Exhibit
10.1


 


March 5, 2014


 


Trans World Entertainment Corporation, as Lead Borrower

38 Corporate Circle

Albany, New York 12203


 


		Re:	2014 Specified Restricted Payment (as defined below) – Trans World Entertainment
Corporation, et al



 


Ladies and Gentlemen:


 


Reference is made to
that certain Amended and Restated Credit Agreement, dated as of April 15, 2010 (as amended, restated, supplemented or otherwise
modified and in effect from time to time, the “Credit Agreement”), by, among others, Trans World Entertainment
Corporation, Record Town, Inc. (“Record Town”), Record Town USA, LLC, Trans World New York, LLC, Trans World
Florida, LLC, Movies Plus, Inc. and Record Town Utah, LLC (each such Person, individually a “Borrower” and collectively
the “Borrowers”), Media Logic, USA, LLC, (individually a “Facility Guarantor” and collectively
with any other Person now or hereafter party thereto as a Facility Guarantor, the “Facility Guarantors”) (the
Borrowers and the Facility Guarantors are hereinafter referred to as the “Loan Parties”), the Lenders party
thereto from time to time, and Wells Fargo Bank, National Association (as successor to Bank of America, N.A.), as Administrative
Agent and Collateral Agent (in such capacities, the “Agent”), Swingline Lender and Issuing Bank. Capitalized
terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.


 


The Lead Borrower has
advised the Administrative Agent that the Lead Borrower desires to make a Restricted Payment to its shareholders in the amount
of $16,500,000 (the “2014 Specified Restricted Payment”), such amount consisting of cash on hand. Section 6.06(a)
of the Credit Agreement prohibits the making of Restricted Payments except to the extent constituting Permitted Dividends. Absent
the consent of the Required Lenders, the making of the 2014 Specified Restricted Payment would constitute an Event of Default under
Section 7.01(d) as a result of a violation of Section 6.06(a) of the Credit Agreement. Accordingly, the Lead Borrower has requested
that the Administrative Agent and the Required Lenders consent to the making of the 2014 Specified Restricted Payment notwithstanding
the restrictions set forth in Section 6.06(a) of the Credit Agreement. The Administrative Agent and the Required Lenders have agreed
to provide such consent, subject to the terms and conditions hereof.


 


Accordingly, the parties
hereto hereby agree as follows:


 





	1.	Consent.




 


		a.	Subject
to the terms and conditions of this letter agreement (this “Letter Agreement”), the Administrative Agent and
the Lenders hereby consent to the making of the 2014 Specified Restricted Payment. The consent provided herein shall in no way
constitute a modification or waiver of any other obligations of the Loan Parties under the Credit Agreement or any other Loan
Documents, each of






    	 



    	



    





Trans World Entertainment Corporation, as Lead Borrower 


March 5, 2014


Page 2


 








	 	 	which remains in full force
                                         and effect. It is hereby agreed to and understood by the parties that this consent is
                                         a one-time consent related to the making of the 2014 Specified Restricted Payment with
                                         $16,500,000 of cash on hand only and is not an amendment to the Credit Agreement with
                                         respect to any other restrictions on Restricted Payments on any other occasion, nor is
                                         it a waiver of any Default or Event of Default now existing or hereafter arising under
                                         the Credit Agreement. 



 


		b.	Notwithstanding the foregoing, prior to the making of the 2014 Specified
Restricted Payment, each of the following conditions shall be satisfied:



 


		i.	no Default or Event of Default then exists or would arise as a result
of the making of the 2014 Specified Restricted Payment other than as a result of a violation of Section 6.06(a) of the Credit Agreement
as described above,



 


		ii.	(x) at no time during the six (6) month period ending on the date
of the 2014 Specified Restricted Payment shall there have been any Borrowings, and (y) after giving effect to the making of the
2014 Specified Restricted Payment, as projected on a pro-forma basis for the six (6) month period following the making of such
dividend or other distribution, there are no anticipated Borrowings, 



 


		iii.	the 2014 Specified Restricted Payment shall be made in cash utilizing
the Loan Parties’ cash on hand not consisting of Eligible Cash on Hand and not from proceeds of any Borrowings under the
Credit Agreement, and



 


		iv.	the Administrative Agent shall have received evidence of satisfaction
of the conditions contained in clauses (ii) and (iii) above on a basis (including, without limitation, giving due consideration
to results for prior periods) reasonably satisfactory to the Administrative Agent. 



