

                                 METLIFE CAPITAL
                           LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT entered into as of the _______ day of _____
19___ by and between MetLife Capital Corporation, a Delaware corporation, whose
address is 10900 NE 4th Street, Suite 500, P.O. Box C-97550, Bellevue, WA 98009
("Lender") and Hampshire Designers, Inc., Co-Borrower and San Francisco
Knitworks, Inc., Co-Borrower both Delaware corporations whose address is 215
commerce Boulevard, Anderson, SC 29621 ("Borrower").

WHEREAS, Lender has agreed to make a commercial loan or loans to borrower; and

WHEREAS, as a condition to making the loans, and in order to secure the
repayment thereof, Lender has required Borrower to execute and deliver to Lender
this Loan and Security Agreement.

NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Borrower and Lender agree as follows:

1. Creation of Security Interest. As security for the due and punctual payment
of any and all of the present and future obligations of the Borrower to Lender,
whether direct or contingent or joint or several, Borrower hereby conveys,
assigns and grants to Lender a continuing security interest in all of Borrower's
rights, title and interest in and to the equipment described in the Supplemental
Security Agreement(s) entered into pursuant to this Loan and Security Agreement
from time to time ("Equipment") including all present and future additions,
attachments and accessories thereto, all substitutions therefor and replacements
thereof and all proceeds thereof, including all proceeds of insurance (such
Equipment and property hereinafter called "Collateral").

2. The Loans. (a) Subject to the terms and conditions of this Loan and Security
Agreement, Lender agrees to make a loan or loans to Borrower. The maximum
principal amount of any loan or loans to be made by Lender to Borrower shall be
within Lender's discretion, subject to the exercise of Lender's reasonable
business judgment, and shall be as stated in the loan commitment letter issued
by Lender to Borrower, or in the event a commitment letter is not issued by
Lender, in Lender's internal credit approval (each such loan or loans shall be
referred to as "the Loan Amount").

               (b) The Loan Amount shall be repaid by Borrower as a term loan or
          term loans ("Term Loan"). The Term Loan shall be evidenced by a
          promissory note or notes in the form attached hereto as Exhibit "A"
          ("Term Note"). The payment provisions of each Term Note shall be
          stated therein.

               (c) If requested by borrower, and in accordance with the terms
          and conditions of Section 3 hereof. Lender shall make interim funding
          to Borrower of a Term Loan as partial advances of the Loan Amount
          ("Interim Loans"). The Interim Loans shall either be for the payment
          of the acquisition cost of any items of Equipment delivered and
          accepted by borrower prior to the expiration date of Lender's loan
          commitment to Borrower ("Commitment Expiration Date") or to fund

<PAGE>
          progress payments to the vendor or manufacturer of the Equipment, if
          the making of progress payments was agreed to by Lender in its
          commitment or approval to make the loan or loans to Borrower. The
          Interim Loans shall be evidenced by promissory notes in the form
          attached hereto as Exhibit "B" ("Interim Note"). Interest on all
          Interim Loans shall be payable as provided therein. The principal
          amount due under the Interim Loans shall be due as provided in the
          Interim Notes, at which time, provided no Event of Default hereunder
          has occurred and is continuing or event which with the passing of time
          or giving of notice or both would become an Event of Default hereunder
          has occurred and is continuing. Lender shall consolidate all Interim
          Loans and convert them to a Term Loan evidenced by a Term Note or
          Notes. Whether or not a Term Loan is evidenced by one or more Term
          notes shall be as agreed between Lender and Borrower, or in the
          absence of such an agreement, as decided by Lender, in the exercise of
          its reasonable business judgment.

               (d) In the event that the amount loaned pursuant to the Interim
          Loans is less than the Loan Amount, subject to Borrower's compliance
          with the terms and conditions of this Loan and Security Agreement
          (including the satisfaction of the conditions of borrowing set forth
          in Section 7 of this Loan and Security Agreement, including but not
          limited to providing Lender with a description of the items of
          Equipment). Lender shall disburse to Borrower the balance of the Loan
          Amount on the same date that the Interim Loans are converted into a
          term loan.

3. Method for Borrowing On Interim Loan. Borrower shall give Lender at least
five (5) business days written notice of a request for the disbursement of an
Interim Loan ("Request"), specifying the date on which the Interim Loan is to be
disbursed. Such Request shall be in the form attached hereto as Exhibit "C".
Such Request shall be accompanied by an original copy of the invoice or invoices
to be paid from the Interim Loan. Such Request shall constitute a representation
and warranty by the Borrower that (i) as of the date of the Request no Event of
Default or event which with the passing of time or the giving of notice or both
would constitute an Event of Default hereunder has occurred and is continuing
and (ii) in the event items of Equipment have been delivered to the Borrower,
Borrower has unconditionally accepted the Equipment from the Lender thereof.
Subject to the conditions of this Loan and Security Agreement, Lender shall
disburse the Interim Loan to the invoicing party, or if Borrower shall have paid
the amount of such invoice. Lender shall reimburse Borrower, upon receipt of
proof of payment from Borrower.

4. Cross Collateral/Cross Default. All Collateral shall secure the payment and
performance of all of Borrower's liabilities and obligations to Lender hereunder
and under any of the loan documents relating hereto including, but not limited
to, all Interim Notes and all Term Notes (the Loan and Security Agreement, the
Interim Notes, the Term Notes, the Supplemental Security Agreement(s) and all
other loan documents may be referred to herein collectively as the "Loan
Document"). Lender's security interest in the Collateral shall not be terminated
until and unless all of Borrower's obligations to Lender under any of the Loan
Documents are fully paid and performed. The occurrence of an event of default
under any other of the Loan Documents shall be deemed to be an Event of Default
hereunder and an Event of Default hereunder shall be deemed to be an event of
default under any other of the Loan Documents.

