Exhibit 10.1
AMENDMENT NO. 3 AND WAIVER
to
CREDIT AGREEMENT
This AMENDMENT NO. 3 AND WAIVER dated as of August 8, 2006 (this
"Amendment") is by and among HAMPSHIRE GROUP, LIMITED (the "Borrower"),
HAMPSHIRE DESIGNERS, INC., GLAMOURETTE FASHION MILLS, 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 and by Amendment No. 2
thereto dated as of November 10, 2005 (as amended, the "Loan Agreement").
B. The Borrower has requested that the Banks (i) 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 July 1, 2006 within 45 days following the
close of such second fiscal quarter of the Borrower, (ii) amend Section 10.04 of
the Loan Agreement to allow the Borrower and its Restricted Subsidiaries, in any
Fiscal Year, to make Consolidated Capital Expenditures in the aggregate amount
up to $3,000,000 and (iii) amend Section 9.08 to clarify the exclusion of real
property leases therefrom.
C. The Banks are agreeable to such waiver and amendments 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. Amendments of Loan Agreement.
2.01 Section 10.4 of the Loan Agreement is hereby amended by deleting
the number "$1,500,000" appearing therein, and substituting the number
"$3,000,000" thererfor.
2.02 Clause (b) of Section 9.08 of the Loan Agreement is hereby
amended in its entirety to read as follows: "(b) each of the real property
leases, whether retail, office, warehouse or otherwise, in effect on this
date and those real property leases entered into in the future,"
Section 3. Waiver.
3.01 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 July 1, 2006 within 45
days following the close of such second fiscal quarter of the Borrower. The
Borrower has informed the Banks that such financial information for the
fiscal quarter ending July 1, 2006 will likely not be delivered within such
45 day period. By its execution hereof, the Banks hereby agree to waive
compliance with such covenant solely for the fiscal quarter ending July 1,
2006 and not for any future periods, so long as the quarterly financial
statements for the fiscal quarter ending July 1, 2006 shall be delivered to
the Banks on or before October 15, 2006. Notwithstanding anything to the
contrary, the foregoing waiver 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 subject to the satisfaction of the terms
and conditions stated below for the effectiveness hereof. Such waiver is
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.
Section 4. Acknowledgments, 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.
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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,
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.
5.03 The execution, delivery and performance by the Borrower and each
Guarantor of this Amendment 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 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 6. Miscellaneous.
6.01 Except as specifically modified 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 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.
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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 jurisdiction
or 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, negotiation and execution of
this Amendment and any other agreements, instruments and documents executed
or furnished in connection with this Amendment.
Section 7. Effectiveness of Waiver. 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, (ii) payment to the Agent for the account of the Banks of a
non-refundable waiver fee in the amount of $50,000 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 Amendment as of the date first written above.
HAMPSHIRE GROUP, LIMITED
By: /s/ Michael S. Culang
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Name: Michael S. Culang
Title: Chief Executive Officer
HAMPSHIRE DESIGNERS, INC.
By: /s/ Michael S. Culang
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Name: Michael S. Culang
Title: Chairman
GLAMOURETTE FASHION MILLS, INC.
By: /s/ Michael S. Culang
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Name: Michael S. Culang
Title: Chairman
ITEM-EYES, INC.
By: /s/ Michael S. Culang
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Name: Michael S. Culang
Title: Chairman
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/ Ignatius J. Marotta
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Name: Ignatius J. Marotta
Title: FVP
THE CIT GROUP/COMMERCIAL SERVICES, INC., as a
Bank
By: /s/ Lizabeth McCartny
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Name: Lizabeth McCartny
Title: Vice President
JPMORGAN CHASE BANK , as a Bank and as Letter
of Credit Issuing Bank (for the Existing Letter
of Credit)
By: /s/ Joseph J. Nastri
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Name: Joseph J. Nastri
Title: SVP
ISRAEL DISCOUNT BANK OF NEW YORK, as a Bank
By: /s/ Michael Paul
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Name: Michael Paul
Title: Assistant Vice President
By: /s/ David A. Acosta
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Name: David A. Acosta
Title: First Vice President
BANK OF AMERICA, N.A., as a Bank
By: /s/ Joyce Y. Chan
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Name: Joyce Y. Chan
Title: VP
WACHOVIA BANK, NATIONAL ASSOCIATION, as a Bank
By: /s/ Jeff Reeves
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Name: Jeff Reeves
Title: SVP