Exhibit 10.3
 
EXECUTION VERSION
 
CONSENT AND AMENDMENT NO. 1 TO CREDIT AGREEMENT
 
This AMENDMENT NO. 1 TO CREDIT AGREEMENT (this “Amendment”) is dated as of May
26, 2011 by and among INTERNATIONAL TEXTILE GROUP, INC., a Delaware corporation
(“ITG”), the other Borrowers and Credit Parties signatory hereto, GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation, for itself and as Agent
(“Agent”), and the other Lenders signatory hereto.  Unless otherwise specified
herein, capitalized terms used in this Amendment shall have the meanings
ascribed to them in the Credit Agreement (as hereinafter defined).
 
R E C I T A L S:
 
WHEREAS, Borrowers, the other Credit Parties, the Agent and the Lenders entered
into that certain Amended and Restated Credit Agreement dated as of March 30,
2011 (as amended, supplemented, restated or otherwise modified from time to
time, the “Credit Agreement”); and
 
WHEREAS, the parties to the Credit Agreement have agreed to an amendment to the
Credit Agreement as set forth herein;
 
NOW, THEREFORE, in consideration of the premises contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
 
1           Consent.  Each of the Lenders signatory hereto hereby consents to
the terms of, and authorizes and directs the Agent to execute and deliver, the
Fifth Amended and Restated Subordination and Intercreditor Agreement,
substantially in the form attached as Exhibit I hereto (the “Intercreditor
Agreement”).
 
2           Amendments to Credit Agreement.
 
2.1           Section 5.9(i) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
 
“(i)           Contingent Obligations of ITG arising under the WLR Phong Phu
Guaranty, provided that such Contingent Obligations and any Indebtedness of ITG
to WLR Recovery Fund IV, LP resulting from such WLR Phong Phu Guaranty (such
Indebtedness, “WLR Phong Phu Indebtedness”) (i) shall not exceed an aggregate
principal amount of $17,250,000 during the term of this Agreement and (ii) shall
constitute Secured Note Indebtedness that is otherwise permitted pursuant to
Section 5.5(h)(ii);”
 
2.2           Section 11.1 of the Credit Agreement is hereby amended by
inserting the following new defined terms in proper alphabetical order thereto:
 
 
 

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““WLR Phong Phu Indebtedness” has the meaning assigned to such term in Section
5.9(i).”
 
““WLR Phong Phu Guaranty” means that certain Guaranty of Payment dated as of May
26, 2011 by ITG in favor of WLR Recovery Fund IV, LP, as such agreement may be
amended, supplemented or otherwise modified from time to time in a manner
acceptable to the Agent in its sole discretion.”
 
2.3           Section 11.1 of the Credit Agreement is hereby amended by amending
and restating the following defined terms in their entirety to read as follows:
 
““Intercreditor Agreement” means that certain Fifth Amended and Restated
Subordination and Intercreditor Agreement dated as of May 26, 2011 by and among
Clearlake Capital Partners, LLC, as collateral agent on behalf of the
Subordinated Creditors (as defined therein), GE Capital, as agent for the
Lenders, and ITG, as amended, amended and restated, supplemented, modified or
replaced from time to time.”
 
““Permitted Investor” means any of WLR, WLR Recovery Fund II, LP, WLR Recovery
Fund III, LP, WLR Recovery Fund IV, LP and WLR-GS MasterCo-Investments, L.P.”
 
3           Representations and Warranties.  In order to induce Agent and the
Lenders to enter into this Amendment, each Borrower and each other Credit Party
represents and warrants to Agent and each Lender (which representations and
warranties shall survive the execution and delivery of this Amendment), that:
 
(a)           the execution, delivery and performance by each Credit Party of
this Amendment has been duly authorized by all necessary corporate and
partnership action and this Amendment is a legal, valid and binding obligation
of such Credit Party enforceable against such Credit Party in accordance with
its terms; and
 
(b)           upon the effectiveness of this Amendment, all of the
representations and warranties contained in the Credit Agreement and in the
other Loan Documents (other than those which speak expressly only as of an
earlier date) are true and correct in all material respects on and as of the
date of the effectiveness of this Amendment after giving effect to this
Amendment and the transactions contemplated hereby.
 