5. Representations and Warranties. Borrower hereby represents and warrants as
follows:

          (a) Power and Authorization. Borrower has the full power and
     (corporate) authority to execute, deliver and perform Borrower's
     obligations under the Loan Documents. The execution and delivery of the
     Loan Documents have been authorized by all requisite corporate (or
     partnership) action on the part of Borrower. The execution, delivery and
     performance of the Loan Documents have not constituted and will not
     constitute a breach, default, or violation of or under Borrower's articles
     of incorporation, by-laws (partnership agreement), or any other agreement,
     indenture, contract, lease, law, order, decree, judgment, or injunction to
     which Borrower is a party or may be bound and have not resulted and will
     not result in the creation of any lien upon the Equipment pursuant to any
     agreement, indenture, lease, contract or other instrument to which Borrower
     is a party, except the lien created by this Loan and Security Agreement.
<PAGE>

          (b) Existence. If Borrower is a corporation, Borrower (i) is duly
     incorporated, validly existing and in good standing under the laws of its
     state of incorporation, (ii) has all corporate powers and all governmental
     licenses, authorizations, consents and approvals required to carry on its
     business as now conducted, and (iii) is duly qualified to transact business
     as a foreign corporation in each jurisdiction where the Equipment will be
     located and in the jurisdiction where is principal place of business is
     located. If borrower is a partnership, Borrower (i) has been duly formed as
     a (limited or general) partnership under the laws of the state of its
     organization. (ii) is comprised of the general partner(s) listed on the
     Schedule of Partners attached to this Loan and Security Agreement, and
     (iii) is in good standing under the laws of the state of its formation.

          (c) Binding Effect. This Loan and Security Agreement constitutes the
     valid and binding agreement of the Borrower; the Interim Notes and the Term
     Notes, when executed and delivered, will constitute the valid and binding
     obligations of the Borrower; and the Loan Documents are enforceable in
     accordance with their terms except as (i) the enforceability thereof may be
     limited by the bankruptcy laws, and (ii) rights of acceleration and the
     availability of equitable remedies may be limited by equitable principles
     or general applicability.

          (d) Litigation. There is no action, suite or proceeding pending
     against, or to the knowledge of the Borrower, threatened against or
     affecting the Borrower, before any court or arbitrator or any governmental
     body, agency or official which has not been previously disclosed to the
     Lender in writing and in which there is a reasonable possibility of an
     adverse decision which could materially adversely affect the business,
     financial condition or results of operations of the Borrower or which would
     in any manner draw into question the validity of any of the Loan Documents.

          (e) Filing of Tax Returns. The borrower has filed all tax returns
     required to have been filed and has paid all taxes shown to be due and
     payable on such returns, including interest and penalties, and all other
     taxes which are payable by it, to the extent the same have become due and
     payable. The Borrower knows of no proposed tax assessment against it and
     all tax liabilities of the Borrower are adequately provided for.

          (f) Title. The borrower has or shall have at the time it executes the
     Term Note good and indefeasible title to the Collateral fee and clear of
     all liens other than the Lender's lien.

          (g) Compliance with Law. The business and operations of the Borrower
     have been and are being conducted in accordance with all applicable laws,
     rules and regulations, other than violations which could not (either
     individually or collectively) have a material adverse effect on the
     financial condition or operations of the Borrower.

          (h) Full Disclosure. All documents, records, instruments,
     certificates, statements (including, but not by way of limitation,
     financial statements of Borrower) and information provided to Lender by
     Borrower in connection with this Loan and Security Agreement are true and
     accurate in all material respects and do not contain any untrue statement,
     or fail to contain any statement of a material fact necessary to make the
     statements contained herein or therein not misleading. There is no fact
     known to the borrower that Borrower has not disclosed in writing which
     could materially and adversely affect the financial condition or operations
     of Borrower

          (i) Security Interest. The security interest granted to Lender
     hereunder is a valid, first priority security interest in the collateral
     and has been or promptly after the execution of the Supplemental Security
     Agreement describing the Collateral will be, perfected in accordance with
     the requirements of all states in which any item of the Collateral is
     located.

          (j) Personal Property. Under the laws of the state(s) in which the
     Collateral is to be located, the Collateral is deemed to consist solely of
     personal property.
<PAGE>

          (k) Pollution and Environmental control. Borrower has obtained all
     permits, licenses and other authorizations which are required under, and is
     in material compliance with, all federal, state, and local laws and
     regulations relating to pollution, reclamation or protection of the
     environment, including laws relating to emissions, discharges, releases or
     threatened releases of pollutants, contaminants or hazardous or toxic
     materials or wastes into air, water, or land, or otherwise relating to the
     manufacture, processing, distribution, use, treatment, storage, disposal,
     transport, or handling of pollutants, contaminants or hazardous or toxic
     materials or wastes. Borrower shall maintain all such permits, licenses,
     and authorizations current.

6. Covenants. Borrower hereby agrees and covenants as follows:
 
          (a) Payment. Borrower shall pay the indebtedness secured hereby as
     provided herein and in the Interim Notes and Term Notes.
 
          (b) Location of Collateral. Borrower will keep the Collateral located
     at the location or locations stated on the Supplemental Security
     Agreements, provided, however, that borrower may change the location of the
     Collateral with Lender's prior written consent.

          (c) No Liens. Except for the security interest granted hereby or under
     any other agreement under which Lender is the secured party, whether as
     mortgagee, beneficiary or otherwise, Borrower shall keep the Collateral
     free and clear of any security interest, lien or encumbrance of any kind
     and borrower shall not sell, assign (by operation of law or otherwise)
     exchange or otherwise dispose of any of the Collateral.

          (d) Insurance. Borrower shall procure and continuously maintain and
     pay for (a) all risk physical damage and property insurance covering loss
     or damage to the equipment for not less than the full replacement value
     thereof naming Lender as loss payee and (b) bodily injury and property
     damage combined single limit liability insurance, all in such amounts and
     against such risks and hazards as are reasonably required by Lender with
     insurance companies and pursuant to contracts or policies and with
     deductibles satisfactory to Lender. All contracts and policies shall
     include provisions for the protection of Lender notwithstanding any act or
     neglect of or breach or default by Borrower, shall provide for payment of
     insurance proceeds to Lender shall provide that they may not be modified,
     terminated or canceled unless Lender is given at least thirty (30) days'
     advance written notice thereof, and shall provide that the coverage is
     "primary coverage" for the protection of Borrower or Lender notwithstanding
     any other coverage carried by Lender protecting against similar risks.
     Borrower shall promptly notify any appropriate insurer and Lender of each
     and every occurrence, which may become the basis of a claim or cause of
     action against the insured and provide Lender with all data pertinent to
     such occurrence, Borrower shall furnish Lender with certificates of such
     insurance or copies of policies upon request and shall furnish Lender with
     renewal certificates not less than thirty (30) days prior to the renewal
     date. Proceeds of all insurance are payable first to Lender to the extent
     of its interest.

