EX-4.2

EXECUTION VERSION


AMENDMENT NO. 1 TO RIGHTS AGREEMENT 


           This
AMENDMENT NO. 1 TO RIGHTS AGREEMENT (this “Amendment”),
dated as of November 20, 2007, is between Trans World Entertainment  Corporation,
a New York corporation (the “Company”),
and Mellon Investor Services LLC, a New Jersey limited liability company as successor
in interest to ChaseMellon Shareholder  Services, L.L.C. (the “Rights Agent”)
and amends the Rights Agreement (the “Rights
 Agreement”), dated as of August 11, 2000,
 between the Company and the Rights Agent. Capitalized terms used but not otherwise
 defined in this Amendment shall have the meanings ascribed to such terms in
 the Rights  Agreement. 


W I T N E S S E T H: 


           WHEREAS, Robert J. Higgins (“RJH”) has submitted a proposal letter dated November 7, 2007 in which he has proposed a Transaction under which the Company would
be acquired by an acquisition vehicle that would be both (i) formed by RJH and/or one or more potential co-investors of RJH, including one or more shareholders of the Company and (ii) would be controlled and/or beneficially owned by RJH (such
acquisition vehicle, the “Acquiror”); 


           WHEREAS, RJH has requested that, prior to proceeding further with any other potential co-investor with respect to certain transactions to acquire the Company, that the Board clarify the application of the Rights Agreement to such
transactions; 


           WHEREAS, pursuant to Section 26 of the Rights Agreement, prior to the earlier of the Distribution Date or the Shares Acquisition Date, the Company may from time to time supplement or amend the Rights Agreement without the
approval of any holders of Rights Certificates and the Rights Agent shall, upon receipt of a certificate from an appropriate officer of the Company that states that the proposed supplement or amendment is in compliance with the terms of such Section
26, execute such supplement or amendment; 


           WHEREAS, no Distribution Date or Shares Acquisition Date has occurred and the Company certifies to the Rights Agent that this Amendment is in compliance with the terms of Section 26 of the Rights Agreement; 


           WHEREAS, pursuant to resolutions duly adopted on November 19, 2007 by a Special Committee (the “Special Committee”) of the Board of Directors of the Company
(the “Board”) pursuant to authority delegated by the Board in resolutions adopted by the Board on May 14, 2007, the Special Committee has determined that an amendment to clarify
certain provisions of the Rights Agreement as set forth herein is desirable, appropriate, advisable and in the best interests of the Company and the shareholders of the Company, and the Company and the Rights Agent desire to evidence such amendment
in writing;


           WHEREAS, all other acts and things necessary to make this Amendment a valid agreement, enforceable according to its terms, have been done and performed, and the execution 










and delivery of this Amendment by the Company and the Rights Agent have been in all respects duly authorized by the Company and the Rights Agent; 


           NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows: 


            1.           Amendment
        to Definition of Acquiring Person. The
        definition of “Acquiring Person” in Section 1(a) of the Rights
        Agreement is hereby amended and supplemented by adding the following
        at the end thereof: 




  “If any Higgins Stockholder and any
      other person or entity that Robert J. Higgins deems appropriate (any such
      person or entity, a “Subject Person”) enters into any agreement,
      arrangement or understanding (whether or not in writing) for the purpose
      of acquiring, holding, voting or disposing of or otherwise acting in concert
      with respect to any shares of Voting Stock (any such agreement, arrangement
      or understanding, a “Subject Arrangement”), and such Subject
      Arrangement (i) is for the purpose of, or relates to, the pursuit, negotiation
      or consummation of any transaction to acquire the Company that (A) is negotiated,
      or is proposed by Robert J. Higgins to be negotiated, with or through the
      Special Committee (the “Special Committee”) of the Board of Directors
      of the Company that is referenced in resolutions adopted by such Board
      of Directors on May 14, 2007, and (B) is subject to the execution of definitive
      documentation that has been approved by the Board of Directors of the Company
      upon the recommendation of the Special Committee (any such transaction
      to acquire the Company as described in this clause (i), a “Negotiated
      Transaction”), and (ii) does not relate to the pursuit or effectuation
      of (A) any (x) tender offer, (y) exchange offer or (z) transaction involving
      securities or assets of the Company that would constitute a “business
      combination” if it were with an “interested shareholder” (as
      such terms are defined in Section 912 of the New York Business Corporation
      Law) or (B) any effort to change the composition of the Board of Directors
      of the Company or to solicit proxies over Voting Stock, in the case of
      each of the immediately preceding clause (A) and this clause (B), that
      is not a Negotiated Transaction or a part of a Negotiated Transaction,
      then, for the purposes of determining whether any Subject Person is an
      Acquiring Person, such Subject Person shall not be deemed to be the Beneficial
      Owner of any shares of Voting Stock Beneficially Owned by any Higgins Stockholder
      or any other Subject Person, in each case, solely as a result of any such
      Subject Arrangement.” 




