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EXHIBIT 10.9
EIGHTH AMENDMENT TO LOAN AGREEMENT
This Eighth Amendment to Loan Agreement is made and effective as of
June 19, 1997, by and between CELEBRITY, INC., a Texas corporation
("Celebrity"), MAGICSILK, INC., a Texas corporation ("Magicsilk"), THE CLUETT
CORPORATION, a California corporation ("Cluett"), and INDIA EXOTICS, INC., a
Texas corporation ("India"), (collectively, the "Borrowers") and NATIONAL
CANADA FINANCE CORP., a Delaware corporation (the "Lender").
WITNESSETH:
WHEREAS, the Lender, Celebrity, and Magicsilk entered into a Loan
Agreement dated May 10, 1993, as amended pursuant to a First Amendment to Loan
Agreement dated as of July 27, 1993, a Second Amendment to Loan Agreement dated
as of November 17, 1993, a Third Amendment to Loan Agreement dated as of March
18, 1994, a Fourth Amendment to Loan Agreement dated as of November 4, 1994, a
Fifth Amendment to Loan Agreement dated as of February 3, 1995, a Sixth
Amendment to Loan Agreement dated as of March 14, 1995, a Seventh Amendment to
Loan Agreement dated as of August 4, 1995, and Waiver and Modification Letters
dated May 15, 1996 and September 26, 1996, respectively (as so amended, the
"Loan Agreement"), pursuant to which the Lender committed, among other things,
to make loans, advances, and other credit facilities available to Celebrity,
Magicsilk, Cluett, and India;
WHEREAS, the parties desire to amend the Loan Agreement in certain
respects, as hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing, for other valuable
consideration hereby acknowledged, and subject to the other terms and
conditions hereof, the Lender and the Borrowers agree that the following
provisions of the Loan Agreement shall be amended, effective the date hereof,
as follows:
1. A new defined term is added in Section One, as follows:
"'Merrill Lynch' means Merrill Lynch Business
Financial Services, Inc., a Delaware corporation."
2. Part (i) of the definition of "Permitted Encumbrances" is
amended and restated in its entirety as follows:
"(i) liens on certain real property located in Smith
County, Texas and Forsyth County, North Carolina and
security interests related thereto in favor of
Merrill Lynch to secure indebtedness of Celebrity to
Merrill Lynch of up to the maximum principal amount
of $5,000,000, plus accrued interest thereon,
provided that Merrill Lynch executes and delivers to
the
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Lender one or more Mortgagee's Waivers and Consents,
in form and content satisfactory to the Lender; and"
3. Part (e) of Section 7.1 of the Loan Agreement, permitting
indebtedness up to the principal amount of $1,800,000 to Tyler Bank and Trust,
N.A., and certain other matters therein set forth, is deleted and intentionally
left blank.
4. Part (h) of Section 7.1 of the Loan Agreement, permitting
indebtedness of up to the principal amount of $1,500,000 to Southern National
Bank of North Carolina and certain other matters therein set forth, is deleted
and intentionally left blank.
5. Part (i) of Section 7.1 of the Loan Agreement, permitting
indebtedness of up to the maximum principal amounts of $2,200,000 and
$1,000,000 to NationsBank and certain other matters therein set forth, is
amended and restated in its entirety, as follows:
"(i) Indebtedness of up to the maximum principal
amount of $5,000,000, plus accrued interest
thereon to Merrill Lynch under and pursuant
to that certain Term WCMA Note dated June
6, 1997 and the related Term WCMA Loan
Agreement of even date with such note
executed by Celebrity in favor of Merrill
Lynch, and any and all amendments,
renewals, restatements, extensions, and
supplements thereof, in whole or in part,
but not any increases thereof;"
6. Section 7.3 of the Loan Agreement is amended and restated in its
entirety, as follows:
"Except for (i) the guaranty by Celebrity of up to
Hong Kong 31,000,000 of indebtedness of Celebrity
Exports International to The Hongkong and Shanghai
Banking Corporation, Ltd., plus post-default
interest and expenses of enforcement as provided in
the instrument of guaranty which evidences such
guaranty, (ii) guaranties by Celebrity of the
indebtedness of India, as described in subsections
(k) and (l) of Section 7.1, above, and (iii) the
guaranty by Cluett, Magicsilk, and India of
indebtedness of Celebrity to Merrill Lynch, as
described in subsection (i) of Section 7.1, above,
guarantee or otherwise in any way become or be
responsible for the indebtedness or obligations of
any other Person, by any means whatsoever, whether
by agreement to purchase the indebtedness of any
other Person or agreement for the furnishing of
funds to any other Person though the purchase of
goods, supplies, or services (or by way of stock
purchase, capital contribution, advance, or loan)
for the purpose of paying or discharging the
indebtedness of any other Person, or otherwise,
except for the endorsement of negotiable instruments
by a Borrower in the ordinary course of business for
collection."
