AMENDMENT NO. 1 effective as of March 26, 1999 to the Note Agreement
dated as of October 10, 1997 (the "Agreement") between Quaker Fabric Corporation
of Fall River (the "Company"), Pruco Life Insurance Company ("Pruco") and The
Prudential Insurance Company of America ("Prudential"; and collectively with
Pruco, the "Noteholders"). Capitalized terms used herein have the meanings
ascribed to such terms in the Agreement unless otherwise defined herein.
W I T N E S S E T H
WHEREAS, the Noteholders and the Company have executed and delivered
the Agreement; and
WHEREAS, the parties hereto wish to amend certain terms of the Agreement
and agree to such other matters, all as set forth below.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Amendment to the Agreement. The Agreement is hereby such that:
1.1. Subparagraph 6A. Subparagraph 6A is hereby amended to read in its
entirety as follows:
"6A. Debt. (i) Senior Debt Ratio. The Company shall not permit
the Senior Debt Ratio, calculated as of the last day of each
fiscal quarter of the Company, to exceed 3.5 to 1.00.
(ii) Total Debt Ratio. The Company shall not permit the Total
Debt Ratio, calculated as of the last day of each fiscal quarter
of the Company to exceed 4.0 to 1.0."
1.2. Subparagraph 6D. Subparagraph 6D is hereby amended to read in its
entirety as follows:
"6D. Maintenance of Fixed Charge Coverage. The Company will not
permit the Fixed Charge Ratio at any time to be less than the
ratio set forth opposite the applicable period below:
--------------------------------------------------------------
Period Ratio
--------------------------------------------------------------
January 3, 1999 through October 1, 1999 1.00 : 1.00
--------------------------------------------------------------
October 2, 1999 through December 31, 1999 1.25 : 1.00
--------------------------------------------------------------
January 1, 2000 and thereafter 1.50 : 1.00
--------------------------------------------------------------
1.3. Section 10B. Subparagraph 10B is hereby amended to add the
following definition of "Senior Debt Ratio," "Subordinated Debt" and
"Total Debt Ratio" in alphabetical order:
"'Senior Debt Ratio' means, as of any date of determination, the
ratio of (i) the result of (a) Debt as of such date minus (b) the
outstanding amount of the Subordinated Debt as of such date to
(ii) Consolidated EBITDA for the four fiscal quarters of the
Company then ended.
`Subordinated Debt' shall mean subordinated indebtedness of the
Company or any Subsidiary so long as the Company has demonstrated
compliance with the covenants set forth in subparagraphs 6A and
6C both immediately before and immediately after the incurrence
of such indebtedness.
`Total Debt Ratio' means, as of any date of determination, the
ratio of (i) Debt as of such date to (ii) Consolidated EBITDA for
the four fiscal quarters of the Company then ended."
2. Conditions to Effectiveness. This Amendment No. 1 shall be effective as
of the date first above written and the Agreement shall be deemed
amended hereby upon (i) payment to the Noteholders of an amendment fee
in the aggregate amount of $56,250, and (ii) delivery of a fully
executed copy hereof to Prudential.
3. Company Representations. The Company hereby represents and warrants that
no Default or Event of Default has occurred or is continuing.
4. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF PARTIES SHALL BE GOVERNED BY, THE
LAWS OF THE STATE OF NEW YORK.
5. Effect on Agreement. Except as expressly provided herein, the Agreement
shall remain in full force and effect and this Amendment No. 1 shall not
operate as a waiver of any right, power or remedy of any holder of a
Note, nor constitute a waiver of any provision of the Agreement.
6. Counterparts. This Amendment No. 1 may be executed in two or more
counterparts, each of which shall be deemed an original, and it shall
not be necessary in making proof of this Amendment to produce or account
for more than one such counterpart.
2
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers as of the date and year first above
written.
QUAKER FABRIC CORPORATION
OF FALL RIVER
By:_________________________
Name:
Title:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:_________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President
PRUCO LIFE INSURANCE COMPANY
By:__________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President
3
