Exhibit 10.1
**FIRST AMENDMENT TO BUSINESS LOAN AGREEMENT**
This First Amendment to Business Loan Agreement (the “Amendment”) is made asof May 7, 2004, between Bank of America, N. A.(“Bank”), and Pacific Sunwear ofCalifornia, Inc., a California corporation (the “Borrower”).
**RECITALS**
     A. Borrower and Bank entered into that certain Business Loan Agreementdated 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 Amendmentshall 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 asfollows:
     “(a) Unused Commitment Fee. The Borrower agrees to pay a feeon any difference between the Commitment and the amount of creditit actually uses, determined by the weighted average creditoutstanding during the specified period. The fee will becalculated at (i) 0.20% per year, if consolidated EBITDA (asdefined in Section 7.3 hereof) is equal to or greater than$100,000,000, or (ii) 0.25% per year, if consolidated EBITDA isless than $100,000,000. The calculation of credit outstandingshall include undrawn amounts of letters of credit and shipsidebonds. The fee will be payable quarterly in arrears untilexpiration of the availability period.”
          2.2 In subsection (c) of Section 7.10 of the Agreement, the first sentenceis amended to read as follows:
     “(c) capital stock repurchases not in excess of (x) FiftyMillion Dollars ($50,000,000) in the aggregate from the date ofthis Agreement through May 6, 2004, or (y) Twenty-Five MillionDollars ($25,000,000) in the aggregate from May 7, 2004 throughthe Expiration Date; provided that, after giving effect to suchstock repurchase (i) No Event of Default under this Agreement hasoccurred and is continuing and (ii) Borrower has not less thanFifty Million Dollars ($50,000,000) in Unencumbered Liquid Assets... . . ”
     3. Representations and Warranties. Borrower hereby represents andwarrants to Bank that: (i) no default specified in the Agreement and no eventwhich with notice or
1

 

lapse of time or both would become such a default has occurred and iscontinuing and has not been previously waived, (ii) the representations andwarranties of Borrower pursuant to the Agreement are true on and as of the datehereof as if made on and as of said date, (iii) the making and performance byBorrower of this Amendment have been duly authorized by all necessary action,and (iv) no consent, approval, authorization, permit or license is required inconnection with the making or performance of the Agreement as amended hereby.
     4. Conditions. This Amendment will be effective when the Bank receivesthe 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, theAgreement shall remain in full force and effect and shall be performed by theparties hereto according to its terms and provisions.
     IN WITNESS WHEREOF, this Amendment has been executed by the parties heretoas 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