Exhibit 10.1


 


THIRD
AMENDMENT TO LOAN AND SECURITY AGREEMENT


 


This THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”)
is made as of this 5th day of September, 2003, by and among FLEET CAPITAL
CORPORATION, as lender (together with its successors and assigns, the
“Lender”), ELECTRONICS BOUTIQUE OF AMERICA INC., as borrower (the “Borrower”),
and Electronics Boutique Holdings Corp. (“EB Holdings”) and EB Investment Corp.
(together with EB Holdings, the “Guarantors” and each individually as a “Guarantor”;
the Guarantors and the Borrower being sometimes referred to herein collectively
as the “Credit Parties” and each individually as a “Credit Party”).


 


RECITALS


 


WHEREAS, the Borrower and the Lender are parties to a certain Loan and
Security Agreement, dated as of March 16, 1998 (as amended, modified or
supplemented from time to time, the “Loan Agreement”) pursuant to which the
Lender has agreed to extend credit to the Borrower subject to the terms and
conditions contained therein;


 


WHEREAS, the Borrower has requested that the Lender amend certain
provisions of the Loan Agreement; and


 


WHEREAS, the Lender is willing to amend certain provisions of the Loan
Agreement, but only on the terms and subject to the conditions set forth
herein.


 


NOW, THEREFORE, based on these premises, and in consideration of the
mutual promises, representations and warranties, covenants and conditions
contained herein and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, and intending to be legally bound,
the parties hereto hereby agree as follows:


 


Definitions


 


Capitalized terms used herein, and not otherwise defined herein, shall
have the meanings assigned to them in the Loan Agreement.


 


Acknowledgment of Obligations


 


Each of the Credit Parties acknowledges and agrees that, as of
September 4, 2003, the Borrower is unconditionally liable to the Lender
under the Loan Agreement and each of the other Loan Documents for Eight Hundred
Sixty-Six Thousand Six Hundred Fifty-Six and 60/100 Dollars ($866,656.60)
representing the outstanding LC Amount (no cash Revolving Credit Loans being
presently outstanding), plus all expenses incurred by the Lender through the
Effective Date, including, without limitation reasonable attorneys’ fees and
expenses, and that, as of the Effective Date, the Borrower has no defenses,
counterclaims or rights of setoff or recoupment with respect to the foregoing
obligations.  Each of the Credit Parties
acknowledges and agrees that (i) Borrower has from time to time requested that
Lender arrange for its affiliate, Fleet Bank, to provide Borrower with one or
more Bank Products, (ii) Lender has arranged, and may, in its sole discretion,
in the future arrange, for Fleet Bank or its affiliates to provide Borrower
with such Bank Products with the express understanding that all Bank Product
Agreements constitute part of the Loan Documents and all Bank Product
Obligations constitute part of the Obligations secured by a continuing security
interest in the Collateral, and (iii) as of the Effective Date, the Borrower is
unconditionally liable to the Lender for all payments and other obligations
incurred by the Borrower with respect to the Bank Product Agreements (the
exposure of Fleet Bank and its affiliates thereunder being underwritten by the
Lender on behalf of the Borrower), and that, as of the Effective Date, the
Borrower has no defenses, counterclaims or rights of setoff or recoupment with
respect to such obligations. Each of the Credit Parties hereby ratifies and
confirms its obligations under the Loan Documents to which it is a party and
hereby acknowledges and agrees that


 


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each of the Loan Documents to which it is a party remains in full force
and effect. Each Guarantor hereby ratifies and confirms its obligations under
its surety agreement and the other Loan Documents to which it is a party and
hereby acknowledges and agrees that, as of the Effective Date, it has no
defenses, counterclaims or rights of setoff or recoupment with respect to its
obligations thereunder. Lender hereby ratifies and confirms that pursuant to
Section 4 of that certain Second Amendment to Loan and Security Agreement,
dated as of July, 23, 1998 (the “Second Amendment”), among the Lender, the
Borrower and The Electronic Boutique, Inc. (“EB”), EB has been released from
all Obligations.  Lender further agrees
that, effective as of the Effective Date, Elbo is hereby released from all
Obligations (it being acknowledged and agreed by each Credit Party that such
release shall not impair or limit any of its liabilities or Obligations under
the Loan Documents).


