, and will use reasonable efforts to cause its Affiliates not to, resell any Securities which are “restricted securities” (as such term is defined under Rule
144(a)(3) under the 1933 Act) that have been reacquired by any of them and shall immediately upon any purchase of any such Securities submit such Securities to the Trustee for cancellation. 
  
 5.10 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 
  
 5.11 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. 
  
 5.12 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF. 
  
 5.13 Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein
shall not be affected or impaired thereby. 
  
 5.14 Entire
Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Issuer with respect to the Registrable Securities. This
Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. 
  

 17 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

  

			
	 THE PANTRY, INC.

		
	 By:
	 	 /s/ Peter J. Sodini

	 Name:
	 	 
	 Title:
	 	 
	
	 KANGAROO, INC.

		
	 By:
	 	 /s/ Peter J. Sodini

	 Name:
	 	 
	 Title:
	 	 
	
	 R.& H. MAXXON, INC.

		
	 By:
	 	 /s/ Peter J. Sodini

	 Name:
	 	 
	 Title:
	 	 

  
 Confirmed and accepted as 
 of the date first above written: 
  

			
	 MERRILL LYNCH, PIERCE, FENNER & SMITH
     INCORPORATED
 WACHOVIA CAPITAL MARKETS, LLC

	
	 BY: MERRILL LYNCH, PIERCE, FENNER & SMITH
     INCORPORATED

		
	 By:
	 	 /s/ Edward Aitken

	 Name:
	 	 
	 Title:CONFIRMATION OF OTC CONVERTIBLE NOTE HEDGE

 Exhibit 10.3 
  
 

 
  
 Confirmation of OTC Convertible Note Hedge

  

					
	Original Date:	  	November 16, 2005	  	ML Ref:            
			
	To:	  	The Pantry, Inc. (“Counterparty”)	  	 
			
	Attention:	  	Dan Kelly	  	 
			
	From:	  	Merrill Lynch International (“ML”)	  	 
	 	  	Merrill Lynch Financial Centre	  	 
	 	  	2 King Edward Street	  	 
	 	  	London EC1A 1HQ	  	 

  
 Dear
Sir / Madam: 
  
 The purpose of this letter agreement (this
“Confirmation”) is to confirm the terms and conditions of the above-referenced transaction entered into between Counterparty and ML through its agent Merrill Lynch, Pierce, Fenner & Smith Incorporated
(“MLPFS” or “Agent”) on the Trade Date specified below (the “Transaction”). This Confirmation constitutes a “Confirmation” as referred to in the Agreement specified
below. 
  
 The definitions and provisions contained in the 2000
ISDA Definitions (the “Swap Definitions”) and the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions” and, together with the Swap Definitions, the “Definitions”),
in each case as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will
govern, and in the event of any inconsistency between the Definitions and this Confirmation, this Confirmation will govern. References herein to a “Transaction” shall be deemed to be references to a “Share Option Transaction” for
purposes of the Equity Definitions and a “Swap Transaction” for the purposes of the Swap Definitions. 
  
 This Confirmation evidences a complete binding agreement between you and us as to the terms of the Transaction to which this Confirmation relates. This
Confirmation (notwithstanding anything to the contrary herein), shall be subject to an agreement in the 1992 form of the ISDA Master Agreement (Multicurrency Cross Border) (the “Master Agreement” or “Agreement”) as
if we had executed an agreement in such form (but without any Schedule and with elections specified in the “ISDA Master Agreement” Section of this Confirmation) on the Trade Date of the first such Transaction between us. In the event of
any inconsistency between the provisions of that agreement and this Confirmation, this Confirmation will prevail for the purpose of this Transaction. 
  
 The terms of the particular Transaction to which this Confirmation relates are as follows: 
  

			
	General Terms:	  	 
		
	Trade Date:	  	November 16, 2005.
		
	Effective Date:	  	The fourth (4th) Business Day immediately following the Trade Date.
		
	Seller:	  	ML.
		
	Buyer:	  	Counterparty.

			
	Shares:	  	The shares of Common stock, par value of USD 0.01, of Counterparty (Security Symbol: “PTRY”) or such other securities or property into which the Reference Notes are convertible on the
date of determination.
		
	Payment Amount Premium:	  	$39.34mm to be paid on the Issue Date, as defined in the Note Indenture.
		
	Exchange:	  	As provided in the Note Indenture in the definition of “Closing Price”.
		
	Related Exchange(s):	  	All Exchanges.
		
	Knock-in Event:	  	Not Applicable.
		
	Knock-out Event:	  	Not Applicable.
		
	Reference Notes:	  	Senior Subordinated Convertible Notes due November 15, 2012 having $135,000,000 principal amount at maturity.
		
	Conversion Event:	  	Each conversion on a Conversion Date (as defined in the Note Indenture) of any Reference Note pursuant to the terms of the Note Indenture (the principal amount at maturity of Reference Notes so
converted, the “Conversion Amount” with respect to such Conversion Event) occurring on or before the Termination Date.
		
	 	  	If the Conversion Amount for any Conversion Event is less than the aggregate principal amount at maturity of Reference Notes then outstanding, then the terms of this Transaction shall continue
to apply, subject to the terms and conditions set forth herein, with respect to the remaining outstanding principal amount at maturity of the Reference Notes.
		
	Note Indenture:	  	The Indenture, dated as of closing of the issuance of the Reference Notes, between Counterparty, the guarantors named therein and Wachovia Bank, National Association as trustee relating to the
Reference Notes, as the same may be amended, modified or supplemented, subject to the “Additional Termination Events” provisions of this Confirmation.
		
	Termination Date:	  	November 15, 2012.
		
