Document:

<PAGE>   1
                                                                    Exhibit 10.5

On February 20, 2000, the Board of Directors held a special meeting and elected
John T. Golle as the Chief Executive Officer of the Company. The Board
reinstated the terms of his former employment agreement with the modification
of the following terms: (1) Mr. Golle's salary would be $240,000 per year, and
(2) upon termination, Mr. Golle would receive a severance package of $28,733.33
per month for a period of twelve months.Exhibit 10.16

                         SEVENTH AMENDMENT TO THE THIRD
                      AMENDED AND RESTATED CREDIT AGREEMENT

                                                      Dated as of April 26, 2000

                  SEVENTH AMENDMENT TO THE THIRD AMENDED AND RESTATED CREDIT
AGREEMENT (this "Amendment") among Glenoit Corporation (the "Borrower"), the
Lenders named in the Credit Agreement (defined below) (the "Lenders"), Banque
Nationale de Paris (the "Agent"), as Agent, Arranger, Issuing Bank and Swing
Line Bank, Fleet National Bank, as Syndication Agent, and LaSalle National Bank,
as Documentation Agent.

                  PRELIMINARY STATEMENTS:

                  (1) The Borrower, the Lenders, the Agent, the Arranger, the
Issuing Bank, the Swing Line Bank, the Syndication Agent and the Documentation
Agent have entered into a Third Amended and Restated Credit Agreement, dated as
of February 12, 1999 (as the same has been and in the future may be amended and
modified from time to time, the "Credit Agreement"). Capitalized terms not
otherwise defined in this Amendment have the same meanings as specified in the
Credit Agreement as amended hereby.

                  (2) Section 2.06(b)(iii) of the Credit Agreement provides that
the Borrower is obligated to prepay an aggregate principal amount of Working
Capital Advances, Swing Line Advances and Letter of Credit Advances in an amount
by which such Advances plus the Available Amount of all Letters of Credit then
outstanding (together with such Advances, the "Outstanding Amount") exceeds the
Loan Value of Eligible Collateral, based upon the most recent Borrowing Base
Certificate.

                  (3) On February 23, 2000, Borrower delivered to the Agent a
Borrowing Base Certificate dated February 23, 2000 (the "February BB
Certificate") reflecting that the Outstanding Amount exceeded the Loan Value of
Eligible Collateral. The Borrower was then obligated under Section 2.06(b)(iii)
of the Credit Agreement to make a principal prepayment in the approximate amount
of $2,000,000, which the Borrower failed to make.

                  (4) The failure of the Borrower to make the principal
prepayment required by Section 2.06(b)(iii) of the Credit Agreement as aforesaid
constitutes on Event of Default under Section 6.01(a) of the Credit Agreement
(the "Section 2.06(b)(iii) Event of Default"), which the Borrower has
acknowledged by its letter to the Agent, dated February 23, 2000.

                  (5) Section 5.04 of the Credit Agreement sets forth the
financial covenants of the Borrower. On April 9, 2000, the Borrower delivered a
letter to the Agent confirming that the Borrower is in breach of the Section
5.04 covenants as of April 1, 2000. The breach of such covenants constitutes an
Event of Default under Section 6.01(c) of the Credit Agreement (the "Covenant
Events of Default").

                  (6) On April 14, 2000, the Agent delivered to the Borrower and
United States Trust Company of New York, the Indenture Trustee under the
Subordinated Debt Documents (the "Indenture Trustee"), a letter (the
"Subordinated Debt Notice") (i) confirming that, as a result of the Section
2.06(b)(iii) Event of Default, the Borrower was prohibited from making any

<PAGE>

payments whatsoever in respect of the Subordinated Notes, and (ii) notifying the
Company and the Indenture Trustee that if, but only if, the Section 2.06(b)(iii)
Event of Default is determined not to be a payment default and the Borrower is
not otherwise in payment default under the Credit Agreement, the Subordinated
Debt Notice shall constitute a Blockage Notice (as defined in the Subordinated
Debt Documents) based on the Covenant Events of Default.

                  (7) Provided the Borrower is working diligently to devise a
restructuring plan acceptable to its creditors and equity holders, the Lenders
may, in their discretion, continue to provide Working Capital Advances and issue
Letters of Credit on the conditions, for the limited period and for the limited
purposes hereinafter set forth.