 


Amendments and Modifications


 


All of the following amendments to the Loan Agreement are effective as
of the Effective Date:


 


Subsection 1.1 of the Loan Agreement is amended by inserting the
following words at the end of the last line thereof:


 


“Lender shall
have the right from time to time to establish and adjust (i) reserves in such
amounts, and with respect to such matters, as Lender shall deem necessary or
appropriate, under the Borrowing Base, including, without limitation, with
respect to (A) price adjustments, damages, unearned discounts, returned
products or other matters for which credit memoranda are issued in the ordinary
course of Borrower’s business; (B) shrinkage, spoilage and obsolescence of
Inventory; (C) slow moving Inventory; (D) other sums chargeable against
Borrower’s Loan Account as Revolving Credit Loans under any section of
this Agreement; (E) amounts owing by Borrower to any Person to the extent
secured by a Lien on, or trust over, any Property of Borrower; and (F) such
other matters, events, conditions or contingencies as to which Lender, in its
sole credit judgment, determines reserves should be established from time to
time hereunder; and (ii) reserves against Availability with respect to Bank
Products (collectively, the “Bank Product Reserves”) in such amounts as Lender
shall deem necessary or appropriate based upon Lender’s determination of the
credit exposure of the then extant Bank Products.”


 


Notwithstanding anything to the contrary contained in
Subsection 1.4 of the Loan Agreement, if requested by Borrower, Lender
may, in its sole discretion, issue one or more Letters of Credit or LC
Guaranties related thereto with expiration dates that are later than 30 days
prior to the scheduled Maturity Date.


 


Subsection 3.1.4 of the Loan Agreement is amended by inserting the
following words at the end of the last line thereof:


 


“All
calculations of the Borrowing Base in connection with the preparation of any
Borrowing Base Certificate shall originally be made by Borrower and certified
to Lender; provided, that Lender shall have the right to review and adjust, in
the exercise of its reasonable credit judgment, any such calculation after giving
notice thereof to Borrower, (1) to reflect its reasonable estimate of declines
in value of any of the Collateral described therein, and (2) to the extent that
such calculation is not in accordance with this Agreement.”


 


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Subsection 3.4 of the Loan
Agreement is amended by deleting the last two sentences thereof in their
entirety and replacing the same with the following sentence:


 


“If as the result of the
collections of Accounts as authorized by Subsection 6.2.2 hereof or the
cash management arrangements described in this Subsection 6.6 hereof, a
credit balance exists in the Loan Account, such credit balance shall not accrue
interest in favor of Borrower, but shall be remitted to the Disbursement
Account at any time or times for so long as no Default or Event of Default
exists, provided that Lender, at its option, may at any time offset such credit
balance against any of the Obligations.”


 


Notwithstanding anything to the
contrary contained in Subsections 4.2.2 or 10.3.6 of the Loan Agreement, to the
extent Borrower is required to deposit funds with Lender in respect of the LC
Amount, such deposit shall be in an amount not less than one hundred fifteen
percent (115%) of the LC Amount.


 


Section 4 of the Loan Agreement
is amended by adding new Subsection 4.2.5, which shall read as follows:


 


“4.2.5                  Bank Product
Obligations.  Without limiting the
generality of anything contained in this Section 4, on the date of
termination of this Agreement, at Lender’s option, all Bank Product
Obligations, as calculated by Fleet Bank or its affiliates in a good faith and
commercially reasonable manner, shall become due and payable without notice or
demand.  Alternatively, if acceptable to
Lender, Borrower may provide cash collateral in an amount satisfactory to
Lender to be held by Lender with respect to and to secure the then extant Bank
Product Obligations.”


 


Subsection 5.1 of the Loan
Agreement is amended by deleting clause (v) thereof in its entirety and
replacing the same with the following:


 


“(v) General
Intangibles (including, without limitation, Software and Payment Intangibles);
Investment Property; Chattel Paper; Deposit Accounts; Letter-of-Credit Rights;
and Supporting Obligations;”


 


Section 5 of the Loan
Agreement is amended by adding new Subsection 5.4, which shall read as
follows:


 


“5.4                           Other
Collateral.


 


5.4.1                        Commercial
Tort Claims. As of September 5, 2003, Borrower represents and warrants to
Lender that Borrower has no right, title or interest in any Commercial Tort
Claim.  Borrower shall promptly notify
Lender in writing upon incurring or otherwise obtaining a Commercial Tort Claim
after September 5, 2003 against any third party and, upon request of
Lender, promptly enter into an amendment to this Agreement and do such other
acts or things deemed appropriate by Lender to give Lender a first priority,
perfected security interest in any such Commercial Tort Claim subject to no
other Liens.