          (e) Financing Statements. At the request of Lender, Borrower will join
     Lender in executing one or more financing statements pursuant to the
     Uniform Commercial Code and other documents deemed necessary by Lender
     under applicable law to record or perfect its security interest in the
     collateral, including continuation statements, in form satisfactory to
     Lender and will pay the cost of filing the same in all public officer
     wherever filing is deemed by Lender to be necessary or desirable. Borrower
     hereby authorizes Lender, in such jurisdictions where such action is
     authorized by law, to effect any such recordation or filing of financing
     statements or other documents without Borrower's signature thereto.

          (f) Change of Name or Address. Borrower will immediately notify Lender
     in writing of any change in its place of business or the adoption or change
     of any trade name or fictitious business name, and will upon request of
     Lender, execute any additional financing statements or other similar
     documents necessary to perfect or maintain its security interest.

          (g) Use of Equipment, Maintenance. Borrower will cause the Equipment
     to be used in a careful and proper manner, will comply with and conform to
     all governmental laws rules and regulations relating thereto, and will
     cause the Equipment to be operated in accordance with the manufacturer's or
     supplier's instructions or manuals and only by competent and duly qualified
     personnel. Borrower will cause the Equipment to be kept and maintained in
     good repair, condition and working order and will furnish all parts,
     replacements, mechanisms, devices and servicing required therefor so that
     the value, condition and operating efficiency thereof will at all times be
     maintained and preserved, normal wear and tear excepted. All such repairs,
     parts, mechanisms, devices and replacements shall immediately, without
     further act, become part of the Equipment and subject to the security

<PAGE>

     interest created by this Loan and Security Agreement. Borrower will not
     make any improvement, change, addition or alteration to the Equipment if
     such improvement, change, addition or alteration will impair the originally
     intended function or use of the Equipment or impair the value of the
     Equipment as it existed immediately prior to such improvement, change,
     addition or alteration. Any part added to the Equipment in connection with
     any improvement, change, addition or alteration shall immediately, without
     further act, become part of the Equipment and subject to the security
     interest created by this Loan and Security Agreement.

          (h) Inspection. Lender may at any reasonable time or times inspect the
     Equipment and may at any reasonable time or times inspect the books and
     records of Borrower.

          (i) Taxes. Borrower shall promptly pay, when due, all charges, fees,
     assessments and taxes (excluding all taxes measured by Lender's income)
     which may now or hereafter be imposed upon the ownership, leasing,
     possession, sale or use of the collateral.

          (j) Performance by Lender. If borrower fails to perform any agreement
     or obligation contained herein, Lender may itself perform, or cause the
     performance of such agreement or obligation. Borrower will pay, or
     reimburse Lender, on demand, for any and all fees, including attorneys'
     fees, costs and expenses of whatever kind or nature incurred by Lender in
     connection with (i) the creation, preservation and protection of Lender's
     security interest in the collateral, including, without limitations, all
     fees and taxes in connection with the recording or filing of instruments
     and documents in public offices, (ii) payments or discharge of any taxes or
     liens upon or in respect of the Collateral, (iii) premiums for insurance
     with respect to the Equipment and (iv) this Loan and Security Agreement and
     with protecting, maintaining or preserving the Collateral and Lender's
     interests therein, whether through judicial proceedings or otherwise, or in
     connection with defending or prosecuting any actions, suits, or proceedings
     arising out of or related to the Loan and Security Agreement and the Loan
     Documents or in connection with any debt restructuring, loan workout
     negotiations or bankruptcy or insolvency case or proceedings. All such
     amounts shall constitute obligations of Borrower secured by the Collateral
     in the event that borrower fails to perform any of its agreements contained
     herein, Borrower will, on demand, reimburse Lender for all such
     expenditures, together with interest thereon from the date of such
     expenditure until fully reimbursed at the rate of two percent (2%) per
     month on the outstanding balance of such expenditures or the highest rate
     permitted by law, whichever is less.

          (k) Power of Attorney. borrower hereby irrevocably appoints Lender
     Borrower's attorney-in-fact with full authority in the place and stead of
     Borrower and in the name of Borrower or otherwise, from time to time in the
     Lender's discretion, to take any action and to execute any instrument which
     Lender may deem necessary or advisable to accomplish the purposes of this
     Loan and Security Agreement, including, without limitation: (i) to obtain,
     compromise and adjust insurance required to be paid to Lender; (ii) to ask,
     demand, collect, sue for, recover, receive and give acquittance and
     receipts for moneys due and to become due under or in respect to any of the
     collateral; (iii) to receive, endorses, and collect any drafts or other
     instruments, documents, and chattel paper in connection with clause (i) or
     (ii) above: and (iv) to file any claims or take any action or institute any
     proceedings which Lender may deem necessary or desirable for the collection
     of any of the Collateral or otherwise to enforce the rights of Lender with
     respect to any of the Collateral.

          (l) No duties. The powers conferred on Lender hereunder are solely to
     protect its interest in the Collateral and shall not impose any duty upon
     it to exercise any such powers. Except for the safe custody of any
     collateral in its possession and the accounting for moneys actually
     received by it hereunder. Lender shall have no duty as to any Collateral or
     as to the taking of any necessary steps to preserve rights against prior
     parties or any other rights pertaining to any collateral.

          (m) Financial Data. borrower will furnish to Lender and will cause any
     guarantor of Borrower's obligations to furnish to Lender on request (i)
     annual balance sheet and profit and loss statements prepared in accordance
     with generally accepted accounting principles and practices consistently
     applied and, if Lender so requires, accompanied by the annual audit report
     of an independent certified public accountant reasonably acceptable to
     Lender, and (ii) all other financial information and reports that Lender
     may from time to time reasonably request, including, if Lender so requires,
     income tax returns of Borrower and any guarantor of Borrower's obligations
     hereunder.
<PAGE>

7. Conditions of Borrowing. Lender shall not be obligated to make any loan
hereunder unless:

          (a) the Interim Notes or Term Notes evidencing such loan shall have
     been duly executed and delivered to lender;

          (b) Borrower shall have executed and delivered to Lender the
     Supplemental Security Agreement describing the collateral and stating,
     except with respect to progress payment funding, the location thereof;

          (c) Except with respect to progress payment fundings, Lender shall
     have received evidence (as described in Section 6d hereof) that insurance
     has been obtained in accordance with the provisions of this Loan and
     Security Agreement;

          (d) Lender shall have received any and all third party consents,
     waivers or releases deemed necessary or desirable by it in connection with
     the loan and the collateral being financed, including, without limitation,
     Uniform Commercial Code lien releases and the consent and waiver, in form
     and substance satisfactory to Lender, of each and every realty owner,
     landlord and mortgagee holding an interest in or encumbrance on the real
     property where any of the Collateral is to be located;

          (e) All filings, recordings and other actions deemed necessary or
     desirable by Lender in order to establish, protect, preserve and perfect
     its security interest in the Collateral by being financed by such loan as a
     valid perfected first priority security interest shall have been duly
     effected, including, without limitation, the filing of financing statements
     and the recordation of landlord (owners) and/or mortgagee waivers or
     disclaimers, all in form and substance satisfactory to Lender, and all
     fees, taxes and other charges relating to such filings and recordings shall
     have been paid by Borrower.

