AMENDMENT NO. 2 TO
                           LOAN AND SECURITY AGREEMENT

         THIS AMENDMENT NO. 2 TO LOAN AND SECURITY  AGREEMENT (this "Amendment")
is dated as of September  30, 1998 and is entered into by and among  BankAmerica
Business Credit, Inc. (the "Lender"),  The Great Train Store Partners, L.P. (the
"Borrower"),  and The Great Train  Store  Company,  GTS  Partner,  Inc.  and GTS
Limited Partner,  Inc. as members of the GTS Consolidated Group. All capitalized
terms used herein but not otherwise  defined shall have the meanings ascribed to
them in the Agreement (as hereinafter defined).

                                   WITNESSETH:

         WHEREAS,  the Borrower,  the members of the GTS Consolidated  Group and
the Lender have entered into that certain Amended and Restated Loan and Security
Agreement  dated as of January  27,  1998,  as  amended  and  supplemented  (the
"Agreement"); and

         WHEREAS,  the  Borrower and the members of the GTS  Consolidated  Group
have  requested the Lender to amend the Agreement in certain  respects,  and the
Lender is willing to do so, subject to the terms and conditions stated herein;

         NOW,  THEREFORE,  in consideration of the premises herein contained and
other good and  valuable  consideration,  the receipt and  adequacy of which are
hereby acknowledged, the Borrower, the members of the GTS Consolidated Group and
the Lender hereby agree as follows:

         Section 1. Amendment to the Agreement. The Lender, the Borrower and the
members of the GTS Consolidated  Group agree that the Agreement shall be amended
as follows:

                  (a) The  definition  of  "Applicable  Inventory  Advance Rate"
         contained  in  Section  1 of the  Agreement  is hereby  amended  by the
         addition  of a new  sentence at the end of said  definition,  which new
         sentence shall read in its entirety as follows:

                           "Notwithstanding  anything to the contrary  contained
                  herein, the Applicable  Inventory Advance Rate with respect to
                  Eligible  Inventory  covered by trade  Letters of Credit shall
                  not exceed (a) fifty percent (50%) during the period beginning
                  the last day of each Fiscal Year through and including January
                  31 of each year; and (b) sixty percent (60%) during the period
                  beginning  on  February  1  through  and   including  the  day
                  preceding the last day of each Fiscal Year."

                  (b)  The  definition  of  "Eligible  Inventory"  contained  in
         Section 1 of the  Agreement is hereby  amended by the addition of a new
         sentence at the end of said  definition,  which new sentence shall read
         in its entirety as follows:

                           "Notwithstanding  anything to the contrary  contained
                  herein,  Inventory  that is  ineligible  solely  because  such
                  Inventory is not located at Premises owned or leased (with the
                  appropriate  landlord  waiver) by the  Borrower or on Premises
                  otherwise  reasonably  acceptable to the Lender but that meets
                  all other criteria for eligibility shall be Eligible Inventory
                  if  (i)  such   Inventory  is  in-transit  to  the  Borrower's
                  facilities,  (ii)  such  Inventory  will  be paid  for  upon a
                  presentation of a trade Letter of Credit,  (iii) the Lender is
                  named as a consignee on the applicable bill of lading or other
                  document of title; (iv) the Lender has possession of that bill
                  of lading or other  document of title and has a first priority
                  perfected security interest in the Inventory  in-transit,  and
                  (v) such  Inventory is covered by insurance  acceptable to the
                  Lender."

                  (c) The amount  "$500,000"  appearing in clause (i) of Section
         2.3(a) of the  Agreement  is hereby  deleted  and in lieu  thereof  the
         amount "$3,500,000" is hereby inserted.

                  (d) Section  10.20  of  the  Agreement is  hereby  amended and
         restated to read in its entirety as follows:

                           "10.20  Fixed   Charge   Coverage   Ratio.   The  GTS
                  Consolidated  Group will not permit the ratio of (a) EBITDA to
                  (b) Fixed Charges to be less than the  following  ratios as of
                  the last day of each of the  following  fiscal  quarters  with
                  each calculation based on a trailing 12-month basis:

                        Period                                      Ratio
                        ------                                      -----
                  Third fiscal quarter of 1998                   Not Applicable
                  Fourth fiscal quarter of 1998                  1.5 to 1.0
                  First fiscal quarter of 1999                   1.0 to 1.0
                  Second fiscal quarter of 1999                  1.0 to 1.0
                  Third fiscal quarter of 1999                   1.0 to 1.0
                  Fourth fiscal quarter of 1999, and
                    each fiscal quarter ending thereafter        1.2 to 1.0"

         Section  2.  Consents  and  Reaffirmations.  The  members  of  the  GTS
Consolidated  Group hereby consent to the terms and conditions of this Amendment
and reaffirm  their  obligations  under the Parent  Guaranty  and the  Affiliate
Guaranties  dated as of January  27,  1998 made by such  members in favor of the
Lender,  and  acknowledge  and agree that the Parent  Guaranty and the Affiliate
Guaranties remain in full force and effect.

