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EXHIBIT 10.4
POST CONFIRMATION CREDIT AGREEMENT AND RATIFICATION AND THIRD
AMENDMENT AGREEMENT
THIS POST CONFIRMATION CREDIT AGREEMENT AND RATIFICATION AND THIRD
AMENDMENT AGREEMENT is made between Paragon Capital LLC ("PARAGON"), a Delaware
limited liability company with its principal executive offices at Hillsite
Office Building, 00 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxxxxx 00000 and
Foothill Capital Corporation ("FOOTHILL"), a California corporation with its
principal executive offices at 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxxx, 00000 and, for the purpose of monitoring and servicing the
facility referenced herein, its regional offices located at 00 Xxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxxxxxxxxxx, 00000, (Paragon and Foothill, collectively
being "LENDER" hereunder) and Crown Books Corporation, Delaware corporations
("BORROWER"), with its principal executive office at 0000 00xx Xxxxxx, Xxxxxxxx,
Xxxxxxxx, 00000, with respect to a certain Loan and Security Agreement between
Borrower and Lender dated July 15, 1998, as amended by the First Amendment to
Loan and Security Agreement dated August 17, 1998 and the Second Amendment to
Loan and Security Agreement dated as of September 9, 1998 (the "Loan Agreement")
(all capitalized terms not otherwise defined herein shall have the meaning set
forth in the Loan Agreement);
WHEREAS, the Borrower and its subsidiaries were Debtors-in-Possession
under Chapter 11, Case No. 98-1575 (RRM) (Jointly Administered), filed in the
United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court");
WHEREAS, the Bankruptcy Court approved the Loan Agreement by interim
order dated July 15, 1998, docketed on July 17, 1998 and, following hearing, by
final order dated July 31, 1998 (the "Final Order") and Lender has continued to
provide financing to Borrower under the Loan Agreement since that time;
WHEREAS, the Bankruptcy Court approved, by order dated July 26, 1999, a
certain agreement dated as of July 1, 1999 between the Borrowers and the Lender
providing for a commitment for "Emergence Financing" to commence upon the
Borrowers' emergence from Chapter 11 in accordance with the Loan Agreement (the
Commitment");
WHEREAS, the Bankruptcy Court approved the Borrower's Joint Plan of
Reorganization dated June 30, 1999 (the "Plan"), by confirmation order dated
October 7, 1999 (the "Confirmation Order") which Confirmation Order and Plan
provides for, among other things, the substantive consolidation of Borrower with
its subsidiaries and the continued financing of the Borrowers under a "Post
Confirmation Credit Agreement" (as defined in the Plan) in accordance with the
Commitment;
WHEREAS the Lender and the Borrower desire to amend the Loan Agreement to
provide for the Emergence Financing in accordance the Commitment and to provided
that the Loan
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Agreement as amended hereby shall be ratified and confirmed and shall become and
be deemed the Post Confirmation Credit Agreement.
NOW THEREFORE in consideration of the mutual promises set forth herein
and other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Subsection 1-1(e) is amended is hereby amended by striking it in its
entirety and substituting the following:
"(e) Anything to the contrary in Article 1-1(b) above
notwithstanding, Lender, in the exercise of its discretion, may
reduce Advance Rates or create Inventory Reserves, Availability
Reserves or other reserves without declaring an Event of Default
if it determines that there has occurred a Material Adverse
Change."
2. Subsection 1-4(j)(ii)(B) is amended is hereby amended by adding the
following sub-section (II):
"(II) Documentary L/C's: forty five (45) days from issuance."
3. Article 1-8(a) is hereby amended by striking it in its entirety and
substituting the following:
"(a) The unpaid principal balance of the Loan Account shall bear
interest, until repaid (calculated based upon a 360-day year and
actual days elapsed), at the aggregate of Base plus one (1%)
percent per annum but in no event less than eight (8%) percent per
annum or in excess of the maximum rate permitted by applicable
law. Commencing with the end of fiscal December 1999, if at the
close of any month, the aggregate outstanding loans and Letters of
Credit exceed one hundred ten (110%) percent of the Borrower's
projected loans and Letters of Credit as set forth in Borrower's
Business Plan, Borrower shall pay Lender for said month a fee of
the greater of Two Thousand ($2,000) Dollars or one and one half
(1 1/2%) percent of said excess."
