Document:

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                                                                    EXHIBIT 10.4

                            FIFTH AMENDMENT AGREEMENT

         This Fifth Amendment Agreement, dated as of March 26, 2001 (this
"Agreement"), is among WESTPOINT STEVENS INC., a Delaware corporation (the
"Borrower"), WESTPOINT STEVENS (UK) LIMITED, WESTPOINT STEVENS (EUROPE) LIMITED,
each of the Banks signatories hereto, and BANK OF AMERICA, N.A., as
Administrative Agent (the "Agent").

                                    RECITALS:

         A.       Pursuant to that certain Second Amended and Restated Credit
Agreement, dated as of June 9, 1998 among the Borrower, WestPoint Stevens (UK)
Limited and WestPoint Stevens (Europe) Limited (collectively, the "Foreign
Borrowers"), the lending and financial institutions party thereto (the "Original
Banks"), and the Agent, as amended by that certain letter agreement dated as of
June 10, 1998 among the Borrower, the Foreign Borrowers, the Existing Banks, and
the Agent (as amended, the "Original Credit Agreement"), the Original Banks
agreed to make revolving loan and letter of credit facilities available to the
Borrower and the Foreign Borrowers.

         B.       Pursuant to that certain Amendment Agreement (the "First
Amendment"), dated as of July 31, 1998, by and among the Borrower, the Foreign
Borrowers, the Original Banks parties thereto, the Agent, and National
Westminster Bank PLC ("Natwest"), the Original Credit Agreement was amended to
increase the aggregate Revolving Committed Amount from $550,000,000 to
$575,000,000, and to add Natwest as a Bank under the Original Credit Agreement
(as amended by the First Amendment, the "First Amended Credit Agreement").

         C.       Pursuant to that certain Second Amendment Agreement (the
"Second Amendment"), dated as of May 20, 1999, by and among the Borrower, the
Foreign Borrowers, the Banks parties thereto, and the Agent, the First Amended
Credit Agreement was amended to increase the aggregate Revolving Committed
Amount to $800,000,000 by increasing the Revolving Commitment of certain
consenting Banks (as amended by the Second Amendment, the "Second Amended Credit
Agreement").

         D.       Pursuant to that certain Third Amendment Agreement (the "Third
Amendment"), dated as of May 30, 2000, by and among the Borrower, the Foreign
Borrowers, the Banks parties thereto, and the Agent, the Second Amended Credit
Agreement was amended by further modifying the Revolving Committed Amount in
section 2.1 and by adding certain financial covenants in section 7.11 (as
amended by the Third Amendment, the "Third Amended Credit Agreement").

         E.       Pursuant to that certain Fourth Amendment Agreement (the
"Fourth Amendment"), dated as of December 31, 2000, by and among the Borrower,
the Foreign Borrowers, the Banks parties thereto, and the Agent, certain
financial covenants, definitions and other terms of the Third Amended Credit
Agreement were amended.

         F.       By separate letter agreements dated June, 30, 1998, October 7,
1998, March 16, 1999, August 31, 1999, and November 15, 1999, the Borrower, the
Foreign Borrowers, the

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Required Banks, and the Agent have amended the definitions of the terms "Maximum
Restricted Payment Amount" and "Minimum Consolidated Net Worth" on four
occasions (the "Letter Amendments"). The Original Credit Agreement, as amended
by the First Amendment, the Second Amendment, the Third Amendment, the Fourth
Amendment and the Letter Amendments shall be referred to as the "Existing Credit
Agreement".

         G.       The Borrower and the Foreign Borrowers have requested that the
Required Banks agree to make certain additional amendments to the Existing
Credit Agreement.

         NOW, THEREFORE, based upon the foregoing, and for good and valuable
consideration, the sufficiency and receipt of which is hereby acknowledged, the
parties hereby agree as follows:

                                     PART I
                                   DEFINITIONS

         SUBPART 1.1                Certain Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Agreement,
including its preamble and recitals, have the following meanings:

                  "Amended Credit Agreement" means the Existing Credit Agreement
         as amended hereby.

                  "Effective Date" shall mean March 26, 2001 subject to the
         occurrence of each of the conditions set forth in Subpart 3.1.

         SUBPART 1.2                Other Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Agreement,
including its preamble and recitals, have the meanings provided in the Amended
Credit Agreement.

                                     PART II
                     AMENDMENTS TO EXISTING CREDIT AGREEMENT

         Effective on (and subject to the occurrence of) the Effective Date, the
Existing Credit Agreement is hereby amended in accordance with this Part II.
Except as so amended, the Existing Credit Agreement shall continue in full force
and effect.

         SUBPART 2.1                Amendment of Definition of Excluded Asset
Disposition. Section 1.1 of the Existing Credit Agreement is amended by revising
the definition of "Excluded Asset Disposition" to read in its entirety as
follows:

                  "Excluded Asset Disposition" means (i) the sale, conveyance or
         other contribution of applicable Transferred Assets by Finco or any
         Consolidated Party as part of any Permitted Receivables Financing, (ii)
         any Asset Disposition by any Consolidated Party to any Credit Party
         other than the Borrower if the Credit Parties shall cause to be

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         executed and delivered such documents, instruments and certificates as
         the Agent may request so as to cause the Credit Parties to be in
         compliance with the terms of Section 2.2 and 2.3 of the Collateral
         Trust Agreement, (iii) any sale or other disposition of the Excluded
         Property (as defined in the Collateral Trust Agreement), and (iv) the
         sale, conveyance or other disposition of such other assets in other
         transactions provided that the aggregate consideration received in all
         such other transactions by any Consolidated Party does not exceed
         $20,000,000 in the aggregate from and after the Closing Date and after
         giving effect to such Asset Disposition; provided, however, in each
         instance referred to in subsection (iv) hereof, (a) after giving effect
         to such Asset Disposition, no Default or Event of Default exists, and
         (b) the aggregate consideration received by the Consolidated Parties in
         connection with such Asset Disposition shall be reasonably equivalent
         in value to the properties sold, conveyed or otherwise disposed of.

