Exhibit 10.1

 

 

[image.jpg]

 

April 18, 2016

 

VIA ELECTRONIC MAIL

AND FACSIMILE

 

Hampshire Group, Limited

114 West 41st Street

New York, NY 10036

 

Re: Further Temporary Extension of Forbearance Termination Date/Maturity Date

 

Ladies and Gentlemen:

 

Reference is made to (i) that certain Credit Agreement, dated as of September
26, 2013 (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Hampshire Group,
Limited, a Delaware corporation, Hampshire Brands, Inc., a Delaware corporation,
Hampshire International, LLC, a Delaware limited liability company and Scott
James, LLC, a Delaware limited liability company (collectively, the
“Borrowers”), Salus CLO 2012-1, LTD. (“Salus CLO”) and Salus Capital Partners,
LLC (collectively, the “Lenders”) and Salus Capital Partners, LLC, as
Administrative Agent and Collateral Agent for the Lenders (in such capacity, the
“Agent”), (ii) that certain Forbearance Agreement and Fifth Amendment to Credit
Agreement, dated as of November 20, 2015 (the “Forbearance Agreement”), by and
among the Borrowers, Lenders and Agent, and (iii) that certain letter agreement,
dated as of March 7, 2016 (the “March 2016 Letter Agreement”), by and among the
Borrowers, Lender and Agent. Capitalized terms used herein without definition
shall have the meanings ascribed to such terms in the Credit Agreement, the
Forbearance Agreement, or March 2016 Letter Agreement, as applicable.

 

As detailed in the March 2016 Letter Agreement, (i) the Borrowers are attempting
to close the New Credit Facilities, and upon such closing the proceeds and
fundings thereunder will be used to pay off in full the Obligations under the
Credit Agreement, (ii) in order to afford time to finalize the definitive loan
documentation under the New Credit Facilities, the Agent and Lenders agreed to
extend each of the Forbearance Termination Date under the Forbearance Agreement
and the Maturity Date under the Credit Agreement from February 29, 2016 to April
4, 2016. Pursuant to a letter agreement dated April 4, 2016 (the “April 4 Letter
Agreement”), the Agent and Lenders further extended the Forbearance Termination
Date and the Maturity Date to April 18, 2016.

 

As of the date hereof, the Borrowers have been unable to close the New Credit
Facilities and are requesting a further temporary extension of the Forbearance
Termination Date under the Forbearance Agreement and the Maturity Date under the
Credit Agreement.

 

 
 

--------------------------------------------------------------------------------

 

 

The Agent and Lenders hereby agree to extend each of the Forbearance Termination
Date under the Forbearance Agreement and the Maturity Date under the Credit
Agreement from April 18, 2016 to May 2, 2016; provided, however, if the Agent
and Lenders are notified by any of the Borrowers, Accord Capital or the
providers of junior capital under the Subordinated Credit Facility that the
Senior Credit Facility and/or Subordinated Credit Facility will not be completed
by such lenders as currently contemplated then, in Agent’s sole discretion, the
Forbearance Termination Date and Maturity Date shall automatically occur as of
the date of such notification. The Borrowers hereby agree to notify Agent
immediately (i) if any of the prospective lenders under the Senior Credit
Facility or Subordinated Credit Facility notify the Borrowers that they do not
intend to consummate the financings under the Senior Credit Facility or
Subordinated Credit Facility, or require any closing conditions not customary
for transactions of this type, or (ii) if the management of the Borrowers
determine that it is unlikely that the Senior Credit Facility or Subordinated
Credit Facility will not close and fund by May 2, 2016.

 

Except as expressly amended hereby, all terms and conditions of the March 2016
Letter Agreement, the Forbearance Agreement and Credit Agreement, and any and
all exhibits annexed thereto and all other writings submitted by the Borrowers
to the Agent and Lenders pursuant thereto, shall remain unchanged and in full
force and effect.