4. Article1-8(b) is hereby amended by deleting the words "plus two (2%)
percent per annum" in the last line thereof and inserting in lieu thereof
"plus three (3%) percent per annum."
5. Article 1-9(a) is hereby amended by striking it in its entirety and
substituting in its place the following:
"(a) The parties acknowledge that following approval of the
Commitment, Borrowers paid a Commitment Fee of One Hundred
Thousand ($100,000) Dollars, which fee has been fully earned and
nonrefundable as of the date thereof.
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In addition to the Commitment Fee previously paid, Borrowers upon
the execution hereof shall pay a one-time "DIP Conversion Fee" of
One Hundred Seventy Five Thousand ($175,000) Dollars, which fee is
fully earned and nonrefundable as of the date hereof."
6. The first paragraph of subsection 1-9(b) is hereby amended by striking it
in its entirety and substituting in its place the following:
"(b) Loan Maintenance Fee. On the date of execution hereof and
on each anniversary of the date of execution hereof, a loan
maintenance fee equal to Eighty-Four Thousand ($84,000) Dollars
Such fee shall have been fully earned as of the date hereof and as
of each anniversary of the date of execution hereof and shall be
payable in twelve (12) monthly installments as follows: 1/12th of
such fee (Seven Thousand ($7,000) Dollars) shall be payable as of
the date hereof and on each anniversary of the date of execution
hereof, and 1/12th of such fee shall be payable on the same day of
each month hereafter and thereafter until paid in full; and,
during any month in which the Effective Advance Rate on any
occasion exceeds fifty (50%) percent an additional fee of Three
Thousand Hundred ($3,000) Dollars shall be payable (the "Loan
Maintenance Fee")."
7. Article 1-9(d) is hereby amended by striking it in its entirety and
substituting in its place the following:
"(e) Financial Examination, Legal Investigation, Documentation,
and Appraisal Fees. Subject to the provisions of Article 9-10,
Lender's actual and reasonable charges paid or incurred for each
financial analysis and examination (i.e., audits) of Borrower
performed by personnel employed by Lender; Lender's actual and
reasonable charges paid or incurred for each appraisal of the
Collateral performed by personnel employed by Lender; and, the
actual and reasonable charges paid or incurred by Lender if it
elects to employ the services of one or more third Persons to
perform legal investigation, documentation financial analysis and
examinations (i.e., audits) of Borrower or to appraise the
Collateral."
8. Article 2-1 is hereby amended by striking the parenthetical
"(specifically excluding all avoidance actions)."
9. Article 4-2 is hereby amended by striking it in its entirety and
substituting in its place the following:
"4-2 Opinion. An opinion of Young Xxxxxxx Stargatt & Xxxxxx, LLP
counsel to the Borrower, in form and substance reasonably
satisfactory to Lender and Lender's counsel."
10. Article 4-7 is hereby amended by striking it in its entirety and
substituting in its place the following:
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"4-7. Initial Minimum Excess Availability. Availability, after
giving effect to the first loans and advances to be made under the
Revolving Credit; any charges to the Loan Account made in
connection with the establishment of the credit facility
contemplated hereby; and L/C's to be issued at, or immediately
subsequent to, the establishment of such Revolving Credit, is not
less than One Million ($1,000,000) Dollars."
11. Article 4-9 is hereby amended by striking it in its entirety and
substituting in its place the following:
"4-9 No Material Adverse Change. No Material Adverse Change since
July 1, 1999 or otherwise has occurred."
12. The following Article 4-10 is added:
"4-10 Delivery of Documents. No document shall be deemed delivered
to the Lender until received and accepted by the Lender at its
head offices in Needham, Massachusetts. Under no circumstances
will this Agreement take effect until executed and accepted by the
Lender at said head office. In the event that Lender agrees to
make the initial advance or any subsequent advance hereunder,
prior to Borrower's delivery of any documents required under this
Article 4 or otherwise by this Agreement, an additional fee, of
One Thousand ($1,000) Dollars shall be payable weekly on Thursday
until such time as all such documents are provided."
13. The following Article 5-4 is added:
"5-4. Locations. Landlord's Consents, Waivers.
