Exhibit 10.8
EXECUTION VERSION
LIMITED WAIVER
AGREEMENT
This LIMITED WAIVER AGREEMENT (this
“ Agreement ”), effective as of June 26,
2009 (the “ Effective Date ”), is by and among
INTERNATIONAL TEXTILE GROUP, INC., a Delaware corporation (the
“ Borrower ”) and the Purchasers signatory
hereto. Unless otherwise specified herein, capitalized terms used
in this Agreement shall have the meanings ascribed to them in the
Note Purchase Agreement (as hereinafter defined).
RECITALS
WHEREAS, the Borrower and the
Purchasers are parties to that certain Senior Subordinated Note
Purchase Agreement, dated as of June 6, 2007 (as amended by
that certain Amendment No. 2 to Senior Subordinated Note
Purchase Agreement, dated as of December 24, 2008 (“
Amendment No. 2 ”) and as the same has been or
may be further amended, restated, supplemented or otherwise
modified from time to time, the “ Note Purchase
Agreement ”);
WHEREAS, the Indebtedness under the
BST Credit Agreement will be due and payable in full on or about
12:00 p.m. prevailing Eastern Time of June 30, 2009 (the
“ BST Required Payment ”), and on or about
June 30, 2009, Global Safety Textiles Holdings LLC (a Delaware
limited liability company and a direct, wholly-owned subsidiary of
the Borrower and eight of its direct and indirect subsidiaries
(specifically, GST ASCI Holdings Asia Pacific LLC, GST ASCI
Holdings Europe, Inc., GST ASCI Holdings Europe II LLC, GST ASCI
Holdings Mexico, Inc., GST Automotive Safety Components
International, Inc., Global Safety Textiles LLC, Global Safety
Textiles Acquisition GmbH and GST Widefabric International GmbH)
intend to file voluntary petitions for relief under chapter 11 of
title 11 of the United States Code in the United States Bankruptcy
Court for the District of Delaware (the “ Bankruptcy
Filing ”);
WHEREAS, the Borrower has requested
that the Purchasers waive solely during the Waiver Period (as
hereinafter defined) (i) any Event of Default under
Section 12(f) of the Note Purchase Agreement occurring solely
as a result of the Bankruptcy Filing and/or the failure to make the
BST Required Payment and (ii) compliance with
(x) Section 12(j) of the Note Purchase Agreement for the
four fiscal quarter periods ending December 31, 2008 and
March 31, 2009, (y) Section 12(k) of the Note
Purchase Agreement for the fiscal quarters ending on
December 31, 2008 and March 31, 2009 and
(z) Section 12(1) of the Note Purchase Agreement for the
fiscal quarters ending on December 31, 2008 and March 31,
2009 (such waivers, collectively, the “ Specified
Waiver ”); and
WHEREAS, the Borrower has requested
that the Purchasers agree to the Specified Waiver on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of
the premises and the agreements, provisions and covenants contained
herein, and subject to the terms and conditions hereof, the
Borrower and the Purchasers agree as follows:
1. Waiver and Related
Provisions .
(a) Waiver Period; Enforcement
Actions . Upon the satisfaction of the condition precedent set
forth in Section 3 of this Agreement and subject to the
terms hereof, the Purchasers
hereby agree to the Specified Waiver solely
during the period beginning on the Effective Date and ending
immediately upon the earliest of (such period being referred to
herein as the “ Waiver Period ”):
(i) July 22, 2009 at 11:59 p.m. prevailing Eastern Time,
(ii) the occurrence of any Default or Event of Default not
subject to the Specified Waiver, (iii) any failure by the
Borrower to comply with any undertaking set forth in this Agreement
(including the reporting obligations in Section 1(c)
and the obligations under Section 1(d) with respect to
the engagement and payment of the Restructuring Advisor), or any
breach of any covenant, representation or warranty set forth in
this Agreement, (iv) the Senior Agent or any lender under the
Senior Loan Documents exercising any enforcement action with
respect to its claims against any Credit Party or with respect to
the Collateral, (vi) the agent or any lender under the BST
Credit Agreement exercising any enforcement action with respect to
its claims against BST or (vii) the occurrence following the
Effective Date of any change, event or occurrence that has or is
reasonably likely to have a material adverse effect on (w) the
business, assets, operations or financial condition of the Credit
Parties taken as a whole, (x) the Credit Parties’
ability, taken as a whole, to pay any of the Obligations in
accordance with the terms of the Note Purchase Agreement,
(y) the Collateral or the Collateral Agent’s Liens, on
behalf of itself and the other Secured Parties, taken as a whole or
(z) the Collateral Agent’s or any Purchaser’s
rights and remedies under the Note Purchase Agreement and the other
Financing Documents, taken as a whole. Notwithstanding anything to
the contrary herein, (i) any additional interest that would
have become applicable as a result of the occurrence of any Default
or Event of Default subject to the Specified Waiver shall at all
times (including the Waiver Period) accrue on the Notes in the same
manner as if the Specified Waiver had not been granted and
(ii) during the Waiver Period, the Purchasers shall have the
inspection rights under Section 8.3(b) of the Note Purchase
Agreement that apply when a Default or an Event of Default
exists.
