Exhibit 10.1
WAIVER
to
CREDIT AGREEMENT
This WAIVER dated as of August 31, 2007 (this "Waiver") is by and among
HAMPSHIRE GROUP, LIMITED (the "Borrower"), HAMPSHIRE DESIGNERS, INC.,
GLAMOURETTE FASHION XXXXX, INC., ITEM-EYES, INC., SB CORPORATION, XXXXX XXXXXX,
INC., MARISA XXXXXXXXX, INCORPORATED, 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, by Amendment No. 2
thereto dated as of November 10, 2005, by Amendment No. 3 and Waiver dated as of
August 8, 2006 (such Amendment No. 3 and Waiver hereinafter referred to as the
"August Waiver"), by Waiver dated as of October 13, 2006 (such Waiver
hereinafter referred to as the "October Waiver"), by Amendment No. 4 and Waiver
dated as of December 29, 2006 (such Amendment No. 4 and Waiver hereinafter
referred to as the "December Waiver"), by Amendment No. 5 and Waiver dated as of
March 30, 2007 (such Amendment No. 5 and Waiver hereinafter referred to as the
"March Waiver"), by Amendment No. 6 dated as of July 11, 2007 and by Waiver
dated as of July 25, 2007 (such Waiver hereinafter referred to as the "July
Waiver") (as amended, the "Loan Agreement").
B. After giving effect to the July Waiver and following the earlier March
Waiver, the Borrower has requested, and the Banks have agreed, to waive
compliance with the Section 8.08(b) of the Loan Agreement requirement for the
Borrower to deliver the annual financial statements of the Borrower and its
Subsidiaries for the Fiscal Year ending December 31, 2006 within the time period
therein required, so long as the Borrower delivers such financial statements by
August 31, 2007.
C. The Borrower has requested that the Banks continue such waiver
originally granted pursuant to the March Waiver, to a new deadline of September
17, 2007 for delivery of the annual financial statements of the Borrower and its
Subsidiaries for the Fiscal Year ending December 31, 2006.
D. After giving effect to the July Waiver and following the earlier March
Waiver, the Borrower has requested, and the Banks have agreed, to waive
compliance with the Section 8.08(a) of the Loan Agreement requirement for the
Borrower to deliver the quarterly financial statements of the Borrower and its
Subsidiaries for the quarter ending March 31, 2007 within the time period
therein required, so long as the Borrower delivers such financial statements by
September 28, 2007.
E. The Borrower has requested that the Banks continue such waiver
originally granted pursuant to the March Waiver, to a new deadline of October
31, 2007 for delivery of the quarterly financial statements of the Borrower and
its Subsidiaries for the quarter ending March 31, 2007.
F. After giving effect to the July Waiver and following the earlier March
Waiver, the Borrower has requested, and the Banks have agreed, to waive
compliance with the Section 8.08(a) of the Loan Agreement requirement for the
Borrower to deliver the quarterly financial statements of the Borrower and its
Subsidiaries for the quarter ending June 30, 2007 within the time period therein
required, so long as the Borrower delivers such financial statements by October
31, 2007.
G. The Borrower has requested that the Banks continue such waiver
originally granted pursuant to the March Waiver, to a new deadline of November
19, 2007 for delivery of the quarterly financial statements of the Borrower and
its Subsidiaries for the quarter ending June 30, 2007.
H. The Borrower has requested, and the Banks have agreed, to waive
compliance with the Section 8.08(a) of the Loan Agreement requirement for the
Borrower to deliver the quarterly financial statements of the Borrower and its
Subsidiaries for the quarter ending September 29, 2007 within the time period
therein required, so long as the Borrower delivers such financial statements by
December 10, 2007.
I. The Banks are agreeable to extend the deadlines for the July Waiver and
to add such new waivers, 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
Waiver shall have the meaning ascribed to such term in the Loan Agreement.
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Section 2. Waivers.