          (f) The representations and warranties contained in this Loan and
     Security Agreement shall be true and correct in all respects on and as of
     the date of the making of any loan hereunder with the same effect as if
     made on and as of such date;

          (g) In the sole judgment of Lender, there shall have been no material
     adverse change in the financial condition, business or operations of
     Borrower from the earliest date of any financial statement, credit report,
     business report or similar document submitted to Lender for its review;

          (h) All Loan Documents shall be satisfactory to Lender's attorneys;
     and

          (i) Lender shall have received, in form and substance satisfactory to
     Lender, such other documents as Lender shall require including, but not
     limited to a request, proof of payment, vendor invoices and certificates of
     authority and incumbency.

8. Default. The occurrence of any of the following events, following the giving
of any required notice and/or the expiration of any applicable period of grace,
shall constitute an event of default ("Event of Default") hereunder:

          (a) Borrower's default in payment of any installment of the principal
     of or interest on any Interim Note or Term Note when and after the same
     shall become due and payable, whether at the due date thereof or by
     acceleration or otherwise, which default shall continue unremedied for ten
     (10) days; or

          (b) The failure by Borrower to make payment of any other amount
     payable hereunder or under any Interim Note, or Term Note and the
     continuance of such failure for more than ten (10) days after written
     notice thereof by Lender to Borrower; or

          (c) The failure by borrower to perform or observe any covenant,
     condition, obligation or agreement to be performed or observed by it
     hereunder, which failure shall continue unremedied for thirty (30) days
     after written notice thereof by Lender to Borrower; or
<PAGE>

          (d) The occurrence of a default described in Section 4 hereof; or

          (e) Any warranty, representation or statement made or furnished with
     respect to the Borrower or the Collateral to Lender by or on behalf of
     Borrower, in connection with this Loan and Security Agreement, or the
     indebtedness secured hereby, shall prove to have been false in any adverse,
     material respect when made or furnished; or

          (f) Borrower shall become insolvent or bankrupt or make an assignment
     for the benefit of creditors or consent to the appointment of a trustee or
     receiver; or a trustee or a receiver shall be appointed for Borrower or for
     a substantial part of its property without its consent and shall not be
     dismissed for a period of sixty (60) days; or bankruptcy, reorganization,
     liquidation, insolvency or dissolution proceedings shall be instituted by
     or against Borrower and, if instituted against Borrower, shall be consented
     to or be pending and not dismissed for a period of sixty (60) days; or any
     execution or writ of process shall be issued under any action or proceeding
     against Borrower in such capacity whereby any of the Collateral may be
     taken or restrained; Borrower shall cease doing business as a going
     concern; or, without the prior written consent of Lender, Borrower shall
     sell, transfer or dispose of all or substantially all of its assets or
     property; or

          (g) The liquidation, merger, consolidation, reorganization, conversion
     to an "S" status or dissolution. If Borrower is a corporation or
     partnership of Borrower, if in Lender's reasonable opinion, such act shall
     materially and adversely affect Borrower's ability to perform under any of
     the Loan documents; or

          (h) Any item of collateral is seized or levied on under legal or
     governmental process or for any reason Lender deems itself insecure. Lender
     shall be entitled to deem itself insecure when some event occurs, fails to
     occur or is threatened or some objective condition exists or is threatened
     which significantly impairs the prospects that any of Borrower's
     obligations to Lender will be paid when due, which significantly impairs
     the value of the Collateral to Lender or which significantly affects the
     financial or business condition of Borrower.

The occurrence of an Event of Default shall terminate any commitment or
obligation by Lender to make any of the loans contemplated by this Loan and
Security Agreement.

9. Remedies Upon Default. Upon the occurrence of an Event of default hereunder,
Lender may, at its option, do any one or more of the following:

          (a) Declare all obligations of Borrower to Lender to be immediately
     due and payable, whereupon all unpaid principal of and interest on said
     indebtedness and other amounts declared due and payable shall be and become
     immediately due and payable;

          (b) Take possession of all or any of the Collateral and exclude
     therefrom Borrower and all others claiming under Borrower, and thereafter
     hold, store, use, operate, manage, maintain and control, make repairs,
     replacements, alterations, additions and improvements to and exercise all
     rights and powers of Borrower in respect to the Collateral or any part
     thereof. In the event Lender demands, or attempts to take possession of the
     Collateral in the exercise of any rights under this Loan and Security
     Agreement, Borrower promises and agrees to promptly turn over and deliver
     complete possession thereof to Lender;

          (c) Require Borrower to assemble the Collateral, or any portion
     thereof, at a place designated by Lender and reasonably convenient to both
     parties, and promptly to deliver such collateral to Lender, or an agent or
     representative designated by it;

          (d) Sell, lease or otherwise dispose of the Collateral at public or
     private sale, without having the Collateral at the place of sale, and upon
     terms and in such manner as Lender may determine ( and Lender may be a
     purchaser at any sale); and

          (e) Exercises any remedies of a secured party under the Uniform
     Commercial Code as adopted in the state where the Collateral is located or
     any other applicable law.

Except as to portions of the Collateral which are perishable or threaten to
decline speedily in value or are of a type customarily sold on a recognized
market. Lender shall give Borrower at least ten (10) days' prior written notice

<PAGE>

of the time and place of any public or private sale of the Collateral or other
intended disposition thereof to be made. Such notice may be mailed to Borrower
at the address et forth in the first paragraph of this Loan and Security
Agreement. Borrower hereby specifically agrees (to the extent that applicable
law and public policy allows it to effectively do so) that any public or private
sale held in accordance with the terms of this Loan and Security Agreement
shall, for the purpose of the uniform Commercial Code as adopted in the state
where the Collateral is located and for all other purposes, be deemed to have
been conducted in a commercially reasonable manner and in good faith.