 


5.4.2                        Other
Collateral. (a) As of September 5, 2003, Borrower represents and warrants
to Lender that Borrower has no right, title or interest in any Letter-of-Credit
Rights or Electronic Chattel Paper. 
Borrower shall promptly notify Lender in writing upon acquiring or
otherwise obtaining any Collateral after September 5, 2003 consisting of
Letter-of-Credit Rights


 


3

















 


or Electronic
Chattel Paper and, upon the request of Lender, promptly execute such other
documents, and do such other acts or things reasonably deemed appropriate by
Lender to deliver to Lender control with respect to such Collateral.


 


(b) As of September 5, 2003, Borrower represents and warrants to
Lender that Borrower has no right, title or interest in any Documents or
Instruments.  Borrower shall promptly
notify Lender in writing upon acquiring or otherwise obtaining any Collateral
after September 5, 2003 consisting of Documents or Instruments and, upon
the request of Lender, will promptly execute such other documents, and do such
other acts or things reasonably deemed appropriate by Lender to deliver to
Lender possession of such Documents which are negotiable and Instruments, and,
with respect to nonnegotiable Documents, to use its best efforts (which shall
not include litigation) to have such nonnegotiable Documents issued in the name
of Lender.


 


(c) As of September 5, 2003, Borrower represents and warrants to
Lender that Borrower has no right, title or interest in any Investment Property
other than the Investment Property consisting of Voting Stock of its
Subsidiaries described on the entity organizational chart delivered to Lender
on or about the same date.  Without
limiting the requirements of Subsection 8.2.9 hereof, Borrower shall
promptly notify Lender in writing upon acquiring or otherwise obtaining any
Collateral after September 5, 2003 consisting of Investment Property and,
upon the request of Lender, promptly execute such other documents, and do such
other acts or things reasonably deemed appropriate by Lender to deliver to
Lender control with respect to such Collateral.”


 


Subsection 6.2.2 of the
Loan Agreement is amended by (i) inserting the words “or Secondary Cash
Dominion Trigger Event” after the words “Event of Default” in the second
sentence thereof, and (ii) inserting the words “in accordance with Subsection 6.6(c)
hereof” before the period at the end of the second sentence.


 


Section 6 of the Loan
Agreement is amended by adding new Subsection 6.6, which shall read as
follows:


 


“6.6 Cash
Management. (a) Subject to the requirements of this Subsection 6.6, (i) Borrower
shall at all times maintain a cash management system substantially in
accordance with its existing cash management system described on Exhibit 6.6
hereto, and (ii) Borrower shall cause all cash receipts of sales of Inventory
and cash collections of Accounts to be deposited promptly after receipt thereof
in the Disbursement Account (defined below) or one or more of the Deposit
Accounts set forth on Exhibit 6.6. 
Without limiting the generality of the foregoing, Borrower shall at all
times maintain its sole concentration and disbursement account (the
“Disbursement Account”) with JP Morgan Chase Bank, as depository bank, unless
and until Lender gives its prior written approval (which shall not be
unreasonably withheld) for the establishment of a successor concentration and
disbursement account (in which case such successor account shall be deemed to
be the Disbursement Account and the predecessor account shall be closed).  As of September 5, 2003, Borrower represents
and warrants to Lender that Borrower has no right, title or interest in any
Deposit Accounts


 


4

















 


other than the
Deposit Accounts described (by account number, depository bank and account
type) on Exhibit 6.6.


 


(b) If and to the extent requested by Lender upon or at any time after
the occurrence of an Initial Cash Dominion Trigger Event, Borrower shall
promptly (but in any event within ten (10) Business Days after such request by
Lender) (i) establish and maintain the Dominion Account with Fleet Bank and
execute such agreements and do such other acts or things deemed appropriate by
Lender to deliver to Lender control with respect to the Dominion Account, (ii)
execute such agreements and do such other acts or things, and cause the
applicable depository bank to execute such agreements and do such other acts or
things, reasonably deemed appropriate by Lender to deliver to Lender control
with respect to the Disbursement Account (which control agreement shall contain
a “standing” instruction consistent with clause (iii) below), and (iii) cause
all funds credited to the Disbursement Account to be transferred, on a daily
basis, to the Dominion Account for application to the Obligations as determined
by Lender.  The requirements described
in the foregoing clauses (i), (ii) and (iii) are collectively referred to
herein as the “Initial Cash Dominion Procedures”.