2.01 After giving effect to the July Waiver and following the earlier
March Waiver, the Borrower has requested that the Banks waive compliance with
Section 8.08(b) of the Loan Agreement to the extent it requires the Borrower to
deliver to the Banks the annual financial statements of the Borrower and its
Subsidiaries for the Fiscal Year ending December 31, 2006 within the time period
then required, so long as the Borrower delivered such financial statements by
August 31, 2007. By its execution hereof, the Banks hereby agree to waive
compliance with such covenant solely for the Fiscal Year ending December 31,
2006 and not for any future periods, so long as the annual financial statements
for the Fiscal Year ending December 31, 2006 shall be delivered to the Banks on
or before September 17, 2007. Notwithstanding anything to the contrary, the
foregoing waiver shall apply only provided no other Default or Event of Default
(other than those Defaults or Events of Default being waived in other Sections
of this Waiver (other than those Defaults or Events of Default with respect to
Financial Covenants and subject to Section 2.06 hereof)) is continuing as of the
date hereof.
2.02 After giving effect to the July Waiver and following the earlier
March Waiver, the Borrower has requested that the Banks waive compliance with
Section 8.08(a) of the Loan Agreement to the extent it requires the Borrower to
deliver to the Banks the quarterly financial statements of the Borrower and its
Subsidiaries for the quarter ending March 31, 2007 within the time period then
required, so long as the Borrower delivered such financial statements by
September 28, 2007. By its execution hereof, the Banks hereby agree to waive
compliance with such covenant solely for the fiscal quarter ending March 31,
2007 and not for any future periods, so long as the quarterly financial
statements for the fiscal quarter ending March 31, 2007 shall be delivered to
the Banks on or before October 31, 2007. Notwithstanding anything to the
contrary, the foregoing waiver shall apply only provided no other Default or
Event of Default (other than those Defaults or Events of Default being waived in
other Sections of this Waiver (other than those Defaults or Events of Default
with respect to Financial Covenants and subject to Section 2.06 hereof)) is
continuing as of the date hereof.
2.03 After giving effect to the July Waiver and following the earlier
March Waiver, the Borrower has requested that the Banks waive compliance with
Section 8.08(a) of the Loan Agreement to the extent it requires the Borrower to
deliver to the Banks the quarterly financial statements of the Borrower and its
Subsidiaries for the quarter ending June 30, 2007 within the time period then
required, so long as the Borrower delivered such financial statements by October
31, 2007. By its execution hereof, the Banks hereby agree to waive compliance
with such covenant solely for the fiscal quarter ending June 30, 2007 and not
for any future periods, so long as the quarterly financial statements for the
fiscal quarter ending June 30, 2007 shall be delivered to the Banks on or before
November 19, 2007. Notwithstanding anything to the contrary, the foregoing
waiver shall apply only provided no other Default or Event of Default (other
than those Defaults or Events of Default being waived in other Sections of
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this Waiver (other than those Defaults or Events of Default with respect to
Financial Covenants and subject to Section 2.06 hereof)) is continuing as of the
date hereof.
2.04 The Borrower has requested that the Banks waive compliance with
Section 8.08(a) of the Loan Agreement to the extent it requires the Borrower to
deliver to the Banks the quarterly financial statements of the Borrower and its
Subsidiaries for the quarter ending September 29, 2007 within the time period
then required, so long as the Borrower delivered such financial statements by
December 10, 2007. By its execution hereof, the Banks hereby agree to waive
compliance with such covenant solely for the fiscal quarter ending September 29,
2007 and not for any future periods, so long as the quarterly financial
statements for the fiscal quarter ending September 29, 2007 shall be delivered
to the Banks on or before December 10, 2007. Notwithstanding anything to the
contrary, the foregoing waiver shall apply only provided no other Default or
Event of Default (other than those Defaults or Events of Default being waived in
other Sections of this Waiver (other than those Defaults or Events of Default
with respect to Financial Covenants and subject to Section 2.06 hereof)) is
continuing as of the date hereof.
2.05 The waivers set forth herein are effective only in this one
instance, and are not intended to waive compliance with such covenants for any
future periods. Such waivers are subject to the satisfaction of the terms and
conditions stated below for the effectiveness hereof. Such waivers are limited
precisely as written and shall not be deemed to (a) be a waiver of any other
term or condition of the Loan Agreement or any of the other Loan Documents, or
(b) prejudice any right or rights which the Banks may have or may have in the
future under or in connection with the Loan Agreement or any of the other Loan
Documents.
