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The Towel is similar to a “Turkish Towel” in Latin dances (samba, cha-cha) — the lady takes the role of the towel, drying the man's back.
Steps 1–3, and 6–9 are simply used to enter and exit the Towel position.
The Towel starts like steps 1–3 of the Butterfly.

The man leads the lady to move right — by pulling her right hand slightly with his right hand — as he moves left and brings his right hand (and the lady's right hand) out to his right at shoulder-height and brings his left hand (and the lady's left hand) behind his neck — the man's palms will typically face forwards.

The man leads the lady to move left — by pulling her left hand slightly with his left hand — as he moves right and brings his left hand (and the lady's left hand) out to his left at shoulder-height and brings his right hand (and the lady's right hand) behind his neck — the man's palms will typically face forwards.
The Towel ends like steps 4–7 of the Butterfly.