Exhibit 10.1
 
EXECUTION VERSION
 
 
AMENDMENT NO. 6 TO SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT
 
This AMENDMENT NO. 6 TO SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT (this
“Amendment”) is dated as of May 23, 2011 (the “Sixth Amendment Effective Date”)
by and among INTERNATIONAL TEXTILE GROUP, INC., a Delaware corporation (the
“Company”) and the Purchasers signatory hereto.  Unless otherwise specified
herein, capitalized terms used in this Amendment shall have the meanings
ascribed to them in the Note Purchase Agreement (as hereinafter defined).
 
R E C I T A L S:
 
WHEREAS, the Company and the Purchasers are party to that certain Senior
Subordinated Note Purchase Agreement, dated as of June 6, 2007 (as amended by
Amendment No. 1 to Note Purchase Agreement, dated as of April 15, 2008
(“Amendment No. 1”), Amendment No. 2 to Senior Subordinated Note Purchase
Agreement, dated as of December 24, 2008 (“Amendment No. 2”), Amendment No. 3 to
Senior Subordinated Note Purchase Agreement, dated as of December 22, 2009
(“Amendment No. 3”), Amendment No. 4 to Senior Subordinated Note Purchase
Agreement, dated as of March 16, 2011 and  Amendment No. 5 to Senior
Subordinated Note Purchase Agreement, dated as of March 30, 2011 (“Amendment No.
5”), and as otherwise amended, supplemented, restated or otherwise modified from
time to time, the “Note Purchase Agreement”) pursuant to which, among other
things, the Company issued and sold to the Purchasers those certain 18% Senior
Subordinated Notes due 2011 in accordance with and pursuant to the terms and
provisions of the Note Purchase Agreement;
 
WHEREAS, in order to induce WLR Recovery Fund IV, L.P. to enter into Phong Phu
LC Agreement (as defined herein) to support obligations of ITG-Phong Phu Limited
Company, a subsidiary of the Company, the Company proposes to (i) guarantee
reimbursement of any payment obligations of WLR Recovery Fund IV, L.P. arising
under such Phong Phu LC Agreement through a guaranty of payment payable by the
Company solely in additional Tranche B Notes and (ii) pay, either directly to
the issuer of the letter of credit under the Phong Phu LC Agreement or to WLR
Recovery Fund IV, L.P. as a reimbursement, a letter of credit fee in an
aggregate amount not to exceed $155,000;
 
WHEREAS, the Company has requested that the Purchasers agree to amend the Note
Purchase Agreement as set forth herein to permit the guaranty and issuance of
additional Tranche B Notes; and
 
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:
 
 
 

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1         Amendments to Note Purchase Agreement. Subject to the satisfaction of
the conditions to effectiveness set forth in Section 5 below:
 
1.1           Section 1 of the Note Purchase Agreement is hereby amended by
inserting “any Additional Tranche B Notes and” after “collectively, together
with” appearing in the final parenthetical in clause (b) of the last sentence
and inserting the following additional sentence at the end of such section:
 
In addition, the Company has authorized the issuance from time to time of
additional Tranche B Notes of up to $17,250,000 in aggregate principal amount in
satisfaction of the obligations of the Company under the Subordinated Phong Phu
LC Guaranty and had previously authorized the issuance of up to $15,000,000 of
Tranche B Notes pursuant to and in accordance with the Consent and Modification
of Senior Subordinated Note Purchase Agreement and Tranche B Notes, dated August
12, 2010 (collectively, the “Additional Tranche B Notes”).
 
