Exhibit 10.2
FORM OF SENIOR SUBORDINATED NOTE
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (3) PURSUANT TO
ANOTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, AND IN EACH CASE
SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE, PLEDGE OR TRANSFER
TO REQUIRE AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO THE COMPANY.
THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE
IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AND
INTERCREDITOR AGREEMENT (THE "SUBORDINATION AGREEMENT") DATED AS OF JUNE 6, 2007
AMONG CANYON CAPITAL ADVISORS LLC, CLEAR LAKE CAPITAL GROUP, INTERNATIONAL
TEXTILE GROUP, INC. (THE "COMPANY") AND GENERAL ELECTRIC CAPITAL CORPORATION
("AGENT"), TO THE INDEBTEDNESS (INCLUDING INTEREST) OWED BY THE COMPANY PURSUANT
TO THAT CERTAIN CREDIT AGREEMENT DATED AS OF DECEMBER 29, 2006 AMONG THE
COMPANY, AGENT AND THE LENDERS FROM TIME TO TIME PARTY THERETO, AS SUCH CREDIT
AGREEMENT HAS BEEN AND HEREAFTER MAY BE AMENDED, SUPPLEMENTED OR OTHERWISE
MODIFIED FROM TIME TO TIME AND TO INDEBTEDNESS REFINANCING THE INDEBTEDNESS
UNDER THAT AGREEMENT AS CONTEMPLATED BY THE SUBORDINATION AGREEMENT; AND EACH
HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE
BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.
THIS NOTE HAS "ORIGINAL ISSUE DISCOUNT" WITHIN THE MEANING OF SECTION 1273 OF
THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED. PLEASE CONTACT INTERNATIONAL
TEXTILE GROUP, INC., ATTENTION: GARY L. SMITH, EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER TO OBTAIN INFORMATION REGARDING THE ISSUE PRICE, THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT AND THE YIELD TO MATURITY.
INTERNATIONAL TEXTILE GROUP, INC.
18.00% SENIOR SUBORDINATED NOTE DUE JUNE 6, 2011
No. R-[
]
June 6, 2007
$[
]
CUSIP #: [
]
FOR VALUE RECEIVED, the undersigned, INTERNATIONAL TEXTILE GROUP, INC. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Delaware, hereby promises to pay to the order of
[
] (the "Payee"), or permitted
successors or assigns, the principal sum of (i)
[
] DOLLARS ($[
]) plus
(ii) any PIK Interest (as defined below) not represented by a separate PIK Note
(as defined below), on June 6, 2011, with interest (computed on the basis of a
360-day year payable for the number of days actually elapsed) on the unpaid
balance thereof at the rate of 18.00% per annum from the date hereof until the
principal hereof shall have become due and payable, payable quarterly in