 


(c) In the event that either a Secondary Cash Dominion Trigger Event
has occurred or an Event of Default has occurred and is continuing, if and to the
extent requested by Lender, Borrower shall immediately (i) implement (if not
previously implemented) and maintain the Initial Cash Dominion Procedures, (ii)
implement and maintain a lockbox arrangement satisfactory to Lender at Fleet
Bank, (iii) notify all of its Account Debtors to remit payments in respect of
Collateral directly to the Dominion Account (or the lockbox, as applicable) for
application to the Obligations as determined by Lender, and (iv) execute and
deliver such agreements, and cause all of its Account Debtors that are credit
card issuers or processors to execute and deliver such agreements, in form and
substance reasonably satisfactory to Lender whereby such Accounts Debtors shall
acknowledge Lender’s first priority Lien in the monies due or to become due to
Borrower (including, without limitation, credits and reserves) under the
agreements or arrangements between Borrower and such Account Debtors, and agree
to transfer all such amounts to the Dominion Account.


 


(d) In addition to the foregoing, if requested by Lender upon or at any
time after the occurrence of an Initial Cash Dominion Trigger Event, Borrower
shall also cause all funds credited to each of its other Deposit Accounts
(other than payroll accounts and, in any event, net of fees and chargebacks of
the applicable depository bank) in excess of $25,000, to be transferred to the
Disbursement Account no less frequently than weekly, provided, that if at any
time the funds credited to any such Deposit Account exceed $50,000, such excess
shall be transferred to the Disbursement Account within one (1) Business
Day.  If requested by Lender upon or at
any time after the occurrence of a Secondary Cash Dominion Trigger Event or
upon the occurrence and during the continuance of an Event of Default, Borrower
shall also cause all funds credited to each of its other Deposit Accounts
(other than payroll accounts and, in any event, net of fees and chargebacks of
the applicable depository bank) in excess of $10,000, to be transferred, on a
daily basis, to the Dominion Account.


 


5

















 


(e) Commencing with the fiscal quarter ending September 30, 2003,
so long as neither the Initial Cash Dominion Trigger Event nor the Secondary
Cash Trigger Event have occurred and no Event of Default has occurred and is
continuing, Borrower shall notify Lender in writing on a semi-annual basis of
all Deposit Accounts acquired or otherwise obtained by Borrower since the last
date covered by Exhibit 6.6 (or any subsequent supplement thereof) by
supplementing Exhibit 6.6 hereto; provided, however that if a Initial Cash
Trigger Event shall have occurred, Borrower shall promptly notify Lender in
writing after the end of each fiscal quarter of all Deposit Accounts acquired
or otherwise obtained by Borrower during such fiscal quarter by supplementing
Exhibit 6.6 hereto.  Notwithstanding the
foregoing, in the event that either a Secondary Cash Dominion Trigger Event has
occurred or an Event of Default has occurred and is continuing, Borrower shall
promptly notify Lender in writing upon acquiring or otherwise obtaining any
Deposit Accounts by supplementing Exhibit 6.6 hereto and, upon the request of
Lender, promptly execute such agreements and do such other acts or things, and
cause the applicable depository banks to execute such agreements and do such
other acts or things, reasonably deemed appropriate by Lender to deliver to
Lender control with respect to any or all Deposit Accounts of Borrower.


 


(f) Nothing contained in this Subsection 6.6 is intended to limit
or otherwise modify Lender’s rights and remedies during the existence of an
Event of Default, including, without limitation, Lender’s right to notify
Borrower’s Account Debtors to remit payments in respect of the Collateral
directly to Lender and further including, without limitation, Lender’s right to
(i) require Borrower to cause all funds credited to each of its Deposit
Accounts be transferred to the Dominion Account at the frequency determined by
Lender and (ii) to issue instructions to the depository banks maintaining
Borrower’s Deposit Accounts directing the transfer of all funds credited to
such Deposit Accounts to Lender (upon receipt of which Lender shall be entitled
to apply to the Obligations).


 


(g) Borrower acknowledges and agrees that, except as otherwise provided
in any Bank Product Agreements relating to the cash management arrangements
described in this Subsection 6.6, Lender assumes no responsibility for any
of such cash management arrangements.”


