Exhibit 10.1
AMENDMENT NO. 4 AND WAIVER
to
CREDIT AGREEMENT
This
AMENDMENT NO. 4 AND WAIVER dated as of December 29, 2006 (this
"Waiver") is by and among HAMPSHIRE GROUP, LIMITED (the
"Borrower"), HAMPSHIRE
DESIGNERS, INC., GLAMOURETTE FASHION MILLS, INC., ITEM-EYES, INC.,
SB
CORPORATION, SHANE HUNTER, INC., MARISA CHRISTINA, INCORPORATED,
the Banks party
hereto and HSBC Bank USA, National Association, as Agent for the
Banks.
RECITALS:
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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 and 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") and by Waiver dated as of October 13, 2006
(such Waiver
hereinafter referred to as the "October Waiver") (as amended, the
"Loan
Agreement").
B.
Pursuant to the August Waiver, the Borrower requested, and the
Banks
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 July 1,
2006 within 45
days following the close of such second fiscal quarter of the
Borrower, so long
as the Borrower delivered such financial statements by October 15,
2006.
C.
The Borrower has requested that the Banks continue such waiver
originally granted pursuant to the August Waiver and extended to
December 31,
2006 pursuant to the October Waiver, to a new deadline of March 31,
2007 for
delivery of the quarterly financial statements of the Borrower and
its
Subsidiaries for the quarter ending July 1, 2006.
D.
Pursuant to the October Waiver, the Borrower requested, and the
Banks
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
30, 2006
within 45 days following the close of such third fiscal quarter of
the Borrower,
so long as the Borrower delivers such financial statements by
December 31, 2006.
The Borrower hereby requests, and the Banks agree, to extend such
December 31
deadline to March 31, 2007.
E.
The Borrower has announced its need to restate its annual and
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quarterly financial statements for the years 2003 through 2005 and
for the
fiscal quarter ending April 1, 2006, including potential
corrections to retained
earnings for adjustments related to periods prior to 2003. To the
extent that
causes a breach of the representation in Section 7.05 of the Loan
Agreement or
of any other representations or terms of the Loan Agreement,
including, without
limitation, those set forth in Sections 7.07, 7.11, 8.04, 8.06 and
8.08(b)
thereof, the Banks agree to waive compliance, so long as the
Borrower delivers
all such restated financial statements (the "Restated Financial
Statements") by
March 31, 2007.
F.
The Banks are agreeable to extend the deadlines for the August
Waiver
and October Waiver and to add such new waiver, on the terms and
subject to the
conditions set forth herein.
G.
The Banks have requested, and the Borrower has agreed, to amend
Section
10.01 of the Loan 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 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.
Section 2. Amendment to the Loan Agreement
2.01 Section 10.01 of the Loan Agreement is here by amended and
restated in its entirety to read as follows:
"Section 10.01 Consolidated Tangible Net Worth. Borrower and
its
Restricted Subsidiaries shall maintain as of June 30, 2006 and at
all times
thereafter a Consolidated Tangible Net Worth of not less than
$75,000,000."
Section 3. Waivers.
3.01 Pursuant to the August Waiver, the Borrower requested, and
the
Banks agreed, to waive compliance with the Section 8.08(a) of the
Loan Agreement
requirement for 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, so long as the Borrower delivered such financial
statements by October
15, 2006. The Borrower has requested that the Banks continue such
waiver,
originally granted pursuant to the August Waiver and extended to
December 31,
2006 pursuant to the October Waiver, to March 31, 2007, the
deadline for
delivery of the quarterly financial statements of the Borrower and
its
Subsidiaries for the quarter ending July 1, 2006. By its execution
hereof, the
Banks hereby agree to continue to waive compliance with such
covenant for the
fiscal
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quarter ending July 1, 2006, so long as the quarterly financial
statements for
the fiscal quarter ending July 1, 2006 shall be delivered to the
Banks on or
before March 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 Sections
3.02 and 3.03
hereof (other than those Defaults or Events of Default with respect
to Financial
Covenants (as defined in Section 3.05 hereof) and subject to
Section 3.05
hereof)) is continuing as of the date hereof.
3.02 Pursuant to the October Waiver, the Borrower requested and
the
Banks agreed, to waive compliance with the Section 8.08(a) of the
Loan Agreement
requirement for the Borrower to deliver to the Banks the quarterly
financial
statements of the Borrower and its Subsidiaries for the quarter
ending September
30, 2006 within 45 days following the close of such third fiscal
quarter of the
Borrower, so long as the Borrower delivered such financial
statements by
December 31, 2006. The Borrower has requested that the Banks
continue such
waiver, originally granted pursuant to the October Waiver, to March
31, 2007,
the deadline for delivery of the quarterl
