AMENDMENT NO. 3 TO
                           FOURTH AMENDED AND RESTATED
                                 LOAN AGREEMENT

     Amendment No. 3 (this "Third Amendment") entered into as of June 30, 1997
among HAMPSHIRE DESIGNERS, INC. (the "Borrower"), THE CHASE MANHATTAN BANK,
("Chase"), FLEET BANK, N.A. ("Fleet", Chase and Fleet are individually referred
to as a "Lender" and collectively as the "Lenders") and FLEET BANK, N.A., in the
capacity as Agent for the Lenders (the "Agent").

     WHEREAS, the Borrower, Chase, Fleet and the Agent are parties to a Fourth
Amended and Restated Loan Agreement dated as of March 31, 1996, as amended by
Amendment No. 1 thereto dated September 1, 1996 and Amendment No. 2 thereto
dated as of March 31, 1997 (as so amended, the "Agreement");

     WHEREAS, the Borrower, the Lenders and the Agent desire to amend certain
provisions of the Agreement, and in order to do so, the parties hereto have
agreed to enter into this Third Amendment;

     NOW, THEREFORE, the parties hereto hereby agree as follows:

          1. All capitalized terms used herein, unless otherwise defined herein,
     have the same meanings provided therefor in the Agreement.

          2. Effective as of June 30, 1997, Section 7.9 of the Agreement is
     hereby amended by deleting the phrase "such Investments (i) do not exceed
     $4,000,000 in aggregate outstanding amount at any time" and inserting in
     its place the phrase "such Investments (i) do not exceed $7,000,000 in
     aggregate outstanding amount at any time".

          3. The Borrower hereby represents and warrants to the Lenders and the
     Agent that (a) no Event of Default and no event or condition which, with
     the giving of notice or lapse of time or both, would constitute such an
     Event of Default exists as of June 30, 1997 or would exist after giving
     effect to this Third Amendment, (b) it has full power and authority to
     enter into, and has taken all proper and necessary corporate action to
     authorize this Third Amendment, and (c) this Third Amendment has been duly
     executed and delivered and constitutes the valid and legally binding
     obligation of the Borrower, enforceable in accordance with its terms.

          4. This Third Amendment shall become effective as of the date hereof,
     upon the satisfaction of the following conditions precedent:

               (a) The Borrower, the Agent and each Lender shall have executed
          and delivered to the Agent a counterpart of this Third Amendment.

               (b) Each of the Grantors and the Guarantors shall have executed
          and delivered to the Agent a counterpart of this third Amendment
          thereby (i) indicating its consent hereto and (ii) confirming that its
          respective Guaranty continues in full force and effect. (c) All legal
          matters in connection with this Third Amendment shall be satisfactory
          to the Agent and its counsel.

          5. Except as modified hereby, all of the terms and provisions of the
     Agreement shall continue in full force and effect. This Third Amendment may
     be executed in any number of counterparts, all of which taken together
     shall constitute one and the same instrument. Any signature delivered by a
     party by a facsimile transmission shall be deemed to be an original
     signature hereto. This Third Amendment shall be governed by and construed
     in accordance with the laws of the State of New York.

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          6. The Borrower will promptly pay all costs of the Agent in preparing
     this Third Amendment including, without limitation, the fees and expenses
     of counsel to the Agent in connection with the preparation, execution and
     delivery, administration, interpretation and enforcement hereof.

          7. The amendments set forth herein are limited precisely as written
     and shall not be deemed to (a) be a consent to or a waiver of any other
     term or condition of the Agreement or any of the documents referred to
     therein or (b) prejudice any right or rights which the Agent or the Lenders
     may now have or may have in the future under or in connection with the
     Agreement or any documents referred to therein. Whenever the Agreement is
     referred to in the Agreement, as amended, or any of the instruments,
     agreements or other documents or papers executed and delivered in
     connection therewith, it shall be deemed to mean the Agreement as modified
     by this Third Amendment. All documents in place with the Borrower and the
     Guarantors in connection with the Agreement shall be deemed amended to
     conform to the provisions of this Third Amendment. In all other respects,
     such documents remain unchanged and in full force and effect.

     IN WITNESS HEREOF, the parties hereto have caused this Third Amendment to
be duly executed and delivered by their respective duly authorized officers as
of the date first above written.

HAMPSHIRE DESIGNERS, INC.
/s/ Charles W. Clayton
--------------------------------
By:  Charles W. Clayton
Vice President

FLEET BANK, N.A., as a Lender and as Agent
/s/ Liz Allen
---------------------------------
By: Liz Allen

THE CHASE MANHATTAN BANK
/s/ Paul O'Neill
---------------------------------
By:  Paul O'Neill
Vice President


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Accepted and Agreed:

HAMPSHIRE GROUP, LTD.
/s/ Charles W. Clayton
----------------------------------
Name:  Charles W. Clayton
Title:  Vice President

GLAMOURETTE FASHION MILLS, INC.
/s/ Charles W. Clayton
----------------------------------
Name:   Charles W. Clayton
Title:  Vice President

SAN FRANCISCO KNITWORKS, INC.
/s/ Charles W. Clayton
----------------------------------
Name:   Charles W. Clayton
Title:  Vice President

SEGUE (AMERICA), LTD.
/s/ Charles W. Clayton
-----------------------------------
Name:   Charles W. Clayton
Title:  Vice President

HAMPSHIRE DESIGNERS, INC., as guarantor of the 
obligations of Segue and Knitworks
/s/ Charles W. Clayton
-----------------------------------
Name:  Charles W. Clayton
Title:  Vice President

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