Form of 2008 Subordinated Promissory Note


 Exhibit 10.1 
 THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATED PURSUANT TO THE TERMS OF (1) THE DEBT SUBORDINATION AGREEMENT DATED AS OF DECEMBER 3, 2007, AMONG WLR RECOVERY FUND III, L.P., AS SUBORDINATE CREDITOR,
MAKER, AS DEBTOR AND GENERAL ELECTRIC CAPITAL CORPORATION, AS AGENT (THE “GE DEBT SUBORDINATION AGREEMENT”), AND (2) THE DEBT SUBORDINATION AGREEMENT DATED AS OF DECEMBER 3, 2007, AMONG WLR RECOVERY FUND III, L.P., WLR IV PARALLEL
ESC, L.P. AND WLR RECOVERY FUND IV, L.P., AS SUBORDINATE CREDITORS, MAKER, AS DEBTOR AND THE PURCHASERS NAMED THEREIN (THE “NOTEHOLDER DEBT SUBORDINATION AGREEMENT”), AND PAYEE AND EACH OTHER HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE
HEREOF, ACKNOWLEDGES AND AGREES TO SUCH SUBORDINATION. 
 FORM OF PROMISSORY NOTE 
  

			
	$                 	 	December 29, 2008

 FOR VALUE RECEIVED, International Textile
Group, Inc., a Delaware corporation (the “Maker”), hereby promises to pay on June 6, 2012 (the “Maturity Date”) to the order of
                     (the “Payee”), at 1166 Avenue of the Americas, 27th
 Floor, New York, New York 10036, or such other place as the Payee may designate in writing, in lawful money of the United States of America, the principal sum of
                 ($                 ), or such lesser amount as may be
advanced hereunder, together with interest (calculated on an assumed year of 360 days, for the actual number of days elapsed) from the date hereof on the unpaid principal balance at the rate of 18% per annum. Accrued but unpaid interest on this
Note shall be converted to additional principal amounts on the last day of each September and March. 
 The principal of or interest on this
Note may be prepaid in whole or in part at any time and from time to time without premium. This Note shall be paid without deduction by reason of any set-off, defense or counterclaim of the Maker. 
 The occurrence of any one or more of the following events shall constitute an Event of Default under this Note: (i) the failure to pay principal of
or interest on this Note as and when due, which failure continues for 15 days after Payee shall have given Maker written notice of such failure to pay; (ii) the commencement of a proceeding against the Maker for dissolution or liquidation, or
the voluntary or involuntary termination or dissolution of the Maker; or (iii) insolvency of, the appointment of a custodian, trustee, liquidator or receiver for any of the property of, an assignment for the benefit of creditors by, or the
filing of a petition under any bankruptcy, insolvency or debtor’s relief law, or for any readjustment of indebtedness, composition or extension by or against the Maker. 
 The Maker agrees that upon an Event of Default under this Note, then all or any part of the unpaid principal balance of and interest on this Note, after
written notice to the Maker as set forth above, shall immediately become due and payable; provided however, that upon the occurrence of an Event of Default described in clauses (ii) and (iii) above, the unpaid balance and accrued but
unpaid interest shall become due and payable without notice or demand. If an Event of Default occurs, the Maker agrees to pay to the Payee all expenses incurred by said Payee, including reasonable attorneys’ fees, in enforcing and collecting
this Note. 






 THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATED, PURSUANT TO
(1) THE DEBT SUBORDINATION AGREEMENT DATED AS OF DECEMBER 3, 2007, AMONG WLR RECOVERY FUND III, L.P., AS SUBORDINATE CREDITOR, MAKER, AS DEBTOR AND GENERAL ELECTRIC CAPITAL CORPORATION, AS AGENT (THE “GE DEBT SUBORDINATION
AGREEMENT”), AND (2) THE DEBT SUBORDINATION AGREEMENT DATED AS OF DECEMBER 3, 2007, AMONG WLR RECOVERY FUND III, L.P., WLR IV PARALLEL ESC, L.P. AND WLR RECOVERY FUND IV, L.P., AS SUBORDINATE CREDITORS, MAKER, AS DEBTOR, AND THE PURCHASERS
NAMED THEREIN (THE “NOTEHOLDER DEBT SUBORDINATION AGREEMENT” AND TOGETHER WITH THE GE DEBT SUBORDINATION AGREEMENT, COLLECTIVELY, THE “SUBORDINATION AGREEMENTS”): 
 (A) NO CASH PAYMENT OF PRINCIPAL OR INTEREST UNDER THIS NOTE MAY BE MADE BY THE MAKER TO THE PAYEE OR OTHER HOLDER HEREOF, NOR ACCEPTED BY
THE PAYEE, OR SUCH OTHER HOLDER, FROM THE MAKER UNLESS SUCH PAYMENT IS EXPRESSLY PERMITTED PURSUANT TO THE SUBORDINATION AGREEMENTS. 
 (B) THE PAYEE OR SUCH OTHER HOLDER, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL PROMPTLY PAY OVER AS REQUIRED PURSUANT TO THE SUBORDINATION AGREEMENTS ANY CASH PAYMENTS (WHETHER PRINCIPAL OR INTEREST, OR OTHERWISE) RECEIVED UNDER THIS
NOTE IN CONTRAVENTION OF THE FOREGOING CLAUSE (A). 
 Failure of the Payee hereof to assert any right contained herein will not be deemed to
be a waiver thereof. 
 Notwithstanding any other provision in this Note, the Maker may, and intends to, comply with all United States
federal withholding tax and information reporting requirements in respect of payments under this Note that the Maker reasonably believes are applicable under the Internal Revenue Code of 1986, as amended, and the Treasury regulations promulgated
thereunder, and any amounts so withheld shall be treated as payments on this Note. 
 In the event any one or more of the provisions of this
Note shall for any reason be held to be invalid, illegal or unenforceable, in whole or in part or in any respect, or in the event that any one or more of the provisions of this Note operate to invalidate this Note, then and in either of those
events, such provision or provisions only shall be deemed null and void and shall not affect any other provision of this Note and the remaining provisions of this Note shall remain operative and in full force and effect and shall in no way be
affected, prejudiced or disturbed thereby. 
 The Maker hereby forever waives presentment, presentment for payment, demand, protest, notice
of protest, notice of dishonor of this Note and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note. 
  

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 This Note shall be governed by and construed in accordance with the laws of the State of New York,
without giving effect to the principles of conflicts of laws thereof, and shall be binding upon the successors and assigns of the Maker and shall inure to the benefit of the successors and assigns of Payee. Time is of the essence in the Maker’s
performance of its obligations hereunder. 
 This Note may be assigned by Payee, in whole or in part, to WL Ross & Co., LLC, or any
affiliated fund of WL Ross & Co., LLC, provided that the assignee thereof is or becomes a party (through joinder or otherwise) to each of the Subordination Agreements. 
  

			
	INTERNATIONAL TEXTILE GROUP, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  



  

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