                  SECTION 1. Working Capital Advances and Letters of Credit.
Subject to the conditions precedent set forth in Section 3 hereof, the Lenders
hereby agree that the Borrower may request and the Lenders, in their discretion,
may provide Working Capital Advances and issue Letters of Credit from the date
hereof through and including June 15, 2000 (the "Amendment Period"); provided,
however, that (a) the aggregate Available Amount of all Letters of Credit
outstanding shall not at any time exceed an amount equal to $48.314 million less
the sum of (x) the Working Capital Advances, (y) the Swing Line Advances, and
(z) the Letter of Credit Advances at the time outstanding and (b) Working
Capital Advances shall not at any time exceed $45 million.

                  SECTION 2. AMENDMENTS.

                  (a) During the Amendment Period, Section 5.01(m) of the Credit
         Agreement shall be amended by replacing all references to "15 days",
         "30 days" and "60 days" therein to "10 days".

                  (b) During the Amendment Period, Section 2.01(e) of the Credit
         Agreement shall be amended by adding the following language at the end
         of such Section:

                      Anything to the contrary set forth in the Loan Documents
         notwithstanding, (i) no Standby Letters of Credit shall be issued
         hereunder and issuance of Letters of Credit shall be limited solely to
         Trade Letters of Credit, and (ii) two Business Days prior to the
         issuance of any Trade Letter of Credit, the Borrower shall provide,
         with respect to such Trade Letter of Credit, documentation to the Agent
         describing the recipient, amount and purpose of such Trade Letter of
         Credit, including, without limitation, the customer for whose benefit
         the Inventory (the payment for which is to be secured by the proposed
         Trade Letter of Credit) is being ordered.

                  SECTION 3. Conditions of Effectiveness of Amendment. This
Amendment shall become effective as of the date first above written when, and
only when, the following conditions precedent shall have been satisfied:

                  (a) The Agent shall have received counterparts of this
         Amendment executed by the Borrower, the Agent and the required number
         of Lenders.

                                      -2-
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                  (b) The Borrower shall have reimbursed or otherwise paid all
         reasonable costs and expenses of the Agent paid or incurred in
         connection with the Borrower or the Credit Agreement, and theretofore
         presented to the Borrower for payment, including, without limitation,
         in connection with the preparation, execution, delivery and
         administration of this Amendment (including, without limitation, (a)
         all outstanding fees and disbursements of (a) Shearman & Sterling and
         Kramer Levin Naftalis & Frankel LLP ("Kramer Levin") in their capacity
         as counsel to the Agent, and (b) Zolfo Cooper LLP, in its capacity as
         consultant to the Agent's counsel ("Zolfo Cooper").

                  SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:

                  (a) Each Loan Party is a corporation duly organized, validly
         existing and in good standing under the laws of the jurisdiction of its
         organization.

                  (b) The execution, delivery and performance by the Borrower of
         this Amendment and the Loan Documents, as amended hereby, to which it
         is or is to be a party, is within the Borrower's corporate powers, has
         been duly authorized by all necessary corporate action and does not (i)
         contravene the Borrower's charter or by-laws, (ii) violate any law
         (including, without limitation, the Securities Exchange Act of 1934, as
         amended, and the Racketeer Influenced and Corrupt Organizations Chapter
         of the Organized Crime Control Act of 1970), rule or regulation
         (including, without limitation, Regulation X of the Board of Governors
         of the Federal Reserve System), or any order, writ, judgment,
         injunction, decree, determination or award, binding on or affecting the
         Borrower or any of its Subsidiaries or any of their properties, (iii)
         conflict with or result in the breach of, or constitute a default
         under, any contract, loan agreement, indenture, mortgage, deed of
         trust, lease or other instrument binding on or affecting the Borrower,
         any of its Subsidiaries or any of their properties or (iv) except for
         the Liens created under the Loan Documents, result in or require the
         creation or imposition of any Lien upon or with respect to any of the
         properties of the Borrower or any of its Subsidiaries.

                  (c) No authorization or approval or other action by, and no
         notice to or filing with, any governmental authority or regulatory body
         or any other third party is required for the due execution, delivery,
         recordation, filing or performance by the Borrower of this Amendment or
         any of the Loan Documents, as amended hereby, to which it is or is to
         be a party.

                  (d) With the exception of the Section 2.06(b)(iii) Event of
         Default and the Covenant Events of Default described herein, there are
         no other Defaults or Events of Default by Borrower as of the date
         hereof.

                  (e) This Amendment has been duly executed and delivered by the
         Borrower. This Amendment and each of the Loan Documents, as amended
         hereby, to which the Borrower is a party are legal, valid and binding
         obligations of the Borrower, enforceable against the Borrower in
         accordance with their respective terms, except as enforceability may be
         limited by bankruptcy, insolvency, reorganization, moratorium or other
         laws relating to or limiting creditors' rights or by equitable
         principles generally.