(a) The Collateral, and the books, records, and
papers of Borrower pertaining thereto, are kept and maintained
solely at the Borrower's chief executive offices as set forth at
the beginning of this Agreement and at those locations which are
listed on EXHIBIT 5-4, annexed hereto, which exhibit includes all
service bureaus with which any such records are maintained and the
names and addresses of each of the Borrower's landlords. Except
(i) to accomplish sales and/or returns of Inventory in the
ordinary course of business or (ii) to utilize such of the
Collateral as is removed from such locations in the ordinary
course of business (such as motor vehicles), the Borrower shall
not remove any Collateral from said chief executive offices or
those locations listed on EXHIBIT 5-4.
(b) The Borrower shall obtain and deliver to the
Lender:
(i) A. Consent, waiver and subordination
agreement (satisfactory to the Lender)
by the landlord for nineteen (19)
locations, upon or before execution
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hereof; and for twenty (20) additional
locations including corporate
headquarters within sixty-five (65)
days of the date of execution hereof;
and
B. Consent to leasehold mortgages for
seventeen (17) locations, upon or
before execution hereof; and for ten
(10) additional locations within
sixty-five (65) days of the date of
execution hereof;
and if the Borrower fails to provide such agreements
and/or consents within such time periods an
additional fee of One Thousand ($1,000) Dollars
shall be payable weekly on Thursday until such time
as such consents are provided.
(ii) The identity of the fee owner, copy of the
lease and a full legal description of the
subject real estate for (A) all locations for
which consent has been obtained on or before
the date of execution hereof, within
sixty-five (65) days of the date of execution
hereof and (B) all other such locations
within sixty-five (65) days of obtaining
consent; and if the Borrower fails to provide
such information within such time periods
shall be subject to an additional fee of One
Thousand ($1,000) Dollars shall be payable
weekly on Thursday until such time as all
such information and/or documents are
provided.
(iii) Leasehold mortgages executed by Borrower in
form and substance reasonably acceptable to
Lender for all locations for which consent
has been obtained within three (3) Business
Days of Borrower's receipt of an execution
copy of a leasehold mortgage for any such
locations(s). Borrower shall cooperate in
obtaining any signature required by Landlord
if so requested by Lender.
(c) Lender may establish an Availability Reserve
for up to ninety (90) days rent for each of the Borrower's
locations in a Landlord Lien State or in a One Turn State. Such
Availability Reserve shall be reduced or eliminated but only if no
Suspension Event is then in existence or has not theretofore
occurred, upon the furnishing to the Lender of a consent, waiver
and subordination agreement (in form satisfactory to the Lender)
by the landlord for the subject location.
(d) Without duplication of any Availability
Reserve described above, the Lender may establish an Availability
Reserve for unpaid rent.
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(e) The Borrower will not:
(i) Execute, alter, modify, or amend any Lease,
except for Borrower's benefit and with at
least ten (10) days prior written notice to
Lender.
(ii) Commit to, or open or close any location at
which the Borrower maintains, offers for
sales, or stores any of the Collateral,
except up to three (3) locations per year and
only to the extent provided for in the
Business Plan, as approved by Borrower's
Board of Directors, and with at least thirty
(30) days prior written notice to Lender.
(f) Except as otherwise disclosed on EXHIBIT 5-4,
no tangible personal property of the Borrower is in the care or
custody of any third party or stored or entrusted with a bailee or
other third party and none shall hereafter be placed under such
care, custody, storage, or entrustment. Borrower shall obtain and
deliver a consent, waiver and subordination (in form reasonably
satisfactory to the Lender) from each bailee disclosed on EXHIBIT
5-4 on or prior to the date of execution hereof."
14. Article 5-27 is hereby amended by striking it in its entirety and
substituting in its place the following:
"5-27. 2000 Compliance.
(a) On the basis of a comprehensive inventory,
review and assessment currently being undertaken by Borrowers of
Borrowers' computer applications utilized by Borrowers or
contained in products produced or sold by Borrowers, and upon
inquiry made of Borrowers' material suppliers and vendors,
Borrowers' management is of the considered view that Borrowers,
its products, and all such suppliers and vendors will be Year 2000
Compliant before October 31, 1999, excepting however, the general
ledger and point of sale software applications which shall be Year
2000 Compliant before December 15, 1999.
(b) Borrowers (i) are undertaking a detailed
inventory, review and assessment of all areas within its business
and operations that could be adversely affected by the failure of
Borrowers or its products to be Year 2000 Compliant on a timely
basis; (ii) is developing a detailed plan and timeline for
becoming Year 2000 Compliant on a timely basis; and (iii) to date,
is implementing that plan in accordance with that timetable in all
respects, and has appointed a committee to oversee such
implementation. Borrowers anticipate that it will be Year 2000
Compliant on a timely basis."
