Exhibit 10.1

 

THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

This THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is made
as of this 5th day of September, 2003, by and among FLEET CAPITAL CORPORATION,
as lender (together with its successors and assigns, the “Lender”), ELECTRONICS
BOUTIQUE OF AMERICA INC., as borrower (the “Borrower”), and Electronics Boutique
Holdings Corp. (“EB Holdings”) and EB Investment Corp. (together with EB
Holdings, the “Guarantors” and each individually as a “Guarantor”; the
Guarantors and the Borrower being sometimes referred to herein collectively as
the “Credit Parties” and each individually as a “Credit Party”).

 

RECITALS

 

WHEREAS, the Borrower and the Lender are parties to a certain Loan and Security
Agreement, dated as of March 16, 1998 (as amended, modified or supplemented from
time to time, the “Loan Agreement”) pursuant to which the Lender has agreed to
extend credit to the Borrower subject to the terms and conditions contained
therein;

 

WHEREAS, the Borrower has requested that the Lender amend certain provisions of
the Loan Agreement; and

 

WHEREAS, the Lender is willing to amend certain provisions of the Loan
Agreement, but only on the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, based on these premises, and in consideration of the mutual
promises, representations and warranties, covenants and conditions contained
herein and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, and intending to be legally bound, the parties
hereto hereby agree as follows:

 

Definitions

 

Capitalized terms used herein, and not otherwise defined herein, shall have the
meanings assigned to them in the Loan Agreement.

 

Acknowledgment of Obligations

 

Each of the Credit Parties acknowledges and agrees that, as of September 4,
2003, the Borrower is unconditionally liable to the Lender under the Loan
Agreement and each of the other Loan Documents for Eight Hundred Sixty-Six
Thousand Six Hundred Fifty-Six and 60/100 Dollars ($866,656.60) representing the
outstanding LC Amount (no cash Revolving Credit Loans being presently
outstanding), plus all expenses incurred by the Lender through the Effective
Date, including, without limitation reasonable attorneys’ fees and expenses, and
that, as of the Effective Date, the Borrower has no defenses, counterclaims or
rights of setoff or recoupment with respect to the foregoing obligations.  Each
of the Credit Parties acknowledges and agrees that (i) Borrower has from time to
time requested that Lender arrange for its affiliate, Fleet Bank, to provide
Borrower with one or more Bank Products, (ii) Lender has arranged, and may, in
its sole discretion, in the future arrange, for Fleet Bank or its affiliates to
provide Borrower with such Bank Products with the express understanding that all
Bank Product Agreements constitute part of the Loan Documents and all Bank
Product Obligations constitute part of the Obligations secured by a continuing
security interest in the Collateral, and (iii) as of the Effective Date, the
Borrower is unconditionally liable to the Lender for all payments and other
obligations incurred by the Borrower with respect to the Bank Product Agreements
(the exposure of Fleet Bank and its affiliates thereunder being underwritten by
the Lender on behalf of the Borrower), and that, as of the Effective Date, the
Borrower has no defenses, counterclaims or rights of setoff or recoupment with
respect to such obligations. Each of the Credit Parties hereby ratifies and
confirms its obligations under the Loan Documents to which it is a party and
hereby acknowledges and agrees that

 

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each of the Loan Documents to which it is a party remains in full force and
effect. Each Guarantor hereby ratifies and confirms its obligations under its
surety agreement and the other Loan Documents to which it is a party and hereby
acknowledges and agrees that, as of the Effective Date, it has no defenses,
counterclaims or rights of setoff or recoupment with respect to its obligations
thereunder. Lender hereby ratifies and confirms that pursuant to Section 4 of
that certain Second Amendment to Loan and Security Agreement, dated as of July,
23, 1998 (the “Second Amendment”), among the Lender, the Borrower and The
Electronic Boutique, Inc. (“EB”), EB has been released from all Obligations. 
Lender further agrees that, effective as of the Effective Date, Elbo is hereby
released from all Obligations (it being acknowledged and agreed by each Credit
Party that such release shall not impair or limit any of its liabilities or
Obligations under the Loan Documents).