The proceeds of any sale under Section 9(d) shall be applied as follows:

          (i) to the repayment of the costs and expense of retaking, holding and
     preparing for the sale and the selling of the Collateral (including legal
     expenses and attorneys' fees) and the discharge of all assessments,
     encumbrances, charges or liens, if any, on the Collateral prior to the lien
     hereof (except any taxes, assessments, encumbrances, charges or liens
     subject to which such sale shall have been made);

          (ii) To the payment of the whole amount then due and unpaid of the
     indebtedness of Borrower to Lender;

          (iii) To the payment of other amounts then secured hereunder; and
 
          (iv) the surplus, if any shall be paid to the Borrower or to
     whomsoever may be lawfully entitled to receive the same. Lender shall have
     the right to enforce one or more remedies hereunder, successively or
     concurrently, and such action shall not operate to estop or prevent Lender
     from pursuing any further remedy which it may have, and any repossession or
     retaking or sale of the Collateral pursuant to the terms hereof shall not
     operate to release Borrower until full payment of any deficiency has been
     made in cash.

10. Limitation on Interest: It is the intent of the parties to this Loan and
Security Agreement to contract in strict compliance with applicable usury laws
from time to time in effect. In furtherance thereof, the parties stipulate and
agree that none of the terms and provisions contained in the Loan Documents
shall ever be construed to create a contract to pay for the use, forbearance or
detention of money at a rate in excess of the maximum interest rate permitted to
be charged by applicable law from time to time in effect.

11. Personal Property/Tags. No item of Equipment will be attached or affixed to
realty or any building without Lender's prior knowledge and written consent and
waiver of the landlord and the mortgagee, if any, of the real property. If so
requested by Lender, Borrower will affix tags supplied by Lender, reflecting
Lender's security interest in the Equipment.

12. Loss and Damage. Borrower shall bear the risk of damage, loss, theft, or
destruction, partial or complete of the Equipment, whether or not such loss or
damage is covered by insurance, except that while Borrower is not in default,
Lender agrees to apply toward payment of obligations of Borrower insurance
proceeds payable to Lender by reason of such damage, loss, theft, or
destruction. In the event of any damage, loss, theft, or destruction, partial or
complete, of any item of Equipment, Borrower shall promptly notify Lender in
writing and at the option of Lender (a) repair or restore the Equipment to good
condition and working order, or (b) replace the Equipment with similar equipment
in good repair, condition and working order, or (c) pay Lender, in cash, an
amount equal to the unamortized equipment cost for the item or if the Equipment
was not purchased with the loan proceeds, the prorata portion of the outstanding
principal balance due under the Interim Note or Term Note, as the case may be,
and all other amounts relating to that item of Equipment then due and owing
hereunder, and upon payment of that amount, Lender's lien shall be terminated
with respect to that item of Equipment only, and Lender will release its
interest in that item of Equipment.

13. Assignment. Borrower may not assign or transfer any rights under this Loan
and Security Agreement or to the Collateral without Lender's prior written
consent.

14. Indemnification. Borrower shall indemnify and hold harmless Lender from and
against any and all claims, losses, liabilities, causes of action, costs and
expenses (including the fees of Lender's attorneys) ("Claims") in any way
relating to or arising out of this Loan and Security Agreement, the other Loan

<PAGE>

Documents or the collateral, except for any Claims resulting solely and directly
from Lender's gross negligence or willful misconduct.

15. Notices. Whenever Borrower or Lender shall desire to give or serve any
notice, demand, requests or other communication with respect to this Loan and
Security Agreement, each such notice, demand, request or communication shall be
in writing and shall be effective only if the same is physically delivered or is
by certified mail, postage prepaid, return receipt requested, or by overnight
courier, postage prepaid, mailed to the parties at the addresses set forth in
the first paragraph of this Loan and Security Agreement, with a copy to Lender's
Vice President of Credit. Any party hereto may change its address for such
notices by delivering or mailing to the other parties hereto, as aforesaid, a
notice of such change.

16. No Waiver by Lender. By exercising or failing to exercise any of its rights,
options or election hereunder, Lender shall not be deemed to have waived any
breach or default on the part of Borrower or to have released Borrower from any
of the obligations secured hereby, unless such waiver or release is in writing
and is signed by Lender. In addition, the waiver by Lender of any breach hereof
for default in payment of an indebtedness secured hereby shall not be deemed to
constitute a waiver of any succeeding breach or default.
 
17. Further Agreements. From time to time, Borrower will execute such further
instruments as Lender may reasonably require, in order to protect, preserve, and
maintain the security interest granted hereby.

18. Binding upon Successors. All agreement, covenants, conditions and provisions
of this Loan and Security Agreement shall apply to and bind the successors and
assigns of all parties hereto.

19. Governing Laws. This Loan and Security Agreement shall be governed by the
laws of the State of Washington.

20. Amendment. This Loan and Security Agreement can be modified or rescinded
only by a writing expressly referring to this Loan and Security Agreement,
signed by both of the parties hereto.

21. Invalidity of Provisions. Every provision of this Loan and Security
Agreement is intended to be severable. In the event that any term or provision
hereof is declared by a court to be illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the balance of the
terms and provisions hereof, which terms and provisions shall remain binding and
enforceable, then to the extent possible all of the other provisions shall
nonetheless remain in full force and effect. Co-Borrower: HAMPSHIRE DESIGNERS,
INC.

By:  /s/ Charles W. Clayton
----------------------------------
(Print Name):  Charles W. Clayton
title:  Vice President

Federal Tax ID Number:  13-2949983


IN WITNESS WHEREOF, Borrower and Lender have duly executed this Loan and
Security Agreement the day and year first above written.

Lender:  METLIFE CAPITAL CORPORATION
By:
----------------------------------
(Print Name):
Title:

Co-Borrower:SAN FRANCISCO KNITWORKS, INC.
By:  /s/ Horace D. Padgett, Jr.
-------------------------------------
(Print Name):  Horace D. Padgett, Jr.
Title:  Asst. Secretary and Treasurer
Social Security Number:
(if borrower is an individual)
Federal Tax Identification Number:  57-0804425

<PAGE>
TERM PROMISSORY NOTE NO. ONE
METLIFE CAPITAL
No.  5006594
$1,300,000.00
May 13, 1994

FOR VALUE RECEIVED, the undersigned, Hampshire Designers, Inc. ("Co-Borrower")
and San Francisco Knitworks, Inc. ("Co-Borrower"), ("Maker"), promise to pay to
the order of MetLife Capital Corporation ("Payee"), at its office at 10900 N.E.
4th St., Suite 500, Box C-97550, Bellevue, Washington 98009, the principal sum
of One Million three Hundred Thousand ($1,300,000.00) Dollars together with
interest on unpaid principal from the date of disbursement of such principal
amount until payment in full at a rate of 7.55 percent (7.55%) per annum
("Rate") computed on the basis of a 360 day year of twelve consecutive thirty
day months. Interest hereunder shall be paid on the unpaid principal, together
with principal, in Sixty (60) installments of Twenty Six Thousand Eighty and
23/100 ($26,080.23) commencing on 6/13/94 and Monthly thereafter until 5/13/99
on which date the entire balance of principal and interest unpaid shall be due
and payable. It is agreed that each installment, when paid, shall be applied by
the holder hereof, first so much as shall be required to the payment of interest
accrued as specified hereto, and the balance thereof to the repayment of the
principal sum.