	Valuation:	  	 
		
	Valuation Date:	  	The last Trading Day of the Conversion Reference Period in respect of any Conversion Event.
		
	Conversion Reference Periods:	  	The “Conversion Reference Periods”, as defined in the Note Indenture with respect to a Conversion Event.
		
	Full Exchange Business Day:	  	A “Trading Day”, as defined in the Note Indenture.
		
	Conversion Reference Period Disruption:	  	Modified Postponement.
		
	Conversion Reference Period Start Date:	  	The first (1st) Conversion Reference Period in respect of any Conversion Event.

  

 2 

			
	Settlement Terms:	  	 
		
	Settlement:	  	Net Share Settlement, as defined below, with respect to each exercise, unless the Counterparty elects to pay cash for all or a portion of the Remaining Shares in the manner provided in Section
4.13(b) under the Note Indenture in respect of a Conversion Event (and provides ML with notice of such election prior to the first Trading Day of the applicable Conversion Reference Period), in which case settlement will be in cash for all or a
portion of the exercise with respect to such Conversion Event.
		
	Settlement Currency:	  	USD.
		
	Settlement Date:	  	The third (3rd) Full Exchange Business Day following the Valuation Date in respect of any Conversion Event occurring on or before the Termination Date.
		
	Conversion Notice:	  	Counterparty agrees to provide ML with notice of any Conversion Event within two (2) Business Days of the Conversion Date and in any event no later than one (1) Business Day following
Counterparty’s receipt of notice of such Conversion Event from the Trustee under the Note Indenture.
		
	Net Share Settlement:	  	On each Settlement Date, ML shall deliver to Counterparty, through the Agent, a number of Shares equal to the related Final Settlement Amount.
		
	Remaining Shares:	  	“Remaining Shares,” as defined in Note Indenture, with respect to the applicable Conversion Event
		
	Final Settlement Amount:	  	Remaining Shares
		
	Share Adjustments:	  	 
		
	Consequences for Merger Events:	  	 
		
	 Share-for-Share:
	  	 Not Applicable, Shares will be adjusted as provided in the Note Indenture.

		
	 Share-for-Other:
	  	 Not Applicable, Shares will be adjusted as provided in the Note Indenture.

		
	 Share-for-Combined:
	  	 Not Applicable, Shares will be adjusted as provided in the Note Indenture.

		
	Tender Offer:	  	 Not Applicable

		
	Nationalization, Insolvency or Delisting:	  	 Not Applicable

		
	Additional Disruption Events:	  	 
		
	 Change in Law:
	  	 Not Applicable

		
	 Failure to Deliver:
	  	 Applicable. If there is an “illiquidity in the market” on a day that would have been a Settlement Date , then the Settlement Date shall be the first
succeeding Exchange Business Day on which there is no “illiquidity in the market,” but in no such event shall the Settlement Date be later than the date that is twenty (20) Full Exchange Business Days immediately following what would have
been the Settlement Date but for such “illiquidity in the market.”

  

 3 

			
	 Insolvency Filing:
	 	Applicable
		
	 Hedging Disruption Event:
	 	Not Applicable
		
	 Increased Cost of Hedging:
	 	Not Applicable
		
	 Hedging Party:
	 	ML
		
	 Loss of Stock Borrow:
	 	Not Applicable
		
	 Increased Cost of Stock Borrow:
	 	Not Applicable
		
	 Determining Party:
	 	ML
		
	Non-Reliance:	 	Applicable
		
	Agreements and Acknowledgments Regarding Hedging Activities:	 	Applicable
		
	Additional Acknowledgments:	 	Applicable

  
 Additional Agreements,
Representations and Covenants of Counterparty, Etc.: 
  

	 	1.	Counterparty hereby represents and warrants to ML, on each day from the Trade Date to and including the date by which ML is able to initially complete a hedge of its position
created by this Transaction, that: 

  

	 	a.	it will not, and will not permit any person or entity subject to its control to, bid for or purchase Shares during such period except as disclosed in the Offering Memorandum
relating to the Reference Notes; and 

  

	 	b.	Counterparty has publicly disclosed all material information necessary for Counterparty to be able to purchase or sell Shares in compliance with applicable law and that it has
publicly disclosed all material information with respect to its condition (financial or otherwise) to the extent required by applicable law. 

  

	 	2.	The parties hereby agree that all documentation with respect to this Transaction is intended to qualify this Transaction as an equity instrument for purposes of EITF 00-19. If
Counterparty would be obligated to receive cash from ML pursuant to the terms of this Agreement for any reason without having had the right (other than pursuant to this paragraph (2)) to elect to receive Shares in satisfaction of such payment
obligation, then Counterparty may elect that ML deliver to Counterparty a number of Shares having a cash value equal to the amount of such payment obligation (such number of Shares to be delivered to be determined by the Calculation Agent acting in
a commercially reasonable manner to determine the number of Shares that could be purchased over a reasonable period of time with the cash equivalent of such payment obligation). Settlement relating to any delivery of Shares pursuant to this
paragraph (2) shall occur within a reasonable period of time. 

  
 Additional Termination Events: 
  
 The occurrence of any
of the following shall be an Additional Termination Event with respect to Counterparty (which shall be the sole Affected Party and this Transaction shall be the sole Affected Transaction): 
  

	 	1.	an Amendment Event occurs (in which case the entirety of this Transaction shall be subject to termination); 

  

 4 

	 	2.	a Repayment Event occurs (in which case this Transaction shall be subject to termination only in respect of the principal amount of Reference Notes that cease to be outstanding in
connection with or as a result of such Repayment Event); or 

  

	 	3.	the transactions contemplated by the Purchase Agreement among the Counterparty, the guarantors named therein and Merrill Lynch, Pierce, Fenner & Smith Incorporated
(“MLPFS”) and Wachovia Capital Markets, LLC as Initial Purchasers, dated as of November 16, 2005 (the “Purchase Agreement”) relating to the purchase of the Reference Notes shall fail to close as a result of any
breach by the Counterparty or any Initial Purchaser of their respective obligations thereunder or as a result of any action, or failure to act, by the Counterparty or any Initial Purchaser thereunder or as a result of a failure or any condition
thereunder, in which case the entirety of this Transaction shall terminate automatically. 

