Merchants
National BORROWER
Bank HAMPSHIRE GROUP LIMITED
102 East 3rd Street
Post Office Box 248 VARIABLE
RATE
Winona, Minnesota 55987-0248
(507) 457-1100 COMMERCIAL
"Lender"
PROMISSORY
ADDRESS
PO BOX 2667
NOTE
ANDERSON, SC 29621
TELEPHONE NO. IDENTIFICATION NO;
06-0967107
OFFICER INTEREST PRINCIPAL FUNDING MATURITY CUSTOMER LOAN
INITIALS RATE AMOUNT DATE DATE NUMBER NUMBER
002 VARIABLE $3,000,000.00 09/20/00 09/20/05 4450383
PROMISE TO PAY
For value received, Borrower promises to pay to the order of Lender indicated
above the principal amount of THREE MILLION AND NO/1OO Dollars ($3,000,000.00)
plus interest on the unpaid principal balance at the rate and in the manner
described below. All amounts received by Lender shall be applied first to late
payment charges and expenses, then to accrued interest, and then to principal or
in any other order as determined by Lender, in Lender's sole discretion, as
permitted by law.
INTEREST RATE: This Note has a variable interest rate feature. Interest on the
Note may change from time to time if the Index Rate identified below changes.
Interest shall be computed on the basis of 360 days and the actual number of
days per year. Interest on this Note shall be calculated at a variable rate
equal to 250 /1000 percent (0.250%) per annum over the Index Rate. The initial
Index Rate is Nine and 500/1000 percent (9.500%) per annum. The initial interest
rate on this Note shall be Nine and 750/100 percent (9.75%) per annum. Any
change in the interest rate resulting from a change in the Index Rate will be
effective on: SEPTEMBER 20, 2001 AND ADJUSTS ANNUALLY THEREAFTER.
INDEX RATE: The Index Rate for this Note shall be:
FIRSTAR BANK OF MILWAUKEE, N.A. PRIME RATE
MINIMUM RATE/MAXIMUM RATE: The minimum interest rate on this Note shall be n/a
percent ( n/a%) per annum. The maximum interest rate on this Note shall not
exceed TWENTY-ONE AND 750/1000 percent ( 21.750%) per annum of the maximum
interest rate Lender is permitted to charge by law, whichever is less.
POST-MATURITY RATE: [X] If checked, this loan is for at least $100,000.00, and
after maturity, due to scheduled maturity or acceleration, past due amounts
shall bear interest at the lesser of: THE INTEREST RATE AT THE TIME OF MATURITY,
or the maximum interest rate Lender is permitted to charge by law.
PAYMENT SCHEDULE: Borrower shall pay the principal and interest according to the
following schedule:
9 PAYMENTS OF $301,940.81 BEGINNING MARCH 20, 2001 AND CONTINUING AT
SEMI-ANNUAL TIME INTERVALS THEREAFTER. A FINAL PAYMENT OF THE UNPAID
PRINCIPAL BALANCE, PLUS ACCRUED INTEREST IS DUE AND PAYABLE ON SEPTEMBER
20, 2005. 1IF THE INTEREST RATE CHANGES, THE PAYMENT AMOUNTS MAY CHANGE IN
AN AMOUNT SUFFICIENT TO REPAY THE UNPAID PRINCIPAL OVER THE SCHEDULED
AMORTIZATION TERM.
All payments will be made to Lender at its address described above and in lawful
currency of the United States of America. RENEWAL: If checked, [ ] this Note is
a renewal of Loan Number ______ , and not in payment of that Note.
SECURITY: To secure the payment and performance of obligations incurred under
this Note, Borrower grants Lender a security interest in, and pledges and
assigns to Lender all of Borrower's rights, title, and interest, in all monies,
instruments, savings, checking and other deposit accounts of Borrower's,
(excluding IRA, Keogh and trust accounts and deposits subject to tax penalties
if so assigned) that are now or in the future in Lender's custody or control.
Upon default, and to the extent permitted by applicable law, Lender may exercise
any or all of its rights or remedies as a secured party with respect to such
property which rights and remedies shall be in addition to all other rights and
remedies granted to Lender including, without limitation, Lender's common law
right of setoff. [X] If checked, the obligations under this Note are also
secured by a lien and/or security interest in the property described in the
documents executed in connection with this Note as well as any other property
designated as security now or in the future.