1.1           Section 11.1 of the Note Purchase Agreement is hereby amended and
restated in its entirety as follows:
 
Except for the transactions described on Schedule 6.19, the Company will not,
and will not permit any Subsidiary to, enter into directly or indirectly any
transaction or group of related transactions (including, without limitation, the
purchase, lease, sale or exchange of properties of any kind or the rendering of
any service) with any Affiliate (other than (i) any transaction between any
members of the ITG Group, (ii) any transaction between members of the BST Group,
(iii) any transaction between any member of the ITG Group and any member of the
BST Group to the extent such transaction is permitted by a specific exception to
Section 4.15 of the Senior Credit Agreement defined and modified in the same
manner set forth in Section 10.7, (iv) any transaction constituting part of the
ASCI Reorganization, (v) any Asset Disposition or Investment between a member of
the ITG Group and any Project Subsidiary to the extent permitted by Sections
11.6 and 11.7, respectively and (vi) the Subordinated Phong Phu LC Guaranty, the
related issuance of Tranche B Notes and the payment of the Phong Phu LC Fee
Payment), except in the Ordinary Course of Business pursuant to the reasonable
requirements of the Company’s or such Subsidiary’s business and upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than would
be obtainable in a comparable arm’s-length transaction with a Person not an
Affiliate.
 
1.2           Section 11.4(i) of the Note Purchase Agreement is hereby amended
and restated in its entirety as follows:
 
“(i)           Contingent Obligations arising (i) under a secured guaranty by
Subsidiaries of Burlington Morelos of the Indebtedness of Burlington Morelos
under the Banamex Facility and (ii) under the Subordinated Phong Phu LC Guaranty
by the Company payable solely by the issuance of additional Tranche B Notes;”
 
1.3           The definitions of “Initial Notes” set forth in Schedule B to the
Note Purchase Agreement are hereby amended and restated in their entirety as
follows:
 
 
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“Initial Notes” means the $80,000,000 aggregate principal amount of 18.00%
Senior Subordinated Notes due 2011 issued on the Closing Date hereunder (as
amended and restated as of the Third Amendment Effective Date and as further
amended and restated as of the Fifth Amendment Effective Date), and such term
shall include any PIK Notes, the Yield Enhancement Tranche A Note, any
Additional Tranche B Notes and any such notes issued in substitution therefor
pursuant to Section 14 of this Agreement.  The Notes shall be substantially in
the form set out in Exhibit 1-D with respect to Tranche A Notes and Exhibit 1-E
with respect to Tranche B Notes, with such changes therefrom, if any, as may be
approved by the Purchasers and the Company.  For the avoidance of doubt, the
Initial Notes shall include both Tranche A Notes and Tranche B Notes.
 
“Debt Subordination Agreement” means the Amended and Restated Debt Subordination
Agreement, dated as of December 22, 2009 among WLR Recovery Fund III, L.P., WLR
IV Parallel ESC, L.P., WLR Recovery Fund IV, L.P., the Company and the
Purchasers signatory thereto, as such agreement may be amended, modified or
supplemented from time to time in accordance with its terms.
 
“Subordination Agreement” means the Fifth Amended and Restated Subordination and
Intercreditor Agreement dated as of the Sixth Amendment Effective Date by and
among the Collateral Agent, the Senior Agent and the Company, which agreement
shall be substantially in the form of Annex D to the Sixth Amendment, as such
agreement may be amended, modified or supplemented from time to time in
accordance with its terms.
 
1.4           Schedule B to the Note Purchase Agreement is hereby amended by
adding the following defined terms thereto in the proper alphabetical order:
 
“Additional Tranche B Notes” is defined in Section 1.”
 
“Phong Phu LC Agreement” means the Application and Agreement for Standby Letter
of Credit between the WLR Beneficiary and the RBS Citizens, National
Association, in the form of Annex A to the Sixth Amendment.
 
“Phong Phu LC Fee Payment” means the payment by the Company of a letter of
credit fee in connection with the issuance of the letter of credit pursuant to
the Phong Phu LC Agreement, either directly to the issuer of the letter of
credit under the Phong Phu LC Agreement or to the WLR Beneficiary as a
reimbursement of the payment of such fee by the WLR Beneficiary, in an aggregate
amount not to exceed $155,000.
 
“Sixth Amendment” means Amendment No. 6 to Senior Subordinated Note Purchase
Agreement, dated as of the Sixth Amendment Effective Date, by and among the
Company and the Purchasers signatory thereto.
 
“Sixth Amendment Effective Date” means May 23, 2011.
 
