Exhibit 10.45
AMENDMENT NO 1. TO TERM LOAN AGREEMENT
This Amendment No. 1 to Term Loan Agreement dated as of November 29, 2006
(this "Amendment") is entered into among Quaker Fabric Corporation of Fall
River, a Massachusetts corporation (the "Borrower"), Quaker Fabric Corporation,
a Delaware corporation (the "Parent", and, collectively with the Borrower, the
"Credit Parties"), 1903 Debt Fund, LP, Bernard National Loan Investors, Ltd.,
and Bernard Global Loan Investors, Ltd. (collectively, the "Lenders"), and GB
Merchant Partners, LLC, as administrative agent for the Lenders (the
"Administrative Agent"). Capitalized terms used herein but not defined herein
shall have the meanings provided in the Credit Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Credit Parties, the Lenders, and the Administrative Agent are
parties to that certain Term Loan Agreement dated as of November 9, 2006 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"); and
WHEREAS, the Credit Parties, the Lenders and the Administrative Agent have
agreed, on the terms and conditions set forth herein, to amend certain
provisions of the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Amendment. Subject to the conditions precedent set forth in
Section 2 hereof, the Credit Agreement is hereby amended by deleting Section
8.5.2. in its entirety, and inserting the following new Section 8.5.2. in its
stead:
"8.5.2 Disposition of Assets.
(a) Neither the Parent nor the Borrower will, or will permit any of
their Subsidiaries to, become a party to or agree to or effect any
disposition of any assets, other than:
(i) the sale of inventory, the licensing of intellectual property and
the disposition of obsolete assets, in each case in the ordinary course of
business consistent with past practices,
(ii) sales of Real Property, as contemplated by the Business Plan;
provided, that (x) the Adjusted Net Proceeds received on account of any
Real Property Sale is greater than or equal to the amount of Minimum
Proceeds for the applicable parcel of Real Property, or if less than such
amount, the Borrower receives the prior written consent of the
Administrative Agent for such sale, and (y) all of the Net Proceeds from
such Real Property Sale are applied, contemporaneously upon receipt, as a
mandatory prepayment of the Term Loans in accordance with Sections 3.1.3(a)
and 3.1.7;
(iii) sales of machinery and equipment; provided, that (x) all of the
Net Proceeds from such Equipment Sale are applied, contemporaneously upon
receipt, as a mandatory prepayment of the Term Loans in accordance with
Sections 3.1.4(b) and 3.1.7, and (y) in the case of Equipment Sales
generating Net Proceeds in excess of $75,000 in the case of any individual
Equipment Sale or $250,000 in the aggregate for all such Equipment Sales in
any Fiscal Year, (A) prior to consummating any such Equipment Sale, the
Borrower, the Parent or such Subsidiary shall have solicited offers to
purchase the applicable assets from at least two (2) nationally recognized
dealers of the subject assets and shall have provided the Administrative
Agent with copies of any offers or bids so received, (B) not less than 100%
of the aggregate consideration attributable to any item of Equipment
constituting part of such Equipment Sale is payable by the purchaser of
such Equipment in cash prior to or contemporaneously with the delivery of
such item of Equipment, (C) 100% of the aggregate consideration payable by
the purchaser under such Equipment Sale is payable within sixty (60) days
after the date of execution of the applicable agreement relating to such
Equipment Sale, and (D) the aggregate purchase price for the Equipment
subject to such Equipment Sale is equal to or greater than 70% of the Net
Orderly Liquidation Value of all such Equipment.
(b) In connection with any disposition of assets permitted under this
Section 8.5.2., each of the Lenders hereby authorizes the Administrative
Agent to execute and deliver any collateral releases necessary to release
its Liens on such assets; provided, that in the case of any Mortgaged
Property, the Lenders hereby authorizes the Administrative Agent to release
its Lien on any parcel of Mortgaged Property upon consummation of any Real
Property Sale yielding Adjusted Net Proceeds equal to or greater than the
Minimum Proceeds for such parcel of Mortgaged Property (or such lesser
amount to which the Administrative Agent shall have consented)."
SECTION 2. Condition Precedent; Effective Date. The Administrative Agent,
the Lenders and the Credit Parties agree that this Amendment shall become
effective upon the satisfaction of the following conditions precedent, each in
form and substance satisfactory to the Administrative Agent:
(i) the execution hereof by the Credit Parties, the Required Lenders and
the Administrative Agent; and
(ii) the execution and delivery of a consent under the Revolving Credit
Agreement.