 


Subsection 7.1.5 of the
Loan Agreement is amended by adding the following sentence immediately
following the second sentence thereof:


 


“Borrower’s
state of incorporation or organization, Type of Organization and Organizational
I.D. Number is set forth on Exhibit 7.1.5. 
The exact legal name of Borrower is set forth on Exhibit 7.1.5.”


 


Clause (ii) of
Subsection 8.1.3 of the Loan Agreement is amended and restated in its
entirety as follows:


 


“(ii)(A) not
later than 45 days after the end of each month, including the last month of Borrower’s
fiscal year, an interim management-prepared operating statement of Borrower
(and, if request by Lender, each other Obligor) as of the end of such month, in
the form previously delivered to Lender (except that each such operating
statement shall also (y) contain a separate line item setting forth the
domestic cash position of EB Finance


 


6

















 


Inc., and (z)
contain financial information as of the end of such month and for the portion
of the fiscal year then elapsed (setting forth comparative figures for the
corresponding month and period in the prior fiscal year)), certified by the
principal financial officer of Borrower to fairly present the financial
position and results of operations of Borrower (and each other Obligor, if
applicable), and the domestic cash position of EB Finance Inc., for such month
and period; and


 


(B) not later
than 45 days after the end of each fiscal quarter, unaudited, interim financial
statements of EB Holdings and its Subsidiaries as of the end of such quarter,
on a consolidated basis, in the form filed with EB Holding’s Form 10-Q filing
with the Securities and Exchange Commission for such quarter;”


 


Clause (v) of
Subsection 8.1.3 of the Loan Agreement is amended by deleting the words
“30 days prior to the close” and replacing the same with the words “the last
day of February”.


 


Subsection 8.2 of the Loan
Agreement is amended by adding new Subsection 8.2.11, which shall read as
follows:


 


“8.2.11            Structural Changes.
Change its state of incorporation or organization or Type of Organization; nor
change its legal name.”


 


Subsection 8.4 of the Loan
Agreement (regarding certain stock ownership requirements for the Kim family
with respect to EB Holdings) is deleted in its entirety.


 


Subsection 11.15 of the
Loan Agreement is amended by (i) deleting the word “and” at the end of clause
(iv) of the first sentence thereof, (ii) deleting the period at the end of
clause (v) thereof and replacing the same with a semi-colon, and (iii) inserting
the following words immediately following such semi-colon:


 


“AND (VI)
EXCEPT AS PROHIBITED BY LAW, ANY RIGHT TO CLAIM OR RECOVER ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES.”


 


Notwithstanding anything to the
contrary contained in the Loan Agreement, all capitalized terms indicating the
Collateral shall have the meanings assigned thereto in the Code. The
definitions of “Account Debtor,” “Aggregate Adjusted Availability,”
“Availability,” “Loan Documents” and “Obligations” contained in Appendix A to
the Loan Agreement are amended and restated in their entirety as follows:


 


“Account
Debtor – any Person who is or may become obligated on or under or on account of
any Account, Chattel Paper or General Intangible.”


 


“Aggregate
Adjusted Availability – as of any applicable measurement date, an amount equal
to Availability (less Revolving Credit Loans requested to be made, and the face
amount of Letters of Credit or LC Guaranties requested to be issued, on such
date) minus all sums due and owing to trade creditors which remain outstanding
beyond normal trade terms.”


 


“Availability
- the amount of money which Borrower is entitled to borrow from time to time as
Revolving Credit Loans, such amount being the difference derived when the sum
of the principal amount of Revolving Credit Loans then outstanding (including
any amounts which Lender may have paid for the account of Borrower pursuant to
any of the Loan


 


7

















 


Documents and
which have not been reimbursed by Borrower), plus the LC Amount and the Bank
Product Reserves is subtracted from the lesser of (i) the Maximum Revolving
Credit Amount and (ii) the Borrowing Base. 
If such amount is equal to or greater than the lesser of (i) the Maximum
Revolving Credit Amount and (ii) the Borrowing Base, then Availability is zero
(0).”


 


“Loan
Documents – the Agreement, the Other Agreements, the Security Documents and the
Bank Product Agreements as each of the same may be amended, modified, renewed,
extended, replaced, restated or substituted from time to time.”


