INTERCREDITOR AGREEMENT

                                                                   EXHIBIT 10.44


                             INTERCREDITOR AGREEMENT


         INTERCREDITOR AGREEMENT (this "INTERCREDITOR  AGREEMENT"),  dated as of
November 9, 2006, among Bank of America, N.A., in its capacity as administrative
agent  (the  "REVOLVING  AGENT")  for  the  Revolving  Lenders  (as  hereinafter
defined),  GB Merchant  Partners,  LLC, in its capacity as agent (the "TERM LOAN
AGENT")  for the Term Loan  Lenders  (as  hereinafter  defined),  Quaker  Fabric
Corporation  of Fall River (the  "BORROWER"),  Quaker  Fabric  Corporation  (the
"PARENT")  and the other credit  parties  named on the  signature  pages of this
Intercreditor  Agreement (together with the Borrower and the Parent, the "CREDIT
PARTIES").

         WHEREAS, pursuant to an Amended and Restated Revolving Credit Agreement
dated as of the  date  hereof  (as  amended  and in  effect  from  time to time,
including any  replacement  agreement or  agreements  therefor,  the  "REVOLVING
CREDIT AGREEMENT"), among the lending institutions party thereto (the "REVOLVING
LENDERS"),  the  Revolving  Agent,  the Borrower and the Parent,  the  Revolving
Lenders  have  agreed,  upon the terms and subject to the  conditions  contained
therein, to make loans and otherwise to extend credit to the Borrower; and

         WHEREAS, pursuant to a Term Loan Agreement, dated as of the date hereof
(as amended and in effect from time to time, including any replacement agreement
or agreements  therefor,  the "TERM LOAN  AGREEMENT"),  among the Borrower,  the
Parent,  the Term Loan Agent and the lending  institutions  party  thereto  (the
"TERM LOAN  LENDERS"),  the Term Loan Lenders  have  agreed,  upon the terms and
subject to the conditions contained therein, to make term loans in the aggregate
amount of $24,600,000 to the Borrower; and

         WHEREAS,  it  is  a  condition  precedent  to  the  Revolving  Lenders'
willingness to make loans and otherwise  extend credit to the Borrower  pursuant
to the Revolving Credit Agreement and the Term Loan Lenders' willingness to make
term loans to the Borrower  pursuant to the Term Loan  Agreement that the Credit
Parties,   the  Revolving  Agent  and  the  Term  Loan  Agent  enter  into  this
Intercreditor Agreement; and

         WHEREAS,  in order to induce  the  Revolving  Lenders to make loans and
otherwise  extend  credit  to the  Borrower  pursuant  to the  Revolving  Credit
Agreement  and the Term  Loan  Lenders  to make the term  loans to the  Borrower
pursuant to the Term Loan Agreement, the Credit Parties, the Revolving Agent and
the Term Loan Agent have agreed to enter into this Intercreditor Agreement;

         NOW,  THEREFORE,   in  consideration  of  the  foregoing,   the  mutual
agreements  herein  contained  and other good and  valuable  consideration,  the
receipt and  adequacy  of which are hereby  acknowledged,  the  parties  hereto,
intending to be legally bound, hereby agree as follows:

1.  DEFINITIONS.  Terms not otherwise  defined  herein have the same  respective
meanings  given to them in the  Revolving  Credit  Agreement.  In addition,  the
following terms shall have the following meanings:

         AGREEMENTS.  Collectively,  the Revolving Credit Agreement and the Term
Loan Agreement.

         BANK DEBT. At any time, as reasonably calculated by the Revolving Agent
at such time,  all  "Obligations"  under and as defined in the Revolving  Credit
Agreement at such time. Bank Debt shall  expressly  include any and all interest
accruing  or out of  pocket  costs or  expenses  incurred  after the date of any
filing by or against any Credit Party of any petition under any Insolvency  Law,
regardless of whether the  Revolving  Agent's or any  Revolving  Lender's  claim
therefor is allowed or allowable in the Insolvency Proceeding.