         Section 3. Conditions.  The  effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent:

                  (a) Amendment.  Fully executed copies of this Amendment signed
         by the Borrower and the members of the GTS Consolidated  Group shall be
         delivered to the Lender.

                  (b) Other  Documents.  The Borrower and the members of the GTS
         Consolidated Group shall have executed and delivered to the Lender such
         other documents and instruments as the Lender may require.

         Section 4. Miscellaneous.

                  (a)   Survival  of   Representations   and   Warranties.   All
         representations  and  warranties  made in the  Agreement  or any  other
         document or documents relating thereto, including,  without limitation,
         any Loan Document  furnished in connection with this  Amendment,  shall
         survive the execution and delivery of this Amendment and the other Loan
         Documents,  and no  investigation  by the Lender or any  closing  shall
         affect the representations and warranties or the right of the Lender to
         rely thereon.

                  (b) Reference to Agreement.  The  Agreement,  each of the Loan
         Documents,  and any and all other agreements,  documents or instruments
         now or hereafter  executed and delivered  pursuant to the terms hereof,
         or pursuant to the terms of the Agreement as amended hereby, are hereby
         amended so that any  reference  therein to the  Agreement  shall mean a
         reference to the Agreement as amended hereby.

                  (c)  Agreement  Remains in Effect.  The Agreement and the Loan
         Documents remain in full force and effect, and each of the Borrower and
         the members of the GTS  Consolidated  Group  ratifies  and confirms its
         agreements  and  covenants  contained  therein.   The  Borrower  hereby
         confirms  that,  after  giving  effect to this  Amendment,  no Event of
         Default or Event exists as of such date.

                  (d)  Severability.  Any provision of this  Amendment held by a
         court of competent  jurisdiction to be invalid or  unenforceable  shall
         not impair or invalidate the remainder of this Amendment and the effect
         thereof  shall be  confined to the  provision  so held to be invalid or
         unenforceable.

                  (e)  APPLICABLE   LAW.  THIS  AMENDMENT  AND  ALL  OTHER  LOAN
         DOCUMENTS  EXECUTED  PURSUANT  HERETO SHALL BE DEEMED TO HAVE BEEN MADE
         AND TO BE PERFORMABLE IN THE STATE OF MISSOURI AND SHALL BE GOVERNED BY
         AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MISSOURI.

                  (f) Successors and Assigns. This Amendment is binding upon and
         shall inure to the benefit of the parties  hereto and their  respective
         successors and assigns;  provided,  however,  that the Borrower and the
         members of the GTS Consolidated Group may not assign or transfer any of
         their  respective  rights or  obligations  hereunder  without the prior
         written consent of the Lender.

                  (g)  Counterparts.  This  Amendment  may be executed in one or
         more counterparts, each of which when so executed shall be deemed to be
         an original,  but all of which when taken together shall constitute one
         and the same instrument.

                  (h) Headings. The headings,  captions and arrangements used in
         this  Amendment  are for  convenience  only and  shall not  affect  the
         interpretation of this Amendment.

                  (i)  Expenses of the  Lender.  The  Borrower  agrees to pay on
         demand (i) all costs and expenses  reasonably incurred by the Lender in
         connection  with the  preparation,  negotiation  and  execution of this
         Amendment and the other Loan Documents executed pursuant hereto and any
         and all subsequent amendments, modifications, and supplements hereto or
         thereto,  including,  without  limitation,  the  costs  and fees of the
         Lender's legal counsel and the allocated cost of the Lender's  in-house
         counsel,  and (ii) all costs and  expenses  reasonably  incurred by the
         Lender in connection with the enforcement or preservation of any rights
         under the Agreement,  this Amendment  and/or the other Loan  Documents,
         including, without limitation, the costs and fees of the Lender's legal
         counsel and the allocated cost of the Lender's in-house counsel.

<PAGE>
                  (j) NO ORAL  AGREEMENTS.  THIS  AMENDMENT,  TOGETHER  WITH THE
         OTHER  LOAN  DOCUMENTS  AS  WRITTEN,  REPRESENTS  THE FINAL AND  ENTIRE
         AGREEMENT  AMONG THE  PARTIES  HERETO  AND MAY NOT BE  CONTRADICTED  BY
         EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
         PARTIES.  THERE ARE NO  UNWRITTEN  ORAL  AGREEMENTS  AMONG THE  PARTIES
         HERETO.

<PAGE>




         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as of the date first written above.

                                  THE GREAT TRAIN STORE PARTNERS, L.P.

                                  By:  GTS PARTNER, INC., its General Partner


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


                                  THE GREAT TRAIN STORE COMPANY


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


                                  GTS PARTNER, INC.


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


                                  GTS LIMITED PARTNER, INC.


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



                                  BANKAMERICA BUSINESS CREDIT, INC.


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