Equity Commitment Agreement among Textile Holding LLC, Aretex LLC, AREH, and WS Textile Co., Inc. (June 23, 2005)
This agreement, dated June 23, 2005, is between Textile Holding LLC, Aretex LLC, American Real Estate Holding Limited Partnership (AREH), and WS Textile Co., Inc. Textile Holding LLC commits to purchase shares of WS Textile's parent company for $187 million, subject to the closing of an asset purchase agreement. Aretex LLC commits to exercise certain subscription rights, and Textile Holding LLC will provide a revolving loan facility if needed. AREH agrees to provide necessary funding to meet these commitments. The agreement is governed by New York law and is enforceable by WS Textile Co., Inc.
Exhibit 10.2
[Equity Commitment Agreement]
June 23, 2005 |
WS Textile Co., Inc.
767 Fifth Avenue
New York, New York 10153
Attention:
Ladies and Gentlemen:
We refer to the Asset Purchase Agreement dated June 23, 2005 (the APA) among WS Textile Co., Inc., New Textile One, Inc., New Textile Two, Inc., Textile Co., Inc., WestPoint Stevens Inc., WestPoint Stevens Inc. I, WestPoint Stevens Stores Inc., and J.P. Stevens Enterprises Inc. All capitalized terms used and not otherwise defined herein shall have the meanings as defined in the APA.
1. Textile Holding, LLC, a wholly owned subsidiary of American Real Estate Holding Limited Partnership (AREH) hereby advises you of its commitment to purchase 5,250,000 shares of Parent Common Stock for a purchase price of One Hundred Eighty-Seven Million ($187,000,000) Dollars (to which the Deposit shall be applied). The commitment to purchase the Parent Common Stock is subject to, and shall occur simultaneously with, the Closing under the Agreement.
2. Aretex hereby advises you of its commitment to exercise (or to cause its Affiliates to acquire and exercise) all Subscription Rights delivered to it at the Closing promptly after receipt thereof.
3. Textile Holding LLC further advises you of its commitment to make available to Parent on the Closing Date a revolving facility in an amount equal to the difference between One Hundred Twenty Five Million ($125,000,000) Dollars and the aggregate Exercise Price payable pursuant to paragraph 2. above (the Loan). The Loan shall bear no interest, have no coverage requirements and shall be secured by the proceeds of the Exercise Price payable by holders of Subscription Rights, other than pursuant to paragraph 2 above. The proceeds of the Exercise Price received from time to time by Parent upon the exercise of Subscription Rights, other than pursuant to paragraph 2 above, shall be applied to mandatory repayments of the Loan and the commitment thereunder shall be reduced by such amount. Any balance of the Loan outstanding on the first anniversary of the Closing Date shall be paid in full. The commitment to make the Loan is subject to, and shall occur simultaneously with, the Closing under the Agreement.
4. AREH hereby advises you of it commitment to make a capital contribution or loan to Textile Holding, LLC, Aretex and its Affiliates necessary to provide the funds to satisfy the commitments set forth in paragraphs 1., 2. and 3. above.
Textile Holding, LLC, Aretex and AREH acknowledge that the Company is an express third party beneficiary of the commitments set forth in paragraphs 1, 2, 3 and 4 hereof, with rights to enforce the provisions of paragraphs 1, 2, 3 and 4 of this commitment letter as if it were a party hereto.
This commitment letter may not be amended or waived except by an instrument signed by all of the parties hereto. This commitment letter shall be governed by and construed in accordance with the laws of the State of New York without regard to its conflicts of laws provisions.
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If the foregoing accurately reflects our agreement, please indicate your acceptance of the terms hereof by returning to us an executed counterpart hereof.
Very truly yours, | ||||||||
Textile Holding LLC | ||||||||
By: | American Real Estate Holding Limited | |||||||
Partnership, its member | ||||||||
By: | American Property Investors, Inc., | |||||||
general partner | ||||||||
By: | /s/ Jon F. Weber | |||||||
Jon F. Weber, President | ||||||||
American Real Estate Holdings | ||||||||
Limited Partnership | ||||||||
By: | American Property Investors, Inc., | |||||||
general partner | ||||||||
By: | /s/ Jon F. Weber | |||||||
Jon F. Weber, President | ||||||||
Aretex LLC | ||||||||
By: | /s/ John P. Saldarelli | |||||||
John P. Saldarelli, Vice President |
Accepted and Agreed to as of the date first written above by: | ||||
WS Textile Co., Inc. | ||||
By: | /s/ Jon F. Weber | |||
Jon F. Weber, President |
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