HAMPSHIRE GROUP, LIMITED
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AMENDMENT NO. 3 TO NOTE PURCHASE AGREEMENTS
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DATED AS OF AUGUST 19, 2003
$15,000,000 SENIOR SECURED NOTES DUE JANUARY 2, 2008
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Hampshire Group, Limited
$15,000,000 Senior Secured Notes Due January 2, 2008
AMENDMENT NO. 3 TO NOTE PURCHASE AGREEMENTS
As of August 19, 2003
To each of the Current Noteholders
Named in Annex 1 hereto:
Ladies and Gentlemen:
HAMPSHIRE GROUP,
LIMITED, a Delaware corporation (together with any
successors and assigns, the "Company"),
HAMPSHIRE DESIGNERS, INC., a Delaware
corporation, and each of HAMPSHIRE
INVESTMENTS, LIMITED, a Delaware corporation
(together with its permitted successors,
"HIL"), GLAMOURETTE FASHION MILLS,
INC., a Delaware corporation, and ITEM
EYES, INC., a Delaware corporation (the
foregoing Persons other than the Company
being referred to herein individually
as a "Guarantor" and collectively as the
"Guarantors"; the Company and the
Guarantors (other than HIL) being referred
to herein individually as an
"Obligor" and collectively as the
"Obligors"), hereby agree, jointly and
severally, with each of you as follows:
1. PRIOR ISSUANCE OF NOTES,
ETC.
The Company
issued and sold $15,000,000 in aggregate principal amount of
its Adjustable Rate Senior Secured Notes
(formerly called 7.05% Senior Secured
Notes) due January 2, 2008 (as may be
amended, restated or otherwise modified
from time to time, the "Notes", such term
to include any such notes issued in
substitution therefor pursuant to Section
14 of any of the Note Purchase
Agreements) pursuant to the separate Note
Purchase Agreements, each dated as of
May 15, 1998, among the Company, the
Guarantors and the purchasers named in
Schedule A thereto (the "Original Note
Purchase Agreements"). The Original Note
Purchase Agreements were amended by
Amendment No. 1 to Note Purchase Agreements
dated as of May 15, 1998 and Other
Financing Documents, which amendment was
dated as of September 5, 2000 ("Amendment
No. 1") and by Amendment No. 2 to Note
Purchase Agreements, which amendment was
dated as of March 31, 2002 ("Amendment
No. 2", and the Original Note Purchase
Agreements as amended by Amendment No. 1
and Amendment No. 2 and as in effect
immediately prior to giving effect to the
amendments provided for by this Amendment
No. 3 to Note Purchase Agreements
(this "Agreement") are referred to herein
as the "Existing Note Purchase
Agreements" and, as may be amended pursuant
to this Agreement and as may be
further amended, restated or otherwise
modified from time to time, the "Note
Purchase Agreements"). The register kept by
the Company for the registration and
transfer of the Notes indicates that each
of the Persons named in Annex 1 hereto
(collectively, the "Current Noteholders")
is currently a holder of the aggregate
principal amount of the Notes indicated in
such Annex.
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2. REQUEST FOR AMENDMENTS,
CONSENT AND RELEASE.
The Company
requests that each of the Current Noteholders (a) agree to the
amendments (the "Amendments") to the
Existing Note Purchase Agreements set forth
in Exhibit A hereto, (b) consent (the
"Consent") to the execution and delivery
by the Company and the Guarantors of that
certain Credit Agreement and Guaranty
(the "HSBC Credit Agreement") dated as of
the date hereof among the Company and
the Guarantors and HSBC Bank USA, as agent
and lender, and the other lenders
party thereto and substantially in the form
of Exhibit B hereto to the extent
that such consent is required by the terms
of the Existing Note Purchase
Agreements and the other Financing
Documents and (c) release (the "Release") the
assignments to the Collateral Agent of
benefits due under life insurance
policies which the Company maintains upon
the lives of Martin H. Axman and
Ludwig Kuttner.
3. WARRANTIES AND
REPRESENTATIONS.
To induce the
Current Noteholders to enter into this Agreement and to agree
to the Amendments, the Consent and the
Release, the Company warrants and
represents as follows (it being agreed,
however, that nothing in this Section 3
shall affect any of the warranties and
representations previously made by the
Company in or pursuant to the Existing Note
Purchase Agreements, and that all of
such other warranties and representations,
as well as the warranties and
representations in this Section 3, shall
survive the effectiveness of the
Amendments, the Consent and the
Release).
3.1.
Organization; Power and Authority.
Each Obligor and
HIL is a corporation, duly organized, validly existing and
in good standing under the laws of its
jurisdiction of incorporation, and each
is duly qualified as a foreign corporation
and is in good standing (to the
extent such concept is recognized) in each
jurisdiction in which such
qualification is required by law, other
than those jurisdictions as to which the
failure to be so qualified or in good
standing could not, individually or in the
aggregate, reasonably be expected to have a
Material Adverse Effect. Each
Obligor and HIL has the corporate power and
authority to own or hold under lease
the properties it purports to own or hold
under lease, to transact the business
it transacts and proposes to transact, to
execute and deliver this Agreement and
to perform the provisions hereof.