         SUBPART 2.2                Amendment to Definition of Funded
Indebtedness. Section 1.1 of the Existing Credit Agreement is amended by adding
the following sentence to the end of the definition of the term "Funded
Indebtedness": "For the avoidance of doubt, the Permitted Receivables Financing
shall constitute Funded Indebtedness for the purposes hereof."

         SUBPART 2.3                Amendment to Definition of Permitted
Receivables Financing. Section 1.1 of the Existing Credit Agreement is amended
by adding the following sentence to the end of the definition of the term
"Permitted Receivables Financing": "Subject to compliance with section 8.1(f),
for purposes hereof, Permitted Receivables Financing shall include, without
duplication, Expanded Permitted Receivables Financing."

         SUBPART 2.4                Deletion of Obsolete Definitions. Section
1.1 of the Existing Credit Agreement is amended by deleting in their entirety
each of the following definitions which are no longer used in the Existing
Credit Agreement: "Maximum Restricted Payment Amount" and "Rate Adjustment
Ratio".

         SUBPART 2.5                Addition of New Definitions in Section 1.1.
Section 1.1 of the Existing Credit Agreement is further amended by adding each
of the following definitions in the appropriate alphabetical order:

                  "Additional Permitted Receivables Financing Amount" means the
         maximum amount by which the committed amount of any Expanded Permitted
         Receivables Financing exceeds at any time $160,000,000.

                  "Expanded Permitted Receivables Financing" means any Permitted
         Receivables Financing the committed amount of which is in excess of
         $160,000,000 at any time.

                  "Calculation Date" means the date which is five Business Days
         after the date by which the Credit Parties are required to provide the
         officer's certificate in accordance with the provisions of Section
         7.1(c) for the most recently ended fiscal quarter of the Consolidated
         Parties.

The definition of "Calculation Date" was inadvertently deleted in the Fourth
Amendment Agreement when the definition of "Applicable Percentage" was amended.

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         SUBPART 2.6                Amendment to Section 2.1(a). Section 2.1(a)
of the Existing Credit Agreement is amended to read in its entirety as follows:

                  (a)      Revolving Commitment.

                  Subject to the terms and conditions hereof and in reliance
         upon the representations and warranties set forth herein, each Bank
         severally agrees to make available to the Borrower such Bank's
         Revolving Commitment Percentage (as set forth on Schedule 2.1(a)) of
         revolving credit loans requested by the Borrower in Dollars ("Revolving
         Loans") from time to time from the Closing Date until the Maturity
         Date, or such earlier date as the Revolving Commitments shall have been
         terminated as provided herein; provided, however, that the sum of the
         aggregate principal amount of outstanding Revolving Loans shall not
         exceed (i) at any time prior to August 1, 2001, EIGHT HUNDRED MILLION
         DOLLARS ($800,000,000) less the Additional Permitted Receivables
         Financing Amount; (ii) from and after August 1, 2001 through and
         including October 31, 2001, SEVEN HUNDRED SEVENTY-FIVE MILLION DOLLARS
         ($775,000,000) less the Additional Permitted Receivables Financing
         Amount; (iii) from and after November 1, 2001 through and including
         January 31, 2002, SEVEN HUNDRED FIFTY MILLION DOLLARS ($750,000,000),
         less the Additional Permitted Receivables Financing Amount; (iv) from
         and after February 1, 2002 through and including June 30, 2002, SEVEN
         HUNDRED TWENTY-FIVE MILLION DOLLARS ($725,000,000), less the Additional
         Permitted Receivables Financing Amount; (v) from and after July 1, 2002
         through and including October 31, 2002, SEVEN HUNDRED MILLION DOLLARS
         ($700,000,000), less the Additional Permitted Receivables Financing
         Amount; (vi) from and after November 1, 2002 through and including
         January 31, 2003, SIX HUNDRED SEVENTY-FIVE MILLION DOLLARS
         ($675,000,000), less the Additional Permitted Receivables Financing
         Amount; (vii) from and after February 1, 2003 through and including
         June 30, 2003, SIX HUNDRED FIFTY MILLION DOLLARS ($650,000,000), less
         the Additional Permitted Receivables Financing Amount; (viii) from and
         after July 1, 2003 through and including October 31, 2003, SIX HUNDRED
         TWENTY-FIVE MILLION DOLLARS ($625,000,000), less the Additional
         Permitted Receivables Financing Amount; and (ix) from and after
         November 1, 2003, SIX HUNDRED MILLION DOLLARS ($600,000,000), less the
         Additional Permitted Receivables Financing Amount (as such aggregate
         maximum amounts may be reduced from time to time as provided herein or
         further reduced as required by Section 3.4, the "Revolving Committed
         Amount"); provided, further, (i) with regard to each Bank individually,
         such Bank's outstanding Revolving Loans shall not exceed such Bank's
         Revolving Commitment, (ii) with regard to the Banks collectively, the
         aggregate principal amount of outstanding Revolving Loans plus the
         aggregate principal amount of Competitive Loans plus the Dollar Amount
         of the aggregate outstanding principal amount of Foreign Currency
         Loans, plus the aggregate principal amount of outstanding Swingline
         Loans plus the Dollar Amount of LOC Obligations outstanding shall not
         exceed the Revolving Committed Amount then in effect. Revolving Loans
         may consist of Base Rate Loans or Eurocurrency Loans, or a combination
         thereof, as the Borrower may request; provided, however, that no more
         than eight (8) Eurocurrency Loans shall be outstanding under this
         Section 2.1 at any time (it