Except as may be otherwise expressly provided herein, this Note may not be
prepaid in whole or in part, except with the prior written consent of Payee,
Maker shall have the privilege of prepaying all (but not part) of the then
outstanding balance under this Note on 5/13/96 or on any installment due date
thereafter, subject to giving thirty (30) days prior written notice to Payee
specifying the date of prepayment and further subject to payment of a prepayment
premium equal to the amount, if any, required to offset the adverse impact to
Payee of any decline in interest rates. The prepayment premium is determined by
(i) calculating the decrease, expressed in basis points (but no less than zero)
in the current weekly average yield for Three (3) year U.S. Treasury Notes as
published in Federal Reserve Statistical Release H. 15(519) (the "Index") from
the weekly average yield of 4.810% as of February 18, 1994 to the Friday (or, if
Friday is not a business day, the last business day) of the week immediately
preceding the prepayment date (ii) dividing the difference by 100, (iii)
multiplying the result by the applicable "Premium Factor" set forth below, and
(iv) multiplying the product by the principal to be prepaid. Any prepayment
shall be applied first to the prepayment premium, if any, next to accrued
interest and late charges (if any), and thereafter to the principal then
outstanding. The Premium Factor shall be the amount shown on the following chart
for the month in which prepayment occurs.

Number of Months Remaining         (Years)              Premium Factor
            36 - 25                 (3)                       .014
            24 - 13                 (2)                       .010
            12 - 1                  (1)                       .005

In the event the Federal Reserve Board ceases to publish Statistical Release H.
15(519), then the decrease in Three (3) - Year U.S. Treasury Notes will be
determined from another source designated by Payee.

If Maker shall have given to Payee notice of Maker's intention to so prepay,
Maker shall not then be entitled to withdraw such notice, and the indebtedness
proposed to be prepaid in such notice together with the aforesaid prepayment
fee, if applicable, shall be due and payable upon the date specified for such
prepayment in such notice. Upon the occurrence of an Event of Default and
acceleration of payment of indebtedness evidenced hereby during a period open to
prepayment, Maker shall pay to Payee, in addition to any and all other sums due
and payable hereunder, as liquidated damages for the loss of Payee's investment
and not as a penalty, an amount equal to the prepayment fee which would have
been payable hereunder on such date of acceleration in the event of a voluntary
prepayment. Maker and Payee agree that the foregoing amounts do not constitute
penalties but rather constitute reasonable calculations of the investment loss
that would be sustained by Payee in the event of such prepayment.

It is specifically understood and agreed by Maker that, in the event of a
default under this Note or under any instrument securing the Note, a tender of
payment of the unpaid principal and accrued interest then outstanding shall be
deemed a prepayment, and accordingly, said tender must include the premium
herein above required, or if said tender is made prior to the time this
privilege is operative, then said tender must include a premium equal to six (6)
months' interest at the Rate computed on the principal amount so tendered. It is
further understood and agreed by Maker that Payee shall not be obligated to
accept said tender, and said tender shall for all purposes be deemed ineffectual
and deficient, unless said tender shall include the premium herein above
required.
<PAGE>

In the event that Payee does not receive any payment on the date due, Maker will
pay Payee a late charge of five percent (5%) of the payment outstanding together
with the payment and, provided said sum is received within ten (10) days of the
date due, Payee agrees not to demand immediate payment of the whole sum of
principal and interest as otherwise permitted herein.

If, from any circumstances whatsoever, payment of any obligation due under this
Note at the time such performance shall be due shall involve exceeding the
maximum amount currently prescribed by any applicable usury statue or any other
applicable law, then such obligation shall be reduced to such maximum amount, so
that in no even shall any payment be possible under this Note, or under any
other instrument evidencing or securing the indebtedness evidenced hereby, that
is in excess of such maximum amount.

In the event that an Event of Default shall occur under the Loan and Security
Agreement (as hereinafter defined) or other instrument now or hereafter securing
repayment hereof, following any required notice and/or the expiration of any
applicable period of grace, then, and in such event, the principal indebtedness
evidenced hereby, and any other sums advanced hereunder, together with all
unpaid interest accrued thereon, shall, at the option of Payee, at once become
due and payable and may be collected forthwith, regardless of the stipulated
date of maturity. TIME IS OF THE ESSENCE WITH RESPECT TO THIS NOTE. Interest
shall accrue on the outstanding principal for so long as such default continues,
regardless of whether or not there has been an acceleration of the indebtedness
evidenced hereby as set forth herein, at the rate equal to the lesser of fifteen
percent (15%) per annum or the maximum rate allowable under law. All such
interest shall be paid at the time of and as a condition precedent to the curing
of any such default should Payee, at its sole option, allow such default to be
cured. In the event this Note, or any part thereof, is collected by or through
an attorney-at-law. Maker agrees to pay all costs of collection including, but
not limited to, reasonable attorneys' fees, whether or not suit is filed.

This Note is one of the notes referred to in and is secured by the Loan and
Security Agreement dated April 19, 1994 between Maker and Payee. The terms of
the Loan and Security Agreement are incorporated herein by reference.

Maker waives any right of exemption and waives presentment, protest and demand
and notice of protest, demand and of dishonor and nonpayment of this Note, and
consents that any holder hereof shall have the right, without notice to grant
any extension or extensions of time for payment of this Note or any part thereof
or any other indulgences or forbearances whatsoever, or may release any of the
security for this Note without any way affecting the liability of any other
party for the payment of this Note.

The due payment and performance of Maker's obligations hereunder shall be
without regard to any counterclaim, right of offset, or any other counterclaim
whatsoever which Maker may have against Payee and without regard to any other
obligations of any nature whatsoever which Payee may have to Maker, and no such
counterclaim or offset shall be asserted by Maker in any action, suite or
proceeding instituted by Payee for Payment of Maker's obligations hereunder.