<PAGE>

         BANK LOAN  TERMINATION  DATE. The first date on which (a) the Revolving
Lenders have received  payment in full in cash of all of the Priority Bank Debt,
(b) the  Revolving  Agent or the  Revolving  Lenders  shall have  received  cash
collateral (or, in connection with Letters of Credit,  "back-to-back" Letters of
Credit from a  financial  institution  acceptable  to  Revolving  Agent) in such
amounts as the Revolving Agent determines is reasonably  necessary to secure the
Revolving  Lenders (and their  affiliates) in connection with (i) any issued and
outstanding  Letters of Credit  constituting  Priority  Bank Debt but not in any
event in an amount  greater  than 103% of the  aggregate  undrawn face amount of
such Letters of Credit (or such  Letters of Credit  shall have been  returned to
the Issuing Bank for cancellation) and (ii) Derivative Agreements but not in any
event  in  an  amount  greater  than  100%  of  the  applicable  Credit  Party's
obligations  to the  Revolving  Agent  and  the  Revolving  Lenders  (and  their
affiliates)  under such  Derivative  Agreements,  and (c) the  commitment of the
Revolving Lenders to make any loans or provide other financial accommodations to
the Borrower shall have been terminated.

         COLLATERAL.  All assets and  properties  of any kind  whatsoever of any
Credit  Party that is at any time  subject  to a lien in favor of the  Revolving
Agent or the Term Loan Agent.

         EXCLUDED  BANK  DEBT.  At  any  time,  (i)  the  aggregate  outstanding
principal  amount of Revolving  Loans and the  aggregate  undrawn face amount of
Letters  of Credit  made,  issued or  incurred  pursuant  to the Loan  Documents
intentionally  and with actual  knowledge  of the account  officers of Revolving
Agent active on the account of the Credit Parties that such making,  issuance or
incurrence  would cause such amount of Revolving  Loans and Letters of Credit to
exceed the Maximum Bank Debt at the time of such making,  issuance or incurrence
at such time and (ii) any prepayment or early  termination  fee set forth in the
Revolving Credit Agreement;  PROVIDED THAT, Excluded Bank Debt shall not include
any interest,  costs, fees, expenses,  or indemnities incurred by or owed to the
Revolving  Agent or the Revolving  Lenders  pursuant to the Loan Documents which
are charged to a Credit Party's loan account  through the advance of a Revolving
Loan.

         EXCLUDED  TERM LOAN DEBT. At any time,  (i) the  aggregate  outstanding
principal amount of indebtedness  under the Term Loan Documents in excess of the
result of  $24,600,000  MINUS all  repayments  and  prepayments of the principal
thereof as of such date and (ii) any  prepayment  or early  termination  fee set
forth in the Term Loan Agreement;  PROVIDED THAT,  Excluded Term Loan Debt shall
not include (a) any interest,  costs, fees, expenses, or indemnities incurred by
or owed to the Term Loan  Agent or the Term Loan  Lenders  pursuant  to the Loan
Documents  and (b) any amounts not to exceed  $2,500,000 in the aggregate at any
time advanced by the Term Loan Agent, in its reasonable business judgment in the
performance  of its duties  under the Term Loan  Agreement,  which the Term Loan
Agent determines to be reasonably  necessary to (1) preserve or protect the Term
Loan Primary  Collateral,  or any portion thereof, or (2) enhance the likelihood
of, or to maximize the amount of, repayment of the Term Loan Debt.

         INSOLVENCY  LAWS. (i) The U.S.  Bankruptcy  Code, (ii) any successor to
such statute,  (iii) any statute dealing with the  reorganization or liquidation
of debtors, and (iv) any other applicable insolvency or other similar law of any
jurisdiction  including,   without  limitation,  any  law  of  any  jurisdiction
permitting  a debtor  to  obtain a stay or a  compromise  of the  claims  of its
creditors against it.

         INSOLVENCY  PROCEEDING.  (a) Any  case or  proceeding  commenced  by or
against  any Person  under any  provision  of any  Insolvency  Laws,  or (b) any
proceeding  seeking  the  appointment  of  any  trustee,  receiver,  liquidator,
custodian or other insolvency  official with similar powers with respect to such
Person or any of its assets, or (c) any proceeding for liquidation,  dissolution
or other winding up of the business of such Person,  or (d) any  assignment  for
the benefit of creditors or any marshalling of assets of such Person.