                                      -3-
<PAGE>

                  (f) There is no action, suit, investigation, litigation or
         proceeding affecting the Borrower or any of its Subsidiaries
         (including, without limitation, any Environmental Action) pending or
         threatened before any court, governmental agency or arbitrator that (i)
         would be reasonably likely to have a Material Adverse Effect or (ii)
         purports to affect the legality, validity or enforceability of this
         Amendment or any of the Loan Documents, as amended hereby.

                  SECTION 5. Covenants of the Borrower. In consideration of the
agreements of the Lenders contained herein, the Borrower covenants and agrees as
follows:

                  (a) Both during and after the Amendment Period, the Borrower
         shall, and shall cause each other Loan Party to, fully cooperate with
         Zolfo Cooper in Zolfo Cooper's performance of its duties under the
         retention agreement between Kramer Levin and Zolfo Cooper; offer Zolfo
         Cooper reasonable access to its facilities, books and records; furnish
         promptly to Zolfo Cooper all information concerning its business,
         properties, personnel and financial performance as Zolfo Cooper shall
         reasonably request; and make available to Zolfo Cooper such of its
         personnel and its professional advisors as Zolfo Cooper shall
         reasonably request for the understanding of the business, property,
         personnel and financial performance of the Borrower and the other Loan
         Parties.

                  (b) During the Amendment Period, the Borrower shall continue
         to employ Price Waterhouse Coopers L.L.P. ("PWC") as its financial
         advisor, shall provide PWC with access to such information and
         personnel of the Borrower and its Subsidiaries as PWC shall reasonably
         require to perform its engagement and shall consult with and be advised
         by PWC on the matters within the scope of the PWC engagement.

                  (c) During the Amendment Period, the Borrower shall, and shall
         cause each other Loan Party to, conduct its business, only in the
         regular and ordinary course of business consistent with past practice.

                  (d) Both during and after the Amendment Period, in addition to
         any and all reporting by the Borrower required by the Loan Documents,
         until otherwise directed by the Agent, the Borrower shall furnish to
         the Agent as of the end of each calendar week not later than five
         Business Days after the end of such calendar week, a summary of cash
         disbursements and deposits for such week, as well as an accounts
         receivable aging report as of the end of such week.

                  (e) The Borrower shall fully and promptly cooperate with the
         Lenders' review of the Collateral and the perfection of the Lenders'
         security interest therein, including, without limitation, promptly
         responding to requests for information from the Agent and its counsel
         concerning the Collateral.

                  (f) The Borrower shall promptly execute and file any and all
         financing statements requested by the Agent and take other action
         reasonably requested by the Agent to perfect or continue the perfection
         of the Lenders' security interest in any Collateral (wherever located).

                                      -4-
<PAGE>

                  (g) During the Amendment Period, the Borrower shall diligently
         work to devise a restructuring plan for the Borrower and its
         Subsidiaries, acceptable to the Borrower, creditors and equity holders,
         such that the Borrower and its Subsidiaries will at all times have
         adequate capital resources to conduct their businesses, fund their
         capital expansion, provide for contingencies and pay their debts and
         other obligations, including obligations under the Loan Documents, as
         and when they become due. In connection therewith, the Borrower shall
         consult and negotiate diligently and in good faith with its equity
         holders, lenders, factors, trade creditors and other parties whose
         approval is or may be required for any restructuring plan.

                  (h) The covenants contained in this Section 5 are in addition
         to, and not in derogation or limitation of, any other covenants,
         agreements or obligations of the Loan Parties under the Loan Documents.

                  SECTION 6. Reference to and Effect on the Credit Agreement,
the Loan Documents, and the Subordinated Notes.

                  (a) On and after the effectiveness of this Amendment, each
         reference in the Credit Agreement to "this Agreement", "hereunder",
         "hereof" or words of like import referring to the Credit Agreement, and
         each reference in the Notes and each of the other Loan Documents to
         "the Credit Agreement", "thereunder", "thereof" or words of like import
         referring to the Credit Agreement, shall mean and be a reference to the
         Credit Agreement, as amended by this Amendment.

                  (b) The Credit Agreement, the Notes and each of the other Loan
         Documents, as specifically amended by this Amendment, are and shall
         continue to be in full force and effect and are hereby in all respects
         ratified and confirmed. Without limiting the generality of the
         foregoing, the Collateral Documents and all of the Collateral described
         therein do and shall continue to secure the payment of all Obligations
         of the Loan Parties under the Loan Documents, in each case as amended
         by this Amendment.