This Note and the Loan and Security Agreement shall be governed by and construed
in accordance with the laws of the State of Washington.

Maker acknowledges that there is no presumption that the value of the property
securing this note is equal to the face amount of the Note, and that a
deficiency judgment many be necessary in proceedings taken for enforcement
hereof.

No amendment to this Note shall be binding upon Payee unless it is in writing
and duly signed by Payee.

IN WITTINESS WHEREOF, the Maker has caused these presents to be duly signed and
the date first above written.

Co-Borrower: Hampshire Designers, Inc. Borrower:  San Francisco Knitworks, Inc.
By:/s/ Charles W. Clayton              By:  /s/ Horace D. Padgett, Jr.
------------------------------------   ----------------------------------------
                                       Witness: /s/ Tony Lamar Charping
(Print name): Charles W. Clayton       (Print name):Horace D. Padgett, Jr.
Title: Vice President                  Title:Assistant Secretary

<PAGE>
                                 METLIFE CAPITAL
                     SUPPLEMENTAL SECURITY AGREEMENT NO. ONE

This Supplemental Security Agreement is executed by Hampshire Designers, Inc.,
("Co-Borrower") and San Francisco Knitworks, Inc. San Francisco Knitworks, Inc.,
("Co-Borrower") pursuant to the terms of a Loan and Security Agreement dated
_________ between Borrower and MetLife Capital Corporation ("Lender"). All
capitalized terms used herein that are not otherwise defined herein shall have
the respective meanings given to such terms in the Loan and Security Agreement.

In order to provide security for the payment and performance of Borrower's
obligations under the Loan Documents, Borrower has granted to Lender a first
priority security interest in the Collateral. In addition to said grant,
Borrower intends by this Supplemental Security Agreement to grant to Lender a
first priority security interest in the items of Equipment identified herein.

1. To further secure the payment and performance of all of Borrower's
obligations to Lender under the Loan Documents, Borrower hereby grants to Lender
a first priority security interest in the items of Collateral described below,
including all present and future additions, attachments and accessories thereto,
all substitutions therefor and replacements thereof and all proceeds thereof,
including all proceeds of insurance: Cost or Qty. Model/Mfr. Description Serial
No. Appraised Value

Various used textile manufacturing equipment as per the attached Exhibit "A",
herein incorporated by this reference $1,300,000.00

2. Borrower hereby (a) affirms that the representations and warranties set forth
in Section 5 of the Loan and Security Agreement are true and correct as of the
date hereof; (b) represents and warrants that Lender has a first priority
security interest in the Collateral; and (c) represents and warrants that the
above described equipment will be maintained at the following locations(s):

375 ALABAMA STREET, SAN FRANCISCO, CA  94110

3. The Loan Amount for loans to be made pursuant to this Supplemental Security
Agreement is $1,300,000.00.

4. The Commitment Expiration Date for loans to be made pursuant to this
Supplemental Security Agreement is May 15, 1994.

5. The amount of liability insurance required to be maintained by Borrower
pursuant to Section 6(d) of the Loan and Security Agreement is $1,000,000.00.

6. All of the terms and provisions of the Loan and Security Agreement are hereby
incorporated in and made a part of this Supplemental Security Agreement to the
same extent as if fully set forth herein.

In witness whereof, Borrower has executed and delivered this supplemental
Security Agreement this 18th day of April 1994.



Borrower:         HAMPSHIRE DESIGNERS, INC.
By:               /s/ Charles W. Clayton
(Print name):     Charles W. Clayton
Title:            Vice President

Borrower:         SAN FRANCISCO KNITWORKS, INC.
By:               /s/ Charles W. Clayton
(Print name):     Charles W. Clayton
Title:            Vice President

<PAGE>

                      CORPORATE GUARANTY AND CERTIFIED COPY
                    OF BOARD RESOLUTION AUTHORIZING GUARANTY

For valuable consideration, the receipt of which is hereby acknowledged, the
undersigned (hereinafter called "Guarantor") unconditionally guarantees to pay
to or perform for METLIFE CAPITAL CORPORATION and/or METLIFE CAPITAL, LIMITED
PARTNERSHIP (hereinafter "METLIFE"), its successors and assigns, any and all
obligations and liabilities whatsoever of HAMPSHIRE DESIGNERS, INC., CO-BORROWER
AND SAN FRANCISCO KNITWORKS, INC.., CO-BORROWER (hereinafter called the
"Obligor"), such obligations and liabilities including but not limited to
indebtedness, promissory notes, security agreements, obligations under equipment
leases, conditional sales contracts, and finance agreements, (hereinafter called
"Obligations"), which the Obligor now has or may hereafter incur or be under to
METLIFE. If default shall at any time be made or suffered by the Obligor in the
prompt and timely payment of the installments, rents, or other sums to be paid
thereunder, or in the performance of any other covenant or condition contained
therein, at the times and in the manner provided, the undersigned, for itself
and its successors and assigns, agrees to pay upon demand said installments,
rents, or any other sums that the Obligor may be liable for thereunder, together
with all damages that may arise in consequence of the nonperformance by Obligor
of any of said covenants and conditions, and fully to perform and carry out all
other covenants and conditions of any such obligation on the part of Obligor to
be performed. The duty of the undersigned to pay or to perform for METLIFE under
any Obligations with respect to which the Obligor is in default is primary and
independent of the duties of Obligor, of any other guarantors, and of all other
persons.

The Obligations of Obligor secured hereby are intended to be construed in the
most comprehensive sense and shall include all Obligations of Obligor, including
all those arising under any such indebtedness, lease, contract or agreement,
whether to pay or deposit money or perform some other act, whether due or not
due, absolute or contingent, liquidated or unliquidated, and whether Obligor may
be liable individually or jointly with others, and whether recovery upon the
Obligations may be or hereafter become barred by any statute of limitations or
be or hereafter become otherwise unenforceable.

The undersigned hereby waives: (a) demand, protest, notice of protest, notice of
Obligor's default, notice of nonpayment or on performance, notice of acceptance
hereof and default hereunder, (b) the right, if any, to the benefit of, or to
direct the application of any security hypothecated to METLIFE until all
Obligations, howsoever arising, shall have been paid or performed; (c) the right
to require METLIFE to proceed against Obligor, or any other guarantor, or any
security, or insurance, or to pursue any other remedy in METLIFE's power.