                                      -2-
<PAGE>

         LIEN  ENFORCEMENT  ACTION.  (a) Any  action by  Revolving  Agent or any
Revolving  Lender or the Term Loan Agent or any Term Loan Lender to foreclose on
the  lien of such  Person  in any  Collateral,  (b)  any  action,  as part of an
exercise  of rights or  remedies,  by either  Revolving  Agent or any  Revolving
Lender or the Term Loan  Agent or any Term Loan  Lender to take  possession  of,
exercise   exclusive  or  partial  control  over,  sell  or  otherwise   realize
(judicially  or  non-judicially)   upon  any  Collateral   (including,   without
limitation,  by setoff or  notification  of  account  debtors  or other  Persons
obligated on Collateral),  and/or (c) the commencement by Revolving Agent or any
Revolving  Lender  or the Term Loan  Agent or any Term Loan  Lender of any legal
proceedings  against  any  Credit  Party or with  respect to any  Collateral  to
facilitate  the actions  described in (a) and (b) above;  PROVIDED that, for the
avoidance  of  doubt  but  without  limitation,  none  of  the  following  shall
constitute  a Lien  Enforcement  Action:  (i)  declaring  a default  or event of
default  under the Revolving  Credit  Agreement or the Term Loan  Agreement,  or
making demand for payment or accelerating  the maturity of any Bank Debt or Term
Loan Debt,  (ii) the receipt of payments of principal of or interest on the Bank
Debt or the Term Loan Debt, or payments of other  obligations  arising under the
Loan  Documents or the Term Loan  Documents,  except as otherwise  expressly set
forth in this  Intercreditor  Agreement,  (iii) the  implementation  of reserves
under the Revolving Credit Agreement,  (iv) the reduction of advance rates under
the Revolving  Credit  Agreement,  (v) the termination of the Commitments or the
cessation (whether temporary or permanent) of lending under the Revolving Credit
Agreement due to the existence of a Default or Event of Default, (vi) sending by
the  Revolving  Agent,  any Revolving  Lender or any of their  Affiliates of any
"activation"  notice  under a deposit  control  agreement to block access to any
deposit account of a Credit Party, or (vii) the exercise by Revolving Agent, any
Revolving  Lender or any of their  respective  Affiliates of any right of offset
with respect to Bank Debt not arising under the Revolving Credit Agreement.

         MAXIMUM REVOLVING CREDIT AMOUNT. On any date of determination  thereof,
an amount equal to the sum of (a) the lesser of (i) the Revolving Borrowing Base
Amount at such time and (ii) $25,000,000 less permanent  reductions in the Total
Commitment under the Revolving Credit Agreement (other than in connection with a
refinancing  in total of the Bank Debt and other than a reduction or termination
occurring after an Event of Default), PLUS (b) $2,500,000.

         MAXIMUM  BANK DEBT.  On any date of  determination  thereof,  an amount
equal to the Maximum Revolving Credit Amount on such date, regardless of whether
allowed or allowable in any Insolvency Proceeding;  PROVIDED,  HOWEVER, that the
Maximum Bank Debt shall be calculated  without giving effect to any decreases in
the Maximum  Revolving  Credit Amount  occurring  after the making,  issuance or
incurrence  of any  Revolving  Loans or Letters  of  Credit,  as a result of (i)
Accounts  Receivable or inventory  that are deemed by the Revolving  Agent to be
eligible on any date  thereafter  becoming or being deemed,  with the passage of
time,  ineligible  (whether  as a result of aging,  obsolescence,  disputes,  or
non-payment by account debtors or otherwise),  the return of uncollected  checks
or other items of payment applied to the reduction of Revolving  Loans, or other
similar  involuntary  or  unintentional   actions;  (ii)  the  Revolving  Agents
exercising  discretion  under the  Revolving  Credit  Agreement  to (x)  declare
Accounts  Receivable  previously  deemed to be Eligible  Accounts  Receivable or
inventory  previously deemed to be Eligible Inventory as no longer  constituting
Eligible Accounts Receivable or Eligible Inventory,  (y) reduce advance rates or
(z) impose,  release,  increase or  decrease  the amount of reserves  (except as
otherwise  expressly  set  forth in this  Intercreditor  Agreement);  (iii)  any
failure  of the  Credit  Parties to report  accurately  the  amount of  Eligible
Accounts Receivable or Eligible Inventory on any Borrowing Base Certificate;  or
(iv) any revaluations or re-appraisals of Collateral.

