AMENDMENT NO. 2 AND WAIVER
To
CREDIT AGREEMENT
This AMENDMENT NO. 2 AND WAIVER dated as of November 10, 2005 (this
"Amendment"), is by and among HAMPSHIRE GROUP, LIMITED (the "Borrower"),
HAMPSHIRE DESIGNERS, INC., GLAMOURETTE FASHION XXXXX, INC., ITEM-EYES, INC., the
Banks party hereto and HSBC Bank USA, National Association, as Agent for the
Banks.
RECITALS:
A. The Borrower, the Guarantors, the Banks and the Agent have entered into
a Credit Agreement and Guaranty dated as of August 15, 2003, as amended by
Amendment No. 1 thereto dated as of December 29, 2004 (as amended, the "Loan
Agreement").
B. The Borrower has requested that the Banks waive a default of Loan
Agreement arising from the Borrower's violation of Section 9.10 of the Loan
Agreement regarding Restricted Payments and agree to amend Section 9.10 to avoid
any subsequent violation of such covenant caused by any further purchases by
Borrower of its own stock.
C. The Banks are agreeable to such waiver and the amendment on the terms
and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration whose receipt and sufficiency are acknowledged, the
Borrower, the Guarantors, the Banks and the Agent hereby agree as follows:
Section 1. Definitions. Each capitalized term used but not defined in this
Amendment shall have the meaning ascribed to such term in the Loan Agreement.
Section 2. Amendment of Loan Agreement.
2.01 Section 9.10 of the Loan Agreement is hereby amended by deleting
the number "$1,500,000" appearing in clause (i) thereof, and substituting
the number "$10,000,000" therefore.
Section 3. Waiver.
3.01 Section 9.10 of the Loan Agreement prohibits the Borrower from
repurchasing treasury stock in an aggregate amount of more than $1,500,000
from and after the date of the Loan Agreement, net amounts received by
Borrower upon the sale of its capital stock, including capital stock which
may be sold. As a result of its repurchase of treasury stock on or before
November 7, Borrower had an aggregate net purchase of treasury stock of
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approximately $3,000,000, thereby violating Section 9.10 of the Loan
Agreement. The Required Banks hereby agree to waive compliance with such
Section 9.10 of the Loan Agreement from the repurchase of treasury stock
occurring on or before November 7, 2005 for the repurchase only and not for
any future calculation of the aggregate amount of net repurchases.
Notwithstanding anything to the contrary, the waiver provided herein shall
apply only provided no other Default or Event of Default is continuing as
of the date hereof.
3.02 The waiver set forth herein is effective only in this one
instance, and is not intended to waive compliance with such covenant for
any future periods. Such waiver is limited precisely as written and is
subject to the satisfaction of the terms and conditions stated below for
the effectiveness of this Amendment.
Section 4. Acknowledgements, Confirmations and Consent.
4.01 The Borrower and the Guarantors acknowledge and confirm that the
Liens granted pursuant to the Security Documents to which it is a party
continue to secure the Obligations.
4.02 Each Guarantor consents in all respects to the execution by the
Borrower of this Amendment and acknowledges and confirms that the Guaranty
by such Guarantor, as set forth in Article V of the Loan Agreement,
guarantees the full payment and performance of all of the obligations, and
remains in full force and effect in accordance with its terms.
Section 5. Representations and Warranties. The Borrower and each Guarantor,
as the case may be, each represents and warrants to the Lenders and the Agent as
follows:
5.01 After giving effect to this Amendment, (i) each of the
representations and warranties set forth in Article VII of the Loan
Agreement is true and correct in all respects as if made on the date of
this Amendment, and (ii) no Default or Event of Default exists under the
Loan Agreement.