METLIFE may proceed against the undersigned directly and independently of
Obligor, any other guarantor(s), and any other persons. No termination,
modification, amendment, extension or renewal of, nor any waiver or excuse of
any default under any Obligation, nor the substitution, elimination or addition
of any collateral or other assets thereunder, nor the termination of any
Obligation with respect to any or all of the collateral or other assets
thereunder, nor the death, disability or incapacity of Obligor, or any other
guarantors, shall release the undersigned, the undersigned hereby consenting
thereto and waiving notice of any such transaction or event. The covenants
hereof shall survive the redelivery of any item of collateral or any assets, or
the acceptance thereof, and the termination of any such obligation.

METLIFE may, without affecting the liability of the undersigned hereunder: (a)
take and hold other security for the performance of any obligations or for the
payment of this guaranty; (b) exchange, enforce, waive or release any such
security; or (c) release or substitute any one or more endorsers or guarantors,
and METLIFE may, without notice to the undersigned, assign this guaranty
agreement in whole or in part.

This is a CONTINUING GUARANTY AGREEMENT and covers all Obligations until the
Guarantor shall have given METLIFE written notice of the withdrawal of this
guaranty agreement, but any such withdrawal shall not impair the liability of
the Guarantor on any such Obligations incurred or acquired before METLIFE
received such notice.

The undersigned agrees to pay reasonable attorneys' fees and all other costs and
expenses incurred by METLIFE in the enforcement of this guaranty agreement. This
guaranty agreement shall be constituted under and governed by the laws of the
State of Washington. The undersigned hereby submits to the jurisdiction of any
state or federal court in the State of Washington in any action or proceeding
brought to enforce this Guaranty, and hereby waives any objection to venue and
any claim that such court is an inconvenient forum.

HAMPSHIRE GROUP, LIMITED
a Delaware corporation
By: /s/ Charles W. Clayton
-------------------------------------
Its: Vice President

<PAGE>
                            CERTIFICATE OF SECRETARY

I hereby certify that I am the duly elected, qualified and acting Secretary of
HAMPSHIRE GROUP, LIMITED (the "Corporation"), a Delaware corporation; that the
following is a true and correct copy of a Resolution adopted by the Board of
Directors of the corporation on the 6th day of April 1994 that said Resolution
was duly and regularly adopted in accordance with the provisions of the Articles
of Incorporation and the By-laws of the Corporation; and that said Resolution is
duly recorded and appears in the minute books of the Corporation and has not
been altered, amended or revoked; that the form of the guaranty referred to
therein is in the form annexed hereto:

RESOLVED that it is in the interest of this Corporation that it execute a
guaranty substantially in the form annexed to these minutes which guarantees to
METLIFE, on the terms and conditions therein stated, the performance of certain
obligations of Hampshire Designers, Inc., Co-Borrower and San Francisco
Knitworks, Inc., Co-Borrower to METLIFE and that the Vice President of this
Corporation are authorized to executed the guaranty in the form attached hereto,
with such modifications thereto as to them shall seem appropriate, on behalf of
the Corporation.

I further certify that the following persons now are the duly appointed,
qualified and acting officers of the Corporation, holding the offices referred
to in the foregoing Resolution, and that the signatures of said person appearing
opposite his name below, is his genuine signature:

Title:  Vice President
Name:  Charles W. Clayton
Signature:  /s/ Charles W. Clayton
-----------------------------------------


IN WITNESS WHEREOF, I have and above set my hand this 18th day of April, 1994

/s/ Charles W. Clayton
------------------------------
Secretary

ATTEST:  /s/ Horace D. Padgett, Jr.

<PAGE>

               CROSS DEFAULT AND CROSS COLLATERALIZATION AGREEMENT

This Cross Default and Cross Collateralization Agreement (hereinafter the
"Agreement") is entered into this day of April 18, 1994 by and between Hampshire
Hosiery, Inc. ("Borrower"), Hampshire Designers, Inc., Co-Borrower and San
Francisco Knitworks, Inc., Co-Borrower, ("Co-Borrower") and MetLife Capital
Corporation (or its assigns), ("Lender").

                                   WITNESSETH:

WHEREAS, Hampshire Hosiery, Inc. as Borrower, and Lender, as secured party,
entered into a certain Loan and Security Agreement dated July 27, 1993, secured
by certain textile manufacturing equipment as per the attached Exhibit "A"
herein incorporated by this reference; and

WHEREAS, Co-Borrower now desires Lender to make a loan to be secured by new and
used textile manufacturing equipment; and

WHEREAS, Lender is willing to enter into such additional loan transactions only
upon Co-Borrower and Borrower's consent to and agreement with the following
cross-default and cross-collateralization provisions.

NOW THEREFORE, in consideration of the loan to be provided to Co-Borrower by
Lender the parties hereby agree as follows:

1. Definitions. The above described loan agreements are herein referred to
individually as a "Loan" and collectively as the "Loans".

2. Cross Default. The occurrence of any event of default with respect to any
obligation of Co-Borrower or Borrower to Lender under any Loan shall constitute
an event of default with respect to all Loans of Co-Borrower and Borrower with
Lender.

3. Cross Collateralization. Co-Borrower and Borrower hereby grants to Lender a
continuing security interest in all equipment or other collateral pledged,
mortgaged or otherwise hypothecated to Lender, until all obligations of
Co-Borrower and Borrower currently owing to Lender, or hereafter arising, are
paid in full. If an event of default shall have occurred under any Loan, all
equipment covered thereby, or by a security interest in any other collateral
granted by Co-Borrower or Borrower to Lender, may be sold and/or auctioned for
the purpose of satisfying such default, and any excess proceeds of same may be
applied to any obligation then outstanding under any Loan.

4. Rights Cumulative. All rights and remedies of Lender herein specified are
intended to be cumulative and not in substitution for any right or remedy
otherwise available. Nothing contained herein shall be construed as to limit the
rights and remedies of Lender to proceed against Co-Borrower or Borrower under
any Loan or as provided by law.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first hereinabove written.

METLIFE CAPITAL CORPORATION
By:  /s/ David Flanary
Its:    Vice President

SAN FRANCISCO KNITWORKS, INC.  (CO-BORROWER)
By: /s/ Horace D. Padgett, Jr.
Its:  Vice President

HAMPSHIRE HOSIERY, INC. (BORROWER)
By:  /s/ Charles W. Clayton
Its: Vice President

HAMPSHIRE DESIGNERS, INC.  (CO-BORROWER)
By:  /s/ Charles W. Clayton
Its:  Vice President