 

Amendments and Modifications

 

All of the following amendments to the Loan Agreement are effective as of the
Effective Date:

 

Subsection 1.1 of the Loan Agreement is amended by inserting the following words
at the end of the last line thereof:

 

“Lender shall have the right from time to time to establish and adjust (i)
reserves in such amounts, and with respect to such matters, as Lender shall deem
necessary or appropriate, under the Borrowing Base, including, without
limitation, with respect to (A) price adjustments, damages, unearned discounts,
returned products or other matters for which credit memoranda are issued in the
ordinary course of Borrower’s business; (B) shrinkage, spoilage and obsolescence
of Inventory; (C) slow moving Inventory; (D) other sums chargeable against
Borrower’s Loan Account as Revolving Credit Loans under any section of this
Agreement; (E) amounts owing by Borrower to any Person to the extent secured by
a Lien on, or trust over, any Property of Borrower; and (F) such other matters,
events, conditions or contingencies as to which Lender, in its sole credit
judgment, determines reserves should be established from time to time hereunder;
and (ii) reserves against Availability with respect to Bank Products
(collectively, the “Bank Product Reserves”) in such amounts as Lender shall deem
necessary or appropriate based upon Lender’s determination of the credit
exposure of the then extant Bank Products.”

 

Notwithstanding anything to the contrary contained in Subsection 1.4 of the Loan
Agreement, if requested by Borrower, Lender may, in its sole discretion, issue
one or more Letters of Credit or LC Guaranties related thereto with expiration
dates that are later than 30 days prior to the scheduled Maturity Date.

 

Subsection 3.1.4 of the Loan Agreement is amended by inserting the following
words at the end of the last line thereof:

 

“All calculations of the Borrowing Base in connection with the preparation of
any Borrowing Base Certificate shall originally be made by Borrower and
certified to Lender; provided, that Lender shall have the right to review and
adjust, in the exercise of its reasonable credit judgment, any such calculation
after giving notice thereof to Borrower, (1) to reflect its reasonable estimate
of declines in value of any of the Collateral described therein, and (2) to the
extent that such calculation is not in accordance with this Agreement.”

 

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Subsection 3.4 of the Loan Agreement is amended by deleting the last two
sentences thereof in their entirety and replacing the same with the following
sentence:

 

“If as the result of the collections of Accounts as authorized by
Subsection 6.2.2 hereof or the cash management arrangements described in this
Subsection 6.6 hereof, a credit balance exists in the Loan Account, such credit
balance shall not accrue interest in favor of Borrower, but shall be remitted to
the Disbursement Account at any time or times for so long as no Default or Event
of Default exists, provided that Lender, at its option, may at any time offset
such credit balance against any of the Obligations.”

 

Notwithstanding anything to the contrary contained in Subsections 4.2.2 or
10.3.6 of the Loan Agreement, to the extent Borrower is required to deposit
funds with Lender in respect of the LC Amount, such deposit shall be in an
amount not less than one hundred fifteen percent (115%) of the LC Amount.

 

Section 4 of the Loan Agreement is amended by adding new Subsection 4.2.5, which
shall read as follows:

 

“4.2.5                  Bank Product Obligations.  Without limiting the
generality of anything contained in this Section 4, on the date of termination
of this Agreement, at Lender’s option, all Bank Product Obligations, as
calculated by Fleet Bank or its affiliates in a good faith and commercially
reasonable manner, shall become due and payable without notice or demand. 
Alternatively, if acceptable to Lender, Borrower may provide cash collateral in
an amount satisfactory to Lender to be held by Lender with respect to and to
secure the then extant Bank Product Obligations.”

 

Subsection 5.1 of the Loan Agreement is amended by deleting clause (v) thereof
in its entirety and replacing the same with the following:

 

“(v) General Intangibles (including, without limitation, Software and Payment
Intangibles); Investment Property; Chattel Paper; Deposit Accounts;
Letter-of-Credit Rights; and Supporting Obligations;”

 

Section 5 of the Loan Agreement is amended by adding new Subsection 5.4, which
shall read as follows:

 

“5.4                           Other Collateral.

 

5.4.1                        Commercial Tort Claims. As of September 5, 2003,
Borrower represents and warrants to Lender that Borrower has no right, title or
interest in any Commercial Tort Claim.  Borrower shall promptly notify Lender in
writing upon incurring or otherwise obtaining a Commercial Tort Claim after
September 5, 2003 against any third party and, upon request of Lender, promptly
enter into an amendment to this Agreement and do such other acts or things
deemed appropriate by Lender to give Lender a first priority, perfected security
interest in any such Commercial Tort Claim subject to no other Liens.