                                      -3-
<PAGE>

         OCCUPANCY  COMMENCEMENT DATE. The earlier to occur of (a) the Term Loan
Agent's  commencement of any Lien Enforcement  Action or (b) the commencement of
an Insolvency Proceeding.

         PRIORITY BANK DEBT.  All Bank Debt other than Excluded Bank Debt.

         PRIORITY TERM LOAN DEBT.  All Term Loan Debt other than  Excluded Term
Loan Debt.

         REVOLVING  BORROWING  BASE AMOUNT.  At any time, an amount equal to the
Borrowing Base (as defined in the Revolving  Credit  Agreement and as determined
by the Revolving  Agent from time to time);  PROVIDED  that the  Borrowing  Base
shall be calculated without giving effect to (a) any amendments or modifications
to the  definition of  "Borrowing  Base",  or any of the  component  definitions
thereof after the Closing Date, (b) any increase in the percentage advance rates
under the Revolving  Credit  Agreement  above the rates in effect on the Closing
Date,  or (c)  any  release  in  whole  or in  part  of,  or  decrease  in,  the
Availability Reserve after the Closing Date, in the case of (a), (b) and (c), in
a manner which would result in a greater  amount of credit being provided to the
Borrower as an advance  against the  Borrowing  Base as in effect on the Closing
Date;  PROVIDED,  HOWEVER,  the Revolving  Credit  Agent's  discretion to reduce
advance  rates,  establish  and release  reserves  (other than the  Availability
Reserve) and to determine eligibility pursuant to the Revolving Credit Agreement
shall not be limited.

         REVOLVING PRIMARY COLLATERAL.  All the Collateral  other than the Term
Loan Primary Collateral.

         REVOLVING   RELEASE   EVENT.   After  the  occurrence  and  during  the
continuance  of an  Event  of  Default,  but  prior  to the  commencement  of an
Insolvency  Proceeding,  the written request of the Revolving Agent delivered to
the Term Loan Agent  requesting that the Term Loan Agent release its lien on any
Revolving Primary  Collateral to be sold or otherwise  disposed of, such written
request to be delivered to the Term Loan Agent not less than five (5) days prior
to the proposed sale or disposition of any Revolving Primary Collateral.

         TERM LOAN DEBT. At any time, as reasonably  calculated by the Term Loan
Agent at such  time,  all  "Obligations"  under and as  defined in the Term Loan
Agreement  at such time.  Term Loan Debt  shall  expressly  include  any and all
interest  accruing or out of pocket costs or expenses incurred after the date of
any filing by or against any Credit Party of any petition  under any  Insolvency
Law, regardless of whether the Term Loan Agent's or any Term Loan Lender's claim
therefor is allowed or allowable in the Insolvency Proceeding.

         TERM LOAN DOCUMENTS. Collectively, the "Loan Documents" as such term is
defined in the Term Loan Agreement.
 
         TERM LOAN EVENT OF  DEFAULT.  An  "Event  of Default" as  such  term is
defined in the Term Loan Agreement.

         TERM LOAN PRIMARY  COLLATERAL.  All of the Real Estate,  Equipment  (as
defined in the UCC) and Fixtures  (as defined in the UCC) of the Credit  Parties
which is subject to a mortgage,  lien or security  interest pursuant to the Term
Loan Documents, together with all identifiable proceeds of the foregoing.