            2.           Miscellaneous.
      This Amendment shall be deemed to be a contract made under the laws of
      the State of New York and for all purposes shall be governed by and construed
      in accordance with the laws of such State applicable to contracts to be
      made and performed entirely within such State. This Amendment may be executed
      in any number of counterparts and each of such counterparts shall for all
      purposes be deemed to be an original, and all such counterparts shall together
      constitute but one and the same instrument. If any term, provision, covenant
      or restriction of this Amendment is held by a 



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  court of competent jurisdiction or other
      authority to be invalid, void or unenforceable, the remainder of the terms,
      provisions, covenants and restrictions of this Amendment shall remain in
      full force and effect and shall in no way be affected, impaired or invalidated;
      provided, however, that notwithstanding anything in the Rights Agreement
      to the contrary, if any such term, provision, covenant or restriction is
      held by such court or authority to be invalid, void or unenforceable and
      the Board determines in its good faith judgment that severing the invalid
      language from this Amendment would adversely affect the purpose or effect
      of the Rights Agreement or this Amendment, the right of redemption set
      forth in Section 22 of the Rights Agreement shall be reinstated and shall
      not expire until the close of business on the tenth day following the date
      of such determination by the Board. Except to the extent amended by this
      Amendment, the remainder of the Rights Agreement shall continue in full
      force and effect. The Rights Agent and the Company hereby waive any notice
      requirement under the Rights Agreement pertaining to the matters covered
      by this Amendment. This Amendment shall cease to be effective with respect
      to periods after the Termination Date (as defined in that certain Consent
      and Agreement, dated as of the date hereof, by and among RJH, Riley Investment
      Management LLC and the Company (as such Consent and Agreement may be amended
      from time to time)), and the Rights Agreement shall thereafter continue
      in full force and effect as though this Amendment had never been adopted. 



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           IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed
and their respective corporate seals to be hereunto affixed and attested, all
as of the day and year first  written above.


[SEAL]

					
	 

  	 
  	 	
TRANS WORLD ENTERTAINMENT
  
	 

  	 
  	 	
CORPORATION
  
	
Attest
  	 	 

  	 
	 

  
	
By:
  	/s/ Ethan A.
        Klingsberg 

  	 	
By:
  	/s/
    Michael Solow

	  	Name:     Ethan
      A. Klingsberg                     
  	 	 	Name: Michael Solow, on behalf
      of the      
	  	Title:
  	 	 	Special Committee 
	 

  	 
  	 	 	Title: Director 
	
[SEAL]
  	 	 

  	 
	 

  	 
  	 	
MELLON INVESTOR SERVICES LLC, as
  
	 

  	 
  	 	
Rights Agent
  
	
Attest
  	 	 

  	 
	 	 	 	 
	By:   	 
	 	By:   	 

	 	Name: 	 	 	Name: 
	 	Title:                         	 	 	Title:                         










           IN
    WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
    executed and their respective corporate seals to be hereunto affixed and
    attested, all as of the day and year first written above.

 [SEAL]

					
	 	 	 	TRANS WORLD ENTERTAINMENT 
	 	 	 	CORPORATION 
	Attest 	 	 	 
	 
	By: 	 
	 	By: 	 

	 	Name: 	 	 	Name: Michael Solow, on behalf
        of the 
	 	Title: 	 	 	Special Committee 
	 	 	 	 	Title: Director 
	[SEAL] 	 	 	 
	 	 	 	MELLON INVESTOR
        SERVICES LLC, as 
	 	 	 	Rights Agent 
	Attest 	 	 	 
	 	 	 	 
	By:   	/s/
          Stanley Siekierski 
	 	By:   	/s/
          Robert Kavanagh

	 	Name: Stanley
        Siekierski 	 	 	Name:  Robert
        Kavanagh
	 	Title: Relationship
        Manager                          	 	 	Title: Relationship
        Manager