 

5.4.2                        Other Collateral. (a) As of September 5, 2003,
Borrower represents and warrants to Lender that Borrower has no right, title or
interest in any Letter-of-Credit Rights or Electronic Chattel Paper.  Borrower
shall promptly notify Lender in writing upon acquiring or otherwise obtaining
any Collateral after September 5, 2003 consisting of Letter-of-Credit Rights

 

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or Electronic Chattel Paper and, upon the request of Lender, promptly execute
such other documents, and do such other acts or things reasonably deemed
appropriate by Lender to deliver to Lender control with respect to such
Collateral.

 

(b) As of September 5, 2003, Borrower represents and warrants to Lender that
Borrower has no right, title or interest in any Documents or Instruments. 
Borrower shall promptly notify Lender in writing upon acquiring or otherwise
obtaining any Collateral after September 5, 2003 consisting of Documents or
Instruments and, upon the request of Lender, will promptly execute such other
documents, and do such other acts or things reasonably deemed appropriate by
Lender to deliver to Lender possession of such Documents which are negotiable
and Instruments, and, with respect to nonnegotiable Documents, to use its best
efforts (which shall not include litigation) to have such nonnegotiable
Documents issued in the name of Lender.

 

(c) As of September 5, 2003, Borrower represents and warrants to Lender that
Borrower has no right, title or interest in any Investment Property other than
the Investment Property consisting of Voting Stock of its Subsidiaries described
on the entity organizational chart delivered to Lender on or about the same
date.  Without limiting the requirements of Subsection 8.2.9 hereof, Borrower
shall promptly notify Lender in writing upon acquiring or otherwise obtaining
any Collateral after September 5, 2003 consisting of Investment Property and,
upon the request of Lender, promptly execute such other documents, and do such
other acts or things reasonably deemed appropriate by Lender to deliver to
Lender control with respect to such Collateral.”

 

Subsection 6.2.2 of the Loan Agreement is amended by (i) inserting the words “or
Secondary Cash Dominion Trigger Event” after the words “Event of Default” in the
second sentence thereof, and (ii) inserting the words “in accordance with
Subsection 6.6(c) hereof” before the period at the end of the second sentence.

 

Section 6 of the Loan Agreement is amended by adding new Subsection 6.6, which
shall read as follows:

 

“6.6 Cash Management. (a) Subject to the requirements of this Subsection 6.6,
(i) Borrower shall at all times maintain a cash management system substantially
in accordance with its existing cash management system described on Exhibit 6.6
hereto, and (ii) Borrower shall cause all cash receipts of sales of Inventory
and cash collections of Accounts to be deposited promptly after receipt thereof
in the Disbursement Account (defined below) or one or more of the Deposit
Accounts set forth on Exhibit 6.6.  Without limiting the generality of the
foregoing, Borrower shall at all times maintain its sole concentration and
disbursement account (the “Disbursement Account”) with JP Morgan Chase Bank, as
depository bank, unless and until Lender gives its prior written approval (which
shall not be unreasonably withheld) for the establishment of a successor
concentration and disbursement account (in which case such successor account
shall be deemed to be the Disbursement Account and the predecessor account shall
be closed).  As of September 5, 2003, Borrower represents and warrants to Lender
that Borrower has no right, title or interest in any Deposit Accounts

 

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other than the Deposit Accounts described (by account number, depository bank
and account type) on Exhibit 6.6.

 

(b) If and to the extent requested by Lender upon or at any time after the
occurrence of an Initial Cash Dominion Trigger Event, Borrower shall promptly
(but in any event within ten (10) Business Days after such request by Lender)
(i) establish and maintain the Dominion Account with Fleet Bank and execute such
agreements and do such other acts or things deemed appropriate by Lender to
deliver to Lender control with respect to the Dominion Account, (ii) execute
such agreements and do such other acts or things, and cause the applicable
depository bank to execute such agreements and do such other acts or things,
reasonably deemed appropriate by Lender to deliver to Lender control with
respect to the Disbursement Account (which control agreement shall contain a
“standing” instruction consistent with clause (iii) below), and (iii) cause all
funds credited to the Disbursement Account to be transferred, on a daily basis,
to the Dominion Account for application to the Obligations as determined by
Lender.  The requirements described in the foregoing clauses (i), (ii) and (iii)
are collectively referred to herein as the “Initial Cash Dominion Procedures”.