         TERM  LOAN  RELEASE   EVENT.   After  the  occurrence  and  during  the
continuance of a Term Loan Event of Default, but prior to the commencement of an
Insolvency  Proceeding,  the written request of the Term Loan Agent delivered to
the Revolving Agent  requesting that the Revolving Agent release its lien on any
Term Loan Primary  Collateral to be sold or otherwise  disposed of, such written
request to be delivered to the Revolving Agent not less than five (5) days prior
to the proposed sale or disposition of any Term Loan Primary Collateral.

                                      -4-
<PAGE>

         TERM LOAN  TERMINATION  DATE.  The first date on  which  the  erm Loan
Lenders have  received  payment in full in cash of all of the Priority Term Loan
Debt.

         UCC. The Uniform  Commercial  Code, as the same may, from time to time,
be enacted and in effect in the Commonwealth of Massachusetts; PROVIDED, that to
the  extent  that the UCC is used to  define  any term  herein  and such term is
defined  differently  in  different  Articles  or  Divisions  of  the  UCC,  the
definition of such term contained in Article or Division 9 shall govern.

                           2. SECURITY INTERESTS; PRIORITIES.

         2.1.  ACKNOWLEDGEMENT  OF  LIENS.  Subject  to the  provisions  of this
Intercreditor  Agreement,  the Revolving Agent hereby acknowledges that the Term
Loan Agent has been  granted  Liens upon all of the  Collateral  pursuant to the
Term Loan  Documents to secure the Term Loan Debt and further  acknowledges  and
agrees  that the Term Loan Debt is  entitled  to be secured on a first  priority
basis by the Term Loan Primary  Collateral.  Subject to the  provisions  of this
Intercreditor  Agreement,  the Term  Loan  Agent  hereby  acknowledges  that the
Revolving  Agent has been granted Liens upon all of the  Collateral  pursuant to
the Loan Documents to secure the Bank Debt, and further  acknowledges and agrees
that the Bank Debt is  entitled to be secured on a first  priority  basis in all
the Revolving Primary Collateral.

         2.2. PRIORITIES.

         (a) The parties  agree that,  at all times,  whether  before  during or
after any  Insolvency  Proceeding,  liens on the  Revolving  Primary  Collateral
securing  the Priority  Bank Debt shall be senior to the liens on the  Revolving
Primary  Collateral  securing  the Term  Loan Debt  irrespective  of the time or
manner of perfection or the execution, delivery or issuance of any thereof.

         (b) The parties  agree that,  at all times,  whether  before  during or
after  any  Insolvency  Proceeding,  liens on the Term Loan  Primary  Collateral
securing  the  Priority  Term Loan Debt shall be senior to the liens on the Term
Loan  Primary  Collateral  securing  the Bank Debt  irrespective  of the time or
manner of perfection or the execution, delivery or issuance of any thereof.

         2.3. APPLICATION OF COLLATERAL PROCEEDS.

         (a) All  proceeds  of the  Revolving  Primary  Collateral  received  or
collected by any Credit Party,  the Revolving Agent or the Term Loan Agent shall
be applied:  FIRST,  to the payment of the  Priority  Bank Debt,  including  the
provision of cash collateral in an amount equal to 103% of the undrawn amount of
any Letters of Credit constituting  Priority Bank Debt and in an amount equal to
100% of the obligations in respect of Cash Management  Obligations  constituting
Priority Bank Debt, and to the payment of interest,  costs,  fees,  expenses and
indemnities  constituting  Priority Bank Debt; SECOND,  after a Lien Enforcement
Action, to the payment of the Priority Term Loan Debt,  including the payment of
interest,  costs, fees, expenses and indemnities constituting Priority Term Loan
Debt,  in each case,  to the extent due and  payable;  THIRD,  to the payment of
Excluded Bank Debt and, with respect to Excluded Bank Debt  consisting of issued
and outstanding  Letters of Credit,  the provision of cash collateral in respect
of such  Letters  of Credit (in an amount  not to exceed  103% of the  aggregate
undrawn  face  amount of such  Letters  of  Credit);  and  FOURTH,  after a Lien
Enforcement Action, to the payment of Excluded Term Loan Debt.

