<PAGE>
                                                                   EXHIBIT 10.21

                SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT

         This Second Amendment to Loan and Security Agreement (the "SECOND
AMENDMENT") is made as of this 9th day of December, 2003 by and among:

         Fleet Retail Group, Inc. (formerly known as Fleet Retail Finance Inc.)
(the "AGENT"), a Delaware corporation with its principal executive offices at 40
Broad Street, Boston, Massachusetts, for the Revolving Credit Lenders party to
the Agreement (defined below), and

         The CIT Group/Business Credit, Inc. (the "CO-AGENT"), a New York
corporation with offices at 5420 LBJ Freeway (Suite 200), Dallas, Texas, and

         The Revolving Credit Lenders party to the Agreement, and

         Hastings Entertainment, Inc. (the "BORROWER"), a Texas corporation with
its principal executive offices at 3601 Plains Boulevard, Amarillo, Texas 79102
in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.

                              W I T N E S S E T H:

         WHEREAS, on August 29, 2000, the Agent, the Co-Agent, the Revolving
Credit Lenders and the Borrower entered in a certain Loan and Security Agreement
which was amended pursuant to a certain First Amendment to Loan and Security
Agreement dated August 23, 2002 (as amended and in effect, the "AGREEMENT"); and

         WHEREAS, the Agent, the Co-Agent, the Revolving Credit Lenders and the
Borrower desire to modify certain provisions of the Agreement as set forth
herein.

         NOW, THEREFORE, it is hereby agreed among the Agent, the Co-Agent, the
Revolving Credit Lenders and the Borrower as follows:

         1.       Capitalized Terms. All capitalized terms used herein and not
                  otherwise defined shall have the same meaning herein as in the
                  Agreement.

         2.       Amendments to Article 1. The provisions of Article 1 of the
                  Agreement are hereby amended as follows:

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                  (a)      The definition of "Base Margin" is hereby deleted in
                           its entirety, and the following substituted in its
                           stead:

                           "BASE MARGIN": Shall mean as of November 1, 2003
                           through January 31, 2004, one half (.5%) percent
                           (notwithstanding that Average Availability
                           requirements for another Level may have been
                           satisfied). Thereafter, commencing February 1, 2004,
                           and on the first day of each fiscal quarter the Base
                           Margin shall be the following percentages based upon
                           the following criteria:

<TABLE>
<CAPTION>
LEVEL         AVERAGE AVAILABILITY        BASE MARGIN
-----------------------------------------------------
<S>      <C>                              <C>
 I          Greater than $25,000,000         0.00%
-------------------------------------------------
II       Greater than $ 15,000,000 and        .25%
             less than or equal to
                  $25,000,000
-------------------------------------------------
III          less than or equal to             .5%
                  $15,000,000
-------------------------------------------------
</TABLE>

                           On the first day of each fiscal quarter, the Base
                           Margin shall be adjusted based upon the Borrower's
                           aggregate daily Average Availability for the
                           immediately preceding quarter divided by the total
                           number of days in such immediately preceding fiscal
                           quarter. Provided, however, upon the occurrence of an
                           Event of Default, the Base Margin shall be
                           immediately increased to the percentage set forth in
                           Level III above (even if the Average Availability
                           requirements for another Level have been met), and
                           interest shall be determined in the manner set forth
                           in Section 2-11 (f).

                  (b)      The definition of "Libor Margin" is hereby deleted in
                           its entirety, and the following substituted in its
                           stead:

                           "LIBOR MARGIN": Shall mean as of November 1, 2003
                                    through January 31, 2004, two and one
                                    quarter (2.25%) percent (notwithstanding
                                    that Average Availability requirements for
                                    another Level may have been satisfied).
                                    Thereafter, commencing February 1, 2004, and
                                    on the first day of each fiscal quarter the
                                    Libor Margin shall be the following
                                    percentages based upon the following
                                    criteria:

<TABLE>
<CAPTION>
LEVEL           AVERAGE AVAILABILITY          LIBOR MARGIN
----------------------------------------------------------
<S>       <C>                                 <C>
   I          Greater than $25,000,000            1.75%
------------------------------------------------------
  II      Greater than $15,000,000 and less
            than or equal to $25.000,000          2.00%
------------------------------------------------------
  III     less than or equal to $15,000,000       2.25%
------------------------------------------------------
</TABLE>

                           On the first day of each fiscal quarter, the Libor
                           Margin shall be adjusted based upon the Borrower's
                           aggregate daily Average Availability for the
                           immediately preceding fiscal quarter divided by the
                           total number of days in such immediately preceding
                           fiscal quarter. Provided, however, upon the
                           occurrence of an Event of Default, the Libor Margin
                           shall be immediately

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<PAGE>

                           increased to the percentage set forth in Level III
                           above (even if the Average Availability requirements
                           for another Level have been met), and interest shall
                           be determined in the manner set forth in Section 2-11
                           (f).

                  (c)      The definition of "Maturity Date" is hereby deleted
                           in its entirety, and the following substituted in its
                           stead:

                           August 29, 2007

         3.       Amendments to Article 2. The provisions of Article 2 are
                  hereby amended as follows:

                  (a)      Section 2-15 of the Agreement is hereby deleted in
                           its entirety, and the following substituted in its
                           stead:

                           EARLY TERMINATION FEE. In the event that the
                           Termination Date occurs, for any reason (other than
                           an account of a refinancing provided by the Agent or
                           an affiliate of the Agent), prior to December 9,
                           2004, the Borrower shall pay to the Agent, for the
                           benefit of the Revolving Credit Lenders, the
                           "REVOLVING CREDIT EARLY TERMINATION FEE" (so referred
                           to herein) equal to one percent of the Revolving
                           Credit Ceiling.

         4.       Amendment Fee. As compensation for the commitments of the
                  Revolving Credit Lenders to enter into this Second Amendment
                  with the Borrower and to continue to make loans and advances
                  to the Borrower and as compensation for such Revolving Credit
                  Lenders' respective maintenance of sufficient funds available
                  for such purpose, such Revolving Credit Lenders have earned an
                  Amendment Fee (the "AMENDMENT FEE") in the amount of
                  $160,000.00 which shall be due and payable upon the execution
                  of this Second Amendment by the Borrower. The Amendment Fee
                  shall be deemed fully earned upon the execution hereof and
                  shall not be subject to refund or rebate under any
                  circumstances.

         5.       Ratification of Loan Documents. Except as provided herein, all
                  terms and conditions of the Agreement and the other Loan
                  Documents remain in full force and effect. The Borrower hereby
                  ratifies, confirms, and reaffirms all representations,
                  warranties, and covenants contained therein and hereby
                  represents that no Events of Default exist under the Loan
                  Documents. The Borrower further ratifies and confirms that any
                  and all Collateral previously granted to the Agent for the
                  ratable benefit of the Revolving Credit Lenders continues to
                  secure the existing Liabilities as well as the Liabilities as
                  amended hereby, and any future Liabilities.

         6.       Conditions to Effectiveness. This Second Amendment shall be
                  become effective upon the satisfaction of the following
                  conditions precedent:

                  (a)      This Second Amendment shall have been duly executed
                           and delivered by each of the Borrower, the Revolving
                           Credit Lenders and the Agent and shall be in full
                           force and effect.

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<PAGE>

                  (b)      The Borrower shall have paid to the Agent the
                           Amendment Fee.

                  (c)      The Borrower shall have delivered to the Agent its
                           Secretary's Certificate with certified copies of (i)
                           Incumbency Certificate; (ii) Specimen Signatures; and
                           (iii) Resolutions.

                  (d)      All proceedings in connection with the transactions
                           contemplated by this Second Amendment and all
                           documents incident thereto shall be reasonably
                           satisfactory in substance and form to the Agent, and
                           the Agent shall have received all information and
                           such counterpart originals or certified or other
                           copies of such documents as the Agent may reasonably
                           request. Further, the Borrower shall have delivered
                           to the Agent such additional documents which the
                           Agent may reasonably request, including, without
                           limitation, a ratification by each guarantor of their
                           respective guaranties.