 

(c) In the event that either a Secondary Cash Dominion Trigger Event has
occurred or an Event of Default has occurred and is continuing, if and to the
extent requested by Lender, Borrower shall immediately (i) implement (if not
previously implemented) and maintain the Initial Cash Dominion Procedures, (ii)
implement and maintain a lockbox arrangement satisfactory to Lender at Fleet
Bank, (iii) notify all of its Account Debtors to remit payments in respect of
Collateral directly to the Dominion Account (or the lockbox, as applicable) for
application to the Obligations as determined by Lender, and (iv) execute and
deliver such agreements, and cause all of its Account Debtors that are credit
card issuers or processors to execute and deliver such agreements, in form and
substance reasonably satisfactory to Lender whereby such Accounts Debtors shall
acknowledge Lender’s first priority Lien in the monies due or to become due to
Borrower (including, without limitation, credits and reserves) under the
agreements or arrangements between Borrower and such Account Debtors, and agree
to transfer all such amounts to the Dominion Account.

 

(d) In addition to the foregoing, if requested by Lender upon or at any time
after the occurrence of an Initial Cash Dominion Trigger Event, Borrower shall
also cause all funds credited to each of its other Deposit Accounts (other than
payroll accounts and, in any event, net of fees and chargebacks of the
applicable depository bank) in excess of $25,000, to be transferred to the
Disbursement Account no less frequently than weekly, provided, that if at any
time the funds credited to any such Deposit Account exceed $50,000, such excess
shall be transferred to the Disbursement Account within one (1) Business Day. 
If requested by Lender upon or at any time after the occurrence of a Secondary
Cash Dominion Trigger Event or upon the occurrence and during the continuance of
an Event of Default, Borrower shall also cause all funds credited to each of its
other Deposit Accounts (other than payroll accounts and, in any event, net of
fees and chargebacks of the applicable depository bank) in excess of $10,000, to
be transferred, on a daily basis, to the Dominion Account.

 

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(e) Commencing with the fiscal quarter ending September 30, 2003, so long as
neither the Initial Cash Dominion Trigger Event nor the Secondary Cash Trigger
Event have occurred and no Event of Default has occurred and is continuing,
Borrower shall notify Lender in writing on a semi-annual basis of all Deposit
Accounts acquired or otherwise obtained by Borrower since the last date covered
by Exhibit 6.6 (or any subsequent supplement thereof) by supplementing Exhibit
6.6 hereto; provided, however that if a Initial Cash Trigger Event shall have
occurred, Borrower shall promptly notify Lender in writing after the end of each
fiscal quarter of all Deposit Accounts acquired or otherwise obtained by
Borrower during such fiscal quarter by supplementing Exhibit 6.6 hereto. 
Notwithstanding the foregoing, in the event that either a Secondary Cash
Dominion Trigger Event has occurred or an Event of Default has occurred and is
continuing, Borrower shall promptly notify Lender in writing upon acquiring or
otherwise obtaining any Deposit Accounts by supplementing Exhibit 6.6 hereto
and, upon the request of Lender, promptly execute such agreements and do such
other acts or things, and cause the applicable depository banks to execute such
agreements and do such other acts or things, reasonably deemed appropriate by
Lender to deliver to Lender control with respect to any or all Deposit Accounts
of Borrower.

 

(f) Nothing contained in this Subsection 6.6 is intended to limit or otherwise
modify Lender’s rights and remedies during the existence of an Event of Default,
including, without limitation, Lender’s right to notify Borrower’s Account
Debtors to remit payments in respect of the Collateral directly to Lender and
further including, without limitation, Lender’s right to (i) require Borrower to
cause all funds credited to each of its Deposit Accounts be transferred to the
Dominion Account at the frequency determined by Lender and (ii) to issue
instructions to the depository banks maintaining Borrower’s Deposit Accounts
directing the transfer of all funds credited to such Deposit Accounts to Lender
(upon receipt of which Lender shall be entitled to apply to the Obligations).

 

(g) Borrower acknowledges and agrees that, except as otherwise provided in any
Bank Product Agreements relating to the cash management arrangements described
in this Subsection 6.6, Lender assumes no responsibility for any of such cash
management arrangements.”

