Exhibit 10.9
EXECUTION VERSION
LIMITED WAIVER
AGREEMENT
This LIMITED WAIVER AGREEMENT (this
“ Agreement ”), effective as of July 22,
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 was due and payable in full on or about 12:00
p.m. prevailing Eastern Time on June 30, 2009 (the “
BST Required Payment ”) and such BST Required Payment
has not been made;
WHEREAS, on June 30, 2009,
Global Safety Textiles Holdings LLC (f/k/a ITG Automotive Safety
Holdings LLC), a Delaware limited liability company (“
GST ”) and a direct, wholly-owned subsidiary of the
Borrower, and eight of GST’s 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)
filed 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) Events of Default under
Section 12(f) of the Note Purchase Agreement occurring solely
as a result of the Bankruptcy Filing 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, March 31, 2009 and June 30, 2009,
(y) Section 12(k) of the Note Purchase Agreement for the
fiscal quarters ending on December 31,
2008, March 31, 2009 and June 30, 2009 and
(z) Section 12(l) of the Note Purchase Agreement for the
fiscal quarters ending on December 31,
2008, March 31, 2009 and June 30, 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) August 24, 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) ,
the obligations under Section 1(d) with respect to the
engagement and payment of the Restructuring Advisor, the delivery
of the Restructuring Proposal under Section 1(e) and
the obligations under Section 1(f) with respect to the
GST Pledged Note (as defined below)), 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, (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 or (viii) the termination, expiration or any
other failure of that certain Limited Waiver and Amendment
No. 16, dated as of June 30, 2009, to the Senior Credit
Agreement, among the Borrower, the Subsidiaries of the Borrower
party thereto, the Senior Agent and the lenders party thereto to be
in full force and effect if at such time any event of default has
occurred and is continuing under the Senior Credit Agreement.
Notwithstanding anything to the contrary herein, including the
existence of the Specified Waiver, (1) 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, (2) 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 and (3) the Purchasers and the Collateral Agent shall
be entitled to exercise and enforce all rights and remedies that
such parties shall have under any of the Financing Documents or
applicable law with respect to the Convertible Subordinated
Promissory Note, dated as of August 15, 2008, in the amount of
$70,000,000 made by GST in favor of the Borrower (the “
GST Pledged Note ”) to the same extent as if the
Specified Waiver had not been granted, all as more fully set forth
in Section 1(f); provided , that the Collateral
Agent agrees to consult with the Borrower prior to any foreclosure
action with respect to the GST Pledged Note (it being understood
that such consultation may take place immediately prior to such
foreclosure).
(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, Events of Default
would have occurred and be continuing as a result of the
Borrower’s failure to comply with (w) Section 12(j)
of the Note
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Purchase Agreement for the four fiscal quarter
periods ending December 31, 2008, March 31, 2009 and
June 30, 2009, (x) Section 12(k) of the Note Purchase
Agreement for the fiscal quarters ending on December 31,
2008, March 31, 2009 and June 30, 2009,
(y) Section 12(l) of the Note Purchase Agreement for the
fiscal quarters ending on December 31,
2008, March 31, 2009 and June 30, 2009 and
(z) Section 12(f) of the Note Purchase Agreement as a
result of the Bankruptcy Filing and 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 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, (B) materials the
Borrower is prohibited from disclosing pursuant to confidentiality
restrictions entered into with the prior written consent of the
Required Holders and (C) materials that have been provided by
members of the BST Group and are not available to the Borrower or
its other Affiliates or Subsidiaries) 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
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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) Restructuring Proposal .
The Borrower shall deliver to the Purchasers on or before
August 24, 2009 a proposal for restructuring the Obligations
(the “ Restructuring Proposal ”).
(f) Enforcement Actions . In
furtherance of Section 1(a)(3) , the Borrower acknowledges
and agrees that the Purchasers at all times during the Waiver
Period may exercise all rights and remedies in connection with the
GST Pledged Note as set forth in the Financing Documents and under
applicable law, including all rights of a secured party under
§9-607 of the UCC. Without limiting the foregoing, the
Borrower acknowledges and agrees that the Collateral Agent on
behalf of the Purchasers has the right, subject to any limitations
under applicable law, to (i) take all actions to enforce the
obligations under the GST Pledged Note, including notifying GST
that all payments on account of the GST Pledged Note shall be made
directly to the Purchasers, (ii) file in their own name a
proof of claim with respect to the GST Pledged Note in the
insolvency proceeding commenced by the Bankruptcy Filing (the
“ GST Bankruptcy Proceeding ”), (iii) take
any and all actions in the GST Bankruptcy Proceeding in order to
preserve and protect all rights and interests in and under the GST
Pledged Note, including objecting to any proposed sale or other
transaction, or any proposed plan or plans of reorganization or
liquidation or any other pleading or proposition advanced in the
GST Bankruptcy Proceeding, (iv) vote the claim under the GST
Pledged Note for or against any plan of reorganization in the GST
Bankruptcy Proceeding and (v) exercise all other rights and
powers of ownership with respect to the GST Pledged
Note.
(g) 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 .
(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
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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 Bo
