Exhibit 10.1





Exhibit 10.1




EXECUTION VERSION




AMENDMENT NO. 1




to




SECOND AMENDED AND RESTATED

CREDIT AGREEMENT AND GUARANTY




This AMENDMENT NO. 1 dated as of May 7, 2010 (this “Amendment”) is by and among
HAMPSHIRE GROUP, LIMITED (“Borrower”), HAMPSHIRE DESIGNERS, INC. (“Designers”),
ITEM-EYES, INC. (“Item-Eyes”, together with Designers, the “Guarantors”), the
financial institutions party hereto (the “Banks”) and HSBC Bank USA, National Association,
as the Agent for the Banks (the “Agent”).



RECITALS:




A. Borrower, Guarantors, the Banks and the Agent have entered into a Second Amended and
Restated Credit Agreement and Guaranty, dated as of August 7, 2009 (the “Credit
Agreement”);



B. Borrower has informed the Banks and the Agent that Borrower desires the ability to make,
from time to time prior to the Revolving Credit Termination Date, (i) dividend payments or other
distributions with respect to its capital stock and payments on account of the purchase of its
capital stock in an aggregate amount not to exceed $3,500,000 and (ii) acquisitions, in one or more
transactions or series of transactions, of assets for an aggregate purchase price not to exceed
$1,500,000, and the Banks and the Agent are agreeable to permit such actions on the terms and
subject to the conditions set forth herein; and



C. Borrower has also requested to amend the definition of Consolidated Net Income and the
Consolidated EBITDA amounts set forth on Schedule 10.01 of the Credit Agreement, and the
Banks and the Agent are agreeable to such 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 hereby acknowledged, Borrower, Guarantors, the
Banks party hereto 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 Credit Agreement.




Section 2. Amendments to the Credit Agreement



2.01 The definition of “Consolidated Net Income” appearing in Section 1.01 of the Credit
Agreement is hereby restated in its entirety and replaced with the following:



“Consolidated Net Income” means, for any period, the net income of Borrower and its Restricted
Subsidiaries, on a consolidated basis, all as determined in accordance with GAAP, plus, to
the
extent such costs were deducted from net income during such period (i) any non-cash write-off
incurred during such period as a result of the special directors & officers insurance policy
purchased by Borrower in December 2007, but not to exceed $3,400,000, (ii) any non-cash expense for
equity incentive compensation issued by Borrower during such period, but not to exceed $600,000,
and (iii) any non-cash loss incurred during such period from the disposal of fixed assets, but not
to exceed $500,000.”


 


 









 





2.02 Section 9.06 of the Credit Agreement is hereby amended by deleting the word “and”
appearing immediately prior to “(f)”, deleting the period “.” appearing at the end of the Section
and adding the following to the end of subclause (f):



“; and (g) acquisitions, in one or more transactions or series of transactions, by Borrower of
assets of any Person located in the United States (such assets being referred to as the “Acquired
Assets”); provided, that, (1) the total consideration paid in respect of all such acquisitions is
not greater than $1,500,000; (2) the Acquired Assets are related, ancillary or complementary to the
business of the Borrower and its Restricted Subsidiaries; (3) as of the date of each such
acquisition and immediately after giving effect thereto no Default or Event of Default shall have
occurred and be continuing; (4) Agent shall have received not less than five (5) business days’
prior written notice thereof setting forth in reasonable detail the nature and terms thereof; (5)
the Acquired Assets which constitute Collateral shall be free and clear of any security interest,
mortgage, pledge, Lien, charge or other encumbrance and the Agent shall have received evidence
reasonably satisfactory to it of the same; (6) promptly upon consummation of any such acquisition,
(A) Borrower shall deliver, or cause to be delivered, to Agent, true, correct and complete copies
of all agreements, documents and instruments relating to such acquisition, and (B) at the request
of the Agent, Borrower shall, at Borrower’s expense, duly execute and deliver, or cause to be duly
executed and delivered, such further agreements, documents and instruments, and do or cause to be
done such further acts as may be necessary to evidence, perfect, maintain and enforce the security
interests of the Agent in the Acquired Assets and the priority thereof; (7) each such acquisition
shall be a bona fide arms’ length transaction with a Person other than an Affiliate; and (8) the
Agent shall have received a certificate of a financial officer or executive officer of Borrower
certifying to the Agent and the Banks as to the matters set forth in this Section 9.06(g).”



