AMENDMENT NO. 1
to
CREDIT AGREEMENT and BORROWER'S SECURITY AGREEMENT
This AMENDMENT NO. 1 dated as of December 29, 2004 (this "Amendment"), is
by and among HAMPSHIRE GROUP, LIMITED, HAMPSHIRE DESIGNERS, INC., HAMPSHIRE
INVESTMENTS, LIMITED, GLAMOURETTE FASHION XXXXX, INC. and ITEM-EYES, INC.
(collectively, the "Borrower"), the lenders party hereto (the "Banks") and HSBC
Bank USA, National Association, as Agent for the Lenders (in such capacity
"Agent").
RECITALS:
A. The Borrower, the Existing Lenders (as defined below) and the Agent have
entered into a Credit Agreement dated as of August 15, 2003 (the "Loan
Agreement"). Capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Loan Agreement.
B. Two Existing Lenders, Bank of America, N.A. and Fleet National Bank are
now under common control and wish to retain only $16,500,000 of the Revolving
Credit Commitments under the name of Fleet National Bank, a Bank of America
company.
C. The Existing Lenders intend to reallocate their pro rata shares of the
Revolving Credit Commitment and to permit Wachovia Bank, National Association
("Wachovia") to become a Bank under the Loan Agreement.
D. The Borrower has requested, and the Banks and the Agent have agreed, to
amend certain provisions of the Loan Agreement and the Borrower's Security
Agreement, all upon the terms and 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 Banks and the Agent 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 The defined term "Banks", as set forth in the preamble to the
Loan Agreement, is hereby amended in its entirety to include only HSBC Bank
USA, National Association ("HSBC"), JPMorgan Chase Bank ("Chase"), The CIT
Group/Commercial Services, Inc. ("CIT"), Israel Discount Bank of New York
("IDB"), Fleet National Bank, a Bank of America company ("Fleet") and
Wachovia Bank, National Association ("Wachovia") (HSBC, Chase, CIT, IDB,
Fleet and Wachovia individually referred to as a "Bank" and collectively,
the "Banks").
2.02 The following defined term contained in Section 1.01 of the Loan
Agreement is amended in its entirety to read as follows:
"Cash Collateral" means a deposit by Borrower, made in
immediately available funds, to a savings, checking, time deposit,
brokerage or other account at HSBC (or HSBC Brokerage (USA) Inc. or
HSBC acting its brokerage capacity) or the purchase by Borrower of a
certificate of deposit issued by HSBC and the execution of all
documents and the taking of all steps required to give Agent a
perfected security interest for the benefit of the Banks in such
account or certificate of deposit.
2.03 The chart set forth in Section 4.01 of the Loan Agreement with
respect to the Participating Banks' Pro Rata Share is hereby amended in its
entirety to duplicate the chart (inclusive of the headings) set forth in
Section 4.01 below.
Section 3. Amendment to the Borrower's Security Agreement. The Security
Agreement dated August 15, 2003 between the Borrower and the Agent is hereby
amended by redesignating the existing Section 1.G. therein to become a new
Section 1.H. and by inserting a new Section 1.G. to read in its entirety as
follows:
HSBC Brokerage (USA) Inc. account number 66C 01100, in including
without limitation all investment property and other financial assets held
therein.
Section 4. Assignment.
4.01 On and as of the date hereof, each Bank (as such term is defined
immediately prior to the effectiveness of this Amendment, each an "Existing
Lender") shall sell, assign and transfer or purchase, as the case may be, such
Existing Lender's Revolving Credit Commitment and such Existing Lender's
Participation in each Letter of Credit such that the Pro Rata Share of each Bank
immediately after giving effect to this Amendment shall be as follows:
Bank Commitment Pro Rata Share
---- ---------- --------------
HSBC $24,000,000 24%
CIT $20,000,000 20%
Chase $15,000,000 15%
Fleet $16,500,000 16.5%
IDB $14,500,000 14.5%
Wachovia $10,000,000 10%
4.02 On and as of the date hereof, each Bank that is purchasing any portion
of the Revolving Credit pursuant to Section 4.01 above shall have paid the
purchase price for its Pro Rata Share of the principal amount of Loans
outstanding Commitment (and funded Participations in Letters of Credit) in
respect of such purchased Revolving Credit Commitment by wire transfer of
immediately available funds to the Agent for distribution to the assigning
Banks, as applicable.
4.03 The assignments and purchases provided for in Section 4.01 above shall
be without recourse or representation, except that each of the assigning Banks
shall be deemed to have represented that is the legal and beneficial owner of
the interests assigned by it, subject to no liens or other encumbrances.