PREPAYMENT: This Note may be prepaid in part or in full on or before its
maturity date. If this Note contains more than one installment, all prepayments
will be credited as determined by Lender and as permitted by law. If this Note
is prepaid in full, there will be: [ X ] No prepayment penalty. [ ] A prepayment
penalty of ______ % of the principal prepaid.
LATE CHARGE: If a payment is received more than 10 days late, Borrower will be
charged a late charge of: [X] 5.00 % of the unpaid payment; [ ] $_______ or
_______% of the unpaid payment, whichever is [ ] greater [ ] less.
BORROWER ACKNOWLEDGES THAT BORROWER HAS READ, UNDERSTANDS, AND AGREES TO THE
TERMS AND CONDITIONS OF THIS NOTE INCLUDING THE PROVISIONS ON THE REVERSE SIDE.
BORROWER ACKNOWLEDGES RECEIPT OF AN EXACT COPY OF THIS NOTE.
NOTEDATE: SEPTEMBER 20, 2000
BORROWER: HAMPSHIRE GROUP, LIMITED BORROWER:
/s/ Charles W. Clayton
---------------------------------- ------------------------------
Charles W. Clayton, CFO
BORROWER: BORROWER:
---------------------------------- ------------------------------
BORROWER: BORROWER:
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<PAGE>
TERMS AND CONDITIONS
1. DEFAULT: Borrower will be in default under this Note in the event that
Borrower or any guarantor or any other third party:
(a) fails to make any payment on this Note or any other indebtedness to
Lender when due;
(b) fails to perform any obligation or breaches any warranty or covenant to
Lender contained in this Note or any other present or future written agreement
regarding this or any indebtedness of Borrower to Lender;
(c) provides or causes any false or misleading signature or representation
to be provided to Lender;
(d) allows the collateral securing this Note (if any) to be lost, stolen,
destroyed, damaged in any material respect, or subjected to seizure or
confiscation;
(e) permits the entry or service of any garnishment, judgment, tax levy,
attachment or lien against Borrower, any guarantor, or any of their property or
the Collateral;
(f) dies, becomes legally incompetent, is dissolved or terminated, ceases
to operate its business, becomes insolvent, makes an assignment for the benefit
of creditors, fails to pay debts as they become due, or becomes the subject of
any bankruptcy, insolvency or debtor rehabilitation proceeding; or
(g) causes Lender to deem itself insecure for any reason, or Lender, for
any reason, in good faith deems itself insecure.
2. RIGHTS OF LENDER ON DEFAULT: If there is a default under this Note,
Lender will be entitled to exercise one or more of the following remedies
without notice or demand (except as required by law):
(a) to declare the principal amount plus accrued interest under this Note
and all other present and future obligations of Borrower immediately due and
payable in full;
(b) to collect the outstanding obligations of Borrower with or without
resorting to judicial process;
(c) to take possession of any collateral in any manner permitted by law;
(d) to require Borrower to deliver and make available to Lender any
collateral at a place reasonably convenient to Borrower and Lender;
(e) to sell, lease or otherwise dispose of any collateral and collect any
deficiency balance with or without resorting to legal process;
(f) to set-off Borrower's obligations against any amounts due to Borrower
including, but not limited to monies, instruments, and deposit accounts
maintained with Lender; and
(g) to exercise all other rights available to Lender under any other
written agreement or applicable law.
Lender's rights are cumulative and may be exercised together, separately, and in
any order. Lender's remedies under this paragraph are in addition to those
available at common law, including, but not limited to, the right of set-off.
3. DEMAND FEATURE: If this Note contains a demand feature, Lender's right
to demand payment, at any time, and from time to time, shall be in Lender's sole
and absolute discretion, whether or not any default has occurred.
4. FINANCIAL INFORMATION: Borrower will provide Lender with current
financial statements and other financial information (including, but not limited
to, balance sheets and profit and loss statements) upon request.