  
 If the transactions contemplated by the Purchase Agreement shall fail to close for any reason other than a breach of the Purchase Agreement by the Initial Purchasers, then the entirety of this Transaction shall
terminate automatically and all payments previously made hereunder, including the Payment Amount Premium less an amount equal to 2.694mm Shares times USD 0.70 per Share times an amount equal to the excess, if any, of the closing price of the
Shares on the Trade Date over the closing price of the Shares on the date of the Termination Event; provided that any negative amount shall be replaced by zero. ML and Counterparty agree that actual damages would be difficult to ascertain under
these circumstances and that the amount of liquidated damages resulting from the determination in the preceding sentence is a good faith estimate of such damages and not a penalty. If the transactions contemplated by the Purchase Agreement shall
fail to close because of a breach of the Purchase Agreement by the Initial Purchasers, then the entirety of this Transaction shall terminate automatically, and all payments previously made hereunder, including the Payment Amount Premium, shall be
promptly returned to the person making such payment. In addition, if an Amendment Event or Repayment Event occurs, no payments shall be required hereunder in connection with the Termination Event arising as a result of such Amendment Event or
Repayment Event. 
  
 As used in this Section
Additional Termination Events: 
  
 “Amendment
Event” means that the Counterparty amends, modifies, supplements or waives any term of the Note Indenture or the Reference Notes relating to the principal amount, coupon, maturity, repurchase obligation of the Counterparty, redemption
right of the Counterparty, any term relating to conversion of the Notes (including changes to the conversion price, conversion settlement dates or conversion conditions), or any other term that would require consent of the holders of not less than
100% of the principal amount of the Reference Notes to amend. 
  
 “Repayment Event” means that (a) any Reference Notes are repurchased (whether in connection with or as a result of a change of control, howsoever defined, or for any other reason) by the Counterparty,
(b) any Reference Notes are delivered to the Counterparty in exchange for delivery of any property or assets of the Counterparty or any of its subsidiaries (howsoever described), other than as a result of and in connection with a Conversion
Event, (c) any principal of any of the Reference Notes is repaid prior to the Final Maturity Date, as defined in the Note Indenture (whether following acceleration of the Reference Notes or otherwise), provided that no payments of cash made in
respect of the conversion a Note shall be deemed a payment of principal under this clause (c), (d) any Reference Notes are exchanged by or for the benefit of the holders thereof for any other securities of the Counterparty or any of its
affiliates (or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction or (e) any of the Notes is surrendered by Counterparty to the trustee for cancellation, other than registration of a transfer
of such Notes or as a result of and in connection with a Conversion Event. 
  
 Staggered Settlement: 
  
 If ML determines reasonably and
in good faith that the number of Shares required to be delivered to Counterparty hereunder on any Settlement Date would exceed 8.5% of all outstanding Shares, then ML may, by notice to Counterparty on or prior to such Settlement Date (a
“Nominal Settlement Date”), elect to deliver the Shares comprising the related the Final Settlement Amount on two or more dates (each, a “Staggered Settlement Date”) as follows: 
  

	 	1.	in such notice, ML will specify to Counterparty the related Staggered Settlement Dates (the first of which will be such Nominal Settlement Date and the last of which will be no
later than the twentieth (20th) Exchange Business Day following such Nominal Settlement Date) and the number of
Shares that it will deliver on each Staggered Settlement Date; 

  

 5 

	 	2.	the aggregate number of Shares that ML will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that ML would otherwise be
required to deliver on such Nominal Settlement Date; and 

  

	 	3.	the Net Share Settlement terms will apply on each Staggered Settlement Date, except that the Shares comprising the Final Settlement Amount will be allocated among such Staggered
Settlement Dates as specified by ML in the notice referred to in clause (1) above. 

  
 Notwithstanding anything herein to the contrary, ML shall be entitled to deliver Shares to Counterparty from time to time prior to the date on which ML would be obligated to deliver them to Counterparty pursuant to
Net Share Settlement terms set forth above, and Counterparty agrees to credit all such early deliveries against ML’s obligations hereunder in the direct order in which such obligations arise. No such early delivery of Shares will accelerate or
otherwise affect any of Counterparty’s obligations to ML hereunder. In addition, within 30 days of the Termination Date or any Settlement Date (with respect to the period before the Settlement Date to the extent Counterparty reasonably
anticipates the occurrence of such Settlement Date), Counterparty shall use its reasonable efforts to refrain from activities which could reasonably be expected to result in ML’s ownership of Shares exceeding 10% of all issued and outstanding
Shares. 
  

			
	Compliance with Securities Laws:	  	 Each party represents and agrees that it has complied, and will comply, in connection with this Transaction and all related or contemporaneous
sales and purchases of Shares, with the applicable provisions of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations each thereunder,
including, without limitation, Rules 10b-5 and Regulation M under the Exchange Act; provided that each party shall be entitled to rely conclusively on any information communicated by the other party concerning such other party’s market
activities; and provided further that Counterparty shall have no liability as a result of a breach of this representation due to ML’s gross negligence or willful misconduct.
  
