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EXHIBIT 4.6
July 24, 1996
Mr. S.E. Melvin Hecht
Chief Financial Officer
Marisa Christina, Inc.
1410 Broadway
New York, New York 10018
Dear Mel:
The Chase Manhattan Bank ("Chase") is pleased to advise that it is
prepared, in its sole discretion, to offer a line of credit to Marisa Christina,
Inc. (the "Company") and its subsidiaries, Marisa Christina Apparel, Inc.,
Flapdoodles, Inc., and Adrienne Vittadirni Enterprises, Inc. (collectively with
the Company, the "Borrowers") subject to the terms and conditions described
below.
Amount: $20,000,000 to be utilized for commercial
letters of credit (maximum tenor 150 days),
bankers' acceptances (maximum tenor 120
days), commercial loans, and letters of
indemnity.
Borrowers (joint and several): Marisa Christina, Inc.
Marisa Christina Apparel, Inc.
Flapdoodles, Inc.
Adrienne Vittadini Enterprises, Inc.
Guarantors: Unlimited cross-collateralized guaranty of
payment of:
Marisa Christina, Inc.,
Marisa Christina Apparel, Inc.,
Flapdoodles, Inc.,
Adrienne Vittadini Enterprises, Inc.,
C.M. Marisa Christina (H.K.) Limited,
Marisa Christina Outlet Holdings, Inc.,
Marisa Christina Outlet Stores of California,
Inc.,
Marisa Christina Outlet Stores of Colorado,
Inc.,
Marisa Christina Outlet Stores of New York,
Inc., and
MF Showroom Holdings, Inc.
Type of Credit: A line of credit repayable on a demand basis.
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Use of Proceeds: Working Capital financing. Availability of
commercial letters of credit, bankers'
acceptances, and letters of indemnity will be
limited to Marisa Christina Apparel, Inc.,
Flapdoodles, Inc., and Adrienne Vittadini
Enterprises, Inc.
Interest Rate: All outstanding borrowings under this
arrangement will bear interest equal at all
times to the following:
a. Prime Rate: Chase's Prime Rate in effect
from time to time. Interest is to be computed
on an actual/360-day basis and is payable
monthly.
b. LIBOR Rate: Interest shall be determined
for periods of one, two or three months (as
selected by the Borrowers); provided,
however, no interest period shall extend
beyond the termination of the facility, and
shall be at an annual rate equal to the
London Interbank Offered Rate ("LIBOR") for
corresponding deposits of U.S. dollars (i.e.,
Eurodollars) plus 1.00%. LIBOR will be
determined by the principal London Office of
Chase at start of each interest period.
Interest shall be paid at the end of each
interest period or quarterly, whichever is
earlier, and is to be calculated on the basis
of the actual number of days elapsed in a
year of 360 days. LIBOR drawings shall
require three business days' prior notice and
shall be in minimum amounts of $500,000.
c. Any bankers' acceptances which Chase
agrees to create will be offered at an all-in
rate.
Letter of Credit Fees: Transaction costs for each letter of credit
plus 1/8 of 1% of the amount of each drawing
under each letter of credit. There is a
minimum letter of credit drawing fee of $100.
If a letter of credit is not, in whole or in
part, drawn on, the Borrower will shall, 30
days after the stated expiration date of each
letter of credit, pay to Chase for its own
account, a fee equal to the greater of a) 1/8
of 1% of such undrawn amount or b) $100.
Requests for Advances: Any advances made under this line of credit
will be on the terms and conditions as Chase
may require at the time a Borrower requests
an advance and must be evidenced by documents
in form and substance satisfactory to Chase.
Security: A first priority security interest in all of
the Borrowers' accounts receivable and
imported inventory; and, with respect to
Adrienne Vittadini Enterprises, Inc., an
assignment of all credit balances at BNY
Financial Corporation (the "Factor") and to
any rights and priorities in favor of the
Factor in any such accounts receivable and
credit balances, to the extent set forth in
an assignment of factoring proceeds and inter
creditor
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agreement to be entered into between Chase,
The Bank of New York and the Factor which is
acceptable to Chase.
Balance Requirement: The Borrowers shall maintain average net
available demand deposit balances in a
minimum amount sufficient to compensate.
Chase for account activity or alternatively
will be charged the usual fees for services
rendered as determined by the standard fee
schedule of Chase, or as otherwise agreed
upon by the Company and Chase. It shall be
understood that the maintenance of such
deposits will not in any way obligate Chase
to lend.
Additional Conditions: In addition to the above
mentioned terms and conditions, and in order
to enable Chase to perform its ongoing
financial review, the Company will be
required to comply with the following
conditions:
The Company will furnish to Chase:
a. Copies of the Company's Form 10-K,
including annual audited financial statements
prepared in accordance with GAAP consistently
applied by an independent certified public
accounting firm acceptable to Chase, filed
with the Securities and Exchange Commission,
to be delivered within five (S) business days
of the filing, but in any case, no later than
one hundred twenty (120) days after the end
of the Company's fiscal year.
b. Copies of the Company's Form 10-Q,
including quarterly financial statements
prepared in accordance with GAAP consistently
applied, filed with the Securities and
Exchange Commission, to be delivered within
ten (10) business days of the filing, but in
any case no later than sixty (60) days after
the end of each fiscal quarter.
c. Copies of any reports submitted to the
Company or any of the Borrowers by
independent certified public accountants in
connection with the examination of the
Company's and Borrowers' financial statements
made by such accountants.
d. Chase reserves the right to request, and
the Company agrees to provide, such other
information as Chase may determine necessary
in order to exercise its discretion in
honoring requests for advances under this
line of credit
This line of credit does not constitute a commitment or in any way obligate
Chase to lend whether or not the Borrowers satisfy the conditions stated in this
letter, and is issued subject to Chase, in its sole discretion, continuing to be
satisfied with the Borrowers' financial condition and economic prospects, prompt
advice to Chase of any circumstances which might materially or adversely affect
the Borrowers, and the Borrowers' maintenance of a satisfactory
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relationship with Chase.
This letter is for the Borrowers' information only and is not to be
shown or relied upon by third parties. This letter constitutes the entire
understanding between Chase and the Borrowers and supersedes all prior
discussions. The terms and conditions set forth in this letter shall survive the
execution of the note evidencing the indebtedness and shall remain in effect so
long as this facility remains in place or any amounts remain outstanding under
this line of credit.
Chase will consider requests for advances hereunder until June 30, 1997
unless this discretionary line of credit is earlier terminated by Chase in its
sole discretion.
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Please acknowledge your understanding of the foregoing by signing and
returning the enclosed copy of this letter to the undersigned no later than
August 31,1996.
We at Chase are looking forward to serving you in the coming year and
supporting the Company' s continued success.
Sincerely,
THE CHASE MANHATTAN BANK
Tracy A. Van Riper
Vice President
RECEIPT OF THE FOREGOING LETTER IS HEREBY ACKNOWLEDGED, TOGETHER WITH ASSENT TO
THE TERMS THEREOF:
MARISA CHRISTINA, INC.
By: ___________________ Date:___________
Its:____________________
MARISA CHRISTINA APPAREL, INC.
By:___________________ Date:__________
Its: ___________________
FLAPDOODLES, INC.
By:____________________ Date: ______________
Its: ____________________
ADRIENNE VITTADINI ENTERPRISES, INC.
By:____________________ Date: ___________
Its: ____________________