 

Subsection 7.1.5 of the Loan Agreement is amended by adding the following
sentence immediately following the second sentence thereof:

 

“Borrower’s state of incorporation or organization, Type of Organization and
Organizational I.D. Number is set forth on Exhibit 7.1.5.  The exact legal name
of Borrower is set forth on Exhibit 7.1.5.”

 

Clause (ii) of Subsection 8.1.3 of the Loan Agreement is amended and restated in
its entirety as follows:

 

“(ii)(A) not later than 45 days after the end of each month, including the last
month of Borrower’s fiscal year, an interim management-prepared operating
statement of Borrower (and, if request by Lender, each other Obligor) as of the
end of such month, in the form previously delivered to Lender (except that each
such operating statement shall also (y) contain a separate line item setting
forth the domestic cash position of EB Finance

 

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Inc., and (z) contain financial information as of the end of such month and for
the portion of the fiscal year then elapsed (setting forth comparative figures
for the corresponding month and period in the prior fiscal year)), certified by
the principal financial officer of Borrower to fairly present the financial
position and results of operations of Borrower (and each other Obligor, if
applicable), and the domestic cash position of EB Finance Inc., for such month
and period; and

 

(B) not later than 45 days after the end of each fiscal quarter, unaudited,
interim financial statements of EB Holdings and its Subsidiaries as of the end
of such quarter, on a consolidated basis, in the form filed with EB Holding’s
Form 10-Q filing with the Securities and Exchange Commission for such quarter;”

 

Clause (v) of Subsection 8.1.3 of the Loan Agreement is amended by deleting the
words “30 days prior to the close” and replacing the same with the words “the
last day of February”.

 

Subsection 8.2 of the Loan Agreement is amended by adding new Subsection 8.2.11,
which shall read as follows:

 

“8.2.11            Structural Changes. Change its state of incorporation or
organization or Type of Organization; nor change its legal name.”

 

Subsection 8.4 of the Loan Agreement (regarding certain stock ownership
requirements for the Kim family with respect to EB Holdings) is deleted in its
entirety.

 

Subsection 11.15 of the Loan Agreement is amended by (i) deleting the word “and”
at the end of clause (iv) of the first sentence thereof, (ii) deleting the
period at the end of clause (v) thereof and replacing the same with a
semi-colon, and (iii) inserting the following words immediately following such
semi-colon:

 

“AND (VI) EXCEPT AS PROHIBITED BY LAW, ANY RIGHT TO CLAIM OR RECOVER ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN,
OR IN ADDITION TO, ACTUAL DAMAGES.”

 

Notwithstanding anything to the contrary contained in the Loan Agreement, all
capitalized terms indicating the Collateral shall have the meanings assigned
thereto in the Code. The definitions of “Account Debtor,” “Aggregate Adjusted
Availability,” “Availability,” “Loan Documents” and “Obligations” contained in
Appendix A to the Loan Agreement are amended and restated in their entirety as
follows:

 

“Account Debtor – any Person who is or may become obligated on or under or on
account of any Account, Chattel Paper or General Intangible.”

 

“Aggregate Adjusted Availability – as of any applicable measurement date, an
amount equal to Availability (less Revolving Credit Loans requested to be made,
and the face amount of Letters of Credit or LC Guaranties requested to be
issued, on such date) minus all sums due and owing to trade creditors which
remain outstanding beyond normal trade terms.”

 

“Availability - the amount of money which Borrower is entitled to borrow from
time to time as Revolving Credit Loans, such amount being the difference derived
when the sum of the principal amount of Revolving Credit Loans then outstanding
(including any amounts which Lender may have paid for the account of Borrower
pursuant to any of the Loan

 

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Documents and which have not been reimbursed by Borrower), plus the LC Amount
and the Bank Product Reserves is subtracted from the lesser of (i) the Maximum
Revolving Credit Amount and (ii) the Borrowing Base.  If such amount is equal to
or greater than the lesser of (i) the Maximum Revolving Credit Amount and (ii)
the Borrowing Base, then Availability is zero (0).”

 

“Loan Documents – the Agreement, the Other Agreements, the Security Documents
and the Bank Product Agreements as each of the same may be amended, modified,
renewed, extended, replaced, restated or substituted from time to time.”