 Each party further represents that if such party (“X”) purchases any Shares from
the other party pursuant to this Transaction, such purchase(s) will comply in all material respects with (i) all laws and regulations applicable to X and (ii) all contractual obligations of X.

		
	 	  	Counterparty (and ML in the case of paragraphs (c) and (d) below) represents that as of the date hereof:
		
	 	  	(a) each of its filings under the Exchange Act that are required to be filed from and including the ending date of Counterparty’s most recent prior fiscal year have been filed, and that,
as of the respective dates thereof and hereof, there is no misstatement of material fact contained therein or omission of a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances in
which they were made not misleading;
		
	 	  	(b) if Counterparty were to have purchased a number of Shares equal to the Number of Shares using MLPFS as broker, such purchase(s) would have complied in all material respects with all
contractual obligations of Counterparty;

  

 6 

			
	 	 	(c) Except pursuant to the terms of the Note Indenture, neither ML nor Counterparty, as the case may be, is entering into this Agreement to facilitate a distribution of the Shares or in
connection with a future issuance of securities; and
		
	 	 	(d) Neither ML nor Counterparty, as the case may be, is entering into this Agreement to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable
for Shares) or to manipulate the price of the Shares (or any security convertible into or exchangeable for Shares).

  
 Account Details: 
  

			
	 Account for payments to Counterparty:
	 	Wachovia Bank
	 	 	ABA# 053000219
	 	 	ACCT# 2073089595370
		
	 Account for payment to ML:
	 	Chase Manhattan Bank, New York
	 	 	ABA# 021000021
	 	 	FAO: ML Equity Derivatives
	 	 	A/C: 066213118

  

			
	Bankruptcy Rights:	  	In the event of Counterparty’s bankruptcy, ML’s rights in connections with this Transaction shall not exceed those rights held by common shareholders. For the avoidance of doubt, the
parties acknowledge and agree that ML’s rights with respect to any other claim arising from this Transaction prior to Counterparty’s bankruptcy shall remain in full force and effect and shall not be otherwise abridged or modified in
connection herewith.
		
	Set-Off:	  	The Set-off provisions in the Agreement shall apply to this Transaction, except in the event of Counterparty’s bankruptcy, in which case Set-off shall not apply.
		
	Collateral:	  	None.
		
	Transfer:	  	Neither party may transfer its rights or obligations under this Transaction except in accordance with Section 7 of the Agreement; provided however that ML may assign its rights and
delegate its obligations hereunder, in whole or in part, to any affiliate (an “Assignee”) of Merrill Lynch & Co., Inc. (“ML&Co.”), effective (the “Transfer Effective
Date”) upon delivery to Counterparty of (a) an executed acceptance and assumption by the Assignee (an “Assumption”) of the transferred obligations of ML under this Transaction (the “Transferred
Obligations”); (b) and an executed guarantee (the “Guarantee”) of ML&Co. of the Transferred Obligations. On the Transfer Effective Date, (a) ML shall be released from all obligations and liabilities arising
under the Transferred Obligations; and (b) the Transferred Obligations shall cease to be a Transaction(s) under the Agreement and shall be deemed to be a Transaction(s) under the ISDA Master Agreement between Assignee and Counterparty, provided
that, if at such time Assignee and Counterparty have not entered into a ISDA Master Agreement, Assignee and Counterparty shall be deemed to have entered into an ISDA form of Master Agreement (Multicurrency-Cross Border) without any Schedule attached
thereto.
		
	Regulation:	  	ML is regulated by The Securities and Futures Authority Limited and has entered into this Transaction as principal.

  

 7 

			
	Indemnity:	  	Each party (such party the Indemnifying Party) agrees to indemnify the other party and its Affiliates and their respective directors, officers, agents and controlling parties (such other party
and each such person being an “Indemnified Party”) from and against any and all losses, claims, damages and liabilities, joint and several, to which such Indemnified Party may become subject because of the untruth of any
representation by such Indemnifying Party or a breach by such Indemnifying Party of any or covenant hereunder, in the Agreement or any Other Agreement relating to the Agreement or Transaction and will reimburse any Indemnified Party for all
reasonable expenses (including reasonable legal fees and expenses) as they are incurred in connection with the investigation of, preparation for, or defense of, any pending or threatened claim or any action or proceeding arising therefrom, whether
or not such Indemnified Party is a party thereto.
		
	Tax Disclosure:	  	Effective from the date of commencement of discussions concerning the Transaction, each of Counterparty and ML (and each of its respective employees, representatives, or other agents) may
disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment
and tax structure.

  
 ISDA Master Agreement

  
 With respect to the Agreement, ML
and Counterparty each agree as follows: 
  
 Specified Entities: 

 
 (i) in relation to ML, for the purposes of: 
  

			
	 Section 5(a)(v):
	 	not applicable 
	 Section 5(a)(vi):
	 	not applicable 
	 Section 5(a)(vii):
	 	not applicable 
	 Section 5(b)(iv):
	 	not applicable 

  
 and (ii) in
relation to Counterparty, for the purposes of: 
  

			
	 Section 5(a)(v):
	  	not applicable
	 Section 5(a)(vi):
	  	not applicable
	 Section 5(a)(vii):
	  	not applicable
	 Section 5(b)(iv):
	  	not applicable

  
 “Specified Transaction” will have the meaning specified in Section 14 of the Agreement. 
  
 The “Credit Event Upon Merger” provisions of Section 5(b)(iv) of the Agreement will not apply to ML and
Counterparty. 
  
 The “Automatic Early
Termination” provision of Section 6(a) of the Agreement will not apply to ML or to Counterparty. 
  