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         being understood that, for purposes hereof, Eurocurrency Loans with
         different Interest Periods shall be considered as separate Eurocurrency
         Loans, even if they begin on the same date, although borrowings,
         extensions and conversions may, in accordance with the provisions
         hereof, be combined at the end of existing Interest Periods to
         constitute a new Eurocurrency Loan with a single Interest Period).
         Revolving Loans may be repaid and reborrowed in accordance with the
         provisions hereof.

         SUBPART 2.7                Amendment to Section 3.4(b). Section 3.4(b)
of the Existing Credit Agreement is amended to read in its entirety as follows:

                  (b)      Mandatory Reductions. On any date that the Loans are
         required to be prepaid pursuant to the terms of Section 3.3(b)(ii), the
         Revolving Committed Amount automatically shall be permanently reduced
         by the amount of such required prepayment and/or reduction. In
         addition, in the event of any Expanded Permitted Receivables Financing,
         then the Revolving Committed Amount then in effect shall automatically
         and immediately be permanently reduced dollar-for-dollar by the
         Additional Permitted Receivables Financing Amount.

As an example of the operation of this provision, if the Revolving Committed
Amount has been reduced to $775 million as a result of the mandatory reductions
under amended section 2.1(a), and thereafter the Borrower obtains Expanded
Permitted Receivables Financing of $190 million, then the Revolving Committed
Amount would be further reduced from $775 million to $745 million. As a second
example of the operation of this provision, if the prevailing Revolving
Committed Amount is $800 million because no mandatory reduction has yet occurred
under section 2.1(a), and the Borrower obtains Expanded Permitted Receivables
Financing of $190 million, then the Revolving Committed Amount would immediately
and permanently reduce by $30 million (the Additional Permitted Receivables
Financing Amount in this example) to $770 million; at the scheduled mandatory
reduction of the Revolving Committed Amount on August 1, 2001, the required
reduction of $25 million in the then existing Revolving Committed Amount would
reduce the Revolving Committed Amount further to $745 million. Each subsequent
scheduled reduction would also further reduce the Revolving Committed Amount by
an additional $25 million.

         SUBPART 2.8                Amendment of Section 3.5(b). Section 3.5(b)
of the Existing Credit Agreement is amended to read in its entirety as follows:

                  (b)      Facility Fee. In consideration of the Revolving
         Commitments of the Banks hereunder, the Borrower agrees to pay to the
         Agent for the account of each Bank a fee (the "Facility Fee") on the
         Revolving Committed Amount computed at a per annum rate of (i) 0.25%
         prior to April 1, 2001, and (ii) 0.50% from and after April 1, 2001;
         provided, however, from and after December 31, 2002, during any fiscal
         quarter in which the ratio of Balance Sheet Debt to Consolidated EBITDA
         is less than 3.75 to 1.0, then the Facility Fee for such fiscal quarter
         shall be computed at a rate of 0.375%. The Facility Fee shall commence
         to accrue on the Closing Date and shall be due and payable in arrears
         on the last Business Day of each March, June, September and December
         (and any date that the Revolving Committed Amount is reduced as
         provided in Section 3.4(a) or

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         (b)) and the Maturity Date for the immediately preceding quarter (or
         portion thereof), beginning with the first of such dates to occur after
         the Closing Date.

         SUBPART 2.9                Amendment of Section 7.1(n). Section 7.1(n)
of the Existing Credit Agreement is amended in its entirety to read as follows:

                  (n)      Monthly Financial Information.  The Borrower shall:

                           (i)      furnish or cause to be furnished to the
                  Agent and each of the Banks a consolidated balance sheet and
                  income statement of the Consolidated Parties as of the end of
                  each month, together with related consolidated statements of
                  cash flow, by the twentieth (20th) calendar day of each fiscal
                  month, with respect to the preceding fiscal month; provided,
                  however, at the end of each of the first three fiscal quarters
                  of the fiscal year, the Borrower shall provide such
                  consolidated balance sheet, income statement and statement of
                  cash flow by the forty-fifth (45th) calendar day after the end
                  of such fiscal quarter; and provided, further, at the end of
                  the fourth fiscal quarter of any fiscal year, the Borrower
                  shall provide such consolidated statements by the ninety-fifth
                  (95th) calendar day after the end of the fiscal year;

                           (ii)     furnish or cause to be furnished to the
                  Agent and each of the Banks, by the twentieth (20th) calendar
                  day of each fiscal month, a calculation (as of the end of such
                  preceding fiscal month) of the Consolidated EBITDA for the
                  most recent fiscal month and the preceding twelve fiscal
                  months; provided, however, at the end of each of the first
                  three fiscal quarters of the fiscal year, the Borrower shall
                  provide such calculation by the forty-fifth (45th) calendar
                  day after the end of such fiscal quarter; and provided,
                  further, at the end of the fourth fiscal quarter of any fiscal
                  year, the Borrower shall provide such calculation by the
                  ninety-fifth (95th) calendar day after the end of the fiscal
                  year; and

                           (iii)    by 5:00 p.m. (Eastern time) on Wednesday of
                  each week, (1) a summary statement of the cash inflows and
                  cash outflows of the Consolidated Parties for the prior week,
                  (2) cash flow projections for the Consolidated Parties for the
                  next succeeding 13 weeks, and (3) a schedule summarizing all
                  of the Funded Indebtedness of the Credit Parties.

