<PAGE>   1
                                                                   EXHIBIT 10.5


                  FOURTH AMENDMENT AND MODIFICATION AGREEMENT


         THIS FOURTH AMENDMENT AND MODIFICATION AGREEMENT (the "Agreement") is
made effective as of the 15th day of May, 1996, by and between CELEBRITY, INC.,
a Texas corporation ("Borrower"),  and NATIONSBANK OF TEXAS, N.A., a national
banking association ("Lender").

                                    RECITALS

         The following forms the basis for, and is a part of, this Agreement:

         A.      Lender and Borrower have entered into various documents
relating to loans (the "Loans") made by Lender to Borrower as follows: (i) that
certain Promissory Note in the original principal amount of $1,800,000.00,
dated April 22, 1993, executed by Borrower, and made payable to the order of
Tyler Bank & Trust, N.A., and endorsed over to Lender ("Note A"); (ii) that
certain Promissory Note in the original principal amount of $2,290,409.98,
dated March 21, 1994, executed by Borrower, and made payable to the order of
Lender ("Note B"); (iii) that certain Promissory Note in the original principal
amount of $1,800,000,00, dated March 21, 1994, executed by Borrower, and made
payable to the order of Lender ("Note "C"); and (iv) that certain Promissory
Note in the original principal amount of $455,550.00, dated February 9, 1996,
executed by Borrower, and made payable to the order of Lender ("Note "D") (Note
A, Note B, Note C and Note D are collectively referred to as the "Notes," and
the Notes, together with all other agreements, documents and instruments
relating thereto or executed in connection therewith or evidencing, securing or
relating to the obligations of Borrower to Lender are hereinafter referred to
as the "Loan Documents").

         B.      Borrower's obligations are further described and set forth in
that certain Loan Agreement dated March 21, 1994, by and between Borrower and
Lender, as amended by that certain Amendment to Loan Agreement dated December
21, 1994, that certain Second Amendment to Loan Agreement dated March 20, 1995,
and that certain Third Amendment to Loan Agreement dated February 9, 1996
(collectively, the "Loan Agreement").

         C.      Borrower is currently in default under Paragraph 9.b. of the
Loan Agreement (the "Existing Default"), and as a result thereof, Lender is
entitled to exercise any or all of its rights and remedies under the Loan
Documents.

         D.      Borrower has requested that Lender waive the Existing Default
and the continuance of the Existing Default as it pertains to the fiscal
quarter ending March 31, 1996, and Lender has agreed to do so, upon the terms
and conditions set forth in this Agreement.
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         NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:

                                   AGREEMENT

         1.      Definitions.  Unless otherwise defined herein, capitalized
terms shall have the meanings given to them in the Loan Agreement and the Loan
Documents.

         2.      Existing Default. Borrower hereby acknowledges, confirms and
agrees the Existing Default has occurred, it presently constitutes an Event of
Default and entitles Lender to exercise its rights and remedies under the Loan
Documents.

         3.      Waiver.  In reliance upon the representations, warranties and
covenants of Borrower contained in this Agreement and subject to the terms and
conditions of this Agreement, Lender hereby agrees to waive the Existing
Default arising from Borrower's failure to maintain a ratio of cash flow to
fixed charge coverage of at least 1.30 to 1.0 for the fiscal quarter ending
March 31, 1996, and from Borrower's violation and/or breach of Sections 6.17
and 6.16(c) of that certain Loan Agreement dated May 10, 1993, by and between
Borrower and NCFC as of this date and for the fiscal quarter ending June 30,
1996 (the "Waiver").

         4.      Outstanding Balance.  Borrower and Lender agree and
acknowledge that as of the date of this Agreement the outstanding principal
balance of Note A is $1,334,590.01, of Note B is $2,042,282.23, of Note C is
$1,545,160.00, and of Note D is $447,191.28.

         5.      Modification of Interest Rate.  The Stated Rate provided for
in the Notes shall be amended such that interest shall be charged, commencing
as of May 15, 1996, at the Prime Rate as provided for in the Notes,
respectively, plus one percentage point (1%).