 Payments on Early Termination for the purpose of Section 6(e) of the Agreement: (i) Market Quotation shall apply; and (ii) the Second Method
shall apply. 
  
 “Termination
Currency” means USD. 
  

 8 

 Tax Representations: 
  

	 	(I)	For the purpose of Section 3(e) of the Agreement, each party represents to the other party that it is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 2(e), 6(d)(ii), or 6(e) of the Agreement) to be made by
it to the other party under the Agreement. In making this representation, each party may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of the Agreement, (ii) the satisfaction of the
agreement contained in Section 4(a)(i) or 4(a)(iii) of the Agreement, and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of the Agreement, and (iii) the satisfaction
of the agreement of the other party contained in Section 4(d) of the Agreement; provided that it will not be a breach of this representation where reliance is placed on clause (ii) above and the other party does not deliver a form or
document under Section 4(a)(iii) of the Agreement by reason of material prejudice to its legal or commercial position. 

  

	 	(II)	For the purpose of Section 3(f) of the Agreement, each party makes the following representations to the other party: 

  

	 	(i)	ML represents that it is a corporation organized under the laws of England and Wales. 

  

	 	(ii)	Counterparty represents that it is a corporation incorporated under the laws of the State of Delaware. 

  
 Delivery Requirements: For the purpose of Sections 3(d), 4(a)(i) and (ii) of the Agreement, each party
agrees to deliver the following documents: 
  
 Tax forms,
documents or certificates to be delivered are: 
  
 Each party
agrees to complete (accurately and in a manner reasonably satisfactory to the other party), execute, and deliver to the other party, United States Internal Revenue Service Form W-9 or W-8 BEN, or any successor of such form(s): (i) before the
first payment date under this agreement; (ii) promptly upon reasonable demand by the other party; and (iii) promptly upon learning that any such form(s) previously provided by the other party has become obsolete or incorrect. 

 
 Other documents to be delivered: 
  

							
	 Party Required to
 Deliver Document

	  	 Document Required to be Delivered

	  	 When Required

	  	 Covered by
 Section 3(d)
 Representation

	Counterparty	  	Evidence of the authority and true signatures of each official or representative signing this Confirmation	  	Upon or before execution and delivery of this Confirmation	  	Yes
				
	Counterparty	  	Certified copy of the resolution of the Board of Directors or equivalent document authorizing the execution and delivery of this Confirmation	  	Upon or before execution and delivery of this Confirmation	  	Yes
				
	ML	  	Guarantee of its Credit Support Provider, substantially in the form of Exhibit A attached hereto, together with evidence of the authority and true signatures of the signatories, if
applicable	  	Upon or before execution and delivery of this Confirmation	  	Yes

  

 9 

 Additional Notice Requirements: The Counterparty hereby agrees to promptly deliver to ML a copy of all notices and
other communications given to the holders of any Reference Notes (whether or not required to be given) pursuant to the terms of the Note Indenture on the dates provided in the Note Indenture and all other notices given and other communications made
by Counterparty in respect of the Reference Notes to holders of any Reference Notes . The Counterparty further covenants to ML that it shall promptly notify ML of each Conversion Event (identifying in such notice (a “Conversion
Notice”) the principal amount at maturity of Reference Notes being converted), Amendment Event (including in such notice a detailed description of any such amendment) and Repayment Event (identifying in such notice the nature of such
Repayment Event and the principal amount at maturity of Reference Notes being paid). The Counterparty shall deliver each Conversion Notice to ML within two Business Days following the occurrence of the related Conversion Event and in any event no
later than one Business Day following Counterparty’s receipt of notice of such Conversion Event from the Trustee under the Note Indenture. The Counterparty hereby acknowledges and agrees that its obligations under this Section shall continue as
obligations of the Counterparty notwithstanding any transfer by it of any of its rights or obligations to any other person or entity in accordance with the Section titled Staggered Settlement above. 
  
 Addresses for Notices: For the purpose of
Section 12(a) of the Agreement: 
  
 Address for notices or communications
to ML: 
  

					
	Address:	  	Merrill Lynch International
	 	  	Merrill Lynch Financial Centre
	 	  	2 King Edward Street, London EC1A 1HQ
	Attention:	  	Manager, Fixed Income Settlements
	Facsimile No.:	  	44 207 995 2004    Telephone No.: 44 207 995 3769

  
 (For all purposes) 

 
 Additionally, a copy of all notices pursuant to Sections 5, 6, and 7 as well as any
changes to Counterparty’s address, telephone number or facsimile number should be sent to: 
  
 GMI Counsel 
 Merrill Lynch World
Headquarters 
 4 World Financial Center 
 New York, New York 10080 
 Attention: Global Equity Derivatives 
 Facsimile No.: 212 449-6576    Telephone No.: 212 449-6309 
  
 Address for notices or communications to Counterparty for all purposes: 
  
 The Pantry, Inc. 
 1801 Douglas Drive 
 Sanford, NC 27331

 Attention: Daniel Kelly 
 Facsimile No.: (919) 774-3329     Telephone No.: (919) 774-6700 ext. 5202 
  
 with a copy to: 
  
 Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. 
 Post Office Box 2611 
 Raleigh, NC 27602-2611 
 Attention: Carl Patterson 
 Facsimile No.:
(919) 821-6800    Telephone No.: (919) 821-1220 
  

 10 

 Process Agent: For the purpose of Section 13(c) of the Agreement, ML
appoints as its process agent: 
  
 Merrill Lynch, Pierce,
Fenner & Smith Incorporated 
 222 Broadway, 16th Floor 
 New York, NY 10038 
 Attention: Litigation Department 
  
 Counterparty does not appoint a Process Agent. 
  
