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EXHIBIT 10.19
[MERRILL LYNCH LOGO] No. 9706340301
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$5,000,000.00 June 17, 1997
TERM WCMA(R) NOTE
FOR VALUE RECEIVED, CELEBRITY, INC., a corporation organized and existing under
the laws of the State of Texas ("Customer"), hereby promises to pay to the
order of MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC., a corporation
organized and existing under the laws of the State of Delaware ("MLBFS"), in
lawful money of the United States, the principal sum of $5,000,000.00, or, if
more or less, an amount equal to the sum of the principal balances from time to
time outstanding under the "Term Note" and "WCMA Note" included herein, plus
accrued and unpaid interest thereon and any other charges hereinafter set forth
or payable in accordance with the terms of the Loan Agreement, as follows:
DEFINITIONS
In addition to terms defined elsewhere in this Note, as used herein, the
following terms shall have the following meanings:
(i)"Closing Date" shall mean the date of the first advancement of funds
hereunder.
(ii)"Excess Interest" shall mean any amount of interest in excess of the
maximum amount of interest permitted to be charged by law.
(iii)"Initial Loan Amount" shall mean an amount equal to the sum of: (a) the
amount advanced on the Closing Date on account of the Term Note, and (b) the
Maximum WCMA Line of Credit immediately after activation of the WCMA Line of
Credit on the Closing Date.
(iv)"Interest Rate" shall mean a variable per annum rate equal to the sum of
(i) 2.65% per annum, and (ii) the interest rate from time to time published in
the "Money Rates" section of The Wall Street Journal as the one-month London
Interbank Offered Rate (the "One-Month LIBOR"). The Interest Rate will change
as of the date of publication in The Wall Street Journal of a One-Month LIBOR
that is different from that published on the preceding Business Day. In the
event that The Wall Street Journal shall, for any reason, fail or cease to
publish the One-Month LIBOR, MLBFS will choose a reasonably comparable index or
source to use as the basis for the Interest Rate.
(v)"Loan Agreement" shall mean that certain TERM WCMA LOAN AGREEMENT NO.
9706340301 between Customer and MLBFS, as the same may have been or may
hereafter be amended or supplemented.
(vi)"Note" shall mean this TERM WCMA NOTE.
Capitalized terms used herein and not defined herein shall have the meaning set
forth in the Loan Agreement. Without limiting the foregoing, the terms
"Additional Agreements", "Bankruptcy Event", "Event of Default" and "WCMA Loan
Balance" shall have the respective meanings set forth in the Loan Agreement.
TERM NOTE
FOR VALUE RECEIVED, Customer hereby promises to pay to the order of MLBFS, in
lawful money of the United States, an amount equal to the outstanding principal
balance of the term portion of the Term WCMA Loan, as increased from time to
time by additional fundings pursuant to the provisions of Section 2.2 (c) of
the
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Loan Agreement (the "Term Note Balance"); together with interest on the Term
Note Balance, from the date of advancement of funds hereunder until payment, at
the Interest Rate.
Said indebtedness shall be payable in 84 consecutive monthly installments
commencing on the first day of the second calendar month following the Closing
Date, and continuing on the first day of each calendar month thereafter until
this Note shall be paid in full. The first 83 such installments shall each be
in an amount equal to the sum of (i) accrued and unpaid interest at the
Interest Rate (with the first such installment including interest accrued from
the Closing Date), and (ii) 1/180th of the Initial Loan Amount, and the 84th
installment shall be a balloon in an amount equal to the sum of all accrued and
unpaid interest hereunder, the then unpaid principal balance hereof and all
other sums then payable hereunder. Each payment received hereunder shall be
applied first to any fees and expenses of MLBFS payable by Customer under the
terms of the Loan Agreement, next to any late charges payable hereunder, next
to accrued and unpaid interest at the Interest Rate, with the balance applied
on account of the unpaid principal hereof. All sums payable hereunder shall be
payable at the office of MLBFS at 33 West Monroe Street, Chicago, Illinois
60603, or at such other place or places as the holder hereof may from time to
time appoint in writing.
Customer may prepay this Term Note at any time in whole or in part without
premium or penalty. Any partial prepayment shall be applied to installments of
the Initial Loan Amount in the chronological order such installments become
due. Customer shall not have the right to re-borrow amounts prepaid on account
of this Term Note.