                  All such financial information described in this section
         7.1(n) shall be in form and detail reasonably satisfactory to the
         Agent. The monthly financial statements delivered pursuant to section
         7.1(n)(i) shall be accompanied by a certificate of the chief financial
         officer, treasurer or controller of the Borrower to the effect that
         such monthly financial statements fairly present in all material
         respects the financial condition of the Consolidated Parties and have
         been prepared in accordance with GAAP, subject to changes resulting
         from audit and normal year-end audit adjustments.

         SUBPART 2.10               Amendment of Section 7.11(c). Section
7.11(c) of the Existing Credit Agreement is amended to read in its entirety as
follows:

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                  (c)      Interest Coverage Ratio. Have at the end of each
         fiscal quarter an Interest Coverage Ratio which is not less than 2.00
         to 1.00; provided, however, that for the fiscal quarters ending nearest
         June 30, 2001 and September 30, 2001, have at the end of each such
         fiscal quarter an Interest Coverage Ratio which is not less than 1.90
         to 1.00.

         SUBPART 2.11               Amendment of Section 7.11(d). Section
7.11(d) of the Existing Credit Agreement is amended to read in its entirety as
follows:

                  (d)      Balance Sheet Debt to Consolidated EBITDA Ratio. Have
         at the end of each fiscal quarter a ratio of Balance Sheet Debt on such
         date to Consolidated EBITDA for the four (4) fiscal quarters ending on
         such date of (i) not more than 6.25 to 1.0 for the fiscal quarter
         ending on or about March 31, 2001, (ii) not more than 6.75 to 1.0 for
         the fiscal quarter ending on or about June 30, 2001, (iii) not more
         than 6.35 to 1.0 for the fiscal quarter ending on or about September
         30, 2001, (iv) not more than 5.50 to 1.0 for each of the fiscal
         quarters ending on or about December 31, 2001 and March 31, 2002,
         respectively, (v) not more than 5.00 to 1.0 for each of the fiscal
         quarters ending on or about June 30, 2002 and September 30, 2002,
         respectively, (vi) not more than 4.50 to 1.0 for the fiscal quarter
         ending on or about December 31, 2002, and (vii) not more than 4.25 to
         1.0 for any fiscal quarter ending after December 31, 2002.

         SUBPART 2.12               Amendment of Section 8.1(f). Section 8.1(f)
of the Existing Credit Agreement is amended to read in its entirety as follows:

                  (f)      obligations of the Borrower or any of its
         Subsidiaries in connection with any Permitted Receivables Financing up
         to $160,000,000 in the aggregate committed amount any time; provided,
         that the Borrower may, upon at least five Business Days' advance
         written notice to the Agent, incur Expanded Permitted Receivables
         Financing of up to $200,000,000 as long as (i) simultaneously with such
         notice the Borrower provides notice under Section 3.4(a) that it is
         permanently reducing the Revolving Committed Amount then in effect by
         the Additional Permitted Receivables Financing Amount, and (ii) such
         Receivables Financier providing the Expanded Permitted Receivables
         Financing is one of the Banks or an Affiliate of one of the Banks;[.]

         SUBPART 2.13               Amendment of Section 8.6(a). Section
8.6(a)(iii) of the Existing Credit Agreement is amended to read in its entirety
as follows:

                  (iii)    for investments that are Capital Expenditures;
         provided, however, that such Capital Expenditures are made in the
         ordinary course of the Consolidated Parties' business and in a manner
         not materially inconsistent with the Annual Budget; and, provided
         further, that the Borrower will not permit Capital Expenditures of the
         Consolidated Parties to exceed, in the aggregate, (x) $85 million
         during the fiscal year 2001, and (y) for any fiscal year thereafter,
         $65 million plus up to $20 million of any unused Capital Expenditures
         from the prior year; and, provided further, that neither the Borrower
         nor any of its Subsidiaries shall make such an investment in a
         Subsidiary other than a Credit Party except as permitted by Section
         8.6(a)(viii), [.]

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         SUBPART 2.14               Amendment of Section 8.7. Section 8.7 of the
Existing Credit Agreement is amended by revising the third sentence thereof to
read as follows:

                  The permitted Restricted Equity Payments described in this
         Section 8.7 may be made by the Borrower or its Subsidiaries only if (i)
         no Default or Event of Default shall have occurred and be continuing at
         the date of the proposed Restricted Equity Payment or the declaration
         of any dividend relating thereto or after giving effect to such
         Restricted Equity Payment, and (ii) at the time or after giving effect
         to such Restricted Equity Payment, the Borrower has an Interest
         Coverage Ratio, calculated as of the most recently ended fiscal
         quarter, that is equal to or greater than (x) 2.0 to 1.0 for each of
         the first three fiscal quarters of fiscal year 2001, and (y) 2.25 to
         1.0 for each fiscal quarter thereafter.

The remainder of section 8.7 shall remain unchanged.