         6.      Conditional Modification of Interest Rate. Notwithstanding
anything to the contrary contained herein, if under Paragraph 9.b. of the Loan
Agreement, Borrower maintains a ratio of cash flow to fixed charge coverage of
at least 1.30 to 1.0 for the fiscal quarter ending June 30, 1997, and there
shall be no other events or conditions existing which constitute an Event of
Default under the Loan Documents and/or with the passage of time and the giving
of notice would constitute Events of Default under the Loan Documents, then the
Stated Rate as modified herein shall be modified such that interest shall be
charged, at the Prime Rate, without any additional percentage points added to
the Prime Rate, upon Lender's receipt of Borrower's audited financial
statements





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for fiscal year ending June 30, 1997, and confirmation of such ratio.

         7.      Minimum Fixed Charge Coverage Ratio.  The first sentence of
Paragraph 9.b. of the Loan Agreement is hereby amended to read as follows:

         In accordance with generally accepted accounting principles
         consistently applied, maintain a ratio of cash flow to fixed charge
         coverage as follows:

<TABLE>
<CAPTION>

         Fiscal Quarter Ending                                      Ratio
         ---------------------                                      -----
         <S>                                                        <C>
         June 30, 1996                                              .90 to 1.0
         September 30, 1996                                         .90 to 1.0
         December 31, 1996                                          .90 to 1.0
         March 31, 1997                                             1.25 to 1.0
         June 30, 1997                                              1.30 to 1.0
         All subsequent quarters                                    1.30 to 1.0
</TABLE>

         8.      Affirmative Covenants.  Paragraph 9. of the Loan Agreement is
hereby amended by adding new subparagraphs j., k. and l. as follows:

         j.      Static Minimum Fixed Charge Coverage Ratio.  In accordance
                 with generally accepted accounting principals consistently
                 applied, maintain a ratio of cash flow to fixed charge
                 coverage of at least 1.0 to 1.0 for the fiscal quarter ending
                 June 30, 1996, and a ratio of cash flow to fixed charge
                 coverage of at least 1.1 to 1.0 for each fiscal quarter
                 thereafter. The said ratio shall be calculated and tested as
                 of the end of each of Borrower's fiscal quarters solely for
                 the fiscal quarter just ending, and it shall not be calculated
                 and tested on a rolling basis as provided in subparagraph b.
                 above.  The numerator of such ratio shall be equal to the sum
                 of Borrower's consolidated net income, plus depreciation and
                 amortization, plus operating lease expense and interest
                 expense.  The denominator of such ratio shall be equal to the
                 sum of the scheduled maturities of Borrower's long-term debt
                 plus the current maturities of Borrower's capital lease
                 obligations, plus dividends and redemptions, plus the
                 aggregate of Borrower's operating lease expense and interest
                 expense.

         k.      Notice of Modifications.  Promptly advise Lender in writing of
                 any changes, modifications or amendments to any agreements,
                 documents or instruments evidencing, securing or relating to
                 the obligations





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                 of Borrower to any other financial institutions, including,
                 but not limited to, NCFC, and furnish to Lender executed
                 copies of any and all agreements, documents or instruments
                 entered into or executed in connection with changing,
                 modifying or amending any other agreements, documents or
                 instruments which evidence, secure or relate to the
                 obligations of Borrower to any other financial institutions,
                 including, but no limited to, NCFC, within five (5) business
                 days after executing same.

         l.      Borrowing Base Report and Compliance Certificate.  Furnish to
                 Lender on a monthly basis a copy of the Borrowing Base Report
                 and on a quarterly basis a copy of the Compliance Certificate
                 that Borrower provides to NCFC, and to furnish same to Lender
                 at the same time Borrower provides them to NCFC.

         9.      Negative Covenant.  Paragraph 10.d. of the Loan Agreement is
hereby amended to read as follows:

         Borrower will not violate, or fail to comply with, any covenants or
         agreements regarding other debt which will or would with the passage
         of time and/or the giving of notice cause maturity of any other debt
         of Borrower to be accelerated, including, but not limited to, any
         covenants or agreements of Borrower to or with National Canada Finance
         Corp. ("NCFC") in connection with various agreements, documents or
         instruments evidencing, securing or relating to the obligations of
         Borrower to NCFC.