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15. Articles 5-29 ("Administrative Priority; Lien Priority") and 5-30
("Interim Borrowing Order, Permanent Borrowing Order, Administrative
Priority; Payment of Claims") are hereby amended by striking them in
their entirety.
16. Article 10-18 is hereby amended by striking it in its entirety and
substituting the following:
"10-18. Executive Management. The death, disability, or failure of
any Executive Officer at any time to exercise that authority and
discharge those management responsibilities with respect to the
Borrower as are exercised and discharged by such Person at the
execution of this Agreement."
17. Article 13-1 is hereby amended by striking it in its entirety and
substituting the following:
"13-1 This Agreement is, and is intended to be, a continuing
agreement and shall remain in full force and effect for an initial
term ending on the Maturity Date, and thereafter for successive
twelve-month periods, each beginning on the 13th day of November
(commencing 2001) of each year and ending on November of the
following year (each such twelve-month period is hereinafter
referred to as a "RENEWAL TERM"); provided, however, that either
party may terminate this Agreement as of the end of the initial
term or any subsequent renewal term by giving the other party
notice to terminate in writing at least sixty (60) days prior to
the end of any such period whereupon at the end of such period all
Liabilities shall be due and payable in full without presentation,
demand, or further notice of any kind, whether or not all or any
part of the Liabilities is otherwise due and payable pursuant to
the agreement or instrument evidencing same. Lender may terminate
this Agreement immediately and without notice upon the occurrence
of an Event of Default. Notwithstanding the foregoing or anything
in this Agreement or elsewhere to the contrary, the security
interest, Lender's rights and remedies hereunder and Borrower's
obligations and liabilities hereunder shall survive any
termination of this Agreement and shall remain in full force and
effect until all of the Liabilities outstanding, or contracted or
committed for (whether or not outstanding), before the receipt of
such notice by Lender, and any extensions or renewals thereof
(whether made before or after receipt of such notice), together
with interest accruing thereon after such notice, shall be finally
and irrevocably paid in full. No Collateral shall be released or
financing statement terminated until such final and irrevocable
payment in full of the Liabilities, as described in the preceding
sentence."
18. Article 13-2 is hereby amended by striking it in its entirety and
substituting the following:
"13-2. Effect of Termination. Upon the termination of the
Revolving Credit, the Borrower shall pay the Lender (whether or
not then due), in immediately available funds, all then
Liabilities including, without limitation: the entire balance of
the
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Loan Account; any then remaining balance of the Loan Maintenance
Fee; any accrued and unpaid Unused Line Fee; any Prepayment
Premium and all unreimbursed costs and expenses of the Lender for
which the Borrower is responsible, and shall make such
arrangements concerning any L/C's then outstanding as are
reasonably satisfactory to the Lender. Until such payment, all
provisions of this Agreement, other than those contained in
Article 1 which place an obligation on the Lender to make any
loans or advances or to provide financial accommodations under the
Revolving Credit or otherwise, shall remain in full force and
effect until all Liabilities shall have been paid in full. The
release by the Lender of the security interests granted the Lender
by the Borrower hereunder may be upon such conditions and
indemnifications as the Lender may require."
19. Article 13-3 is hereby amended by striking it in its entirety and
substituting the following
"13-3. If Borrower pays in full all or substantially all of the
Liabilities prior to the end of the initial term of this Agreement
(or any renewal term), other than temporarily from funds
internally generated in the ordinary course of business, at the
time of such payment Borrower shall also pay to Lender a
prepayment premium in an amount equal to: (i) two (2%) percent of
the Credit Limit, if paid during the first year after the date of
this Agreement and (ii) one and one half (1.5%) percent of the
Credit Limit, if prepaid after the first anniversary of this
Agreement. Any tender of payment in full of the Liabilities
following an acceleration by Lender of the Liabilities pursuant to
ARTICLE 10 hereof, shall be for purposes of this section deemed to
be a prepayment requiring Borrower to pay the aforementioned
prepayment premium. Such prepayment premium shall be paid to
Lender as liquidated damages for the loss of the bargain by Lender
and not as a penalty."