2.06 Notwithstanding anything to the contrary stated herein, and for
avoidance of doubt, in respect to any test dates occurring subsequent to June
29, 2006, (a) none of the waivers set forth herein constitutes an agreement by
the Banks to waive compliance by the Borrower and its Restricted Subsidiaries
with any financial covenants set forth in Article X of the Loan Agreement (the
"Financial Covenants"), and (b) the Banks and the Agent reserve all of their
rights and remedies as set forth in the Loan Agreement and other Loan Documents
with respect to any non-compliance with any Financial Covenants.
Section 3. Acknowledgments, Confirmations and Consent.
3.01 Each of the Borrower and the Guarantors acknowledges and confirms
that the Liens granted pursuant to the Security Documents to which it is a party
continue to secure the Obligations.
3.02 Each Guarantor consents in all respects to the execution by the
Borrower of this Waiver and acknowledges and confirms that the Guaranty by such
Guarantor, as set forth in Article V of the Loan Agreement, guarantees the full
payment
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and performance of all of the Obligations, and remains in full force and
effect in accordance with its terms.
Section 4. 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:
4.01 After giving effect to this Waiver, (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 Waiver, and (ii)
no Default or Event of Default exists under the Loan Agreement.
4.02 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 Waiver and the other agreements, instruments
and documents to be executed by it in connection with this Waiver. 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 Waiver and the other agreements, instruments
and documents executed in connection with this Waiver.
4.03 The execution, delivery and performance by the Borrower and each
Guarantor of this Waiver 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.
4.04 This Waiver 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 5. Miscellaneous.
5.01 Except as specifically modified by this Waiver, the Loan
Agreement and each of the other Loan Documents shall remain in full force and
effect in accordance with their respective terms.
5.02 THIS WAIVER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW
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YORK APPLICABLE TO CONTRACTS EXECUTED IN AND TO BE PERFORMED ENTIRELY WITHIN THE
STATE OF NEW YORK BY RESIDENTS OF SUCH STATE.
5.03 This Waiver may be signed in any number of counterparts with the
same effect as if all parties to this Waiver signed the same counterpart.
5.04 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
Waiver and any other agreements, instruments and documents executed or furnished
in connection with this Waiver.
Section 6. Effectiveness of Waiver. This Waiver shall become effective as
of the date first written above upon receipt by the Agent of (i) original
counterparts of this Waiver duly executed by the Borrower, the Guarantors and
the Required Banks, (ii) payment to the Agent for the account of the Banks of a
non-refundable waiver fee in the amount of $25,000 and (iii) 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 and the Agent
have signed and delivered this Waiver as of the date first written above.
HAMPSHIRE GROUP, LIMITED
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice President & Chief Financial Officer
HAMPSHIRE DESIGNERS, INC.
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Treasurer
GLAMOURETTE FASHION XXXXX,
INC.
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Treasurer
ITEM-EYES, INC.
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Treasurer
SB CORPORATION
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Treasurer
XXXXX XXXXXX, INC.
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Treasurer
MARISA XXXXXXXXX, INCORPORATED
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Treasurer
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/ Xxxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
THE CIT GROUP/COMMERCIAL
SERVICES, INC.
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
JPMORGAN CHASE BANK, N.A., as a Bank and
as Letter of Credit Issuing Bank (for
the Existing Letter of Credit)
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
ISRAEL DISCOUNT BANK OF NEW
YORK, as a Bank
By: /s/ Xxxx X. Xxxxx
---------------------------------------------
Name: Xxxx X. Xxxxx
Title: First Vice President
By: /s/ R. Xxxxx Xxxxxxxxx
---------------------------------------------
Name: R. Xxxxx Xxxxxxxxx
Title: Vice President
BANK OF AMERICA, N.A., as a Bank
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
WACHOVIA BANK, NATIONAL
ASSOCIATION, as a Bank
By: /s/ Xxxx Xxxxxx
---------------------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