         SUBPART 2.15               Amendment of Section 8.12. Section 8.12 of
the Existing Credit Agreement is amended to read in its entirety as follows:

                  The Borrower will not permit any Consolidated Party, directly
         or indirectly, to become or remain liable as lessee or as guarantor or
         other surety with respect to any lease of any Property (whether real,
         personal or mixed), whether now owned or hereafter acquired, (a) which
         such Consolidated Party has sold or transferred or is to sell or
         transfer to a Person which is not a Consolidated Party, or (b) which
         such Consolidated Party intends to use for substantially the same
         purpose as any other Property which has been sold or is to be sold or
         transferred by such Consolidated Party to another Person which is not a
         Consolidated Party in connection with such lease, unless such
         transaction is structured as a Synthetic Lease or Operating Lease and
         (w) the aggregate consideration to be received by such Consolidated
         Party on account of its sale, transfer or other disposition of such
         Property shall not be less than the fair market value for such property
         and shall be in the form of cash or cash equivalents, (x) no later than
         10 Business Days prior to such sale, transfer or other disposition, the
         Agent and the Banks shall have received a certificate of an officer of
         the Borrower specifying the anticipated or actual date of such
         transaction, briefly describing the Property to be sold, transferred or
         disposed of, and the estimated Net Cash Proceeds to be received for
         such Property, (y) the Borrower shall have delivered to the Agent a Pro
         Forma Compliance Certificate demonstrating that, upon giving effect on
         a pro forma basis to such transaction, no Default or Event of Default
         would exist hereunder, and (z) within the period of 5 Business Days
         following the consummation of such sale, transfer or other disposition,
         the Borrower shall (or cause its Subsidiaries to) prepay the Loans in
         an amount equal to the Net Cash Proceeds received in connection with
         such sale, transfer or other disposition and simultaneously provide the
         Agent notice under Section 3.4(a) that it is permanently reducing the
         Revolving Committed Amount then in effect by the amount of such Net
         Cash Proceeds; provided, however, the aggregate consideration received
         in all such transactions by any Consolidated Party shall not exceed
         $50,000,000 in the aggregate from and after the Closing Date and after
         giving effect to each such transaction. In case of any conflict between
         this section and section 8.5 in the instance of any Sale Leaseback
         Transaction, section 8.12 shall control. Notwithstanding any other
         provision hereof, no

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         sale, transfer or other conveyance of Property as part of a Sale
         Leaseback Transaction shall constitute an Excluded Asset Disposition.

         Section 2.16      Amendment of Section 11.3. Section 11.3 of the
Existing Credit Agreement is amended by (i) deleting in its entirety subsection
11.3(b)(ii) in the Existing Credit Agreement, (ii) re-numbering existing
subsection 11.3(b)(iii) as subsection 11.3(b)(ii), and (iii) and re-numbering
existing subsection 11.3(iv) as subsection 11.3(b)(iii).

                                    PART III
                           CONDITIONS TO EFFECTIVENESS

         SUBPART 3.1                Effective Date. The amendments made by this
Agreement shall be and become effective as of the Effective Date when (i) all of
the conditions set forth in this Subpart 3.1 shall have been satisfied, and (ii)
the Required Banks, the Borrower, and the Foreign Borrowers shall have duly
executed counterparts of this Agreement and provided original copies thereof to
the Agent.

                  SUBPART 3.1.1.             Closing Certificate. The Agent
         shall have received a certificate from the Borrower and the Foreign
         Borrowers certifying that (i) after giving effect to this Fifth
         Amendment Agreement, no Default or Event of Default exists as of the
         Effective Date, and (ii) the representations and warranties of the
         Borrower and the Foreign Borrowers made in or pursuant to the Credit
         Documents are true in all material respects on and as of the Effective
         Date.

                  SUBPART 3.1.2.             Guarantors Consent. Each of the
         Guarantors shall have executed the Consent included in the signature
         pages of this Agreement, and the Agent shall have received such Consent
         executed by each Guarantor.

                  SUBPART 3.1.3.             Corporate Action. The Borrower
         shall deliver to the Agent certified copies of all corporate action
         taken by each Credit Party approving this Agreement and each of the
         documents executed and delivered in connection herewith (including,
         without limitation, a certificate setting forth the resolutions of the
         Board of Directors of each Credit Party adopted in respect of the
         transactions contemplated by this Agreement.)

                  SUBPART 3.1.4.             Documentation. The Existing Banks
         and the Agent shall have received all information, and such counterpart
         originals or such certified or other copies of such originals, as they
         may reasonably request. The Agent shall have received executed
         counterparts of all related documentation. All legal matters incident
         to the transactions contemplated by this Agreement shall be
         satisfactory to the counsel for the Agent.

                  SUBPART 3.1.5.             Amendment Fee. An amendment fee of
         25 basis points ($2,000,000) of the Revolving Committed Amount shall be
         paid pro rata to those Banks executing and delivering this Agreement to
         the Agent prior to 5:00 p.m. Eastern time on March 26, 2001.

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                  SUBPART 3.1.6.             Pledge Agreement. The Borrower
         shall have executed and delivered to the Agent a Third Amended and
         Restated Stock Pledge Agreement in substantially the form as that
         attached as Exhibit A hereto.

                                     PART IV
                                  MISCELLANEOUS

         SUBPART 4.1                Cross-References. References in this
Agreement to any Part or Subpart are, unless otherwise specified, to such Part
or Subpart of this Agreement.