         10.     Events of Default. Paragraph 11. of the Loan Agreement is
hereby amended by adding a new subparagraph g. as follows:

         g.      NCFC Loan Default. Borrower shall be in default under any
                 agreement, document or instrument evidencing, securing or
                 relating to the obligations of Borrower to NCFC, regardless of
                 whether NCFC waives or agrees to waive such default or
                 defaults.

         11.     Conditions to Effectiveness of Waiver in this Agreement.  The
effectiveness of this Agreement and the Waiver are subject to the satisfaction
of each of the following conditions precedent on or before 5:00 p.m. Dallas
time, on May 15, 1996, unless specifically waived in writing by Lender:

                 a.       Lender shall have received this Agreement, duly
         executed by Borrower, and such additional documents,  instruments and
         information as Lender may reasonably request;

                 b.       All corporate proceedings taken in connection with
         the transactions contemplated by this Agreement and all





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         documents, instruments and other legal matters incident thereto shall
         be satisfactory to Lender;

                 c.       Lender shall have received an executed copy of any
         and all agreements, documents or instruments executed by and between
         Borrower and National Canada Finance Corp. ("NCFC") in connection with
         the waiver by NCFC of Borrower's default under certain agreements,
         documents and instruments executed by and between Borrower and NCFC,
         evidencing, securing or relating to the obligations of Borrower to
         NCFC; and

                 d.       Payment of Lender's expenses in connection with the
         preparation and negotiation of this Agreement.

         12.     No Waiver of Cure.  Nothing contained herein shall be
construed as a waiver by Lender of any covenant or provision of any of the Loan
Documents or of this Agreement, except as otherwise specifically provided for
herein, and Lender's failure at any time or times hereafter to require strict
performance by Borrower of any provision hereof or thereof shall not waive,
affect or diminish any right of Lender to thereafter demand strict compliance
herewith or therewith.  Lender hereby reserves all rights granted under the
Loan Documents and this Agreement.

         13.     Warranties and Representations.  As a material inducement to
Lender to execute and deliver this Agreement, Borrower represents and warrants
to Lender that (a) except as noted herein, Borrower is in compliance with all
of the terms and conditions of the Notes, the Loan Agreement and the other Loan
Documents, including, without limitation, the payment of all amounts due and
payable under such instruments; (b) Borrower has full power and authority to
make the agreements contained in this Agreement without the joinder or consent
of any other party, and the execution and delivery of this Agreement have been
duly authorized or approved by Borrower and constitutes the valid and binding
obligation of Borrower, enforceable in accordance with their terms; (c) there
have been no material changes or conditions affecting any warranties,
representations, materials or information delivered to Lender by, or on behalf
of, Borrower prior to the date hereof; (d) Borrower is solvent and is not
bankrupt and is subject to no claims, suits, garnishments, bankruptcies or
court actions which would render Borrower insolvent; (e) there has been no
material adverse change in Borrower's financial condition subsequent to the
date of the most recent operating statement delivered to Lender; and (f)
Borrower has no defenses or counterclaims to the terms or provisions of, and
the obligations created by, the Loan Documents, or to the payment of the Notes,
and has no right of offset or claim against Lender. Should any of the foregoing
representations or warranties prove to have been false when made or should a
default occur and continue beyond any applicable grace or cure period, under
the Notes as modified hereby, or under any of the Security





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Documents, this Agreement, at Lender's election, shall immediately terminate.

         14.     Costs and Expenses.  Borrower shall pay, on demand, all costs
and expenses, including, without limitation, attorneys' fees incurred in the
negotiation, preparation and execution of this Agreement and the consummation
of the transactions contemplated by this Agreement.