5. MODIFICATION AND WAIVER: The modification or waiver of any of Borrower's
obligations or Lender's rights under this Note must be contained in a writing
signed by Lender. Lender may perform any of Borrower's obligations or delay or
fail to exercise any of its rights without causing a waiver of those obligations
or rights. A waiver on one occasion will not constitute a waiver on any other
occasion. Borrower's obligations under this Note shall not be affected if Lender
amends, compromises, exchanges, fails to exercise, impairs or releases any of
the obligations belonging to any co-borrower or guarantor or any of its rights
against any co-borrower, guarantor or collateral.
6. SEVERABILITY AND INTEREST LIMITATION: If any provision of this Note is
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Notwithstanding anything contained in this Note to the contrary, in no event
shall interest accrue under this Note, before or after maturity, at a rate in
excess of the highest rate permitted by applicable law, and if interest
(including any charge or fee held to be interest by a court of competent
jurisdiction) in excess thereof be paid, any excess shall constitute a payment
of, and be applied to, the principal balance hereof, and if the principal
balance has been fully paid, then such interest shall be repaid to the Borrower.
7. ASSIGNMENT: Borrower will not be entitled to assign any of its rights,
remedies or obligations described in this Note without the prior written consent
of Lender which may be withheld by Lender in its sole discretion. Lender will be
entitled to assign some or all of its rights and remedies described in this Note
without notice to or the prior consent of Borrower in any manner.
8. NOTICE: Any notice or other communication to be provided to Borrower or
Lender under this Note shall be in writing and sent to the parties at the
addresses described in this Note or such other address as the parties may
designate in writing from time to time.
9. APPLICABLE LAW: This Note shall be governed by the laws of the state
indicated in Lender's address. Borrower consents to the jurisdiction and venue
of any court located in the state indicated in Lender's address in the event of
any legal proceeding pertaining to the negotiation, execution, performance or
enforcement of any term or condition contained in this Note or any related loan
document and agrees not to commence or seek to remove such legal proceeding in
or to a different court.
10. COLLECTION COSTS: If Lender hires an attorney to assist in collecting
any amount due or enforcing any right or remedy under this Note, Borrower agrees
to pay Lender's attorney's fees, to the extent permitted by applicable law, and
collection costs.
11. RETURNED CHECK: If a check for payment is returned to Lender for any
reason, Lender will charge an additional fee of $20.00.
12. MISCELLANEOUS: This Note is being executed for commercial/agricultural
purposes. Borrower and Lender agree that time is of the essence. Borrower waives
presentment, demand for payment, notice of dishonor and protest. If Lender
obtains a judgment for any amount due under this Note, interest will accrue on
the judgment at the judgment rate of interest permitted by law. All references
to Borrower in this Note shall include all of the parties signing this Note. If
there is more than one Borrower, their obligations will be joint and several.
This Note and any related documents represent the complete and integrated
understanding between Borrower and Lender pertaining to the terms and conditions
of those documents.
13. JURY TRIAL WAIVER: BORROWER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN
ANY CIVIL ACTION ARISING OUT OF, OR BASED UPON, THIS NOTE OR THE COLLATERAL
SECURING THIS NOTE.
14. ADDITIONAL TERMS:
PURPOSE: FUND PURCHASE OF ITEM EYES INC.
<PAGE>
Merchants
National BORROWER
Bank HAMPSHIRE GROUP LIMITED
102 East 3rd Street
Post Office Box 248 COMMERCIAL/
Winona, Minnesota 55987-0248 AGRICULTURAL
(507) 457-1100 SECURITY
"Lender" SUMMARY
ADDRESS
PO BOX 2667
ANDERSON, SC 29621
TELEPHONE NO. IDENTIFICATION NO.
06-0967107
OFFICER INTEREST PRINCIPAL FUNDING MATURITY CUSTOMER LOAN
INITIALS RATE AMOUNT DATE DATE NUMBER NUMBER
002 VARIABLE $3,000,000.00 09/20/00 09/20/05 4450383
In connection with the note described above, the Borrower and/or Owner of
Collateral has granted to Lender a security interest in the collateral
summarized below. A detailed description of the collateral is contained in the
original documents referenced in the summary.
LOAN AGREEMENT DATED 09/20/00
Initials CWC