 

“Obligations - all Loans and all other advances, debts, liabilities,
obligations, covenants and duties, together with all interest, fees and other
charges thereon, owing, arising, due or payable from Borrower to Lender, and/or
to Fleet Bank or any affiliate of Fleet Bank, of any kind or nature, present or
future, whether or not evidenced by any note, guaranty or other instrument,
whether arising under the Agreement or any of the other Loan Documents or
otherwise, whether direct or indirect (including those acquired by assignment),
absolute or contingent, primary or secondary, due or to become due, now existing
or hereafter arising and however acquired, including, without limitation, the
Bank Product Obligations.”

 

The definition of “Borrowing Base” contained in Appendix A to the Loan Agreement
is amended by deleting the last five words in clause (a) thereof and replacing
the same with “first-in, first-out basis”. The definition of “Eligible
Inventory” contained in Appendix A to the Loan Agreement is amended by (i)
deleting the word “or” at the end of clause (vii) thereof, (ii) deleting the
period at the end of the clause (viii) thereof and replacing the same with a
semi-colon followed by the word “or” and (iii) inserting a new clause (ix),
which shall read as follows:

 

“(ix) it is subject to any licensing, patent, royalty, trademark, trade name or
copyright agreements with, or rights of, any third parties which would require
the consent of any third party upon the sale or disposition of that Inventory
(including, without limitation, upon the sale or disposition of that Inventory
by Lender following an Event of Default) or the payment of any monies to any
third party upon any such sale or disposition of that Inventory (unless Lender
shall have received one or more “access and use” agreements reasonably
acceptable to Lender from such third parties with respect to such Inventory,
duly executed and delivered by such third parties).”

 

Appendix A to the Loan Agreement is amended by adding (and inserting in
alphabetical order) the following definitions:

 

“ACH Transaction - any cash management or related services (including the
Automated Clearing House processing of electronic funds transfers through the
direct Federal Reserve Fedline system) provided by Fleet Bank or its affiliates
for the account of Borrower.”

 

“Bank Product Agreements - those certain agreements entered into from time to
time by Borrower and those certain agreements entered into from time to time
between Fleet Bank and its affiliates, in each case, in connection with any of
the Bank Products.”

 

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“Bank Product Obligations - all obligations, liabilities, contingent
reimbursement obligations, fees and expenses owing by Borrower to Fleet Bank or
its affiliates pursuant to or evidenced by the Bank Product Agreements and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
and including all such amounts that Borrower is obligated to reimburse to Fleet
Bank or its affiliates.”

 

“Bank Product - any service or facility extended to Borrower by Fleet Bank or
its affiliates including, without limitation: (a) credit cards, (b) credit card
processing services, (c) debit cards, (d) purchase cards, (e) ACH Transactions,
(f) cash management, including controlled disbursement, accounts or services,
and (g) Hedge Agreements.”

 

“Bank Product Reserves - shall have the meaning set forth in Subsection 1.1
hereof.”

 

“Disbursement Account - shall have the meaning set forth in Subsection 6.6(a)
hereof.”

 

“Dominion Account - a special account established by Borrower pursuant to the
Agreement at Fleet Bank and over which Lender shall have sole and exclusive
access and control for withdrawal purposes.”

 

“Fleet Bank – means Fleet National Bank, and references to affiliates of Fleet
Bank shall include Lender.”

 

“Hedge Agreement - any and all transactions, agreements, or documents now
existing or hereafter entered into between Borrower and Fleet Bank or its
affiliates, which provide for an interest rate, credit, commodity or equity
swap, cap, floor, collar, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, or any combination of, or option with
respect to, these or similar transactions, for the purpose of hedging Borrower’s
exposure to fluctuations in interest or exchange rates, loan, credit exchange,
security or currency valuations or commodity prices.”

 

“Initial Cash Dominion Procedures - shall have the meaning set forth in
Subsection 6.6(b) hereof.”

 

“Initial Cash Dominion Trigger Event – the occurrence of one or more of the
following events at any time when 60% of the value of Eligible Inventory,
calculated on the basis of the lower of cost or market on a first-in, first-out
basis, is less than Seventy Million Dollars ($70,000,000): (i) the numerical
average, for any period of three (3) consecutive Business Days, of Availability
is less than or equal to Fifteen Million Dollars ($15,000,000), or (ii) the
numerical average, for any period of three (3) consecutive Business Days, of the
sum of (A) aggregate principal amount of all outstanding Revolving Credit Loans,
plus (B) the outstanding LC Amount, plus (C) the Bank Product Reserve, is
greater than or equal to Thirty-Five Million Dollars ($35,000,000).”