2.03 Section 9.09 of the Credit Agreement is hereby deleted in its entirety and replaced with
the following:



“Section 9.09 Dividends. Declare or pay any cash dividends on capital stock of Borrower; or
purchase, redeem, retire, or otherwise acquire for value any of the capital stock or securities
convertible into capital stock of Borrower now or hereafter outstanding or make any distribution of
assets to its stockholders as such, whether in cash, assets, or in obligations of Borrower or any
Restricted Subsidiary, or allocate or otherwise set apart any sum for the payment of any dividend
or distribution on, or for the purchase, redemption, or retirement of any shares of its capital
stock, except (a) in all cases for transactions that are made in common stock of Borrower and (b)
as otherwise permitted under Section 9.10 hereof.”


 


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2.04 Section 9.10 of the Credit Agreement is hereby deleted in its entirety and replaced with
the following:



“Section 9.10 Restricted Payments. Notwithstanding anything to the contrary contained in this
Article IX, make any Restricted Payments; except that, (a) so long as no Default
exists and is continuing, Borrower may make advances or payments to or investments in, or issue
guaranties for, any Restricted Subsidiary and (b) Borrower may make, at any time and from time to
time prior to the Revolving Credit Termination Date, dividend payments or other distributions with
respect to its capital stock and payments on account of the purchase of its capital stock in cash,
provided, that, (1) Borrower has received an income tax refund from the federal
government for the fiscal year ending 2009 (the “2009 Tax Refund”) in an amount at least equal to
$4,500,000, (2) the amount of all cash paid in respect of all such dividends, distributions and
stock repurchases does not exceed the lesser of (X) fifty percent (50%) of the 2009 Tax Refund
received by Borrower and (Y) $3,500,000, and shall constitute funds legally available therefor, and
(3) as of the date of the payment for such dividend, distribution and/or repurchase and
immediately after giving effect thereto, no Default or Event of Default shall exist or have
occurred and be continuing, and immediately after giving effect to such dividend, distribution or
repurchase, Borrower and its Restricted Subsidiaries shall be in pro forma compliance with all of
the covenants set forth in Article X, such compliance to be determined on the basis of the
financial information most recently delivered to the Agent and the Banks pursuant to Section 8.08
as though such 2009 Tax Refund had been received and such dividend, distribution or repurchase had
been consummated as of the first day of the fiscal period covered thereby, and (4) such dividend,
distribution or repurchase shall not violate any law or regulation or the terms of any indenture,
agreement or undertaking, if any, to which the Borrower is a party or by which Borrower or its
property is bound.”



2.05 Schedule 10.01 to the Credit Agreement is hereby replaced in its entirety with a
new Schedule 10.01 attached hereto as Exhibit A.




Section 3. Acknowledgments, Confirmations and Consent.



3.01 Each of Borrower and 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 Borrower of this Amendment
and acknowledges and confirms that the Guaranty by such Guarantor, as set forth in Article V of the
Credit Agreement, guarantees the full payment and performance of all of the Obligations, and
remains in full force and effect in accordance with its terms.



Section 4. Representations and Warranties. Borrower and each Guarantor, as the case
may be, each represents and warrants to the Banks and the Agent as follows:



4.01 After giving effect to this Amendment, (i) each of the representations and warranties set
forth in Article VII of the Credit 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 Credit Agreement.


 


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4.02 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 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.



4.03 The execution, delivery and performance by 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.



4.04 This Amendment has been duly executed and delivered by Borrower or such Guarantor, as the
case may be, and constitutes the valid and legally binding obligation of 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. Effectiveness of Amendment. This Amendment shall become effective as of the
date first written above upon receipt by the Agent of original counterparts of this Amendment duly
executed by Borrower, Guarantors and the Required Banks.




Section 6. Miscellaneous.