 Multibranch Party. For the purpose of Section 10(c) of the Agreement: Neither ML nor Counterparty is a Multibranch Party. 
  
 Calculation Agent. The Calculation Agent is ML, whose judgments, determinations and
calculations in this Transaction and any related hedging transaction between the parties shall be made in good faith and in a commercially reasonable manner. 
  
 Credit Support Document. 
  
 ML: Guarantee of Merrill Lynch & Co., Inc. (“ML&Co.”) in the form attached hereto as Exhibit A. 
  
 Counterparty: Not Applicable 
  
 Credit Support Provider. 
  
 With respect to ML: ML&Co. and with respect to
Counterparty, Not Applicable. 
  
 Governing Law. This
Confirmation will be governed by, and construed in accordance with, the substantive laws of the State of New York. 
  
 Netting of Payments. The provisions of Section 2(c) of the Agreement shall not be applicable to this Transaction; provided, however, that with
respect to this Agreement or any other ISDA Master Agreement between the parties, any Share delivery obligations on any day of Counterparty, on the one hand, and ML, on the other hand, shall be netted. The resulting Share delivery obligation of a
party upon such netting shall be rounded down to the nearest number of whole Shares, such that neither party shall be required to deliver any fractional Shares. 
  

Accuracy of Specified Information. Section 3(d) of the Agreement is hereby amended by adding in the third line thereof after the word
“respect” and before the period the words “or, in the case of audited or unaudited financial statements or balance sheets, a fair presentation of the financial condition of the relevant person.” 
  
 Basic Representations. Section 3(a) of the Agreement is hereby amended by
the deletion of “and” at the end of Section 3(a)(iv); the substitution of a semicolon for the period at the end of Section 3(a)(v) and the addition of Sections 3(a)(vi), as follows: 
  
 Eligible Contract Participant; Line of Business. It is an
“eligible contract participant” as defined in the Commodity Futures Modernization Act of 2000 and it has entered into this Confirmation and this Transaction in connection with its business or a line of business (including financial
intermediation), or the financing of its business. 
  

 11 

 Amendment of Section 3(a)(iii). Section 3(a)(iii) of the
Agreement is modified to read as follows: 
  
 No Violation or
Conflict. Such execution, delivery and performance do not materially violate or conflict with any law known by it to be applicable to it, any provision of its constitutional documents, any order or judgment of any court or agency of government
applicable to it or any of its assets or any material contractual restriction relating to Specified Indebtedness binding on or affecting it or any of its assets. 
  
 Amendment of Section 3(a)(iv). Section 3(a)(iv) of the Agreement is modified by inserting the following at the
beginning thereof: 
  
 “To such party’s best
knowledge,” 
  
 Additional Representations: 
  
 Counterparty Representations. Counterparty (i) has such knowledge and experience
in financial and business affairs as to be capable of evaluating the merits and risks of entering into this Transaction; (ii) has consulted with its own legal, financial, accounting and tax advisors in connection with this Transaction; and
(iii) is entering into this Transaction for a bona fide business purpose to hedge risks related to the Reference Notes. 
  
 Counterparty is not and has not been the subject of any civil proceeding of a judicial or administrative body of competent jurisdiction that could reasonably be expected
to impair materially Counterparty’s ability to perform its obligations hereunder. 
  
 Counterparty will by the next succeeding Business Day notify ML upon obtaining knowledge of the occurrence of any event that would constitute an Event of Default, a Potential Event of Default or a Potential Adjustment Event. 
  
 As of the date hereof, Counterparty is not insolvent.

  
 Acknowledgements: 
  
 (1) The parties acknowledge and agree that there are no other representations, agreements or
other undertakings of the parties in relation to this Transaction, except as set forth in this Confirmation. 
  
 (2) The parties hereto intend for: 
  
 (a) this Transaction to be a “securities contract” as defined in Section 741(7) of Title 11 of the United States Code (the “Bankruptcy Code”), qualifying for the protections under Section 555 of
the Bankruptcy Code; 
  
 (b) a party’s right to liquidate
this Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as defined in the Bankruptcy Code; and 
  
 (c) all payments for, under or in connection with this Transaction, all
payments for the Shares and the transfer of such Shares to constitute “settlement payments” as defined in the Bankruptcy Code. 
  
 Amendment of Section 6(d)(ii). Section 6(d)(ii) of the Agreement is modified by deleting the words “on the day” in the
second line thereof and substituting therefor “on the day that is three Local Business Days after the day”. Section 6(d)(ii) is further modified by deleting the words “two Local Business Days” in the fourth line
thereof and substituting therefor “three Local Business Days.” 
  
 Amendment of Definition of Reference Market-Makers. The definition of “Reference Market-Makers” in Section 14 is hereby amended by adding in clause (a) after the word “credit” and before the word
“and” the words “or to enter into transactions similar in nature to Transactions.” 
  
 Consent to Recording. Each party consents to the recording of the telephone conversations of trading and marketing personnel of the parties and their Affiliates in connection with this Confirmation. To the
extent that one 

  

 12 

 
party records telephone conversations (the “Recording Party”) and the other party does not (the Non-Recording Party”), the Recording Party
shall in the event of any dispute, make a complete and unedited copy of such party’s tape of the entire day’s conversations with the Non-Recording Party’s personnel available to the Non-Recording Party. The Recording Party’s
tapes may be used by either party in any forum in which a dispute is sought to be resolved and the Recording Party will retain tapes for a consistent period of time in accordance with the Recording Party’s policy unless one party notifies the
other that a particular transaction is under review and warrants further retention. 
  
 Disclosure. Each party hereby acknowledges and agrees that ML has authorized Counterparty to disclose this Transaction and any related hedging transaction between the parties if and to the extent that Counterparty reasonably
determines (after consultation with ML) that such disclosure is required by law or by the rules of Nasdaq or any securities exchange. 
  