         (b) All  proceeds  of the Term  Loan  Primary  Collateral  received  or
collected by any Credit Party,  the Term Loan Agent or the Revolving Agent shall
be applied:  FIRST,  to the payment of the Priority  Term Loan Debt,  and to the
payment of interest, costs, fees, expenses and indemnities constituting Priority
Term Loan Debt, in each case, to the extent then due and payable;  SECOND, after
a Lien Enforcement  Action, to the payment of the Priority Bank Debt,  including
the payment of interest,  costs,  fees,  expenses and  indemnities  constituting
Priority Bank Debt, in each case, to the extent then due and payable;  THIRD, to
the payment of Excluded  Term Loan Debt;  and FOURTH,  after a Lien  Enforcement
Action, to the payment of Excluded Bank Debt.

                                      -5-
<PAGE>

         2.4. FURTHER ASSURANCES.

         (a) The Term Loan Agent hereby  agrees,  upon request of the  Revolving
Agent at any time and from time to time,  to  execute  such other  documents  or
instruments  as may be requested by the  Revolving  Agent further to evidence of
public  record or otherwise  the senior  priority of the liens on the  Revolving
Primary Collateral securing the Priority Bank Debt as contemplated hereby.

         (b) The Revolving  Agent hereby  agrees,  upon request of the Term Loan
Agent at any time and from time to time,  to  execute  such other  documents  or
instruments  as may be requested  by the Term Loan Agent  further to evidence of
public  record or  otherwise  the senior  priority of the liens on the Term Loan
Primary Collateral securing the Priority Term Loan Debt as contemplated hereby.

         2.5.  BOOKS AND RECORDS.  The Term Loan Agent and the  Revolving  Agent
further agree to maintain on their  respective  books and records such notations
as the Revolving Agent or the Term Loan Agent may reasonably  request to reflect
the lien subordination contemplated hereby and to perfect or preserve the rights
of the Revolving Agent and the Term Loan Agent hereunder.

         2.6. LIEN  VALIDITY.  The  subordination  provisions  contained  herein
relate solely to the priority of liens  granted to the  Revolving  Agent and the
Term  Loan  Agent  by  the  Credit   Parties.   It  is  the  Revolving   Agent's
responsibility  to ensure the validity,  perfection  and  enforceability  of the
liens granted by the Credit  Parties to the  Revolving  Agent for the benefit of
itself and the Revolving Lenders. It is the Term Loan Agent's  responsibility to
ensure the validity,  perfection and  enforceability of the liens granted by the
Credit  Parties  to the Term Loan  Agent for the  benefit of itself and the Term
Loan Lenders.  Except as expressly  set forth herein,  (a) neither the Revolving
Agent nor any  Revolving  Lender shall have any duties to the Term Loan Agent or
the Term Loan Lenders with  respect to the  Collateral  and (b) neither the Term
Loan Agent nor any Term Loan Lender shall have any duties to the Revolving Agent
or the Revolving Lenders with respect to the Collateral. The Term Loan Agent and
the Term Loan Lenders agree that they will not contest the validity, perfection,
priority  or  enforceability  of the  claims  of the  Revolving  Agent  and  the
Revolving  Lenders with respect to the Priority  Bank Debt or the liens upon the
Collateral  in  favor  of the  Revolving  Agent.  The  Revolving  Agent  and the
Revolving  Lenders  agree that they will not contest the  validity,  perfection,
priority  or  enforceability  of the  claims of the Term Loan Agent and the Term
Loan Lenders  with respect to the Priority  Term Loan Debt or the liens upon the
Collateral in favor of the Term Loan Agent.

         2.7. NOT DEBT SUBORDINATION.

         (a)  Nothing  in  this  Intercreditor  Agreement  shall  be  deemed  to
subordinate  the right of Term Loan  Lenders  to receive  payment  from a source
other  than the  Revolving  Primary  Collateral  (whether  before  or after  the
occurrence of any default, event of default or Insolvency Proceeding),  it being
the  intent  of  the  parties  hereto  that,  to the  extent  provided  in  this
Intercreditor  Agreement,  the lien of the Term Loan Agent  with  respect to the
Revolving Primary  Collateral shall be junior to the lien of the Revolving Agent
with respect to the Revolving Primary Collateral to the extent of the respective
lien priorities provided for in this Intercreditor Agreement.