 
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“Subordinated Phong Phu LC Guaranty” means the Subordinated Guaranty of Payment
in the form of Annex B to the Sixth Amendment by the Company in favor of the WLR
Beneficiary guaranteeing reimbursement of the obligations of the WLR Beneficiary
under the Phong Phu LC Agreement, so long as: (i) such Subordinated Guaranty of
Payment is unsecured and expressly subject to and subordinated pursuant to the
terms of the Debt Subordination Agreement and otherwise qualifies as WLR
Subordinated Indebtedness, (ii) the beneficiary on such Subordinated Guaranty of
Payment is the WLR Beneficiary, (iii) except for the Phong Phu LC Fee Payment,
the sole method of payment and only available recourse under such Subordinated
Guaranty of Payment whether for principal, interest or fees shall be the
issuance by the Company of Additional Tranche B Notes to the WLR Beneficiary in
a principal amount equal to the amount of reimbursement obligations and fees
payable under such Subordinated Guaranty of Payment and in an aggregate amount
not to exceed $17,250,000 at any time, (iv) the sole purpose of the Phong Phu LC
Agreement is to provide credit support for credit lines to ITG Phong Phu Ltd.,
Co., a joint venture organized under the laws of the Socialist Republic of
Vietnam and (v) no amendment, supplement or modification of such Subordinated
Guaranty of Payment or the Phong Phu LC Agreement is made without the prior
written approval of the Purchasers.
 
“WLR Beneficiary” means WLR Recovery Fund IV, L.P.
 
2         Representations and Warranties.  In order to induce Purchasers to
enter into this Amendment, the Company represents and warrants, on its own
behalf and on behalf of each Credit Party, to each Purchaser, that:
 
(a)           the execution, delivery and performance by the Company of this
Amendment has been duly authorized by all necessary corporate action and this
Amendment and the Note Purchase Agreement as amended hereby (the “Amended Note
Purchase Agreement”) constitute legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their terms;
 
(b)           upon the effectiveness of this Amendment and after giving effect
hereto, no Default or Event of Default exists under the Amended Note Purchase
Agreement; and
 
(c)           upon the effectiveness of this Amendment and after giving effect
hereto, all representations and warranties in the Amended Note Purchase
Agreement the other Financing Documents are true and correct in all material
respects as of the effective date of this Amendment.
 
3         Conditions to Effectiveness.  This Amendment shall be effective on the
date when the Required Holders determine that each of the following conditions
have been met:
 
(a)           this Amendment shall have been duly executed and delivered by the
Company, each of the Tranche A Purchasers and each of the Tranche B Purchasers;
 
(b)          the Company shall have delivered to the Purchasers a fully executed
copy of Amendment No. 1 to the Amended and Restated Senior Credit Agreement in
the form of Annex C hereto, and the conditions precedent to effectiveness
thereof shall have been satisfied, and a fully executed copy of the Fifth
Amended and Restated Subordination and Intercreditor Agreement in the form of
Annex D; provided, that no fee or other compensation shall be payable by the
Company in connection such amendment to the Amended and Restated Senior Credit
Agreement;
 
 
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(c)           receipt by the Purchasers of such other instruments and documents
as they may reasonably request; and
 
(d)           prior to or contemporaneous with the effectiveness of this
Amendment, the Company shall have reimbursed the Purchasers for all reasonable,
out-of-pocket expenses, including, without limitation, attorneys’ and
paralegals’ fees and expenses, incurred or to be incurred by the Purchasers
through the date hereof in connection with the preparation, negotiation and
execution of this Amendment or any document, instrument or other agreement
delivered pursuant to this Amendment or otherwise in connection with the Note
Purchase Agreement.
 
4         Miscellaneous.
 
4.1      Effect; Ratification; Release.
 
(a)           Except as specifically set forth above, the Amended Note Purchase
Agreement and the other Financing Documents (including, without limitation,
Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4 and Amendment
No. 5) and all payment and performance obligations and all liens granted
thereunder shall remain in full force and effect and are hereby ratified and
confirmed.  The Company agrees that such ratification and reaffirmation is not a
condition to the continued effectiveness of the Amended Note Purchase Agreement
or the other Financing Documents.
 
(b)           The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any Default or Event of Default (whether or not known
to any Purchaser) or any right, power or remedy of the Purchasers under the
Amended Note Purchase Agreement or any other Financing Document, nor constitute
an amendment of any provision of the Amended Note Purchase Agreement or any
other Financing Document, except as specifically set forth herein.  Upon the
effectiveness of this Amendment, each reference in the Amended Note Purchase
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of
similar import shall mean and be a reference to the Note Purchase Agreement as
amended hereby.
 
