exv10w1



 



Exhibit 10.1


THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT




     This Third Amendment to Loan and Security Agreement (the “Third
Amendment”) is made as of this 27th day of October, 2004 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 300 S. Grand Avenue, 3rd Floor, Los Angeles,
California 90071, 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.



WITNESSETH:




     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, and pursuant to a certain Second Amendment to
Loan and Security Agreement dated December 9, 2003 (as the same may have
further been amended from time to time, collectively, 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.	 	Amendment to Article 1. The provisions of Article 1 of the
Agreement are hereby amended by adding the following new definition
thereto:




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     "Third
Amendment Effective Date”: Shall mean October 27, 2004, the effective
date of that certain Third Amendment to Loan and Security Agreement by and
among the Borrower, the Agent, the Co-Agent and the Revolving Credit Lenders.




	3.	 	Amendment to Article 5. Section 5-11 of the Agreement is hereby amended
by inserting the following provision at the end thereof:




     “Notwithstanding the foregoing, for the period commencing as of the Third
Amendment Effective Date through and including December 15,
2004, only, the
Borrower shall maintain Availability of not less than $5 Million at all times:




	4.	 	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 benefits of the
Revolving Credit Lenders continues to secure the existing Liabilities as
well as the Liabilities as amended hereby, and any future Liabilities.
	 
	5.	 	Conditions to Effectiveness. This Third Amendment shall be become
effective upon the satisfaction of the following conditions precedent:




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	 	a.	 	This Third 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.
	 
	 	b.	 	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.
	 
	 	c.	 	All proceedings in connection with the transactions
contemplated by this Third 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 reasonable 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.
	 
	 	d.	 	The Borrower shall have paid all reasonable costs and
expenses of the Agent including, without limitation, all
attorney’s fees and expenses incurred by the Agent in connection
with the Agreement, the Loan Documents, and the preparation,
negotiation and execution of this Third Amendment.





	6.	 	Miscellaneous.





     (a) This Third 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 Third 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 Third 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 Third 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 Third
Amendment.



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



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



	 	 	 	 	 
	

	 	HASTINGS ENTERTAINMENT, INC.

(“Borrower”)
	 
	 	 	 	 
	

	 	By:	 	/s/ John H. Marmaduke
	

	 	 	 	
 
	

	 	Name:
	 	John H. Marmaduke
	

	 	 	 	
 
	

	 	Title:
	 	President & CEO
	

	 	 	 	
 
	 
	 	 	 	 
	

	 	FLEET RETAIL GROUP, INC.
	

	 	(“Agent”)
	 
	 	 	 	 
	

	 	By:	 	/s/ Keith Vercauteren
	

	 	 	 	
 
	

	 	Name:
	 	Keith Vercauteren
	

	 	 	 	
 
	

	 	Title:
	 	Director
	

	 	 	 	
 
	 
	 	 	 	 
	

	 	THE CIT GROUP/BUSINESS CREDIT,
	

	 	INC.
	

	 	(“Co-Agent”)
	 
	 	 	 	 
	

	 	By:	 	/s/ Mike Richman
	

	 	 	 	
 
	

	 	Name:
	 	Mike Richman
	

	 	 	 	
 
	

	 	Title:
	 	Vice President
	

	 	 	 	
 








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