                  (e)      The Borrower shall have paid all reasonable costs and
                           expenses of the Agent including, without limitation,
                           all attorneys' fees and expenses incurred by the
                           Agent in connection with the Agreement, the Loan
                           Documents, and the preparation, negotiation and
                           execution of this Second Amendment.

         7.       Miscellaneous.

                           (a)      This Second Amendment may be executed in
                  several counterparts and by each party on a separate
                  counterpart, each of which when so executed and delivered
                  shall be an original, and all of which together shall
                  constitute one instrument.

                           (b)      This Second Amendment expresses the entire
                  understanding of the parties with respect to the transactions
                  contemplated hereby. No prior negotiations or discussions
                  shall limit, modify, or otherwise affect the provisions
                  hereof.

                           (c)      Any determination that any provision of this
                  Second Amendment or any application hereof is invalid, illegal
                  or unenforceable in any respect and in any instance shall not
                  effect the validity, legality, or enforceability of such
                  provision in any other instance, or the validity, legality or
                  enforceability of any other provisions of this Second
                  Amendment.

                           (d)      The Borrower shall pay on demand all costs
                  and expenses of the Agent, including, without limitation,
                  reasonable attorneys' fees in connection with the preparation,
                  negotiation, execution and delivery of this Second Amendment.

                           (e)      The Borrower warrants and represents that
                  the Borrower has consulted with independent legal counsel of
                  the Borrower's selection in connection

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                  with this Second Amendment and is not relying on any
                  representations or warranties of any Revolving Credit Lender
                  or the Agent or their respective counsel in entering into this
                  Second Amendment.

                           (f)      The Borrower acknowledges and agrees that
                  the Borrower does not have any claims, counterclaims, offsets,
                  or defenses against any Revolving Credit Lender or the Agent
                  directly or indirectly relating to the Borrower's relationship
                  with, and/or the Borrower's Liabilities, and to the extent
                  that the Borrower has or ever had any such claims,
                  counterclaims, offsets, or defenses against any of the
                  Revolving Credit Lenders or the Agent, the Borrower
                  affirmatively WAIVES the same. The Borrower, and for its
                  representatives, successors and assigns, hereby RELEASES, and
                  forever discharges the Revolving Credit Lenders and the Agent
                  and their respective officers, directors, agents, servants,
                  attorneys, and employees, and their respective
                  representatives, successors and assigns, of, to, and from all
                  known debts, demands, actions, suits, accounts, covenants,
                  contracts, agreements, damages, and any and all claims,
                  demands, or liabilities whatsoever, of every name and nature,
                  both at law and in equity through the date hereof.

                  [remainder of page left intentionally blank]

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        IN WITNESS WHEREOF, the parties have hereunto caused this Second
Amendment to be executed and their seals to be hereto affixed as of the date
first above written.

                                       HASTINGS ENTERTAINMENT, INC.
                                       ("Borrower")

                                       BY: /s/ Dan Crow
                                           -------------------------------------

                                       Name : Dan Crow

                                       Title: CFO

                                       FLEET RETAIL GROUP, INC.
                                       ("Agent")

                                       BY: /s/ Keith Vercauteren
                                           -------------------------------------

                                       Name: Keith Vercauteren

                                       Title: Vice President

                                       THE CIT GROUP/BUSINESS CREDIT, INC.
                                       ("Co-Agent")

                                       BY: /s/ Mike Richman
                                           -------------------------------------

                                       Name: Mike Richman

                                       Title: Vice President

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<PAGE>

                                       The "Revolving Credit Lenders"

                                       FLEET RETAIL GROUP, INC.

                                       By: /s/ Keith Vercauteren
                                           -------------------------------------

                                       Name: Keith Vercauteren

                                       Title: Vice President

                                       THE CIT GROUP/BUSINESS CREDIT, INC.

                                       By: /s/ Mike Richman
                                           -------------------------------------

                                       Name: Mike Richman

                                       Title: Vice President

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