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20. Article14-10 is hereby amended by striking it in its entirety and
substituting the following:
"14-10. Consent to Jurisdiction.
(a) The Borrower agrees that any legal action,
proceeding, case, or controversy against the Borrower with respect
to any Loan Document may be brought in the Superior Court of
Middlesex County, Massachusetts or in the United States District
Court, District of Massachusetts, sitting in Boston,
Massachusetts, as the Lender may elect in the Lender's sole
discretion. By execution and delivery of this Agreement, the
Borrower, for itself and in respect of its property, accepts,
submits, and consents generally and unconditionally, to the
jurisdiction of the aforesaid courts.
(b) Nothing herein shall affect the right of the Lender
to bring legal actions or proceedings in any other competent
jurisdiction.
(c) The Borrower agrees that any action commenced by the
Borrower asserting any claim or counterclaim arising under or in
connection with this Agreement or any other Loan Document shall be
brought solely in the Superior Court of Middlesex County,
Massachusetts or in the United States District Court, District of
Massachusetts, sitting in Boston, Massachusetts, and that such
Courts shall have exclusive jurisdiction with respect to any such
action."
21. Article 14-18 is hereby amended by striking it in its entirety and
substituting the following:
"14-18. Entities Related to Lender. Borrower acknowledges
notice that Lender is affiliated with The Ozer Group, LLC
("OZER"), Ozer Valuation Services, Inc. ("OZER VALUATION") and
Ozer Wholesale Services, Inc. ("OWS"). Ozer, Ozer Valuation, and
other entities related to Lender may, from time to time act as a
merchant consultant or provide other services to Lender with
respect to Borrower."
22. Article 15 (Debtor In Possession Provisions) is deleted in its entirety.
23. The following Exhibits and Schedules are hereby amended by deleting them
in their entirety and substituting the attached revised Exhibits and
Schedules
5-2 Related Entities
5-3 Trade Names
5-4 Locations
5-5 Encumbrances
5-6 Indebtedness
5-7 Insurance Policies
5-9 Leases
5-12 Taxes
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7-1 DDA's
7-2 Credit Card Arrangements
9-4 Borrowing Base Certificate
9-5 Reporting requirements
9-12(a) Financial Performance Covenants
9-12(b) Business Plan
24. The definition of "Acceptable Inventory" is hereby amended by striking,
in its entirety and substituting the following:
"Such of the Borrower's Inventory, at such locations, and of such
types, character, qualities and quantities, (net of Inventory
Reserve) as the Lender in its sole discretion from time to time
determines to be acceptable for borrowing, as to which Inventory,
the Lender has a perfected security interest which is prior and
superior to all security interests, claims and Encumbrances."
25. The definition of "Availability Reserves" is hereby amended the
following subsection (g):
" (g) Held or post-dated checks."
26. The definition of "Base" is hereby amended by striking it in its entirety
and substituting the following:
""BASE": The Base Rate announced from time to time by Xxxxx Fargo
Bank, N.A. (or any successor in interest to Xxxxx Fargo Bank,
N.A). In the event that said bank (or any such successor) ceases
to announce such a rate, "Base" shall refer to that rate or index
announced or published from time to time as the Lender, in good
faith, designates as the functional equivalent to said Base Rate.
Any change in "Base" shall be effective, for purposes of the
calculation of interest due hereunder, when such change is made
effective generally by the bank on whose rate or index "Base" is
being set."