         15.     No Other Modifications.  This Agreement is only a modification
of the Notes, the Loan Agreement and, to the extent necessary, the other Loan
Documents and is not a novation of the same. Except as modified by the terms of
this Agreement, the Notes and the Loan Agreement shall continue in full force
and effect in accordance with their terms.  Nothing contained in this Agreement
shall (a) alter or limit the provisions of the Notes regarding late charges or
the rate of interest which shall accrue on amounts past due under the Notes,
(b) impair, waive or limit Lender's rights or remedies, at law or in equity,
under the Notes or the Loan Documents, in the event of any default under the
Notes or the Loan Documents, or (c) release Borrower from its liability to keep
and perform all of the terms and conditions, obligations and agreements
contained in the Notes and the Loan Documents.  Borrower hereby reaffirms the
Notes, as further modified hereby, and all other indebtedness secured by the
Loan Documents and agrees to perform its obligations thereunder as they become
due.

         16.     Survival of Representations and Warranties.  All
representations and warranties made in the Loan Documents or this Agreement
shall survive the execution and delivery of this Agreement,  and no
investigation by Lender or any closing shall affect the representations and
warranties or the right of Lender to rely upon them.

         17.     Borrower Acknowledgments.  Borrower hereby acknowledges and
agrees that (a) Lender is not in default in the performance of its obligations
under the Loan Documents; (b) Borrower has no claims, counterclaims, offsets,
credits or defenses to the Loan Documents in the performance of its obligations
thereunder, or if Borrower has any such claims, counterclaims, offsets, credits
or defenses to the Loan Documents or any transaction related to the
indebtedness evidenced by the Notes and any other indebtedness or obligations
owed by Borrower to Lender, same are hereby waived, relinquished and released
in consideration of Lender's execution and delivery of this Agreement; (c) all
of the provisions of the Loan Documents, except as modified hereby, are in full
force and effect; (d) the liens created and evidenced by the Loan Documents are
valid and existing liens of the recited dignity and priority; and (e) no other
granting of a lien or security interest or assignment has been or will be
executed affecting any of the property described in the Loan Documents in which
Lender has a





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lien, without Lender's prior written consent except as permitted in the Loan
Documents.

         18.     Effective Waiver.  No consent or waiver, express or implied,
by Lender to or any breach of or deviation from any covenant or condition by
Borrower shall be deemed a consent to or waiver of any other breach of the same
or any other covenant, condition or duty.

         19.     Final Agreement.  THIS AGREEMENT REPRESENTS THE ENTIRE
EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE
THIS AGREEMENT IS EXECUTED, THIS AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO MODIFICATION,
RESCISSION,  WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THE LOAN
DOCUMENTS OR THIS AGREEMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED
BY BORROWER AND LENDER.

         20.     Miscellaneous.

                 a.       No Joint Venture, This Agreement shall not be
         construed, and is not intended, to create a partnership or joint
         venture between Borrower and Lender or to render either party liable
         for the obligations of the other.

                 b.       GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED AND
         GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF
         THE UNITED STATES OF AMERICA.  The parties hereto intend to conform
         strictly to the applicable usury laws. In no event, whether by reason
         of acceleration of the maturity of the Notes or otherwise, shall the
         amount paid or agreed to be paid to Lender for the use, forbearance or
         detention of money under the Notes or otherwise exceed the maximum
         amount permissible under applicable law.  If fulfillment of any
         provision of the Notes or of any Security Document, at the time
         performance of such provision shall be due, would involve transcending
         the limit of validity prescribed by law, then the obligation to be
         fulfilled shall be reduced automatically to the limit of such
         validity.  If Lender shall ever receive anything of value deemed
         interest under applicable law which would exceed interest at the
         highest lawful rate, an amount equal to any amount which would have
         been excessive interest shall be applied to the reduction of the
         principal amount owing under the Notes in the inverse order of its
         maturity and not to the payment of interest, or if such amount which
         would have been excessive interest exceeds the unpaid balance of
         principal of the Notes, such excess shall be refunded to Borrower.
         All sums paid or agreed to be paid to Lender for the use, forbearance
         or detention of the indebtedness of Borrower to Lender shall, to the
         extent