4           Conditions to Effectiveness.  This Amendment shall be effective on
the date when each of the following conditions has been satisfied:
 
(a)           This Amendment shall have been duly executed and delivered by each
Borrower, each other Credit Party party hereto, Agent and the Majority Lenders;
and
 
(b)           The Agent shall have received a fully executed copy of the
Intercreditor Agreement.
 
5           Miscellaneous.
 
5.1           Effect; Ratification.
 
 
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(a)           Except as specifically set forth above, the Credit Agreement and
the other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.  Without limiting the generality of the foregoing, each
Credit Party reaffirms its guaranty of the Obligations and the Liens securing
those guaranties.
 
(b)           The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of Agent or any Lender
under the Credit Agreement or any other Loan Document, nor constitute amendment
of any provision of the Credit Agreement or any other Loan Document, except as
specifically set forth herein.  Upon the effectiveness of this Amendment, each
reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”,
“herein” or words of similar import shall mean and be a reference to the Credit
Agreement as amended hereby.
 
(c)           Each Credit Party acknowledges and agrees that the amendments set
forth herein are effective solely for the purposes set forth herein and that the
execution and delivery by Agent and the Lenders of this Amendment shall not be
deemed (i) except as expressly provided in this Amendment, to be a consent to
any amendment, waiver or modification of any term or condition of the Credit
Agreement or of any other Loan Document, (ii) to create a course of dealing or
otherwise obligate Agent or Lenders to forbear, waive, consent or execute
similar amendments under the same or similar circumstances in the future, or
(iii) to amend, prejudice, relinquish or impair any right of Agent or Lenders to
receive any indemnity or similar payment from any Person or entity as a result
of any matter arising from or relating to this Amendment.
 
5.2           Counterparts and Signatures by Fax.  This Amendment may be
executed in any number of counterparts, each such counterpart constituting an
original but all together one and the same instrument.  Any party delivering an
executed counterpart of this Amendment by fax shall also deliver an original
executed counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of this Amendment.
 
5.3           Severability.  In case any provision in or obligation under this
Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
 
5.4           Loan Document.  This Amendment shall constitute a Loan Document.
 
5.5           GOVERNING LAW.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL, IN ALL RESPECTS, INCLUDING MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.
 
[Signature Pages Follow]
 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first above written.
 
BORROWERS:

INTERNATIONAL TEXTILE GROUP, INC.
BURLINGTON INDUSTRIES LLC
CONE JACQUARDS LLC
CONE DENIM LLC
CARLISLE FINISHING LLC
SAFETY COMPONENTS FABRIC TECHNOLOGIES, INC.

By: /s/Craig J. Hart
Name: Craig J. Hart
Title: Vice President and Treasurer

NARRICOT INDUSTRIES LLC

By: International Textile Group, Inc., its sole member

By: /s/Craig J. Hart
Name: Craig J. Hart
Title: Vice President and Treasurer
 
[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]
 
 

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OTHER CREDIT PARTIES:
APPAREL FABRICS PROPERTIES, INC.
BURLINGTON INDUSTRIES V, LLC
CONE ADMINISTRATIVE AND SALES LLC
CONE INTERNATIONAL HOLDINGS II, INC.
INTERNATIONAL TEXTILE GROUP ACQUISITION GROUP LLC
BURLINGTON WORLDWIDE INC.
CONE DENIM WHITE OAK LLC
CONE INTERNATIONAL HOLDINGS, INC.
CONE ACQUISITION LLC
WLR CONE MILLS IP, INC.
 
By: /s/Craig J. Hart
Name: Craig J. Hart
Title: Vice President and Treasurer
 
 
VALENTEC WELLS, LLC
By: International Textile Group, Inc.,
its sole member
 
By: /s/Craig J. Hart
Name: Craig J. Hart
Title: Vice President and Treasurer
 
 
[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]
 
 

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AGENT AND LENDERS:
 
GENERAL ELECTRIC CAPITAL CORPORATION, as the Agent and a Lender
 
By: /s/James DeSantis
Title: Its Duly Authorized Signatory
 
 
[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]
 
 

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TD BANK, N.A., as a Lender

By: /s/Jang Kim
Name: Jang Kim
Title: Vice President
 
[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]
 
 

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BANK OF AMERICA, N.A., as a Lender

By: /s/John Yankauskas          
Name: John Yankauskas
Title: Sr. Vice President
 
 
[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]