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CIRCLE FINE ART CORP. ANNOUNCES PRELIMINARY AGREEMENTS FOR FINANCIAL RESTRUCTURING

 CIRCLE FINE ART CORP. ANNOUNCES PRELIMINARY
 AGREEMENTS FOR FINANCIAL RESTRUCTURING
 CHICAGO, July 20 /PRNewswire/ -- Circle Fine Art Corp. (NASDAQ: CFNE) announced today that a preliminary agreement in principle for a financial restructuring had been reached with its three long-term lenders, Standard Chartered Bank, Marine Midland Bank N.A. and Chrysler Capital Corp. As part of the restructuring and as required by the lenders, three Circle executives, Jack Solomon, chairman, Carolyn Solomon, president, and Jordon Ross, vice chairman, have agreed to invest a total of $500,000 of new funds into the company in exchange for 666,667 newly issued common shares. In addition, as part of the proposed restructuring, Chrysler Capital will exercise outstanding warrants it now owns for 245,000 Circle common shares. The exercise price will be the higher of market price or $.75 per share. Chrysler Capital will acquire these shares by reducing a like amount of outstanding principal balance due on Circle subordinated notes which Chrysler Capital owns.
 Other key features of the proposed restructuring include conversion of major portions of approximately $12,700,000 of outstanding bank loans now past due (plus a past due first mortgage), to long term debt, with reduced interest rates. With respect to approximately $9,000,000 face amount of Circle's subordinated notes owned by Chrysler Capital Corp. which are now in default, interest rates will be reduced and certain scheduled principal re-payments will be postponed to later dates. Also, Chrysler Capital will receive 500,000 newly issued warrants to purchase Circle common stock at an exercise price of $3 per share.
 Jack Solomon, Circle chairman, reported that although the parties are working towards a closing to occur within the next four weeks, the proposed restructuring is, at this time, only a preliminary agreement in principle, that it is subject to preparation and acceptance of definitive documents by all parties, formal corporate approvals and certain other conditions, and that there can be no assurance at this time that the proposed restructuring agreements will be consummated.
 Circle Fine Art publishes and distributes limited edition original graphics, deals in contemporary fine art and manufactures and distributes "Art-To-Wear" limited edition fine art jewelry designed by a number of world's leading contemporary artists. The company is also a leading retailer of animation art. Circle owns and operated 35 fine art galleries in the United States and Canada. There are six Circle Galleries operating in Japan pursuant to a license agreement. The company also owns The Art Collectors Circle(TM), a club for both beginning and advanced art collectors which it operated in association with a division of American Express.
 -0- 7/20/92
 /CONTACT: Jack Solomon, chairman, or Joseph Atkin, vice president, Circle Fine Art Corp., 312-616-1300/
 (CFNE) CO: Circle Fine Art Corp. ST: Illinois IN: REA SU: RCN


LD -- NY083 -- 0944 07/20/92 17:14 EDT
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Publication:PR Newswire
Date:Jul 20, 1992
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