(b) Reservation of Rights .
The Purchasers expressly reserve the right to exercise all remedies
under any Financing Document and under applicable law upon the
expiration or termination of the Waiver Period in respect of all
Defaults or Events of Default subject to the Specified Waiver and
any other Default or Events of Default then existing. The Borrower
hereby confirms that absent the Specified Waiver, (i) Events
of Default would have occurred and be continuing as a result of the
Borrower’s failure to comply with (x) Section 12(j)
of the Note Purchase Agreement for the four fiscal quarter periods
ending December 31, 2008 and March 31, 2009,
(y) Section 12(k) of the Note Purchase Agreement for the
fiscal quarters ending on December 31, 2008 and March 31,
2009 and (z) Section 12(1) of the Note Purchase Agreement
for the fiscal quarters ending on December 31, 2008 and
March 31, 2009 and (ii) Events of Default may occur and
be continuing as a result of the Borrower’s failure to comply
with Section 12(f) of the Note Purchase Agreement as a result
of the Bankruptcy Filing and/or the failure to make the BST
Required Payment. Nothing in this Agreement shall be deemed to
constitute a waiver by any Purchaser of any such Defaults and
Events of Default or any other Defaults or Events of Default,
whether now existing or hereafter arising, or of any right or
remedy that the Collateral Agent and the Purchasers may have under
any of the Financing Documents or applicable law, except to the
extent expressly set forth above.
(c) Information: Reporting
etc . The Borrower shall deliver to the Purchasers (i) all
statements, reports, analysis or findings of financial advisors and
other representatives of the company and all other written
materials and information provided by the Borrower or any of its
Subsidiaries or Affiliates to the agents or lenders under the BST
Credit Agreement or the Senior
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Credit Agreement substantially contemporaneously
with (and in any event within one calendar day of) delivery of any
such materials to any agents or lenders under the BST Credit
Agreement or the Senior Credit Agreement, and (ii) all term
sheets, waivers, forbearances, restructuring proposals or other
negotiation materials or correspondence related to any waiver,
restructuring or refinancing under the BST Credit Agreement or the
Senior Credit Agreement (other than (A) independent reports
and analyses prepared by the lenders under the BST Credit Agreement
or the Senior Credit Agreement or their advisors to the extent the
Borrower is prohibited from disclosing such materials pursuant to
confidentiality restrictions which the Borrower entered into upon
not less than two (2) Business Days’ prior written
notice to the Collateral Agent and after making a good faith effort
to exclude the Purchasers from application thereof and
(B) materials the Borrower is prohibited from disclosing
pursuant to confidentiality restrictions entered into with the
prior written consent of the Required Holders) substantially
contemporaneously with (and in any event within one calendar day
of) delivery of any such materials to (or receipt of any such
materials from) any agents or lenders under the BST Credit
Agreement or the Senior Credit Agreement (such information and
materials under clauses (i) and (ii) the “
Specified Materials ”). The Borrowers shall
furthermore cause the Purchasers to have access, at all times
during reasonable business hours that the Collateral Agent or
Purchasers may request, to any physical or electronic data room
made available to the agent or lenders under the BST Credit
Agreement or the Senior Credit Agreement.
(d) Restructuring Advisor
.
