EXHIBIT 10.49

                      [On GB Merchant Partners Letterhead]


July 18, 2007

Quaker Fabric Corporation of Fall River
941 Grinnell Street
Fall River, Massachusetts 02721
Attn: Paul J. Kelley, Chief Financial Officer

         Re: Additional Term Loan Advance
             ----------------------------

Dear Paul:

         Reference is made to the Term Loan Agreement dated as of November 9,
2006, by and among Quaker Fabric Corporation of Fall River (the "Borrower"),
Quaker Fabric Corporation, GB Merchant Partners, LLC, as Administrative Agent
(the "Administrative Agent") and the Lenders party thereto (as amended and in
effect, the "Loan Agreement"). Capitalized terms used in this letter without
definition have the respective meanings ascribed to such terms in the Loan
Agreement. Reference is further made to the letter dated July 3, 2007, sent by
counsel to the Administrative Agent and the Lenders to the Borrower identifying
certain Events of Default which have occurred and continue to exist under the
Loan Agreement (the "Default Letter"). Currently, the Administrative Agent and
the Lenders are forbearing from exercising rights and remedies in respect of the
Events of Default identified in the Default Letter.

         The Borrower has informed the Administrative Agent and the Lenders that
the Borrower and its affiliates intend to cease the operation of their
businesses, wind down their operations, and engage in an orderly disposition of
their assets and properties. In connection with the same, the Borrower has
requested that the Administrative Agent and the Lenders fund certain expenses to
be incurred by the Borrower. The Administrative Agent and the Lenders are
willing to make an overadvance under the Term Loans in the amount of $2,000,000
(the "Overadvance"), on the following terms and conditions:

Overadvance Amount:            $2,000,000 (less the Initial Advances) available
                               in one or more weekly advances by the Lenders to
                               the Borrower.

Structure:          The Overadvance constitutes an overadvance under one or both
                    of the existing Term Loans under the Loan Agreement, as
                    determined by Administrative Agent in its sole discretion,
                    and the Loan Agreement would be amended to accommodate the
                    same. The Overadvance will constitute a portion of the Term
                    Loans and will be subject to all of the terms and conditions
                    of the Loan Agreement. The Overadvance constitutes funds
                    necessary to preserve or protect the Lenders' Collateral and
                    enhance the prospects of repayment of the Term Loans, and

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                    consequently, does not constitute "Excluded Term Loan Debt",
                    as defined in the Intercreditor Agreement.

Interest:           The Overadvance will bear interest at a rate per annum equal
                    to the interest rate currently payable with respect to the
                    Term Loans under the Loan Agreement.

Forbearance and
Funding Fee:        In consideration of the agreement of the Administrative
                    Agent and the Lenders to continue to forbear from exercising
                    rights and remedies as a result of the Existing Defaults (as
                    defined in the Default Letter), as well as the willingness
                    of the Administrative Agent and Lenders to fund the
                    Overadvance, the Borrower will pay to the Administrative
                    Agent, for the account of the Lenders, a Forbearance and
                    Funding Fee in an amount equal to 20% of any amounts funded
                    under the Overadvance, such fee fully earned and payable
                    weekly with the proceeds of each weekly advance. In
                    connection with funding the Initial Advance on the date of
                    this letter agreement, Borrowers shall pay the Forbearance
                    and Funding Fee relative to each of the Initial Advances.

Collateral:         The Overadvance will be secured by all of the Collateral
                    securing the existing Term Loans, subject to the terms of
                    the Intercreditor Agreement.

Use of Proceeds:    The proceeds of fundings under the Overadvance will be
                    funded directly to the Revolving Credit Agent to reduce the
                    outstanding amounts under the Revolving Credit Agreement.
                    Proceeds of subsequent advances under the Revolving Credit
                    Agreement shall be used by the Borrower solely to fund wind
                    down expenses and other costs and expenses set forth in a
                    wind down budget prepared under direction of and approved by
                    RAS Management and approved by the Administrative Agent and
                    the Revolving Credit Agent, each in their sole discretion
                    (the "Wind Down Budget").


         The parties hereto acknowledge that on or about July 13, 2007, the
Lenders funded a portion of the Overadvance in the amount of $200,000, and as of
the date of this letter agreement the Lenders have funded an additional portion
of the Overadvance in the amount of $175,000 (plus the Forbearance and Funding
Fee due on account of each such funding in the aggregate amount of $75,000), in
each case to pay certain approved expenses of the Borrower (collectively, the
"Initial Advances"). The funding of the Initial Advances does not obligate the
Administrative Agent and the Lenders to fund the balance of the Overadvance; the
willingness of the Administrative Agent and the Lenders to do so being
conditioned on satisfaction of all of the terms and conditions set forth in this
letter agreement, including execution of an acceptable amendment to the Loan
Agreement. After giving effect to the funding of the Initial Advances, the


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outstanding principal balance of the Overadvance is $450,000, all of which bears
interest as provided in this letter agreement.

         All other terms and conditions with respect to the Overadvance shall be
acceptable to the Administrative Agent in its sole discretion. The willingness
of the Administrative Agent and the Lenders to make the Overadvance shall not be
construed as a waiver of the Existing Defaults, any other Default or Event of
Default which may now exist or hereafter arise under the Loan Agreement, and any
of the rights and remedies of the Administrative Agent and the Lenders, all of
which are expressly reserved.

         The Revolving Credit Agent hereby joins this letter agreement to
acknowledge its consent to the terms hereof, and the agreement of the Revolving
Credit Agent and Revolving Credit Lenders (without waiving any of the terms and
conditions of the Revolving Credit Agreement and the other Revolving Credit Loan
Documents) to continue to make advances under the Revolving Credit to fund wind
down costs and expenses and other costs and expenses set forth in the Wind Down
Budget.




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         If this proposal is acceptable to you, please execute this letter in
the space provided below and return the same to the attention of the
undersigned.

                                                   Sincerely,

                                                   GB Merchant Partners, LLC,
                                                   as Administrative Agent



                                                   By:____/s/__________________
                                                   Name: D. Michael Murray
                                                   Title: Managing Director

Accepted and Agreed:

Quaker Fabric Corporation of Fall River


By: _____/s/_____________
Name:
Title:


Acknowledged
and Agreed:

Bank of America, N.A.,
as Revolving Credit Agent


By: ______/s/____________
Name:
Title:






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