         SUBPART 4.2                Instrument Pursuant to Existing Credit
Agreement. This Agreement is a document executed pursuant to the Existing Credit
Agreement and shall (unless otherwise expressly indicated therein) be construed,
administered and applied in accordance with the terms and provisions of the
Existing Credit Agreement.

         SUBPART 4.3                Credit Documents. Each of the Borrower and
the Foreign Borrowers hereby confirms and agrees that the Credit Documents are,
and shall continue to be, in full force and effect, except as amended hereby,
except that, on and after the Effective Date, references in each Credit Document
to the "Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Existing Credit Agreement shall mean the Amended Credit
Agreement.

         SUBPART 4.4                Representations and Warranties. Each of the
Borrower and the Foreign Borrowers hereby represents and warrants that (i) it
has the requisite corporate power and authority to execute, deliver and perform
this Agreement, (ii) it is duly authorized to, and has been authorized by all
necessary corporate action, to execute, deliver and perform this Agreement,
(iii) it has no claims, counterclaims, offsets, or defenses to the Credit
Documents and the performance of its obligations thereunder, (iv) the
representations and warranties contained in Section 6 of the Existing Credit
Agreement are, subject to the limitations set forth therein, true and correct in
all material respects on and as of the date hereof as though made on and as of
such date (except for those which expressly relate to an earlier date or those
which relate to specific schedules, the changes to which do not represent a
Material Adverse Effect), (v) no event of default under any other agreement,
document or instrument to which it is a party will occur as a result of the
transactions contemplated hereby, and (vi) as of the date of, and giving effect
to, this Agreement, no Event of Default or Defaults exists.

         SUBPART 4.5                Costs and Expenses. The Borrower hereby
agrees to pay on demand all costs and expenses (including without limitation the
reasonable fees and expenses of counsel to the Agent) incurred by the Agent in
connection with the negotiation, preparation, execution, and delivery of this
Agreement and the enforcement or preservation of any rights and remedies of the
Banks and the Agent hereunder.

         SUBPART 4.6                Counterparts, Effectiveness, Etc. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.

                                       10
<PAGE>   11

         SUBPART 4.7                Captions. The captions in this Agreement are
inserted only as a matter of convenience and for reference and in no way define,
limit or describe the scope of this Agreement or any provision hereof.

         SUBPART 4.8                Governing Law. THIS AGREEMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF.

         SUBPART 4.9                Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.

         SUBPART 4.10               Excluded Property. The Borrower and
Consolidated Subsidiaries shall provide the Agent, within thirty (30) days of
the Effective Date, a schedule identifying all assets or properties owned by the
Borrower or any Consolidated Subsidiaries which constitute Excluded Property (as
defined in the Collateral Trust Agreement). Such schedule shall contain either
an approximate fair market value of each such item of Excluded Property or of
the current book value of each such item. The Borrower and Consolidated
Subsidiaries shall, if requested by the Agent or the Required Banks, execute
such additional collateral documentation as the Agent or Required Banks may
elect for any such scheduled assets or properties owned by the Borrower or
Consolidated Subsidiaries the value of which is in excess of $1,000,000. The
schedule of Excluded Property and any such additional collateral documentation
required hereby shall be in form and content reasonably satisfactory to the
Agent and Required Banks.

               [Remainder of this page intentionally left blank.]

                                       11
<PAGE>   12

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the day and year
first above written.

THE BORROWER:                            WESTPOINT STEVENS INC.,
                                         a Delaware corporation

                                         By: /s/ David C. Meek
                                             -----------------------------------
                                         Name: David C. Meek
                                         Title: Executive Vice President-Finance
                                                 & Chief Financial Officer

THE FOREIGN BORROWERS:                   WESTPOINT STEVENS (UK) LIMITED

                                         By: /s/ David C. Meek
                                             -----------------------------------
                                         Name: David C. Meek
                                         Title: Director

                                         WESTPOINT STEVENS (EUROPE)
                                         LIMITED

                                         By: /s/ David C. Meek
                                             -----------------------------------
                                         Name: David C. Meek
                                         Title: Director

THE BANKS:                               BANK OF AMERICA, N.A.,
                                         individually in its capacity as a
                                         Bank and in its capacity as
                                         Agent

                                         By: /s/ David H. Dinkins
                                             -----------------------------------
                                         Name: David H. Dinkins
                                         Title: Principal

                             [Signatures Continued]

                                       12
<PAGE>   13

                                         BANK ONE, N.A.

                                         By:
                                            ------------------------------------
                                         Name:
                                              ----------------------------------
                                         Title:
                                               ---------------------------------

                                         THE BANK OF NEW YORK

                                         By:  /s/ Ronald R. Reedy
                                              ----------------------------------
                                         Name: Ronald R. Reedy
                                         Title: Vice President

                                         SCOTIABANC INC.

                                         By: /s/ W. E. Zarrett
                                             -----------------------------------
                                         Name: William E. Zarrett
                                         Title: Managing Director

                                         WACHOVIA BANK, N.A.

                                         By: /s/ Stephen R. Philpott
                                             -----------------------------------
                                         Name: Stephen R. Philpott
                                         Title: Senior Vice President

                                         SOCIETE GENERALE

                                         By:/s/ R. Wayne Hutton
                                            ------------------------------------
                                         Name: R. Wayne Hutton
                                         Title: Director Corporate Banking

                                         ABN AMRO BANK, N.V.