                  (c) The Borrower hereby agrees that (i) the Borrower is truly
         and justly indebted to the Secured Parties, without defense,
         counterclaim or offset of any kind in the full amount of the Secured
         Obligations and (ii) the Secured Obligations are secured by valid,
         perfected, enforceable and unavoidable first priority Liens and
         security interests upon the Collateral senior to all other security
         interests and liens upon the Collateral (except as set forth in the
         Third Amended and Restated Security Agreement and the Credit
         Agreement), granted by the Loan Parties to the Agent for the ratable
         benefit of the Secured Parties.

                  (d) The execution, delivery and effectiveness of this
         Amendment shall not, except as expressly provided herein, operate as a
         waiver of any right, power or remedy of any Lender Party or the Agent
         under any of the Loan Documents, nor constitute a waiver of any
         provision of any of the Loan Documents.

                  (e) This Amendment shall not constitute a waiver of the
         Section 2.06(b)(iii) Event of Default, the Covenant Events of Default
         or any other Default or Event of

                                      -5-
<PAGE>

         Default existing as of the date hereof, nor shall this Amendment
         authorize or be deemed to authorize any payment by the Borrower in
         respect of the Subordinated Notes or terminate or be deemed to
         terminate the payment block existing in respect of the Subordinated
         Notes.

                  SECTION 7. Fees; Costs and Expenses. The Borrower agrees to
pay on demand all reasonable costs and expenses of the Agent in connection with
the preparation, execution, delivery and administration, modification and
amendment of this Amendment and the other instruments and documents to be
delivered hereunder (including, without limitation, the reasonable fees and
disbursements of counsel and financial advisor to the Agent) in accordance with
the terms of Section 8.04 of the Credit Agreement.

                  SECTION 8. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.

                  SECTION 9. Governing Law. This Amendment shall be governed by,
and construed in accordance with, the laws of the State of New York.

                                      -6-
<PAGE>

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

                                  GLENOIT CORPORATION

                                  By       /s/ Thomas J. O'Gorman
                                           -------------------------------------
                                  Name:    Thomas J. O'Gorman
                                  Title:   President and Chief Executive Officer

                                  AGENT

                                  BANQUE NATIONALE DE PARIS,
                                           as Agent and as a Lender

                                  By       /s/ David Barcus
                                           -------------------------------------
                                  Name:    David Barcus
                                  Title:   Director

                                  By       /s/ Elie Doft
                                           -------------------------------------
                                  Name:    Elie Doft
                                  Title:   Associate

                                  LENDERS

                                  BOEING CAPITAL CORPORATION

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

                                  CENTURA BANK

                                  By       /s/ Lowry D. Perry
                                           -------------------------------------
                                  Name:    Lowry D. Perry
                                  Title:   Bank of Filer

                                      -7-
<PAGE>

                                  COMERICA

                                  By       /s/ James R. Grossell
                                           -------------------------------------
                                  Name:    James R. Grossell
                                  Title:   First Vice President

                                  DEUTSCHE FINANCIAL SERVICES

                                  By       /s/ Philip G. Porcher, IX
                                           -------------------------------------
                                  Name:    Philip G. Porcher, IX
                                  Title:   Vice President

                                  FIRST SOURCE FINANCIAL LLP,
                                  By First Source Financial, Inc., as its
                                           Agent/Manager

                                  By       /s/ Robert Horak
                                           -------------------------------------
                                  Name:    Robert Horak
                                  Title:   Vice President

                                  FLEET BANK, N.A.

                                  By       /s/ Paul Chau
                                           -------------------------------------
                                  Name:    Paul Chau
                                  Title:   Senior Vice President

                                  INVESCO

                                  By       /s/ Gregory Stoeckle
                                           -------------------------------------
                                  Name:    Gregory Stoeckle
                                  Title:   Authorized Signatory

                                      -8-
<PAGE>

                                  LASALLE BANK NATIONAL ASSOCIATION

                                  By       /s/ Margaret P. Heger
                                           -------------------------------------
                                  Name:    Margaret P. Heger
                                  Title:   First Vice President

                                  KZH ING-1 LLC

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

                                  KZH ING-2 LLC

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

                                  KHZ ING-3 LLC

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

                                  METROPOLITAN LIFE
                                           INSURANCE COMPANY

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

                                      -9-
<PAGE>

                                  VAN KAMPEN SENIOR FLOATING
                                           RATE FUND

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

                                  VAN KAMPEN PRIME RATE
                                           INCOME TRUST

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

                                  FLEET BUSINESS CREDIT CORPORATION

                                  By       /s/Mark Pickering
                                           -------------------------------------
                                  Name:    Mark Pickering
                                  Title:   Vice President

                                      -10-

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