<PAGE>

                                                                    EXHIBIT 99.3


                   FIRST AMENDMENT TO BUSINESS LOAN AGREEMENT

This First Amendment to Business Loan Agreement (the "Amendment") is made as of
May 7, 2004, between Bank of America, N. A.("Bank"), and Pacific Sunwear of
California, Inc., a California corporation (the "Borrower").

                                    RECITALS

         A.       Borrower and Bank entered into that certain Business Loan
Agreement dated as of January 30, 2004 (the "Agreement").

         B.       Borrower and Bank desire to amend the Agreement as herein
provided.

                                    AGREEMENT

         1.       Definitions. Capitalized terms used but not defined in this
Amendment shall have the meaning given to them in the Agreement.

         2.       Amendments. The Agreement is hereby amended as follows:

                  2.1 Section 3.1(a) of the Agreement is amended in its entirety
to read as follows:

                           "(a) Unused Commitment Fee. The Borrower agrees to
                  pay a fee on any difference between the Commitment and the
                  amount of credit it actually uses, determined by the weighted
                  average credit outstanding during the specified period. The
                  fee will be calculated at (i) 0.20% per year, if consolidated
                  EBITDA (as defined in Section 7.3 hereof) is equal to or
                  greater than $100,000,000, or (ii) 0.25% per year, if
                  consolidated EBITDA is less than $100,000,000. The calculation
                  of credit outstanding shall include undrawn amounts of letters
                  of credit and shipside bonds. The fee will be payable
                  quarterly in arrears until expiration of the availability
                  period."

                  2.2 In subsection (c) of Section 7.10 of the Agreement, the
first sentence is amended to read as follows:

                           "(c) capital stock repurchases not in excess of (x)
                  Fifty Million Dollars ($50,000,000) in the aggregate from the
                  date of this Agreement through May 6, 2004, or (y) Twenty-Five
                  Million Dollars ($25,000,000) in the aggregate from May 7,
                  2004 through the Expiration Date; provided that, after giving
                  effect to such stock repurchase (i) No Event of Default under
                  this Agreement has occurred and is continuing and (ii)
                  Borrower has not less than Fifty Million Dollars ($50,000,000)
                  in Unencumbered Liquid Assets. . . . "

         3.       Representations and Warranties. Borrower hereby represents and
warrants to Bank that: (i) no default specified in the Agreement and no event
which with notice or


                                       1
<PAGE>

lapse of time or both would become such a default has occurred and is continuing
and has not been previously waived, (ii) the representations and warranties of
Borrower pursuant to the Agreement are true on and as of the date hereof as if
made on and as of said date, (iii) the making and performance by Borrower of
this Amendment have been duly authorized by all necessary action, and (iv) no
consent, approval, authorization, permit or license is required in connection
with the making or performance of the Agreement as amended hereby.

         4.       Conditions. This Amendment will be effective when the Bank
receives the following items, in form and content acceptable to the Bank:

                  4.1 This Amendment duly executed by all parties hereto.

                  4.2 Payment of all out-of-pocket expenses, including
attorneys' fees, incurred by the Bank in connection with the preparation of this
Amendment.

         5.       Effect of Amendment. Except as provided in this Amendment, the
Agreement shall remain in full force and effect and shall be performed by the
parties hereto according to its terms and provisions.

         IN WITNESS WHEREOF, this Amendment has been executed by the parties
hereto as of the date first above written.


                                          BANK OF AMERICA, N.A.

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


                                          PACIFIC SUNWEAR OF CALIFORNIA, INC.

                                          By:
                                              ----------------------------------
                                          Name: Greg Weaver
                                          Title: Chairman and Chief
                                                 Executive Officer

                                          By:
                                              ----------------------------------
                                          Name: Carl Womack
                                          Title: Chief Financial Officer


                                       2