ex10_4.htm


    
      
        
        

      

      
        
        

        
          

        

      

      
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    Exhibit
      10.4

    FIRST
      AMENDMENT TO

    INTERCREDITOR
      AND SUBORDINATION AGREEMENT

    


    This
      First Amendment to Intercreditor and Subordination Agreement (this
“Amendment”) is dated
      as of this ___ day of October, 2007, by and between Textile Investment
      International  S.A. (“Junior
      Creditor”) and Wachovia Bank, National
      Association (“Senior
      Creditor”).

     

    BACKGROUND

     

    A.           Junior
      Creditor and Senior Creditor are parties to a certain Intercreditor and
      Subordination Agreement dated as of December 30, 2004 (as amended or otherwise
      modified from time to time, the “Intercreditor
      Agreement”).  Capitalized terms used
      herein and not otherwise defined shall have the respective meanings set forth
      in
      the Intercreditor Agreement.

     

    B.           The
      parties have agreed, subject to the terms and conditions of this Amendment,
      to
      amend the Intercreditor Agreement.

     

    NOW,
      THEREFORE, with the foregoing Background hereinafter deemed incorporated by
      this
      reference, the parties hereto, intending to be legally bound, promise and agree
      as follows:

     

    1.  AMENDMENTS
      TO INTERCREDITOR AGREEMENT

     

    1.1  Permitted
      Payments.  Section 3.2(a) of the Intercreditor Agreement is
      amended and restated as follows:

     

    (a)  Senior
      Creditor hereby agrees that, notwithstanding anything to the contrary contained
      in Section 3.1, on and after July 31, 2008 Debtor may make, and Junior Creditor
      may receive and retain from Debtor, regularly scheduled payments of principal
      which, for the purposes hereof, shall include Deferred Note Payments, with
      respect to the Junior Debt and interest thereon, evidenced by the License Note
      on an unaccelerated basis, in accordance with the terms of the applicable Junior
      Creditor Agreements as in effect on the date hereof (but not any payments
      pursuant to acceleration or claims of breach (other than with respect to missed
      regularly scheduled payments of principal and interest which are subsequently
      cured) or to prepay any Junior Debt or otherwise), providedthat,
      as of the date of any such payment and after giving effect thereto, (a) no
      Default or Event of Default, under the Senior Credit Agreements, shall exist
      or
      have occurred and be continuing, (b) Debtor has a Fixed Charge Coverage Ratio
      (as defined in the Senior Loan Agreement) of at least 1.20 to 1.00 determined
      for the twelve (12) month period then ending and (c) Debtor has Excess
      Availability of at least $2,500,000.

     

    2.  REAFFIRMATION

     

    This
      Amendment shall be incorporated into and made part of the Intercreditor
      Agreement.  Except as expressly modified by the terms hereof, all of
      the terms and conditions of the Intercreditor Agreement is hereby reaffirmed
      and
      shall continue in full force and effect as therein written.

     

    3.  MISCELLANEOUS

     

    3.1  GOVERNING
      LAW. The validity, construction and effect of this
      Amendment shall be governed by the internal laws of the Commonwealth of
      Pennsylvania (without giving effect to principles of conflicts of
      law).

     

    3.2  Consent
      to Jurisdiction; Waiver of Jury Trial.  Each of the parties hereto
      hereby irrevocably consents to the non-exclusive jurisdiction of the Courts
      of
      the Commonwealth of Pennsylvania, and the United States District Court for
      the
      Eastern District of Pennsylvania, and waives trial by jury in any action or
      proceeding with respect to this Amendment.

     

    3.3  Counterparts.  This
      Amendment may be executed in any number of counterparts, each of which shall
      be
      an original with the same force and effect as if the signatures thereto and
      hereto were upon the same instrument.

     

    


    SIGNATURES
      ON FOLLOWING PAGE


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Dated
      the date and year first written
      above.

    


    
      	
              SENIOR
                CREDITOR:

            	
              WACHOVIA
                BANK, NATIONAL ASSOCIATION

               

               

              By:           /s/
                Georgios C. Kyvernitis        
                

              Name:      Georgios
                C.
                Kyvernitis             
                

              Title:        Director                                       
                

               

            
	
              JUNIOR
                CREDITOR:

            	
              TEXTILE
                INVESTMENT INTERNATIONAL S.A.

               

               

              By:           /s/Tom
                Felgen                
                /s/ René Faltz    

              Name:     
                Tom
                Felgen                    
                René
                Faltz          

              Title:        Director                            Director           
                 

               

            


    

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    ACKNOWLEDGMENT

    


    On
      this ___ day of October, 2007, the
      undersigned hereby acknowledges and agrees to the foregoing terms and
      provisions.  By its signature below, the undersigned agrees that it
      will, together with its successors and assigns, be bound by the provisions
      hereof; provided that, nothing in the foregoing Amendment
      shall amend, modify, change or  supersede the respective terms of any
      Creditor’s Agreements with the undersigned.  In the event of any
      conflict or inconsistencies between the terms of the foregoing Amendment and
      the
      Senior Creditor Agreements or the Junior Creditor Agreements, the terms of
      the
      Senior Creditor Agreements or the Junior Creditor Agreements, as the case may
      be, shall govern as between the Creditor involved and the
      undersigned.

    


    The
      undersigned agrees that any
      Creditor holding Collateral does so as bailee (under the UCC) for the other
      and
      is hereby authorized to and may turn over to such other Creditor upon request
      therefor any such Collateral, after all obligations and indebtedness of the
      undersigned to the bailee Creditor have been fully paid and
      performed.

    


    The
      undersigned acknowledges and agrees
      that: (i) although it may sign this Amendment it is not a party hereto or to
      the
      Intercreditor Agreement and does not and will not receive any right, benefit,
      priority or interest under or because of the existence of the foregoing
      Amendment or the Intercreditor Agreement, (ii) in the event of a breach by
      the
      undersigned or Junior Creditor of any of the terms and provisions contained
      in
      the foregoing Amendment or the Intercreditor Agreement, such a breach shall
      constitute an “Event of Default” as defined in and under the Senior Creditor
      Agreements and (iii) it will execute and deliver such additional documents
      and
      take such additional action as may be necessary or desirable in the opinion
      of
      any Creditor to effectuate the provisions and purposes of the Intercreditor
      Agreement, provided that  such requests made or
      instructions given for additional documents or additional actions are not
      inconsistent with and do not otherwise conflict with the terms of the Senior
      Creditor Agreements or the Junior Creditor Agreements.

    


    


    I.C.
      ISAACS & COMPANY L.P.,

    a
      Delaware limited partnership

    


    By:
      I.C.
      Isaacs & Company, Inc., its general partner

    


    By:           /s/
      Robert S.
      Stec                                   
  

    Robert
      S. Stec, Chief Executive
      Officer