                                      -6-
<PAGE>

         (b)  Nothing  in  this  Intercreditor  Agreement  shall  be  deemed  to
subordinate  the right of  Revolving  Lenders to receive  payment  from a source
other  than the Term  Loan  Primary  Collateral  (whether  before  or after  the
occurrence of any default, event of default or Insolvency Proceeding),  it being
the  intent  of  the  parties  hereto  that,  to the  extent  provided  in  this
Intercreditor  Agreement,  the lien of the  Revolving  Agent with respect to the
Term Loan Primary  Collateral shall be junior to the lien of the Term Loan Agent
with respect to the Term Loan Primary Collateral to the extent of the respective
lien priorities provided for in this Intercreditor Agreement.

         2.8. COLLATERAL RELEASE.

         (a) Following the  occurrence of a Revolving  Release  Event,  upon the
request of the Revolving Agent with respect to the Revolving Primary  Collateral
identified in such request  (which  request shall specify the proposed  terms of
the  proposed  transfer,  sale or other  disposition  and the type and amount of
consideration  to be received in connection  therewith),  the Term Loan Agent on
behalf of the Term Loan Lenders shall:

                  (i) release or otherwise terminate its liens on such Revolving
         Primary  Collateral (to the same extent that the Revolving  Agent shall
         release or terminate its liens on such Collateral),  to the extent such
         Revolving  Primary  Collateral  is to be sold or otherwise  disposed of
         either by (i) the  Revolving  Agent or its  agents,  or (ii) any Credit
         Party with the consent of the requisite Revolving Lenders;

                  (ii) deliver such release documents as the Revolving Agent may
         reasonably  require  in  connection  therewith;  PROVIDED  that  if the
         closing of the sale or disposition of such Revolving Primary Collateral
         is not consummated  within thirty (30) days of receipt by the Revolving
         Agent of such release documents from the Term Loan Agent, the Revolving
         Agent  shall  promptly  return all release  documents  to the Term Loan
         Agent; and

                  (iii)  be  deemed  to  have  consented  under  the  Term  Loan
         Agreement to such sale or other disposition;  PROVIDED that such deemed
         consent  shall lapse in the event such sale or other  disposition  does
         not occur within thirty (30) days of receipt by the Revolving  Agent of
         the relevant release documents from the Term Loan Agent.

         (b) The effectiveness of any such release,  termination  and/or consent
by the Term Loan Agent  under  clause (a) above shall be subject to (i) the sale
or other  disposition  of the  Revolving  Primary  Collateral  described in such
request on the terms described in such request or on substantially similar terms
and in a commercially  reasonable manner, (ii) the application of all of the net
proceeds of such sale or other  disposition  promptly by the Revolving  Agent or
the Term Loan Agent as  specified in SECTION  2.3(A)  hereof and Section 12.4 of
the Revolving  Credit  Agreement (as in effect on the date hereof) to reduce the
Priority  Bank Debt,  and (iii) the rights of the Term Loan Agent under  SECTION
2.9(A).

         (c) Following the  occurrence  of a Term Loan Release  Event,  upon the
request of the Term Loan Agent with respect to the Term Loan Primary  Collateral
identified in such request  (which  request shall specify the proposed  terms of
the  proposed  transfer,  sale or other  disposition  and the type and amount of
consideration  to be received in connection  therewith),  the Revolving Agent on
behalf of the Revolving Lenders shall:

                                      -7-
<PAGE>

                  (i) release or otherwise terminate its liens on such Term Loan
         Primary  Collateral  (to the same extent that the Term Loan Agent shall
         release or terminate its liens on such Collateral),  to the extent such
         Term Loan Primary  Collateral  is to be sold or  otherwise  disposed of
         either by (i) the Term Loan  Agent or its  agents,  or (ii) any  Credit
         Party with the consent of the requisite Term Loan Lenders;

                  (ii)