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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, 75 Second Avenue, Suite 400, Needham, Massachusetts 02494 and
Foothill Capital Corporation ("FOOTHILL"), a California corporation with its
principal executive offices at 11111 Santa Monica Boulevard, Suite 1500, Los
Angeles, California, 90025 and, for the purpose of monitoring and servicing the
facility referenced herein, its regional offices located at 60 State Street,
Suite 1150, Boston, Massachusetts, 02109, (Paragon and Foothill, collectively
being "LENDER" hereunder) and Crown Books Corporation, Delaware corporations
("BORROWER"), with its principal executive office at 3300 75th Avenue, Landover,
Maryland, 20785, 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 Conaway Stargatt & Taylor, 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 Wells Fargo
              Bank, N.A. (or any successor in interest to Wells 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 Steven G. Panagos and Zolfo Cooper, 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, bill of lading, an airway bill, customs
              clearance documents, quota statement, certificate, beneficiaries
              statement and bill 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/  Steven G. Panagos
   ---------------------------------------
Steven G. Panagos, Responsible Officer


                                          FOOTHILL CAPITAL CORPORATION
                                          (LENDER)


                                       By:  /s/  Todd W. Colpitts
                                          --------------------------------------
                                       Print Name:  Todd W. Colpitts
                                                    ----------------------------
                                       Title:  Vice President
                                               ---------------------------------


                                          PARAGON CAPITAL LLC
                                          (LENDER)

                                          By:  /s/  Robert J. Shusterman
                                             -----------------------------------
                                            Robert J. Shusterman, Executive V.P.
                                            and Chief Credit Officer

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