SECTION 3. Borrower Representations and Warranties. Each Credit Party
hereby represents and warrants that (a) this Amendment constitutes its legal,
valid and binding obligation, enforceable against such Credit Party in
accordance with the terms hereof, (b) after giving effect to this Amendment, (i)
the representations and warranties contained in the Credit Agreement are correct
in all material respects as though made on and as of the date of this Amendment,
and (ii) no Default or Event of Default has occurred and is continuing.
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SECTION 4. Reference to and Effect on the Credit Agreement.
4.1 Upon the effectiveness of this Amendment, each reference in the Credit
Agreement to "this Agreement", "hereunder", "hereof", "herein", or words of like
import shall mean and be a reference to the Credit Agreement, as modified
hereby, and each reference to the Credit Agreement in any other document,
instrument or agreement executed and/or delivered in connection with the Credit
Agreement shall mean and be a reference to the Credit Agreement, as modified
hereby.
4.2 Except as specifically set forth in Section 1 hereof, the Credit
Agreement and all other documents, instruments and agreements executed and/or
delivered in connection therewith shall remain in full force and effect and are
hereby ratified and confirmed.
4.3 The execution, delivery and effectiveness of this Amendment shall not
operate or be construed as a waiver or forbearance with respect to any Defaults
or Events of Default under the Credit Agreement which may now or hereafter
exist, or the waiver of any right, power or remedy which the Administrative
Agent and the Lenders may have with respect thereto under the Credit Agreement
or applicable law. The Lenders hereby reserve any and all rights which may now
or hereafter exist in favor of the Lenders under the Credit Agreement.
SECTION 5. Consent and Acknowledgment. Pursuant to the terms of a letter
agreement dated November 15, 2006, between International Textile Machinery
Sales, Inc. ("International") and the Borrower (the "International Letter
Agreement"), the Borrower has agreed to sell and International has agreed to
purchase certain Equipment of the Borrower (the "International Equipment Sale").
The Administrative Agent and the Lenders hereby consent to the International
Equipment Sale on the terms set forth in the International Letter Agreement, and
agree that the Administrative Agent shall release its liens on the Equipment
sold as part of the International Equipment Sale; provided, that the
Administrative Agent shall only release its liens on specific items of Equipment
delivered to International as and to the extent the Borrower has received the
applicable purchase price attributable to such items of Equipment pursuant to
the International Letter Agreement. The Administrative Agent and the Lenders
acknowledge that the first Equipment Appraisal Report required to be delivered
to the Administrative Agent pursuant to Sections 3.1.4(a)(i) and 7.15.2 of the
Credit Agreement shall be delivered in April, 2007; provided that the foregoing
shall not limit the right of the Administrative Agent to request or require
appraisals of the Equipment on a more frequent basis upon the occurrence of a
Default or Event of Default.
SECTION 6. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument.
SECTION 7. Governing Law. This Amendment shall be governed by and construed
in accordance with the internal laws (as opposed to the conflicts of laws
provisions) of the Commonwealth of Massachusetts.
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SECTION 8. Section Titles. The section titles contained in this Amendment
are and shall be without substance, meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
(Signature pages follow)
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
Term Loan Agreement to be duly executed and delivered as of the date first above
written.
QUAKER FABRIC CORPORATION OF FALL
RIVER
By: /s/ Paul J. Kelly
------------------------------
Name: Paul J. Kelly
Title: Chief Financial Officer
and Vice President
Finance
QUAKER FABRIC CORPORATION
By: /s/ Paul J. Kelly
------------------------------
Name: Paul J. Kelly
Title: Chief Financial Officer
and Vice President
Finance
GB MERCHANT PARTNERS, LLC,
as Administrative Agent
By: /s/ Alan Goldstein
------------------------------
Name: Alan Goldstein
Title: Chief Financial Officer
and Manager
1903 DEBT FUND, LP
By: /s/ Alan Goldstein
------------------------------
Name: Alan Goldstein
Title: Manager
BERNARD NATIONAL LOAN INVESTORS,
LTD.
By: Bernard Capital Funding, LLC
Its Investment Advisor
By: /s/ Daniel B. Zwirn
------------------------------
Name: Daniel B. Zwirn
Title: Managing Partner
BERNARD GLOBAL LOAN INVESTORS,
LTD.
By: Bernard Capital Funding, LLC
Its Investment Advisor
By: /s/ W. Ginsberg
------------------------------
Name: W. Ginsberg
Title: Director
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