6.01 Except as modified pursuant hereto, no other changes or modifications to the Credit
Agreement and the other Loan Documents are intended or implied, and in all other respects the
Credit Agreement and the other Loan Documents are hereby specifically ratified, restated and
confirmed by all parties hereto as of the date hereof. This Amendment represents the entire
agreement and understanding concerning the subject matter hereof between the parties hereto and
supersedes all prior agreements, understandings, negotiations and discussions, representations,
warranties, commitments, proposals, offers and contracts concerning the subject matter hereof,
whether oral or written. To the extent of conflict between the terms of this Amendment and the
other Loan Documents, the terms of this Amendment shall control. The Credit Agreement and this
Amendment shall be read and construed as one agreement.



6.02 THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS EXECUTED IN AND TO BE PERFORMED ENTIRELY WITHIN THE
STATE OF NEW YORK.



6.03 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.



6.04 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.



[signature pages follow]



 


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IN WITNESS WHEREOF, the parties hereto have signed and delivered this Amendment as of the date
first written above.



	 	 	 	 	 
	 	HAMPSHIRE GROUP, LIMITED, as Borrower, 
a Letter
of Credit Account Party and a Guarantor

 	 
	 	By:  	/s/ Jonathan W. Norwood
 	 
	 	 	Name:  	Jonathan W. Norwood 	 
	 	 	Title:  	Treasurer 	 
	 
	 	HAMPSHIRE DESIGNERS, INC., as a Letter of 
Credit
Account Party and a Guarantor

 	 
	 	By:  	/s/ Jonathan W. Norwood
 	 
	 	 	Name:  	Jonathan W. Norwood 	 
	 	 	Title:  	Treasurer 	 
	 
	 	ITEM-EYES, INC., as a Letter of Credit

Account Party and a Guarantor

 	 
	 	By:  	/s/ Jonathan W. Norwood
 	 
	 	 	Name:  	Jonathan W. Norwood 	 
	 	 	Title:  	Treasurer 	 
	 



[Signature Page to Amendment No. 1 to 2nd A/R Credit Agreement — HSBC/Hampshire]




 


 









 








IN WITNESS WHEREOF, the parties hereto have signed and delivered this Amendment as of the date
first written above.



	 	 	 	 	 
	 	HSBC BANK USA, NATIONAL ASSOCIATION, 
as a Bank,
as Letter of Credit Issuing Bank and as Agent

 	 
	 	By:  	/s/ Edward Chonko
 	 
	 	 	Name:  	Edward Chonko 	 
	 	 	Title:  	Vice President 	 



[Signature Page to Amendment No. 1 to 2nd A/R Credit Agreement — HSBC/Hampshire]




 


 









 








IN WITNESS WHEREOF, the parties hereto have signed and delivered this Amendment as of the date
first written above.



	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as a Bank

 	 
	 	By:  	/s/ Paul V. Phelan
 	 
	 	 	Name:  	Paul V. Phelan 	 
	 	 	Title:  	Senior Vice President 	 



[Signature Page to Amendment No. 1 to 2nd A/R Credit Agreement — HSBC/Hampshire]




 


 









 








IN WITNESS WHEREOF, the parties hereto have signed and delivered this Amendment as of the date
first written above.



	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL

ASSOCIATION
(successor by merger to Wachovia 
Bank, National
Association), as a Bank

 	 
	 	By:  	/s/ Jeffrey R. Stottler
 	 
	 	 	Name:  	Jeffrey R. Stottler 	 
	 	 	Title:  	Senior Vice President 	 



[Signature Page to Amendment No. 1 to 2nd A/R Credit Agreement — HSBC/Hampshire]




 


 









 








IN WITNESS WHEREOF, the parties hereto have signed and delivered this Amendment as of the date
first written above.



	 	 	 	 	 
	 	BANK LEUMI USA, as a Bank

 	 
	 	By:  	/s/ Paul J. DeChagas
 	 
	 	 	Name:  	Paul J. DeChagas 	 
	 	 	Title:  	Vice President 	 



[Signature Page to Amendment No. 1 to 2nd A/R Credit Agreement — HSBC/Hampshire]