7. By their execution hereof, each of the Borrowers hereby certifies
to the Lender that as of the date hereof (a) all representations and warranties
heretofore made by them under the
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Loan Agreement and the other loan papers related thereto are true in all
material respects, including but not limited to the fact that Cluett is a
corporation duly organized,validly existing, and in good standing under the
laws of the State of California, and (b) the Borrowers do not have or claim to
have any offset, counterclaim, or defense to any of their obligations under the
Loan Agreement or any of the other loan papers related thereto.
8. Subject to satisfaction of the requirements for the effectiveness
of this Eighth Amendment, as set forth in paragraph 10 hereof, and the
agreement of the Borrowers to the terms and provisions in this Eighth
Amendment, the Lender hereby agrees to all of the foregoing amendments to the
Loan Agreement.
9. Except as expressly set forth herein, all terms and provisions of
the Loan Agreement and the other loan papers related thereto are hereby
confirmed as in full force and effect. The Borrowers expressly agree by their
execution hereof that all security interests, liens, and benefits created and
conferred by the Loan Agreement and such loan papers cover and extend to all
obligations evidenced and created by the Note, the Loan Agreement as amended
hereby, and all renewals, extensions, and modifications thereof, in whole or in
part. All terms with their initial letters capitalized herein and not otherwise
defined herein have the same meanings set forth in the Loan Agreement.
10. This Eighth Amendment shall not be effective until the Lender
shall have received the following, each dated such day and in form and
substance satisfactory to the Lender:
a. This Eighth Amendment, duly executed by all parties hereto;
b. Certified copies (i) of the resolutions of the Board of
Directors of each of the Borrowers, upon which the Borrowers
rely for authorization of this Eighth Amendment and all
documents executed in connection herewith, and (ii) of all
documents evidencing other necessary corporate action,
including all governmental and other consents and approvals,
if any, with respect hereto and all other documents executed
in connection herewith; and
c. A certificate of the Secretary or an Assistant Secretary of
each of the Borrowers, certifying the names and genuine
signatures of the officer or officers of each of the
Borrowers authorized to sign this Eighth Amendment and the
other documents to be executed and delivered by each of the
Borrowers hereunder.
11. This Eighth Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument. In making proof hereof, it shall not be necessary to produce or
account for any counterpart other than one signed by the party against which
enforcement is sought.
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THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties hereto have caused this Eighth
Amendment to be executed by their respective officers thereunto duly authorized
as of the date first above written.
NATIONAL CANADA FINANCE CELEBRITY, INC.
CORP.
By: /s/ WILLIAM HANDLEY By: /s/ JAMES R. THOMPSON
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Print Name: William Handley Print Name: James R. Thompson
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Title: Vice President Title: Vice President
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By: /s/ LARRY L. SEARS MAGICSILK, INC.
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Print Name: Larry L. Sears
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Title: Group Vice President By: /s/ JAMES R. THOMPSON
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Print Name: James R. Thompson
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Title: Vice President
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THE CLUETT CORPORATION
By: /s/ JAMES R. THOMPSON
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Print Name: James R. Thompson
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Title: Vice President
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INDIA EXOTICS, INC.
By: /s/ JAMES R. THOMPSON
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Print Name: James R. Thompson
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Title: Vice President
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