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<PAGE>   8
         permitted by applicable law, be amortized, prorated, allocated, and
         spread throughout the full stated term of such indebtedness so that
         the amount of interest on such indebtedness does not exceed the
         maximum permitted by applicable law.  The provisions of this paragraph
         shall control all existing and future agreements between Borrower and
         Lender.

                 c.       Parties Bound. This Agreement shall be binding upon
         and inure to the benefit of the parties hereto,  and their respective
         heirs, executors, administrators, legal representatives, successors
         and assigns where permitted by this Agreement.

                 d.       Legal Construction. In case any one or more of the
         provisions contained in this Agreement shall for any reason be held to
         be invalid, illegal, or unenforceable in any respect, such invalidity,
         illegality, or unenforceability shall not affect any other provision
         hereof, and this Agreement shall be construed as if such invalid,
         illegal or unenforceable provision had never been contained herein.

                 e.       Headings.  The headings used in this Agreement have
         been included only in order to make it easier to locate the subject
         covered by each provision and are not to be used in construing this
         Agreement.

                 f.       Attorneys' Fees and Legal Expenses. Should either
         party hereto institute any action or proceeding in court to enforce
         any provision hereof or for damages by reason of any alleged breach of
         any provision of this Agreement or for any other judicial remedy, the
         prevailing party shall be entitled to receive from the losing party
         all reasonable attorneys' fees and all court costs in connection with
         said proceeding.

                 g.       Counterparts and Facsimiles. This Agreement may be
         executed in any number of counterparts, and each of such counterparts
         shall for all purposes be deemed to be an original.  Also, this
         Agreement may be executed by facsimile signatures and a facsimile
         signature shall for all purposes be deemed to be an original.

                 h.       Modification.  This Agreement may not be modified or
         amended except by a written instrument signed by the parties hereto
         and referring specifically to this Agreement.

                 i.       Other Instruments. Each party shall, upon the request
         of the other party, execute, acknowledge and deliver any and all
         instruments reasonably necessary or appropriate to carry into effect
         the intention of the parties as expressed in this Agreement.





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                 j.       Rule of Construction.  The parties acknowledge that
         each party and its counsel have reviewed and revised this Agreement
         and that the normal rule of construction to the effect that any
         ambiguities are to be resolved against the drafting party shall not be
         employed in the interpretation of this Agreement or any amendments or
         exhibits hereto.


         IN WITNESS WHEREOF, the parties have executed this Agreement on the
15th day of May, 1996. This Agreement shall be void if each of the conditions
stated in Paragraph 9. hereof has not been satisfied (or waived by Lender in
writing) prior to 5:00 p.m. Dallas, Texas time on May 15, 1996.


         BORROWER:                CELEBRITY, INC.
                                  
                                  
                                  By:/s/ JAMES R. THOMPSON
                                     ---------------------------------------
                                     James R. Thompson,
                                     Vice President - Finance

         LENDER:                  NATIONSBANK TEXAS, N.A.
                                  
                                  
                                  By:/s/ PAM CUNNINGHAM                         
                                     ---------------------------------------
                                     Pam Cunningham,
                                     Vice President


         The undersigned hereby join in the foregoing Modification Agreement to
evidence their consent and agreement to the terms and provisions of same, and
the undersigned covenant and agree to be bound by all of the terms and
provisions of the foregoing Modification Agreement applicable to Guarantor.


                                  THE CLUETT CORPORATION
                                  
                                  
                                  By:/s/ JAMES R. THOMPSON  
                                     -----------------------------------------
                                     James R. Thompson,
                                     Vice President-Finance
                                  
                                   MAGICSILK, INC.
                                  
                                  
                                  By:/s/ JAMES R. THOMPSON    
                                     -----------------------------------------
                                     James R. Thompson,
                                     Vice President
                                  
                                  
                                  STAR WHOLESALE FLORIST, INC.
                                  
                                  
                                  By:/s/ JAMES R. THOMPSON 
                                     -----------------------------------------
                                     James R. Thompson,
                                     Vice President
                                  
                                  INDIA EXOTICS, INC.
                                  
                                  
                                  By:/s/ JAMES R. THOMPSON 
                                     -----------------------------------------
                                     James R. Thompson,
                                     Vice President





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