 


“Obligations -
all Loans and all other advances, debts, liabilities, obligations, covenants
and duties, together with all interest, fees and other charges thereon, owing,
arising, due or payable from Borrower to Lender, and/or to Fleet Bank or any
affiliate of Fleet Bank, of any kind or nature, present or future, whether or
not evidenced by any note, guaranty or other instrument, whether arising under
the Agreement or any of the other Loan Documents or otherwise, whether direct
or indirect (including those acquired by assignment), absolute or contingent,
primary or secondary, due or to become due, now existing or hereafter arising
and however acquired, including, without limitation, the Bank Product
Obligations.”


 


The definition of “Borrowing
Base” contained in Appendix A to the Loan Agreement is amended by deleting the
last five words in clause (a) thereof and replacing the same with “first-in,
first-out basis”. The definition of “Eligible Inventory” contained in Appendix
A to the Loan Agreement is amended by (i) deleting the word “or” at the end of
clause (vii) thereof, (ii) deleting the period at the end of the clause (viii)
thereof and replacing the same with a semi-colon followed by the word “or” and
(iii) inserting a new clause (ix), which shall read as follows:


 


“(ix) it is
subject to any licensing, patent, royalty, trademark, trade name or copyright
agreements with, or rights of, any third parties which would require the
consent of any third party upon the sale or disposition of that Inventory
(including, without limitation, upon the sale or disposition of that Inventory
by Lender following an Event of Default) or the payment of any monies to any
third party upon any such sale or disposition of that Inventory (unless Lender
shall have received one or more “access and use” agreements reasonably
acceptable to Lender from such third parties with respect to such Inventory,
duly executed and delivered by such third parties).”


 


Appendix A to the Loan
Agreement is amended by adding (and inserting in alphabetical order) the
following definitions:


 


“ACH
Transaction - any cash management or related services (including the Automated
Clearing House processing of electronic funds transfers through the direct
Federal Reserve Fedline system) provided by Fleet Bank or its affiliates for
the account of Borrower.”


 


“Bank Product
Agreements - those certain agreements entered into from time to time by
Borrower and those certain agreements entered into from time to time between
Fleet Bank and its affiliates, in each case, in connection with any of the Bank
Products.”


 


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“Bank Product
Obligations - all obligations, liabilities, contingent reimbursement
obligations, fees and expenses owing by Borrower to Fleet Bank or its
affiliates pursuant to or evidenced by the Bank Product Agreements and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter
arising, and including all such amounts that Borrower is obligated to reimburse
to Fleet Bank or its affiliates.”


 


“Bank Product
- any service or facility extended to Borrower by Fleet Bank or its affiliates
including, without limitation: (a) credit cards, (b) credit card processing
services, (c) debit cards, (d) purchase cards, (e) ACH Transactions, (f) cash
management, including controlled disbursement, accounts or services, and (g)
Hedge Agreements.”


 


“Bank Product
Reserves - shall have the meaning set forth in Subsection 1.1 hereof.”


 


“Disbursement
Account - shall have the meaning set forth in Subsection 6.6(a) hereof.”


 


“Dominion
Account - a special account established by Borrower pursuant to the Agreement
at Fleet Bank and over which Lender shall have sole and exclusive access and
control for withdrawal purposes.”


 


“Fleet Bank –
means Fleet National Bank, and references to affiliates of Fleet Bank shall
include Lender.”


 


“Hedge
Agreement - any and all transactions, agreements, or documents now existing or
hereafter entered into between Borrower and Fleet Bank or its affiliates, which
provide for an interest rate, credit, commodity or equity swap, cap, floor,
collar, forward foreign exchange transaction, currency swap, cross currency
rate swap, currency option, or any combination of, or option with respect to,
these or similar transactions, for the purpose of hedging Borrower’s exposure
to fluctuations in interest or exchange rates, loan, credit exchange, security
or currency valuations or commodity prices.”


 


“Initial Cash
Dominion Procedures - shall have the meaning set forth in
Subsection 6.6(b) hereof.”


 


“Initial Cash
Dominion Trigger Event – the occurrence of one or more of the following events
at any time when 60% of the value of Eligible Inventory, calculated on the
basis of the lower of cost or market on a first-in, first-out basis, is less
than Seventy Million Dollars ($70,000,000): (i) the numerical average, for any
period of three (3) consecutive Business Days, of Availability is less than or
equal to Fifteen Million Dollars ($15,000,000), or (ii) the numerical average,
for any period of three (3) consecutive Business Days, of the sum of (A)
aggregate principal amount of all outstanding Revolving Credit Loans, plus (B)
the outstanding LC Amount, plus (C) the Bank Product Reserve, is greater than
or equal to Thirty-Five Million Dollars ($35,000,000).”