 

“Organizational I.D. Number – with respect to any Person, the organizational
identification number assigned to such Person by the

 

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applicable governmental unit or agency of the jurisdiction of organization of
such Person.”

 

“Secondary Cash Dominion Trigger Event - the occurrence of one or more of the
following events at any time: (i) the numerical average, for any period of three
(3) consecutive Business Days, of Availability is less than or equal to Ten
Million Dollars ($10,000,000), or (ii) the numerical average, for any period of
three (3) consecutive Business Days, of the sum of (A) aggregate principal
amount of all outstanding Revolving Credit Loans, plus (B) the outstanding LC
Amount, plus (C) the Bank Product Reserve, is greater than or equal to Forty
Million Dollars ($40,000,000).”

 

“Type of Organization – with respect to any Person, the kind or type of entity
by which such Person is organized, such as a corporation or limited liability
company.”

 

The Borrower’s disclosure schedules appended to the Loan Agreement are
supplemented by (i) the addition of Schedule 6.6 (Cash Management) attached
hereto, and (ii) the replacement of Schedule 7.1.5 to the Loan Agreement with
Schedule 7.1.5 (Corporate Names, etc.) attached hereto.

 

REPRESENTATIONS AND WARRANTIES; ADDITIONAL COVENANTS

 

In order to induce the Lender to enter into this Amendment, each Credit Party
represents and warrants to the Lender that (i) the execution, delivery and
performance by the Credit Parties of this Amendment and the transactions
contemplated hereby (A) are and will be within the respective corporate powers
of the Credit Parties, (B) have been authorized by all necessary corporate
action on behalf of the Credit Parties, (C) are not in contravention of any
order or decree of any court or governmental unit, or of any law, rule or
regulation to which any Credit Party or any Credit Party’s property is bound,
(D) are not and will not be in conflict with, or result in a breach of or
constitute (with due notice and/or lapse of time) a default under (x) any Credit
Party’s articles of incorporation or bylaws or (y) any indenture, agreement,
contract or undertaking to which any Credit Party is a party or by which any of
them or any of their property is bound, and (E) except for the Liens created
under the Loan Documents in favor of the Lender, will not result in the
imposition of any Lien on any of the properties of any Credit Party; (ii) this
Amendment shall be valid, binding and enforceable against the Credit Parties in
accordance with its terms; and (iii), no Default or Event of Default has
occurred and is continuing and no Default or Event of Default would result from
the execution, delivery or consummation of the transactions contemplated by this
Amendment. On and as of Effective Date, each Credit Party confirms, reaffirms
and restates, and on the date of each request for a Loan or Letter of Credit
each Credit Party shall be deemed to have further confirmed, reaffirmed and
restated, to the Lender the representations and warranties set forth in the Loan
Agreement, as amended hereby, and the other Loan Documents, except to the extent
that such representations and warranties solely relate to a specific earlier
date in which case each Credit Party confirms, reaffirms and restates such
representations and warranties as of such earlier date. The Borrower represents
and warrants to Lender that attached hereto as Exhibit A is a true, correct and
complete entity organizational chart of the Borrower, EB Holdings and their
Subsidiaries, together with a memorandum summarizing the activities and purpose
of each entity within such organizational structure (an “organizational summary
memorandum”).  Borrower agrees to promptly deliver to Lender, in connection with
any future change to the organizational structure reflected in the attached
exhibit, an updated entity organizational chart together with an updated
organizational summary memorandum (it being understood and agreed that any such
change shall be made in compliance with the Loan Agreement and the other Loan
Documents).

 

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EFFECTIVENESS; CONDITIONS PRECEDENT

 

The effectiveness of the amendments and other provisions hereof are subject to
the following conditions precedent, including, where applicable, that the Lender
shall have received the following documents and other items, duly executed,
where appropriate, by authorized representatives of the Credit Parties and the
Lender, as applicable (all such documents and other items must be in form and
substance satisfactory to the Lender):

 

This Amendment (including the Exhibits hereto); Any and all agreements,
instruments and documents required by the Lender to effectuate and implement the
terms hereof and the Loan Documents;

Evidence that the execution, delivery and performance of this Amendment by each
of the Credit Parties have been duly authorized by all necessary action, and
that no amendment or other modification to the articles or certificate of
incorporation or bylaws of any Credit Party has been made since the date of the
original delivery thereof to Lender and that such documents (in the form
delivered to the Lender) remain in full force and effect; and Payment of all
reasonable fees and expenses of Blank Rome LLP, counsel to the Lender, incurred
by the Lender that are outstanding as of the date hereof. The date which all of
the conditions precedent set forth in Section 5(a) hereof shall have been
satisfied or waived is referred to herein as the “Effective Date.”