 Severability. If any term, provision, covenant or condition of this Confirmation, or the application thereof to any party or circumstance, shall be held to be
invalid or unenforceable in whole or in part for any reason, the remaining terms, provisions, covenants, and conditions hereof shall continue in full force and effect as if this Confirmation had been executed with the invalid or unenforceable
provision eliminated, so long as this Confirmation as so modified continues to express, without material change, the original intentions of the parties as to the subject matter of this Confirmation and the deletion of such portion of this
Confirmation will not substantially impair the respective benefits or expectations of parties to this Agreement; provided, however, that this severability provision shall not be applicable if any provision of Section 2,
5, 6 or 13 of the Agreement (or any definition or provision in Section 14 to the extent that it relates to, or is used in or in connection with any such Section) shall be so held to be invalid or unenforceable.

  
 Affected Parties. For purposes of Section 6(e) of the
Agreement, each party shall be deemed to be an Affected Party in connection with Illegality and any Tax Event. 
  

 13 

 Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy
of this Confirmation enclosed for that purpose and returning it to us. 
  
 Very truly yours, 
  
 MERRILL LYNCH
INTERNATIONAL 
  

			
	By:	 	 /s/ Rhonda Lucarelli

	Name:	 	 
	Title:	 	Authorized Signatory
	
	Confirmed as of the date first above written:
	
	THE PANTRY, INC.
		
	By:	 	 /s/ Daniel J. Kelly

	Name:	 	Daniel J. Kelly
	Title:	 	VP/CFO
	
	Acknowledged and agreed as to matters relating to the Agent:
	
	 MERRILL LYNCH, PIERCE, FENNER & SMITH
 INCORPORATED,
     solely in its capacity as Agent hereunder

		
	By:	 	 /s/ Angelina Lopes

	Name:	 	 
	Title:	 	Authorized Signatory

  

 14 

 EXHIBIT A 
  
 GUARANTEE OF MERRILL LYNCH & CO., INC. 
  
 FOR VALUE RECEIVED, receipt of which is hereby acknowledged, MERRILL LYNCH & CO., INC., a corporation duly
organized and existing under the laws of the State of Delaware (“ML & Co.”), hereby unconditionally guarantees to The Pantry, Inc. (the “Company”), the due and punctual payment of any and all amounts payable by Merrill
Lynch International, a company organized under the laws of England and Wales (“ML”), under the terms of the Confirmation of OTC Convertible Note Hedge between the Company and ML, dated as of November 16, 2005 (the
“Confirmation”), including, in case of default, interest on any amount due, when and as the same shall become due and payable, whether on the scheduled payment dates, at maturity, upon declaration of termination or otherwise, according to
the terms thereof. In case of the failure of ML punctually to make any such payment, ML & Co. hereby agrees to make such payment, or cause such payment to be made, promptly upon demand made by the Company to ML & Co.; provided,
however that delay by the Company in giving such demand shall in no event affect ML & Co.’s obligations under this Guarantee. This Guarantee shall remain in full force and effect or shall be reinstated (as the case may be) if at any
time any payment guaranteed hereunder, in whole or in part, is rescinded or must otherwise be returned by the Company upon the insolvency, bankruptcy or reorganization of ML or otherwise, all as though such payment had not been made. 
  
 ML & Co. hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the Confirmation; the absence of any action to enforce the same; any waiver or consent by the Company concerning any provisions thereof; the rendering of any judgment
against ML or any action to enforce the same; or any other circumstances that might otherwise constitute a legal or equitable discharge of a guarantor or a defense of a guarantor. ML & Co. covenants that this guarantee will not be
discharged except by complete payment of the amounts payable under the Confirmation. This Guarantee shall continue to be effective if ML merges or consolidates with or into another entity, loses its separate legal identity or ceases to exist.

  
 ML & Co. hereby waives diligence; presentment;
protest; notice of protest, acceleration, and dishonor; filing of claims with a court in the event of insolvency or bankruptcy of ML; all demands whatsoever, except as noted in the first paragraph hereof; and any right to require a proceeding first
against ML. 
  
 ML & Co. hereby certifies and warrants
that this Guarantee constitutes the valid obligation of ML & Co. and complies with all applicable laws. 
  
 This Guarantee shall be governed by, and construed in accordance with, the laws of the State of New York. 
  
 This Guarantee may be terminated at any time by notice by ML & Co.
to the Company given in accordance with the notice provisions of the Confirmation, effective upon receipt of such notice by the Company or such later date as may be specified in such notice; provided, however, that this Guarantee shall continue in
full force and effect with respect to any obligation of ML under the Confirmation entered into prior to the effectiveness of such notice of termination. 
  
 This Guarantee becomes effective concurrent with the effectiveness of the Confirmation, according to its terms. 
  
 IN WITNESS WHEREOF, ML & Co. has caused this Guarantee to be
executed in its corporate name by its duly authorized representative. 
  

			
	MERRILL LYNCH & CO., INC.
		
	By:	 	 /s/ Patricia Kropiewnicki

	Name:	 	Patricia Kropiewnicki
	Title:	 	Designated Signatory
	Date:	 	November 16, 2005

  

 15 

 

 
  
 COVER STATEMENT 
 CLIENT/COUNTERPARTY RELATIONSHIP 
  
 Dear Client/Counterparty: 
  
 Merrill Lynch is pleased to provide the attached statement of Generic Risks Associated with Over-the-Counter Derivative Transactions under this Cover
Statement that concerns, among other things, the nature of our relationship with you in the context of such transactions. This statement was developed for our new and our ongoing client/counterparties in response to suggestions that OTC derivative
dealers consider taking steps to ensure that market participants utilizing OTC derivatives understand their risk exposures and the nature of their relationships with dealers before they enter into OTC derivative transactions. 
  