 


“Organizational
I.D. Number – with respect to any Person, the organizational identification
number assigned to such Person by the


 


9

















 


applicable
governmental unit or agency of the jurisdiction of organization of such
Person.”


 


“Secondary
Cash Dominion Trigger Event - the occurrence of one or more of the following
events at any time: (i) the numerical average, for any period of three (3)
consecutive Business Days, of Availability is less than or equal to Ten Million
Dollars ($10,000,000), or (ii) the numerical average, for any period of three
(3) consecutive Business Days, of the sum of (A) aggregate principal amount of
all outstanding Revolving Credit Loans, plus (B) the outstanding LC Amount,
plus (C) the Bank Product Reserve, is greater than or equal to Forty Million
Dollars ($40,000,000).”


 


“Type of Organization
– with respect to any Person, the kind or type of entity by which such Person
is organized, such as a corporation or limited liability company.”


 


The Borrower’s disclosure
schedules appended to the Loan Agreement are supplemented by (i) the addition
of Schedule 6.6 (Cash Management) attached hereto, and (ii) the
replacement of Schedule 7.1.5 to the Loan Agreement with
Schedule 7.1.5 (Corporate Names, etc.) attached hereto.


 


Representations and Warranties; Additional Covenants


 


In order to induce the Lender
to enter into this Amendment, each Credit Party represents and warrants to the
Lender that (i) the execution, delivery and performance by the Credit Parties
of this Amendment and the transactions contemplated hereby (A) are and will be
within the respective corporate powers of the Credit Parties, (B) have been
authorized by all necessary corporate action on behalf of the Credit Parties,
(C) are not in contravention of any order or decree of any court or
governmental unit, or of any law, rule or regulation to which any Credit Party
or any Credit Party’s property is bound, (D) are not and will not be in
conflict with, or result in a breach of or constitute (with due notice and/or
lapse of time) a default under (x) any Credit Party’s articles of incorporation
or bylaws or (y) any indenture, agreement, contract or undertaking to which any
Credit Party is a party or by which any of them or any of their property is
bound, and (E) except for the Liens created under the Loan Documents in favor
of the Lender, will not result in the imposition of any Lien on any of the
properties of any Credit Party; (ii) this Amendment shall be valid, binding and
enforceable against the Credit Parties in accordance with its terms; and (iii),
no Default or Event of Default has occurred and is continuing and no Default or
Event of Default would result from the execution, delivery or consummation of
the transactions contemplated by this Amendment. On and as of Effective Date,
each Credit Party confirms, reaffirms and restates, and on the date of each
request for a Loan or Letter of Credit each Credit Party shall be deemed to
have further confirmed, reaffirmed and restated, to the Lender the
representations and warranties set forth in the Loan Agreement, as amended
hereby, and the other Loan Documents, except to the extent that such
representations and warranties solely relate to a specific earlier date in
which case each Credit Party confirms, reaffirms and restates such
representations and warranties as of such earlier date. The Borrower represents
and warrants to Lender that attached hereto as Exhibit A is a true, correct and
complete entity organizational chart of the Borrower, EB Holdings and their
Subsidiaries, together with a memorandum summarizing the activities and purpose
of each entity within such organizational structure (an “organizational summary
memorandum”).  Borrower agrees to
promptly deliver to Lender, in connection with any future change to the
organizational structure reflected in the attached exhibit, an updated entity
organizational chart together with an updated organizational summary memorandum
(it being understood and agreed that any such change shall be made in
compliance with the Loan Agreement and the other Loan Documents).


 


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Effectiveness; Conditions Precedent


 


The effectiveness of the
amendments and other provisions hereof are subject to the following conditions
precedent, including, where applicable, that the Lender shall have received the
following documents and other items, duly executed, where appropriate, by
authorized representatives of the Credit Parties and the Lender, as applicable
(all such documents and other items must be in form and substance satisfactory
to the Lender):


 


This Amendment (including the
Exhibits hereto); Any and all agreements, instruments and documents required by
the Lender to effectuate and implement the terms hereof and the Loan Documents;


Evidence that the execution,
delivery and performance of this Amendment by each of the Credit Parties have
been duly authorized by all necessary action, and that no amendment or other
modification to the articles or certificate of incorporation or bylaws of any
Credit Party has been made since the date of the original delivery thereof to
Lender and that such documents (in the form delivered to the Lender) remain in
full force and effect; and Payment of all reasonable fees and expenses of Blank
Rome LLP, counsel to the Lender, incurred by the Lender that are outstanding as
of the date hereof. The date which all of the conditions precedent set forth in
Section 5(a) hereof shall have been satisfied or waived is referred to
herein as the “Effective Date.”