 


	2.	Miscellaneous.	



 


		a.	The Loan Parties represent and warrant that, after giving effect
to this Letter Agreement, no Default or Event of Default now exists and is continuing.



 


		b.	Except as expressly waived or modified herein, all other terms and
conditions of the Credit Agreement and the other Loan Documents remain in full force and effect. This Letter Agreement shall constitute
a Loan Document for all purposes.



 


		c.	This Letter Agreement and the other Loan Documents constitute the
entire contract among the parties relating to the subject matter hereof and supersede any and all contemporaneous or previous agreements
and understandings, oral or written, relating to the subject matter hereof. 



 


		d.	This
Letter Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all






    	 



    	



    



Trans World Entertainment Corporation, as Lead Borrower 


March 5, 2014


Page 3





 


	 	 	 of which when taken
                                         together shall constitute a single contract. Delivery of an executed counterpart of a
                                         signature page of this Letter Agreement by telecopy or other electronic transmission
                                         shall be effective as delivery of a manually executed counterpart of this Letter Agreement.
                                         



 


		e.	Any provision of this Letter Agreement held to be invalid, illegal
or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof, and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.



 


		f.	The Loan Parties represent and warrant that they have consulted with
independent legal counsel of their selection in connection with this Letter Agreement and are not relying on any representations
or warranties of the Agents or the other Credit Parties or their respective counsel in entering into this Letter Agreement.



 


		g.	This Letter Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to the conflicts of laws principles thereof.



 


[SIGNATURE PAGES FOLLOW]





    	 



    	



    






Trans World Entertainment Corporation, as Lead Borrower 


March 5, 2014


Page 4


 


If the foregoing correctly
sets forth our understanding, please indicate your agreement by signing below.


 





	 	Very truly yours,
	 	 
	 	WELLS FARGO BANK, NATIONAL

ASSOCIATION, as Administrative Agent,

Collateral Agent, and a Lender
	 	 
	 	By:	/s/ Peter A. Foley	 
	 	Name:	Peter A. Foley
	 	Title:	Authorized Signatory



 




Signature Page to Letter Agreement regarding
2014 Specified Restricted Payment













    	 



    	



    

Trans World Entertainment Corporation, as Lead Borrower 


March 5, 2014


Page 5



 


The foregoing is acknowledged, agreed and accepted:


 


TRANS WORLD ENTERTAINMENT

 CORPORATION, as Lead Borrower
and as 

a Borrower








 




	By:	/s/ Edwin Sapienza	 
	Name:	Edwin Sapienza	 
	Title:	Corporate Secretary	 








 




RECORD TOWN, INC., as a Borrower


 


	By:	/s/ Edwin Sapienza	 
	Name:	Edwin Sapienza	 
	Title:	Corporate Secretary	 



 




RECORD TOWN USA, LLC, as a 

Borrower


 


	By:	/s/ Edwin Sapienza	 
	Name:	Edwin Sapienza	 
	Title:	Corporate Secretary	 







 







TRANS WORLD NEW YORK, LLC, as a 

Borrower


 


	By:	/s/ Edwin Sapienza	 
	Name:	Edwin Sapienza	 
	Title:	Corporate Secretary	 



 




TRANS WORLD FLORIDA, LLC, as a 

Borrower


 


	By:	/s/ Edwin Sapienza	 
	Name:	Edwin Sapienza	 
	Title:	Corporate Secretary	 



 




Signature Page to Letter Agreement regarding
2014 Specified Restricted Payment













    	 



    	



    

Trans World Entertainment Corporation, as Lead Borrower 


March 5, 2014


Page 6



 


MOVIES PLUS, INC., as a Borrower


 


	By:	/s/ Edwin Sapienza	 
	Name:	Edwin Sapienza	 
	Title:	Corporate Secretary	 





 






RECORD TOWN UTAH, LLC, as a 

Borrower


 


	By:	/s/ Edwin Sapienza	 
	Name:	Edwin Sapienza	 
	Title:	Corporate Secretary	 





 






MEDIA LOGIC USA, LLC, as a Facility


Guarantor


 


	By:	Record Town, Inc., its sole member	 
	 	 	 
	By:	/s/ Edwin Sapienza	 
	Name:	Edwin Sapienza	 
	Title:	Corporate Secretary	 





 


Signature Page to Letter Agreement regarding
2014 Specified Restricted Payment