SECOND AMENDMENTTO CREDIT AGREEMENT

SECOND AMENDMENT TO CREDIT AGREEMENT

This Second Amendment to Credit Agreement (this “Amendment”) is made as of August 21, 2013, by and among:

TRANS WORLD ENTERTAINMENT CORPORATION, a New York corporation (the “Lead Borrower”);

the Persons named on Schedule I hereto (together with the Lead Borrower, individually, a “Borrower”, and collectively, the “Borrowers”);

the Persons named on Schedule II hereto (individually, a “Guarantor”, and collectively, the “Guarantors”, and together with the Borrowers, individually, a “Loan Party”, and collectively, the “Loan Parties”);

the LENDERS party hereto; and

WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), as Administrative Agent, Collateral Agent, Swingline Lender and as Issuing Bank;

in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

W I T N E S S E T H:

WHEREAS, 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, the Loan Parties, the Lenders party thereto from time to time, Bank of America, N.A. (“Bank of America”), as Administrative Agent, Collateral Agent, Swingline Lender and Issuing Bank, and Bank of America, N.A. and Wells Fargo Bank, National Association (as successor by merger to Wells Fargo Retail Finance, LLC), as Co-Borrowing Base Agents;

WHEREAS, on May 4, 2012, Bank of America resigned as Administrative Agent, Collateral Agent, Swingline Lender, Issuing Bank and Co-Borrowing Base Agent in accordance with the terms of the Credit Agreement, and Wells Fargo was appointed successor Administrative Agent, Collateral Agent and Issuing Bank in accordance with the terms of the Credit Agreement;

WHEREAS, the Lead Borrower has advised the Administrative Agent that the Lead Borrower desires to make Restricted Payments in the aggregate amount of up to $22,000,000 utilizing cash on hand, which Restricted Payments shall be made to the Lead Borrower’s shareholders for the purposes of repurchasing and redeeming from such shareholders up to $22,000,000 in aggregate value of Capital Stock of the Lead Borrower;

WHEREAS, in connection therewith, the parties hereto have agreed to amend certain provisions of the Credit Agreement as set forth herein.

NOW, THEREFORE, the parties hereto hereby agree as follows:

“Dividend Conditions” means, at the time of determination with respect to any dividend or other distribution (whether in cash, securities or other property) of the type described in clause (d) of the definition of “Permitted Dividends”, that (a) no Default or Event of Default then exists or would arise as a result of the making of such dividend or other distribution, (b) (i) at no time during the six (6) month period ending on the date of such dividend or other distribution shall there have been any Borrowings, and (ii) after giving effect to the making of such dividend or other distribution, 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, (c) after giving effect to the making of such dividend or other distribution, (i) in the case of dividends of the type described in clause (d)(i) of the definition of “Permitted Dividends”, the aggregate amount of all such dividends and other distributions made during the then current Fiscal Year does not exceed $5,000,000, and (ii) in the case of dividends of the type described in clause (d)(ii) of the definition of “Permitted Dividends”, the aggregate amount of all such dividends and other distributions made from and after the Second Amendment Effective Date does not exceed $22,000,000, and (d) such dividend is made in cash utilizing the Loan Parties’ cash on hand not consisting of Eligible Cash on Hand and not from proceeds of any Borrowings hereunder. Prior to undertaking any transaction or payment which is subject to the Dividend Conditions, the Loan Parties shall deliver to the Administrative Agent evidence of satisfaction of the conditions contained in clauses (b) and (c) above on a basis (including, without limitation, giving due consideration to results for prior periods) reasonably satisfactory to the Administrative Agent.

“Second Amendment Effective Date” means August 21, 2013.

[SIGNATURE PAGES FOLLOW]

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

Signature Page to Second Amendment to Credit Agreement

Signature Page to Second Amendment to Credit Agreement

Signature Page to Second Amendment to Credit Agreement

Schedule I

Borrowers other than the Lead Borrower

Record Town, Inc.

Record Town USA, LLC

Trans World New York, LLC

Trans World Florida, LLC

Movies Plus, Inc.

Record Town Utah, LLC

Schedule II

Guarantors

Media Logic USA, LLC