(i) The Borrower acknowledges that
Kurt Salmon Associates, Inc. (the “ Restructuring
Advisor ”) shall be retained by counsel to the Collateral
Agent to advise the Purchasers with respect to the matters
contemplated by that certain letter agreement, dated as of
June 11, 2009, among the Restructuring Advisor, the Borrower
and the Collateral Agent (the “ Engagement Letter
”).
(ii) All of the fees and expenses of
the Restructuring Advisor required to be paid under the Engagement
Letter shall be paid by the Borrower pursuant to the terms of the
Engagement Letter. All other out-of-pocket fees, costs and expenses
(including attorneys’ fees and expenses) incurred by the
Collateral Agent or any Purchaser in connection with the
enforcement of the Financing Documents or otherwise reimbursable
pursuant to the Financing Documents (including, without limitation,
in connection with the negotiation, preparation, execution,
delivery, and monitoring of compliance with this Agreement) shall
be promptly paid upon demand and in any event within five
(5) Business Days. The foregoing shall be without prejudice
to, and shall not otherwise impair in any manner, any liability
that the Borrower or Credit Parties may have to the Collateral
Agent or the Purchasers for such fees, costs, and expenses or
otherwise.
(e) Prior Understandings .
This Agreement sets forth the entire understanding of the parties
relating to the subject matter hereof, and supersedes all prior
understandings and agreements, written or oral.
2. Representations and
Warranties; Covenants .
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(a) Enforceability . The
Borrower hereby represents and warrants that this Agreement and the
Note Purchase Agreement as may be modified by this Agreement, are
the legal, valid and binding obligations of such party and are
enforceable against such party in accordance with their respective
terms, 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).
(b) Authorization; No
Conflicts . The Borrower hereby represents and warrants that
its execution, delivery and performance of this Agreement and its
performance of the Note Purchase Agreement as modified by this
Agreement, (i) have been duly authorized by all necessary
action on the part of such party and are within such party’s
corporate or similar powers, (ii) do not (A) contravene
such party’s constituent documents, (B) violate any
applicable requirement of law or (C) result in the imposition
of any Lien upon any property of the Borrower or any of its
Subsidiaries and (iii) do not require any permit of, or filing
with, any Governmental Authority or any consent of, or notice to,
any Person, other than those that, if not obtained, would not, in
the aggregate, have a Material Adverse Effect.
(c) No Default; Representations
and Warranties in Financing Documents . The Borrower hereby
represents and warrants as of the date hereof that, (i) no
Default or Event of Default has occurred and is continuing other
than, to the extent in existence on the date hereof, Defaults or
Events of Default which are the subject of the Specified Waiver and
(ii) except solely by reason of any Defaults or Events of
Default which are the subject of the Specified Waiver, all of the
representations and warranties of such party contained in each
Financing Document to which it is a party are true and correct in
all material respects on and as of the date hereof, except to the
extent such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties
shall have been true and correct in all material respects on and as
of such earlier date.
3. Condition Precedent
. This Agreement shall
become effective as of the Effective Date upon the satisfaction of
the following condition precedent in a manner satisfactory to the
Required Holders:
(a) execution and delivery by the
Borrower and the Purchasers sufficient to constitute Required
Holders of their respective counterparts of this Agreement;
and
(b) prior to or contemporaneous with
the effectiveness of this Agreement, the Borrower 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 Effective Date in connection with the
preparation, negotiation and execution of this Agreement or any
document, instrument or other agreement delivered pursuant to this
Agreement or otherwise in connection with the Note Purchase
Agreement.
4. Ratification and Release;
No Waiver .
(a) Ratification . The
Borrower hereby (i) ratifies and reaffirms all of its payment
and
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performance obligations, contingent or
otherwise, and each grant of security interests and liens in favor
of the Collateral Agent or the Purchasers, as the case may be,
under each Financing Document, (ii) agrees and acknowledges
that the Liens in favor of the Collateral Agent and the Purchasers
under each Financing Document constitute valid, binding,
enforceable and perfected liens and security interests and are not,
except as permitted by the terms thereof, subject to avoidance,
disallowance or subordination pursuant to any requirement of law,
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), (iii) agrees and acknowledges that the
Obligations (as defined in the Guaranty and Security Agreement)
co