(c)           The Company 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 the Purchasers 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 Amended Note
Purchase Agreement or of any other Financing Document, (ii) to create a course
of dealing or otherwise obligate any Purchaser 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 the
Purchasers 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.
 
 
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(d)           In consideration of, among other things, the amendments, waivers
and consents provided for herein, and any other financial accommodations which
the Purchasers elect to extend to the Company, the Company, on its own behalf
and on behalf of each Credit Party, forever waives, releases and discharges any
and all claims (including, without limitation, cross-claims, counterclaims,
rights of setoff and recoupment), causes of action, demands, suits, costs,
expenses and damages that they now have, of whatsoever nature and kind, whether
known or unknown, whether arising at law or in equity, against the Collateral
Agent and any Purchaser (in their respective capacities as such) and any of
their respective subsidiaries and affiliates, and each of their respective
successors, assigns, officers, directors, employees, agents, attorneys and other
representatives, based in whole or in part on facts, whether or not known,
existing on or prior to the date of this Amendment.  The provisions of this
Section 8.1(d) shall survive the termination of the Amended Note Purchase
Agreement and payment in full of the Obligations.
 
(e)           Each Tranche B Purchaser reaffirms the terms and conditions of the
Debt Subordination Agreement and Section 9.8 of the Note Purchase Agreement and
agrees that neither such ratification and reaffirmation, nor any Person’s
solicitation of such ratification and reaffirmation, constitutes a course of
dealing giving rise to any obligation or condition requiring a similar or any
other ratification or reaffirmation from any Tranche B Purchaser with respect to
any subsequent modifications, consent or waiver with respect to the Note
Purchase Agreement or other Financing Documents.  Each Tranche B Purchaser
acknowledges and agrees that the Debt Subordination Agreement shall continue in
full force and effect and that all of its obligations thereunder shall be valid
and enforceable, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law), and shall
not be impaired or limited by the execution or effectiveness of this Amendment.
 
4.2         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 or electronic mail 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.
 
4.3         Severability.  In case any provision in or obligation under this
Amendment shall be invalid, illegal or unenforceable in any court of competent
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not be affected or impaired thereby.
 
4.4         Financing Document.  This Amendment shall constitute a Financing
Document.
 
 
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4.5         GOVERNING LAW.  THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF NEW YORK INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS THEREOF, BUT OTHERWISE WITHOUT REFERENCE TO THE CHOICE-OF-LAW
PRINCIPLES OF THE LAW THEREOF.
 

 
[Signature Pages Follow]
 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first above written.
 

  COMPANY      
INTERNATIONAL TEXTILE GROUP, INC.
           
 
By:
/s/ Craig J. Hart   Name: Craig J. Hart   Title: Vice President and Treasurer  
   

 
 
Signature Page to Amendment No. 6 to Note Purchase Agreement
 
 

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PURCHASERS:
     
CCP F, L.P.
     
By: Clearlake Capital Partners, LLC, its general partner
      By: CCG Operations, LLC, its managing member      
 
By:
/s/ Jose Feliciano   Name: Jose Feliciano   Title: Manager      

 
 
Signature Page to Amendment No. 6 to Note Purchase Agreement
 
 

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WLR RECOVERY FUND IV, L.P.
          By: 
WLR Recovery Associates IV, LLC, its General Partner
       
 
By:
/s/ David L. Wax     Name: David L. Wax     Title: Principal Member  

 
 

 
WLR RECOVERY FUND III, L.P.
          By:
WLR Recovery Associates III, LLC, its General Partner
       
 
By:
/s/ David L. Wax     Name: David L. Wax     Title: Principal Member  

 

 
WLR RECOVERY FUND ESC, L.P.
          By:
INVESCO WLR IV Associates, LLC, its General Partner
       
 
By:
/s/ David L. Wax     Name: David L. Wax     Title: Principal Member  

 
 

 
Signature Page to Amendment No. 6 to Note Purchase Agreement