                                         By: /s/ Judith M. Bresnen
                                             -----------------------------------
                                         Name: Judith M. Bresnen
                                         Title: Group Vice President

                                         By: /s/ Kenneth E. Kozar
                                             -----------------------------------
                                         Name: Kenneth E. Kozar
                                         Title: Assistant Vice President

                             [signatures continued]

                                       13
<PAGE>   14

                                    SUNTRUST BANK, ATLANTA

                                    By: /s/ David W. Penter
                                        ----------------------------------------
                                    Name: David W. Penter
                                    Title: Director Senior Relationship Manager

                                    FIRST UNION NATIONAL BANK

                                    By:  /s/ Roger Pelz
                                         ---------------------------------------
                                    Name: Roger Pelz
                                    Title: Senior Vice President

                                    FLEET NATIONAL BANK

                                    By: /s/ Stephen M. Leavenworth
                                         ---------------------------------------
                                    Name: Stephen M. Leavenworth
                                    Title: Vice President

                                    AMSOUTH BANK

                                    By: /s/ E. T. Hutton, II
                                    --------------------------------------------
                                    Name: E. T. Hutton, II
                                    Title: Vice President

                                    COOPERATIEVE CENTRALE
                                    RAIFFEISEN-BOERENLEENBANK B.A.,
                                    "Rabobank Nederland", New York Branch

                                    By: /s/ Juliana Sagonalong
                                         ---------------------------------------
                                    Name: Juliana Sagonalong
                                    Title: Vice President

                                    By: /s/ James S. Cunningham
                                        ----------------------------------------
                                    Name: James S. Cunningham
                                    Title: Managing Director, Chief Risk Officer

                             [signatures continued]

                                       14
<PAGE>   15

                                    NATIONAL WESTMINSTER BANK
                                     PLC

                                    By:  /s/ Geoffrey Ray
                                         ---------------------------------------
                                    Name: Geoffrey Ray
                                    Title: Senior Corporate Manager

                             [signatures continued]

                                       15
<PAGE>   16

                              CONSENT TO AGREEMENT

         Each of the undersigned Subsidiary Guarantors, as a party to one or
more of the Credit Documents, hereby acknowledges the execution and delivery of
the Fifth Amendment Agreement, dated as of March 26, 2001, hereby confirms and
agrees that each Credit Document to which it is a party is, and shall continue
to be, in full force and effect, and hereby ratifies and confirms in all
respects its obligations thereunder. This Consent may be executed by the parties
hereto in counterparts, each of which shall be deemed to be an original and all
of which shall constitute together but one and the same instrument.

                                  WESTPOINT STEVENS INC. I
                                  f/k/a West Point-Pepperell Enterprises, Inc.

                                  By:  /s/ Richard Klumpp
                                       -----------------------------------------
                                  Name: Richard F. Klumpp
                                  Title: Vice President & Assistant Treasurer

                                  J. P. STEVENS & CO., INC.

                                  By:  /s/ David C. Meek
                                       -----------------------------------------
                                  Name: David C. Meek
                                  Title: President

                                  J. P. STEVENS ENTERPRISES, INC.

                                  By:  /s/ Richard Klumpp
                                       -----------------------------------------
                                  Name: Richard F. Klumpp
                                  Title: Vice President & Assistant Treasurer

                                  WESTPOINT STEVENS STORES, INC.

                                  By:  /s/ David C. Meek
                                       -----------------------------------------
                                  Name: David C. Meek
                                  Title: Vice President & Treasurer

                                  LIEBHARDT, INC.

                                  By:  /s/ David C. Meek
                                       -----------------------------------------
                                  Name: David C. Meek
                                  Title: President

                                       16<PAGE>   1

                                                                    EXHIBIT 10.5

                                              March 26, 2001

WPS Receivables Corporation
507 West 10th Street
Post Office Box 71
West Point, Georgia  31833
Attn: Nelson Griffith

WestPoint Stevens, Inc.
507 West 10th Street
Post Office Box 71
West Point, Georgia  31833
Attn: Nelson Griffith

                             Re: Conditional Waiver

Ladies and Gentlemen:

         Reference is made to (i) the Asset Interest Transfer Agreement, dated
as of December 18, 1998 (as amended, restated, supplemented or otherwise
modified, the "Asset Transfer Agreement"), among WPS Receivables Corporation
("Transferor"), WestPoint Stevens, Inc. ("WestPoint"), as initial Servicer, Blue
Ridge Asset Funding Corporation ("Blue Ridge") and Wachovia Bank, N.A., as
administrative agent (in such capacity, the "Administrator") and (ii) the Second
Amended and Restated Credit Agreement, dated as of June 9, 1998 (as amended,
restated, supplemented or otherwise modified, the "Credit Agreement") among
WestPoint, as borrower, certain subsidiaries of WestPoint, the financial
institutions from time to time party thereto (the "CA Lenders") and Bank of
America, N.A. (f/k/a NationsBank, N.A.), as agent for the CA Lenders (in such
capacity, the "CA Agent"). Capitalized terms used herein and not defined herein
shall have the respective meanings assigned thereto in the Asset Transfer
Agreement.

         Transferor is a wholly-owned Subsidiary of WestPoint. As a condition to
the effectiveness of the Fifth Amendment Agreement, dated as of March 26, 2001,
which amends the Credit Agreement, the CA Lenders are requiring WestPoint to
pledge all of its right, title and interest in and to the capital stock of
Transferor to the CA Agent, for the benefit of the CA Lenders, pursuant to a
pledge agreement to be entered into between WestPoint and the CA Lender (the
"Pledge Agreement") as additional security for WestPoint's obligations under the
CA Credit Agreement (the "Proposed Pledge").