 

MISCELLANEOUS

 

Except as modified or provided herein or in any other instruments or documents
executed in connection herewith, all terms and conditions of the Loan Agreement
and the other Loan Documents shall remain in effect in accordance with their
original tenor.  Except as otherwise provided herein, each agreement, covenant,
representation and warranty of each of the Credit Parties hereunder shall be
deemed to be in addition to, and not in substitution for, the agreements,
covenants, representations and warranties previously made by such Credit Party.
Each Credit Party hereby agrees to take all such actions and to execute and/or
deliver to the Lender all such documents, assignments, financing statements and
other documents, as the Lender may require from time to time, to effectuate and
implement the purposes of this Amendment and the other Loan Documents, and to
pay or reimburse the Lender for all reasonable attorneys’ fees and expenses
incurred in connection herewith and therewith. Each Credit Party covenants,
confirms and agrees that as security for the repayment of the Obligations of the
Credit Parties under the Loan Documents, the Lender has, and shall continue to
have, a continuing first priority, perfected lien on and security interest in
the Collateral, all whether now owned or hereafter acquired, created or arising,
together with all proceeds, including insurance proceeds thereof, as set forth
in the Loan Agreement and the other Loan Documents, as applicable, subject to no
Liens other than Permitted Liens.  Each Credit Party acknowledges and agrees
that nothing herein contained in any way impairs the Lender’s existing rights
and priority in the Collateral.  The Loan Agreement (as modified by this
Amendment), together with the Loan Documents, contains the entire agreement
among the parties with respect to the transactions contemplated hereby, and
supersedes all negotiations, presentations, warranties, commitments, offers,
contracts and writings prior to the date hereof relating to the subject matters
hereof.  The Loan Agreement (as modified by this Amendment) and the other Loan
Documents may be amended, modified, waived, discharged or terminated only in
accordance with the terms thereof. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW. This
Amendment may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute but one and the same instrument. 
Execution and delivery by facsimile shall bind each of the parties. This
Amendment shall be binding upon and inure to the benefit of each of the Credit
Parties and the Lender and their respective successors, heirs and assigns,
except that no Credit Party may assign or transfer its rights or obligations
hereunder without the prior written consent of the Lender. Any provision hereof
that is prohibited or unenforceable in any jurisdiction shall be, as to such
jurisdiction, ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not

 

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invalidate or render unenforceable such provision in any other jurisdiction. No
rights are intended to be created hereunder for the benefit of any third party
donee, creditor or incidental beneficiary, except that Fleet Bank and its
affiliates shall be entitled to rely on Section 2(b) hereof. The headings of any
section or paragraph of this Amendment are for convenience only and shall not be
used to interpret any provision of this Amendment. EACH PARTY TO THIS AMENDMENT
KNOWINGLY AND INTENTIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF THIS AMENDMENT OR
THE OTHER LOAN DOCUMENTS.

 

*                                                                                        
*                                                                                        
*                                                                                        
*

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.

 

 

ELECTRONICS BOUTIQUE OF AMERICA INC., as the
Borrower

 

 

 

 

 

 

 

By:

/s/ James A. Smith

 

 

Name:

James A. Smith

 

Title:

Senior Vice President and
Chief Financial Officer

 

 

 

 

Electronics Boutique Holdings Corp., as a Guarantor

 

 

 

 

 

 

 

By:

/s/ James A. Smith

 

 

Name:

James A. Smith

 

Title:

Senior Vice President and
Chief Financial Officer

 

 

 

 

 

 

 

EB Investment Corp., as a Guarantor

 

 

 

 

 

 

 

By:

/s/ James A. Smith

 

 

Name:

James A. Smith

 

Title:

Treasurer and Secretary

 

 

 

 

 

 

 

FLEET CAPITAL CORPORATION, as the Lender

 

 

 

 

 

 

 

By:

/s/ Michael Kerneklian

 

 

Name:

Michael Kerneklian

 

Title:

Vice President

 

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