WCMA NOTE
FOR VALUE RECEIVED, Customer hereby promises to pay to the order of MLBFS, at
the times and in the manner set forth in the Loan Agreement, or in such other
manner and at such place as MLBFS may hereafter designate in writing, the
following: (a) on the WCMA Maturity Date, the then WCMA Loan Balance; and (b)
interest at the Interest Rate on the outstanding WCMA Loan Balance, from and
including the date on which the initial WCMA Loan is made until the date of
payment of all WCMA Loans in full. Interest shall be payable in the manner and
on the dates specified in, or determined in accordance with, the Loan
Agreement.
PROVISIONS APPLICABLE TO BOTH TERM NOTE AND WCMA NOTE
Any part of the principal hereof or interest hereon or other sums payable
hereunder or under the Loan Agreement not paid within ten (10) days of the
applicable due date shall be subject to a late charge equal to the lesser of
(i) 5% of the overdue amount, or (ii) the maximum amount permitted by law. All
interest shall be computed on the basis of actual days elapsed over a 360-day
year.
This Term WCMA Note constitutes and includes both the "Term Note" and the "WCMA
Note" referred to in, and is entitled to all of the benefits of the Loan
Agreement. The Loan Agreement is by this reference hereby incorporated as a
part hereof.
If Customer shall fail to pay when due any installment or other sum due
hereunder, and any such failure shall continue for more than five (5) Business
Days after written notice thereof from the holder hereof to Customer, or if any
other Event of Default shall occur and be continuing, then at the option of the
holder hereof (or, upon the occurrence of any Bankruptcy Event, automatically,
without any action on the part of the holder hereof), and in addition to all
other rights and remedies available to such holder under the Loan Agreement and
otherwise, an amount equal to the sum of the WCMA Loan Balance and the Term
Note Balance at such time remaining unpaid, together with all accrued and
unpaid interest thereon and all other sums then owing by Customer under the
Loan Agreement, may be declared to be and thereby become immediately due and
payable.
It is expressly understood, however, that nothing contained in the Loan
Agreement, any other agreement, instrument or document executed by Customer, or
otherwise, shall affect or impair the right, which is unconditional and
absolute, of the holder hereof to enforce payment of all sums due under this
Term WCMA Note at or after maturity, whether by acceleration or otherwise, or
shall affect the obligation of Customer,
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which is also unconditional and absolute, to pay the sums payable under this
Term WCMA Note in accordance with its terms. Except as otherwise expressly set
forth herein or in the Loan Agreement, Customer hereby waives presentment,
demand for payment, protest and notice of protest, notice of dishonor, notice
of acceleration, notice of intent to accelerate and all other notices and
formalities in connection with this Term WCMA Note.
Wherever possible each provision of this Term WCMA Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Term WCMA Note shall be prohibited by or invalid under such
law, such provision shall be ineffective to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the
remaining provisions of this Term WCMA Note. Notwithstanding any provision to
the contrary in this Term WCMA Note, the Loan Agreement or any of the
Additional Agreements, no provision of this Term WCMA Note, the Loan Agreement
or any of the Additional Agreements shall require the payment or permit the
collection of any Excess Interest. If any Excess Interest is provided for, or
is adjudicated as being provided for, in this Term WCMA Note, the Loan
Agreement or any of the Additional Agreements, then: (a) Customer shall not be
obligated to pay any Excess Interest; and (b) any Excess Interest that MLBFS
may have received under this Term WCMA Note, the Loan Agreement or any of the
Additional Agreements shall, at the option of MLBFS, be: (i) applied as a
credit against the then unpaid principal balance of this Term WCMA Note, or
accrued and unpaid interest hereon not to exceed the maximum amount permitted
by law, or both, (ii) refunded to the payor thereof, or (iii) any combination
of the foregoing.
This Term WCMA Note shall be construed in accordance with the laws of the State
of Illinois and may be enforced by the holder hereof in any jurisdiction in
which the Loan Agreement may be enforced.
IN WITNESS WHEREOF, this Term WCMA Note has been executed by Customer as of the
day and year first above written.
CELEBRITY, INC.
By: /s/ JAMES R. THOMPSON
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Signature (1) Signature (2)
James R. Thompson
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Printed Name Printed Name
Vice President - Finance
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