5.02 The Borrower and each Guarantor has the power to execute, deliver
and perform, and has taken all necessary action to authorize the execution,
deliver and performance of, this Amendment and the other agreements,
instruments and documents to be executed by it in connection with this
Amendment. No consent or approval of any Person, no waiver of any Lien or
right of distraint or other similar right and no consent, license,
certificate of need, approval, authorization or declaration of, or filing
with, any government authority, bureau or agency is or will be required in
connection with the execution, delivery or performance by the Borrower or
any Guarantor, or the validity, enforcement or priority, of this Amendment
and the other agreements, instruments and documents executed in connection
with this Amendment.
5.03 The execution, delivery and performance by the Borrower and each
Guarantor of this Amendment and each of the agreements, instruments and
documents executed in connection with this Amendment to which it is a party
will not violate any Law, and will not result in, or require, the creation
or imposition of any Lien on any of its properties or revenues pursuant to
any Law except those in favor of the Agent.
5.04 This Amendment and each of the other agreements, instruments and
documents executed in connection with this Amendment to which the Borrower
or a Guarantor is a party has been duly executed and delivered by the
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Borrower or such Guarantor, as the case may be, and constitutes the valid
and legally binding obligation of the Borrower or such Guarantor, as the
case may be, enforceable in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in
effect, relating to or affecting the enforcement of creditors' rights
generally and except that the remedy of specific performance and other
equitable remedies are subject to judicial discretion.
Section 6. Miscellaneous.
6.01 Except as specifically amended by this Amendment, the Loan
Agreement and each of the other Loan Documents shall remain in full force
and effect in accordance with their respective terms.
6.02 THIS AMENDMENT AND ALL OTHER AGREEMENTS, DOCUMENTS AND
INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT SHALL
BE GOVERNED BY AND CONSTUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS EXECUTED IN AND TO BE PERFORMED ENTIRELY
WITHIN THE STATE OF NEW YORK BY RESIDENTS OF SUCH STATE.
6.03 The provisions of this Amendment are severable, and if any clause
or provision shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect
only such clause, provision or part in such jurisdiction and shall not in
any manner affect such clause, provision or part in any other clause or
provision in this Amendment in any jurisdiction.
6.04 This Amendment may be signed in any number of counterparts with
the same effect as if all parties to this Amendment signed the same
counterpart.
6.05 The Borrower agrees to pay the Agent upon demand all reasonable
expenses, including reasonable fees of attorneys for the Agent, incurred by
the Agent in connection with the preparation, negation and execution of
this Amendment and any other agreements, instruments and documents executed
or furnished in connection with this Amendment.
Section 7. Effectiveness of Amendment. This Amendment shall become
effective as of the date first written above upon receipt by the Agent of (i)
original counterparts of this Amendment duly executed by the Borrower, the
Guarantors and the Required Banks and (ii) payment of the Agent's legal fees and
expenses.
(signature pages follow)
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IN WITNESS WHEREOF, the Borrower, the Guarantors, the Banks of the Agent
have signed and delivered this Amendment as of the date first written above.
HAMPSHIRE GROUP, LIMITED
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President
HAMPSHIRE DESIGNERS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
GLAMOURETTE FASHION XXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
ITEM-EYES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
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HSBC BANK USA, NATIONAL ASSOCIATION, as a Bank, as
Letter of Credit Issuing Bank (for all Letters of
Credit other than Existing Letters of Credit) and as
Agent
By: /s/ Xxxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: FVP
THE CIT GROUP/COMMERCIAL
SERVICES, INC., as a Bank
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: VP
JPMORGAN CHASE BANK, as a Bank and as a Letter of
Credit Issuing Bank (for the Existing Letter of
Credit)
By: /s/ Xxxxx X Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
ISRAEL DISCOUNT BANK OF NEW
YORK, as a Bank
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
BANK OF AMERICA, N.A., as a Bank
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
WACHOVIA BANK, NATIONAL
ASSOCIATION, as a Bank
By: /s/ Xxx Xxxxxxxx
------------------------------------
Name: Xxx Xxxxxxxx
Title: Vice President
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