3.2.
Authorization, etc.
This Agreement
has been duly authorized by all necessary corporate action
on the part of the Company and each of the
Guarantors, and this Agreement
constitutes and, upon execution and
delivery thereof, will constitute, a legal,
valid and binding obligation of the Company
and each of the Guarantors
enforceable against the Company and each of
the Guarantors in accordance with
its terms, except as such enforceability
may be limited by (i) applicable
bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or
other similar laws affecting the
enforcement of creditors' rights generally and
(ii) general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at
law).
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3.3. No Material
Adverse Change.
Since the date
of the most recent audited financial statements of the
Company delivered to the Current
Noteholders, there has been no change in the
business operations, profits, financial
condition, properties or business
prospects of the Company except changes
that, in the aggregate, could not
reasonably be expected to have a Material
Adverse Effect.
3.4. Full
Disclosure.
Neither the
financial statements and other certificates previously provided
to the Current Noteholders pursuant to the
provisions of the Existing Note
Purchase Agreements nor the statements made
in this Agreement nor any other
written statements furnished by or on
behalf of the Company to the Current
Noteholders in connection with the proposal
and negotiation of the Amendments,
the Consent or the Release, taken as a
whole, contain any untrue statement of a
material fact or omit a material fact
necessary to make the statements contained
therein and herein not misleading. There is
no fact relating to any event or
circumstance that has occurred or arisen
since the date of the Closing that the
Company has not disclosed to the Current
Noteholders in writing that has had or,
so far as the Company can now reasonably
foresee, could reasonably be expected
to have, a Material Adverse Effect.
3.5. Intent.
Neither the
Company nor any Guarantor is entering into the transactions
contemplated by this Agreement and the HSBC
Credit Agreement with any intent to
hinder, delay or defraud either current
creditors or future creditors of the
Company or any Guarantor.
3.6. No
Defaults.
No event has
occurred and no condition exists that, upon the execution and
delivery of this Agreement and the
effectiveness of the Amendments, the Consent
and the Release, would constitute a Default
or an Event of Default.
3.7. Guaranties
of Subsidiaries.
There is no
Subsidiary that, in accordance with Section 10.7 of the
Existing Note Purchase Agreements, should
have become a Guarantor under the Note
Purchase Agreements, but has not executed
and delivered the requisite documents,
as required by such Section, to become a
Guarantor under the Note Purchase
Agreements. All Subsidiaries are listed on
the signature pages hereto.
3.8. HSBC Credit
Agreement.
The Company has
delivered to each of the Current Noteholders a true and
correct copy of the HSBC Credit Agreement.
Each of the representations and
warranties contained in Article VII of the
HSBC Credit Agreement are true and
correct as of the date hereof.
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4. AMENDMENTs; CONSENT;
RELEASE.
4.1. Amendment
to Existing Note Purchase Agreements; Consent; Release.
Subject to
Section 4.2 of this Agreement, the Current Noteholders and the
Company hereby agree to each of the
Amendments, the Consent and the Release.
4.2.
Effectiveness of the Amendments, the Consent and the Release.
The Amendments,
the Consent and the Release contemplated by Section 4.1
shall, in accordance with Section 18.1 of
the Existing Note Purchase Agreements,
become effective as of the date first
written above (the date of such
effectiveness is herein referred to as the
"Effective Date"), if at all, at such
time as the Company and the Current
Noteholders shall have indicated their
written consent to the Amendments, the
Consent and the Release by executing and
delivering the applicable counterparts of
this Agreement. It is understood that
any Current Noteholder may withhold its
consent for any reason or for no reason,
and that, without limitation of the
foregoing, any Current Noteholder hereby
makes the granting of its consent
contingent upon satisfaction of each of the
following conditions:
(a) each of the Current Noteholders shall have received true
and
correct copies
of the fully executed HSBC Credit Agreement substantially in
the form of
Exhibit B hereto;
(b) that certain
Intercreditor Agreement dated as of the date hereof
among HSBC Bank
USA, each of the other lenders under the HSBC Credit
Agreement and
the Current Noteholders and acknowledged and agreed to by the
Obligors shall
have been fully executed and delivered substantially in the
form of Exhibit
C hereto;
(c) each of the representations and warranties set forth in Section
3
hereof shall be
true and correct as of the Effective Date;
(d) each of the conditions precedent set forth in Section 6.01 of
the
HSBC Credit
Agreement shall have been fully satisfied;
(e) the Company shall have paid the fees and disbursements of
special
counsel to the
Current Noteholders reflected on a statement delivered in
connection with
the execution and delivery of this Agreement to the
Company; and
(f) each of the Current Noteholders shall have received any
additional
information,
certification or other item as such Current Noteholder shall
have reasonably
requested on or before the Effective Date.