 


Miscellaneous


 


Except as modified or provided
herein or in any other instruments or documents executed in connection
herewith, all terms and conditions of the Loan Agreement and the other Loan
Documents shall remain in effect in accordance with their original tenor.  Except as otherwise provided herein, each
agreement, covenant, representation and warranty of each of the Credit Parties
hereunder shall be deemed to be in addition to, and not in substitution for,
the agreements, covenants, representations and warranties previously made by
such Credit Party. Each Credit Party hereby agrees to take all such actions and
to execute and/or deliver to the Lender all such documents, assignments,
financing statements and other documents, as the Lender may require from time
to time, to effectuate and implement the purposes of this Amendment and the
other Loan Documents, and to pay or reimburse the Lender for all reasonable
attorneys’ fees and expenses incurred in connection herewith and therewith.
Each Credit Party covenants, confirms and agrees that as security for the
repayment of the Obligations of the Credit Parties under the Loan Documents,
the Lender has, and shall continue to have, a continuing first priority,
perfected lien on and security interest in the Collateral, all whether now
owned or hereafter acquired, created or arising, together with all proceeds,
including insurance proceeds thereof, as set forth in the Loan Agreement and
the other Loan Documents, as applicable, subject to no Liens other than
Permitted Liens.  Each Credit Party
acknowledges and agrees that nothing herein contained in any way impairs the
Lender’s existing rights and priority in the Collateral.  The Loan Agreement (as modified by this
Amendment), together with the Loan Documents, contains the entire agreement
among the parties with respect to the transactions contemplated hereby, and
supersedes all negotiations, presentations, warranties, commitments, offers,
contracts and writings prior to the date hereof relating to the subject matters
hereof.  The Loan Agreement (as modified
by this Amendment) and the other Loan Documents may be amended, modified,
waived, discharged or terminated only in accordance with the terms thereof.
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAW. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which counterparts together shall constitute but one and
the same instrument.  Execution and
delivery by facsimile shall bind each of the parties. This Amendment shall be
binding upon and inure to the benefit of each of the Credit Parties and the
Lender and their respective successors, heirs and assigns, except that no
Credit Party may assign or transfer its rights or obligations hereunder without
the prior written consent of the Lender. Any provision hereof that is
prohibited or unenforceable in any jurisdiction shall be, as to such
jurisdiction, ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not


 


11

















 


invalidate or render
unenforceable such provision in any other jurisdiction. No rights are intended
to be created hereunder for the benefit of any third party donee, creditor or
incidental beneficiary, except that Fleet Bank and its affiliates shall be
entitled to rely on Section 2(b) hereof. The headings of any
section or paragraph of this Amendment are for convenience only and shall
not be used to interpret any provision of this Amendment. EACH PARTY TO THIS
AMENDMENT KNOWINGLY AND INTENTIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF THIS
AMENDMENT OR THE OTHER LOAN DOCUMENTS.


 


*                                                                                         *                                                                                         *                                                                                         *


 


IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above written.


 


	
   

  	
  ELECTRONICS
  BOUTIQUE OF AMERICA INC., as the

  Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A.
  Smith

  	
   

  
	
   

  	
  Name:

  	
  James A.
  Smith

  
	
   

  	
  Title:

  	
  Senior Vice
  President and

  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Electronics
  Boutique Holdings Corp., as a Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A.
  Smith

  	
   

  
	
   

  	
  Name:

  	
  James A.
  Smith

  
	
   

  	
  Title:

  	
  Senior Vice
  President and

  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EB
  Investment Corp., as a Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A.
  Smith

  	
   

  
	
   

  	
  Name:

  	
  James A.
  Smith

  
	
   

  	
  Title:

  	
  Treasurer and
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FLEET
  CAPITAL CORPORATION, as the Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  Kerneklian

  	
   

  
	
   

  	
  Name:

  	
  Michael
  Kerneklian

  
	
   

  	
  Title:

  	
  Vice
  President

  
									



 


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