 

Borrowers hereby acknowledge, confirm and agree that (a) the aggregate
outstanding principal amount of the Obligations on as of the date hereof is
$13,311,039.58, (b) such amounts, together with all interest accrued and
accruing thereon, and all fees, costs, expenses and other charges now or
hereafter payable by Borrowers to Agent and Lenders under the Loan Documents,
are unconditionally owing by the Borrowers to Agent and Lenders without offset,
defense or counterclaim of any kind, nature or description whatsoever, (c) their
obligation and liability for the payment and performance of the Obligations
pursuant to the Loan Documents is unconditionally owing to Agent and Lenders
without offset, defense or counterclaim of any kind, nature or description
whatsoever, and (d) the amount set forth in the preceding clause (a) includes
(i) the accommodation fee in the amount of $50,000 payable by Borrowers under
the March 2016 Agreement, and (ii) the accommodation fee in the amount of
$30,000 payable by Borrowers under the April 4 Letter Agreement, each which fees
has been fully earned pursuant to the terms of the respective agreements, and
are not subject to refund or reduction in whole or in part.

 

In consideration of the agreement of the Agent and Lenders to further extend the
Maturity Date and Forbearance Termination Date hereunder, the Borrowers hereby
agree to pay to the Agent, for the ratable benefit of the Lenders, an
accommodation fee in the amount of $30,000, which fee is deemed fully earned and
due and payable as of the date of this Letter Agreement; provided, however, that
if the Obligations are paid in full on or before May 2, 2016 in accordance with
the terms of a payoff letter provided by the Agent, the Agent and Lenders hereby
agree to credit $15,000 of such accommodation fee towards the payoff amount of
the Obligations.

 

 
2 

--------------------------------------------------------------------------------

 

 

The Borrowers hereby acknowledge and reaffirm their obligations under the Loan
Documents, in each case as amended, restated, supplemented or otherwise modified
prior to or as of the date hereof. The Borrowers hereby confirm the security
interests and liens granted by the Borrowers to the Agent, in and to the
Collateral in accordance with the Credit Agreement and other Loan Documents as
security for the Obligations.

 

EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE, COUNTERCLAIM, OFFSET,
CROSS COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE
ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE
OBLIGATIONS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM
THE AGENT OR LENDERS. EACH BORROWER HEREBY VOLUNTARILY AND KNOWINGLY RELEASES
AND FOREVER DISCHARGES AGENT, EACH LENDER, THEIR AGENTS, EMPLOYEES, SUCCESSORS
AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION,
DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,
ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, ASSERTED OR UNASSERTED,
FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR
IN PART ON OR BEFORE THE DATE THIS LETTER AGREEMENT IS EXECUTED, WHICH SUCH
BORROWER MAY NOW OR HEREAFTER (WHETHER OR NOT PRESENTLY SUSPECTED, CONTEMPLATED
OR ANTICIPATED) HAS AGAINST AGENT, ANY LENDER, AND THEIR AGENTS, EMPLOYEES,
SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS
ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND
ARISING FROM THE CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS, INCLUDING, WITHOUT
LIMITATION, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE CREDIT AGREEMENT
OR OTHER LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS LETTER
AGREEMENT.

 

Kindly acknowledge your acknowledgment and agreement to the foregoing by signing
and returning a copy of this Letter Agreement to the attention of the
undersigned. Thank you.

 

[Signature Page Follows]

 

 
3 

--------------------------------------------------------------------------------

 

 

 

Very truly yours,

       

SALUS CLO 2012-1, LTD.

as a Lender

       

By: Salus Capital Partners II, LLC,

Its: Collateral Manager

              By: /s/ Kyle Shonak                               

Name:  Kyle Shonak

Title:    President

             

SALUS CAPITAL PARTNERS, LLC

as a Lender, Administrative Agent

and Collateral Agent

             

By: /s/ Kyle Shonak                           

   

Name:  Kyle Shonak

Title:    President

 

 

 

Letter Agreement Re: Further Temporary Extension of Forbearance Termination Date

 

 
 

--------------------------------------------------------------------------------

 

  

Acknowledged and Agreed:

 

HAMPSHIRE GROUP, LIMITED

as Lead Borrower

 

 

By:      /s/ William Drozdowski          

Name:       William Drozdowski         

Title:            Interim CFO                    

 

HAMPSHIRE BRANDS, INC.

as a Borrower

 

 

By:      /s/ William Drozdowski          

Name:       William Drozdowski         

Title:            Interim CFO                    

 

HAMPSHIRE INTERNATIONAL, LLC

as a Borrower

 

 

By:      /s/ William Drozdowski          

Name:       William Drozdowski         

Title:            Interim CFO                    

 

SCOTT JAMES, LLC

as a Borrower

 

 

By:      /s/ William Drozdowski          

Name:       William Drozdowski         

Title:            Interim CFO                    

 

 

 

Letter Agreement Re: Further Temporary Extension of Forbearance Termination Date