4.3. No Other
Amendments; Confirmation.
Except as
expressly provided herein, (a) no terms or provisions of any
agreement are modified or changed by this
Agreement, (b) the terms of this
Agreement shall not operate as a waiver by
any Current Noteholder of, or
otherwise prejudice any Current
Noteholder's rights, remedies or powers under,
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the Existing Note Purchase Agreements or
any other Financing Document or under
any applicable law, and (c) the terms and
provisions of the Existing Note
Purchase Agreements and each other
Financing Document shall continue in full
force and effect.
5. DEFINED TERMS.
Capitalized
terms used herein and not otherwise defined herein shall have
the meanings ascribed to them in the
Existing Note Purchase Agreements.
6. EXPENSES.
Whether or not
any of the Amendments, the Consent or the Release becomes
effective, the Company will promptly (and
in any event within thirty (30) days
of receiving any statement or invoice
therefor) pay all fees, expenses and costs
relating to this Agreement, including, but
not limited to, (a) the reasonable
cost of reproducing this Agreement and the
other documents delivered in
connection herewith and (b) the reasonable
fees and disbursements of the Current
Noteholders' special counsel, Bingham
McCutchen LLP, incurred in connection with
the preparation, negotiation and delivery
of this Agreement. This Section 6
shall not be construed to limit the
Company's obligations under Section 16.1 of
the Note Purchase Agreements.
7. MISCELLANEOUS.
7.1. Part of
Note Purchase Agreements, Future References, etc.
This Agreement
shall be construed in connection with and as a part of each
of the Existing Note Purchase Agreements
and, except as expressly amended by
this Agreement, all terms, conditions and
covenants contained in the Existing
Note Purchase Agreements and the other
Financing Documents are hereby ratified
and shall be and remain in full force and
effect. Any and all notices, requests,
certificates and other instruments executed
and delivered after the execution
and delivery of this Agreement may refer to
the Note Purchase Agreements without
making specific reference to this
Agreement, but nevertheless all such
references shall include this Agreement
unless the context otherwise requires.
7.2. Governing
Law.
THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK, UNITED STATES OF AMERICA,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE
LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A
JURISDICTION OTHER THAN SUCH STATE.
7.3. Duplicate
Originals, Execution in Counterpart.
Two (2) or more
duplicate originals hereof may be signed by the parties,
each of which shall be an original but all
of which together shall constitute
one and the same instrument. This Agreement
may be executed in one or more
counterparts and shall become effective at
the time provided in Section 4.2
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hereof, and each set of counterparts that,
collectively, show execution by the
Company and each consenting Current
Noteholder shall constitute one duplicate
original. Delivery of a facsimile of an
executed signature page hereto shall be
effective as delivery of an original.
7.4. Binding
Effect.
This Agreement
shall be binding upon and shall inure to the benefit of the
Company and the Current Noteholders and
their respective successors and assigns.
[Remainder of page intentionally
left blank. Next page
is signature page.]
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If this
Agreement is satisfactory to you, please so indicate by signing
the
applicable acceptance on a counterpart
hereof and returning such counterpart to
the Company, whereupon this Agreement shall
become binding among you, the
Obligors and HIL in accordance with its
terms.
Very truly yours,
HAMPSHIRE GROUP, LIMITED
By: /s/ Charles W.
Clayton
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Name:
Charles W. Clayton
Title:
Treasurer
Accepted:
PHOENIX LIFE INSURANCE COMPANY
By: /s/ Michael E. Haylon
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Name: Michael E. Haylon
Title: Executive Vice President and
Chief Investment Officer
THE OHIO NATIONAL LIFE INSURANCE
COMPANY
By: /s/ Jed R. Martin
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Name: Jed R. Martin
Title: Investment Vice President,
Private Placements
[Signature Page to Amendment No. 3 to Note Purchase Agreements]
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Each undersigned
Guarantor hereby consents to the Amendments and confirms
its obligations as Guarantor under the Note
Purchase Agreements:
HAMPSHIRE DESIGNERS, INC.
By: /s/ William W.
Hodge
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Name:
William W. Hodge
Title: Vice
President
HAMPSHIRE INVESTMENTS, LIMITED
By: /s/ Charles W. Clayton
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Name: Charles W.
Clayton
Title: Treasurer
GLAMOURETTE FASHION MILLS, INC.
By: /s/ Charles W. Clayton
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Name: Charles W.
Clayton
Title: Treasurer
ITEM-EYES, INC.
(formerly VINTAGE III, INC.)
By: /s/ William W. Hodge
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Name: William W.
Hodge
Title: Vice
President
[Signature Page to Amendment No. 3 to