27. The definition of "Borrowing Base" is hereby amended by striking it in
its entirety and substituting the following:
""BORROWING BASE": Means amounts up to the lesser of (a)
fifty-five percent (55%) of the Cost of Acceptable Inventory; and
(b) ninety (90%) percent of the Net Retail Liquidation Value
provided however, during the period commencing November 1, 1999
and ending on December 18, 1999 only, means amounts up to the
lesser of (w) sixty (60%) percent of the Cost of Acceptable
Inventory and (x) ninety four and five tenths (94.5%) percent of
the Net Retail Liquidation Value; in each case minus (i) the then
unpaid balance of the Loan Account, minus (ii) the then aggregate
of such Reserves as may have been established by Lender, and minus
(iii) the sum of (aa) then outstanding Stated Amount of all L/C's
except
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Documentary L/C's; (bb) the product of the one hundred percent
minus the then applicable Advance Rate applicable to the Cost of
Acceptable Inventory times then outstanding Stated Amount of all
Documentary L/C's and (cc) all freight and duty charges applicable
to any Inventory subject to Documentary L/C's "
28. The definition of is "Executive Officer" hereby amended by striking it in
its entirety and substituting the following:
"EXECUTIVE OFFICER": Means during an interim period until the
hiring of a permanent Chief Executive Officer and Chief Financial
Officer Xxxxxx X. Xxxxxxx and Xxxxx Xxxxxx, and any other Person
who (without regard to title) is a successor (reasonably
satisfactory to Lender) to any of the foregoing or who exercises a
substantial portion of the authority being exercised, at the
execution of this Agreement, by any of the foregoing or a
combination of the such authority of more than one of the
foregoing or who otherwise has Control of the Borrower.
29. The definition of "Material Adverse Change" is hereby amended by striking
it in its entirety and substituting the following:
"MATERIAL ADVERSE CHANGE": Means (a) a material adverse change in
the business, prospects, operations, results of operations,
assets, liabilities or condition (financial or otherwise) of
Borrower, including, without limitation, a material adverse change
in the business, prospects, operations, results or operations,
assets, liabilities or condition since the date of the latest
financial information submitted to Lender on or before the Closing
Date, and since the date of the latest financial information
supplied hereunder or at any time as compared to the Business Plan
attached hereto on the date of execution hereof as EXHIBIT
9-12(b); (b) the material impairment of Borrower's ability to
perform its obligations under the Loan Documents to which it is a
party or of Lender to enforce the Liabilities or realize upon the
Collateral, (c) a material adverse effect on the value of the
Collateral or the amount that Lender would be likely to receive
(after giving consideration to delays in payment and costs of
enforcement) in the liquidation of such Collateral, or (d) a
material impairment of the priority of Lender's liens with respect
to the Collateral."
30. The definition of "Maturity Date" is hereby amended by striking it in its
entirety and substituting the following:
"MATURITY DATE": Means November 12, 2001.
31. The definition of " Credit Limit" is hereby amended by striking it in its
entirety and substituting the following:
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"CREDIT LIMIT": Means Thirty Five Million ($35,000,000) Dollars
during the months September through March of each year, and Thirty
Million ($30,000,000) Dollars at all other times.
32. The following definitions are added
"ADVANCE RATES": Means the percentage(s) of the Cost of Acceptable
Inventory or Net Retail Liquidation Value used to calculate the
Borrowing Base.
"DOCUMENTARY L/C": Means a documentary L/C issued to support the
purchase by Borrower of Inventory prior to its transport to a
location set forth on EXHIBIT 5-4 that provides that all draws
there under must require presentation of customary documentation
(including, if applicable, commercial invoices, packing lists,
certificate of origin, xxxx of lading, an airway xxxx, customs
clearance documents, quota statement, certificate, beneficiaries
statement and xxxx of exchange, bills of lading, dock warrants,
dock receipts, warehouse receipts or other documents of title, in
form and substance satisfactory to Lender and reflecting passage
to Borrower of title to first quality Inventory conforming to
Borrower's contract with the seller thereof.
"EFFECTIVE ADVANCE RATE": Means an Advance Rate calculated by
dividing the amount of the then total balance of the Loan Account
by the then total Cost of all then existing Acceptable Inventory.
In all other respects, the Loan Agreement, as amended remains unchanged,
notwithstanding the entry of the Confirmation Order, Borrowers "emergence" from
Chapter 11 or otherwise, and is hereby ratified and confirmed in all respects,
and hereby is and shall be deemed the Post Confirmation Credit Agreement
provided for in the Plan.
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Executed as a sealed instrument, this 11th day of November, 1999.
CROWN BOOKS CORPORATION,
(BORROWER)
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxx, Responsible Officer
FOOTHILL CAPITAL CORPORATION
(LENDER)
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Print Name: Xxxx X. Xxxxxxxx
----------------------------
Title: Vice President
---------------------------------
PARAGON CAPITAL LLC
(LENDER)
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxxxx, Executive V.P.
and Chief Credit Officer
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