 Merrill Lynch (“we”) are providing to you and your organization
(“you”) the attached statement of Generic Risks Associated with Over-the-Counter Derivative Transactions in order to identify, in general terms, certain of the principal risks associated with individually negotiated over-the-counter
(“OTC”) derivative transactions. The attached statement does not purport to identify the nature of the specific market or other risks associated with a particular transaction. 
  
 Before entering into an OTC derivative transaction, you should ensure that you fully understand the terms of the
transaction, relevant risk factors, the nature and extent of your risk of loss and the nature of the contractual relationship into which you are entering. You should also carefully evaluate whether the transaction is appropriate for you in light of
your experience, objectives, financial resources, and other relevant circumstances and whether you have the operational resources in place to monitor the associated risks and contractual obligations over the term of the transaction. If you are
acting as a financial adviser or agent, you should evaluate these considerations in light of the circumstances applicable to your principal and the scope of your authority. 
  
 If you believe you need assistance in evaluating and understanding the terms or risks of a particular OTC derivative
transaction, you should consult appropriate advisers before entering into the transaction. 
  
 Unless we have expressly agreed in writing to act as your adviser with respect to a particular OTC derivative transaction pursuant to terms and conditions specifying the nature and scope of our advisory relationship,
we are acting in the capacity of an arm’s length contractual Counterparty to you in connection with the transaction and not as your financial adviser or fiduciary. Accordingly, unless we have so agreed to act as your adviser, you should not
regard transaction proposals, suggestions or other written or oral communications from us as recommendations or advice or as expressing our view as to whether a particular transaction is appropriate for you or meets your financial objectives.

  
 Finally, we and/or our affiliates may from time to time take
proprietary positions and/or make a market in instruments identical or economically related to OTC derivative transactions entered into with you, or may have an investment banking or other commercial relationship with and access to information from
the issuer(s) of securities, financial instruments, or other interests underlying OTC derivative transactions entered into with you. We may also undertake proprietary activities, including hedging transactions related to the initiation or
termination of an OTC derivative transaction with you, that may adversely affect the market price, rate index or other market factor(s) underlying an OTC derivative transaction entered into with you and consequently the value of the transaction.

  

 16 

 

 
  
 GENERIC RISKS ASSOCIATED WITH

 OVER-THE-COUNTER DERIVATIVE TRANSACTIONS 
  

OTC derivative transactions, like other financial transactions, involve a variety of significant risks. The specific risks presented by a particular OTC derivative
transaction necessarily depend upon the terms of the transaction and your circumstances. In general, however, all OTC derivative transactions involve some combination of market risk, credit risk, funding risk and operational risk. 
  
 Market risk is the risk that the value of a transaction will
be adversely affected by fluctuations in the level or volatility of or correlation or relationship between one or more market prices, rates or indices or other market factors or by illiquidity in the market for the relevant transaction or in a
related market. 
  
 Credit risk is the risk that a
Counterparty will fail to perform its obligations to you when due. 
  
 Funding risk is the risk that, as a result of mismatches or delays in the timing of cash flows due from or to your counterparties in OTC derivative transactions or related hedging, trading, collateral or other transactions,
you or your Counterparty will not have adequate cash available to fund current obligations. 
  
 Operational risk is the risk of loss to you arising from inadequacies in or failures of your internal systems and controls for monitoring and quantifying the risks and contractual obligations associated
with OTC derivative transactions, for recording and valuing OTC derivative and related transactions, or for detecting human error, systems failure or management failure. 
  
 There may be other significant risks that you should consider based on the terms of a specific transaction. Highly customized OTC derivative
transactions in particular may increase liquidity risk and introduce other significant risk factors of a complex character. Highly leveraged transactions may experience substantial gains or losses in value as a result of relatively small changes in
the value or level of an underlying or related market factor. 
  
 Because the
price and other terms on which you may enter into or terminate an OTC derivative transaction are individually negotiated, these may not represent the best price or terms available to you from other sources. 
  
 In evaluating the risks and contractual obligations associated with a particular OTC
derivative transaction, you should also consider that an OTC derivative transaction may be modified or terminated only by mutual consent of the original parties and subject to agreement on individually negotiated terms. Accordingly, it may not be
possible for you to modify, terminate or offset your obligations or your exposure to the risks associated with a transaction prior to its scheduled termination date. 
  
 Similarly, while market makers and dealers generally quote prices or terms for entering into or terminating OTC derivative transactions and
provide indicative or mid-market quotations with respect to outstanding OTC derivative transactions, they are generally not contractually obligated to do so. In addition, it may not be possible to obtain indicative or mid-market quotations for an
OTC derivative transaction from a market maker or dealer that is not a Counterparty to the transaction. Consequently, it may also be difficult for you to establish an independent value for an outstanding OTC derivative transaction. You should not
regard your Counterparty’s provision of a valuation or indicative price at your request as an offer to enter into or terminate the relevant transaction at that value or price, unless the value or price is identified by the Counterparty as firm
or binding. 
  
 This brief statement does not purport to disclose all of the
risks and other material considerations associated with OTC derivative transactions. You should not construe this generic disclosure statement as business, legal, tax or accounting advice or as modifying applicable law. You should consult your own
business, legal, tax and accounting advisers with respect to proposed OTC derivative transactions and you should refrain from entering into any OTC derivative transaction unless you have fully understood the terms and risks of the transaction,
including the extent of your potential risk of loss. 
  

 17

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