4.04 Each of the parties hereby consents to the assignments and purchases
provided for in Section 4.01 above and agrees that as of the date hereof
Wachovia shall become a party to the Loan Agreement, as amended hereby, as a
Bank, and from and after the date hereof, Wachovia shall have all of the rights
and obligations of a Bank thereunder to the same extent and with the same effect
as if it had been an original signatory thereto.
4.05 Upon consummation of the transactions contemplated in Section 4.01
above, Bank of America, N.A. shall cease to be party to the Loan Agreement, as
amended hereby, and shall be released from all further obligations thereunder
and shall have no further rights to or interest in any of the collateral subject
to the liens created under the Loan Documents; provided that the provisions set
forth in Section 14.03 of the Loan Agreement shall continue to inure to the
benefit of Bank of America, N.A.. Upon consummation of the transactions
contemplated in Section 4.01 above, any outstanding note payable to Bank of
America, N.A. by the Borrower shall cease to evidence Loans made by such party
and shall be deemed cancelled hereby.
4.06 Conforming Amendments. The Loan Agreement and the other Loan Documents
and all agreements, instruments and documents executed and delivered in
connection with any of the foregoing, shall each be deemed to be amended and
supplemented hereby to the extent necessary, if any, to give effect to the
provisions of this Amendment. Except as so amended hereby, the Loan Agreement
and the other Loan Documents shall remain in full force and effect in accordance
with their respective terms.
Section 5. Acknowledgments, Confirmations and Consent.
5.01 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.
5.02 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 6. Release.
As of the effective date of the consummation of the HIL Spin-off
Transaction, the Guaranty Obligation of HIL pursuant to the Guaranty is hereby
terminated and HIL shall have no further obligation under such Guaranty. The
definition of "Guarantor" for all purposes under the Loan Agreement is hereby
deemed to exclude HIL.
Section 7. 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:
7.01 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.
7.02 The Borrower and each Guarantor has the power to execute, deliver and
perform, and has taken all necessary action to authorize the execution, delivery
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 governmental 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.
7.03 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.
7.04 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 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 8. Miscellaneous.
8.01 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.
8.02 THIS AMENDMENT AND ALL OTHER AGREEMENTS, DOCUMENTS AND INSTRUMENTS
EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED 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.
8.03 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 jurisdiction or any other
clause or provision in this Amendment in any jurisdiction.
8.04 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.
8.05 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, negotiation and execution of this
Amendment and any other agreements, instruments and documents executed or
furnished in connection with this Amendment.
Section 9. 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 each party hereto, (ii)
in substitution for the existing Revolving Credit Notes, new revolving credit
notes executed by the Borrower, delivered to the Agent and payable to each Bank,
respectively, in the amount of such Bank's Pro Rata Share of the Revolving
Credit Commitment (after giving effect to this Amendment) and (iii) payment of
the Agent's legal fees and expenses.
[signature pages follow]
IN WITNESS WHEREOF, the Borrower, the Lenders, the Agent and the Guarantors
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. Clayont
Title: Vice President
HSBC BANK USA, NATIONAL
ASSOCIATION, as a Bank, as
Letter of Credit Issuing
Bank (for all Letters of
Cedit other than Existing
Letters of Credit) and as
Agent
By: /s/ Ignatitus X. Xxxxxxx
------------------------
Name: Ignatitus X. Xxxxxxx
Title: Executive Vice President
CIT GROUP/COMMERCIAL
SERVICES, INC., as a Bank
By: /s/ Xxxxxxx Xxxxxxxx
--------------------
Name: Xxxxxxx Xxxxxxxx
Title:Assistant Vice President
JPMORGAN CHASE BANK , as a
Bank and as 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/ Xxxxxx Xxxxxxxx
-------------------
Name: Xxxxxx Xxxxxxxx
Title: Senior Vice President I
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Assistant Vice President
BANK OF AMERICA, N.A., as an Existing Lender
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION, as a Bank
By: /s/ Xxx Xxxxxxxx
----------------
Name: Xxx Xxxxxxxx
Title: Vice President
Address for Notices:
Wachovia Bank, National Association
000 X. Xxxx Xxxxxx, XX 6754
Xxxxxxx-Xxxxx, XX 00000
Attn: Credit Products Managment
Fax Number: (000) 000-0000
FLEET NATIONAL BANK, a Bank of America company, as a Bank
By: /s/ Xxxxx Xxxxxxxxx
-------------------
Name: Xxxxx Xxxxxxxxx
Title:Vice President