         Pursuant to the terms of Section 6.01(u) of the Asset Transfer
Agreement and Section 5.1(w) of the Sale Agreement (collectively, the "Relevant
Provisions"), WestPoint represents and warrants that it owns 100% of the issued
and outstanding capital stock of Transferor, free and clear of any lien or
security interest. WestPoint and Transferor have requested that the
Administrator and the Transferees waive compliance by WestPoint with the
Relevant Provisions for the purpose of allowing WestPoint to consummate the
Proposed Pledge.

<PAGE>   2

         Subject to the immediately succeeding sentence, upon delivery to the
Administrator of an executed counterpart of this waiver letter from WestPoint
and Transferor, the Administrator and each Transferee hereby waive compliance by
WestPoint with the Relevant Provisions, but solely to the extent that such
provisions require WestPoint to represent and warrant that there are no liens or
security interests on the capital stock of Transferor owned by WestPoint and
subject to the condition that WestPoint shall not permit any lien or security
interest, other than in favor of the CA Agent, for the benefit of the CA
Lenders, to exist upon any of the capital stock of Transferor. In the event that
WestPoint or Seller fails to deliver to the Administrator the following
documents, in each case, in form and substance satisfactory to the Administrator
in sole discretion, on or prior to the date hereof, the waiver and the
agreements of the Administrator and the Transferees specified in the immediately
preceding sentence shall be null and void, have no force and effect and the
Relevant Provisions shall be reinstated and shall continue in full force and
effect as currently provided in the Asset Transfer Agreement and the Sale
Agreement:

         (1)      in the event that any Person, other than the CA Lenders, has
the right, directly or indirectly, to direct or instruct the CA Agent to
exercise any rights, remedies, powers, privileges or options with respect to the
common stock of Transferor pursuant to the terms of the Pledge Agreement, such
Person shall enter into an agreement setting forth provisions that are
substantially the same as the provisions specified in the agreement to be
executed on the date hereof by and between the CA Lender and the Administrator,
a form of which is attached as Exhibit A hereto;

         (2)      a copy of the Pledge Agreement, duly executed and delivered by
the parties thereto; and

         (3)      an agreement, substantially in the form of Exhibit A attached
hereto, duly executed and delivered by the CA Agent.

         WestPoint and Transferor agree that the waiver set forth in the
preceding paragraph shall be limited to the precise meaning of the words as
written therein and shall not be deemed (i) to be a consent to any waiver or
modification of any other term, provision or condition of the Transaction
Documents, as amended, modified, supplemented or amended and restated from time
to time, or (ii) to prejudice any right or remedy that the Administrator or any
Transferee may now have or may in the future have under or in connection with
the Transaction Documents, as amended, modified, supplemented or amended and
restated from time to time.

         Except as expressly set forth herein, the waiver described in the
second preceding paragraph shall not modify, alter, affect, release or prejudice
in any way any of WestPoint's or Transferor's obligations under the Transaction
Documents, as amended, modified, supplemented or amended and restated from time
to time. This waiver letter shall not constitute or operate as a waiver of any
other terms or provisions of, or rights or remedies of, the Administrator or any
Transferee under the Transaction Documents, as amended, modified, supplemented
or amended and restated from time to time, and shall not be construed as
establishing a course of conduct on the part of the Administrator or any
Transferee on which WestPoint and/or Transferor may rely at any time in the
future. Each of WestPoint and Transferor expressly waives any right to assert
any claim to such effect at any time.

                                       2
<PAGE>   3

                  This waiver letter (i) shall be governed by and construed in
accordance with the internal laws of the State of New York, (ii) may be executed
in any number of counterparts, each of which shall be deemed to be an original
but all of which, taken together, shall constitute one and the same instrument,
(iii) may not be amended, modified, supplemented or amended and restated or the
any of the terms or provisions hereof waived, except by a written instrument
executed by all of the parties hereto, and (iv) applies to, and inures to the
benefit of, and binds all of the parties hereto and their permitted successors
and assigns.

                     [Rest of Page Intentionally Left Blank]

                                       3
<PAGE>   4

                  If the foregoing correctly sets forth the agreement among
WestPoint, Transferor, the Administrator and the Transferees with respect to the
limited waiver of the Relevant Provisions, please execute two counterparts of
this waiver letter and deliver them to the Administrator.

                                          Very truly yours,

                                          WACHOVIA BANK, N.A., as
                                          Administrator

                                          By:/s/ Frances W. Josephic
                                             -----------------------------------
                                             Name: Frances W. Josephic
                                             Title: Vice President

                                          BLUE RIDGE ASSET FUNDING
                                          CORPORATION

                                          By: WACHOVIA BANK N.A.,
                                              as Attorney-in- Fact

                                          By: /s/ Kenny Karpowicz
                                              ----------------------------------
                                              Name: Kenny Karpowicz
                                              Title: Vice President

                                       4
<PAGE>   5

Consented and Agreed to as of
the date hereof:

WPS RECEIVABLES CORPORATION

By: /s/ Nelson Griffith
    ----------------------------------------
Name: Nelson Griffith
Title: President

WESTPOINT STEVENS, INC.

By: /s/ Nelson Griffith
    ----------------------------------------
Name: Nelson Griffith
Title: Senior Vice President & Controller

                                       5

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