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                                                                   EXHIBIT (10l)

                         RECEIVABLES PURCHASE AGREEMENT

                  THIS RECEIVABLES PURCHASE AGREEMENT, dated as of December 19,
2000 is entered into by and among:

                  (a) Unifi Receivables, LLC, a Nevada limited liability
         corporation ("SELLER"),

                  (b) Unifi, Inc., a New York corporation ("UNIFI"), as initial
         Servicer,

                  (c) Blue Ridge Asset Funding Corporation, a Delaware
         corporation ("BLUE RIDGE"), and

                  (d) Wachovia Bank, N.A., as agent for Blue Ridge and its
         assigns under the Transaction Documents and under the Liquidity
         Agreement (together with its successors and assigns in such capacity,
         the "AGENT").

UNLESS DEFINED ELSEWHERE HEREIN, CAPITALIZED TERMS USED IN THIS AGREEMENT SHALL
HAVE THE MEANINGS ASSIGNED TO SUCH TERMS IN EXHIBIT I.

                             PRELIMINARY STATEMENTS

                  Seller desires to transfer and assign Receivable Interests
         from time to time.

                  Blue Ridge shall purchase Receivable Interests from Seller
         from time to time either by issuing its Commercial Paper or by availing
         itself of a Liquidity Funding to the extent available.

                  Wachovia Bank, N.A. has been requested and is willing to act
         as Agent on behalf of Blue Ridge and its assigns in accordance with the
         terms hereof.


                                   ARTICLE I.
                              PURCHASE ARRANGEMENTS

         Section 1.1       Purchase Facility.

                  (a)      Upon the terms and subject to the conditions of this
Agreement (including, without limitation, Article VI), from time to time prior
to the Facility Termination Date, Seller may request that Blue Ridge purchase
from Seller undivided ownership interests in the Receivables and the associated
Related Security and Collections, and Blue Ridge shall make such Purchase;
PROVIDED THAT no Purchase shall be made by Blue Ridge if, after giving effect
thereto, either (i) the Aggregate Invested Amount would exceed the Purchase
Limit, or (ii) the aggregate of the Receivable Interests would exceed 100%. It
is the intent of Blue Ridge to fund the Purchases by the issuance of Commercial
Paper. If for any reason Blue Ridge is unable, or determines that it is
undesirable, to issue Commercial Paper to fund or maintain its investment in


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the Receivable Interests, or is unable for any reason to repay such Commercial
Paper upon the maturity thereof, then Blue Ridge will avail itself of a
Liquidity Funding to the extent available. If Blue Ridge funds or refinances its
investment in a Receivable Interest through a Liquidity Funding, in lieu of
paying CP Costs on the Invested Amount pursuant to Article III hereof, Seller
will pay Yield thereon at the Alternate Base Rate or the LIBO Rate, selected in
accordance with Article IV hereof. Nothing herein shall be deemed to constitute
a commitment of Blue Ridge to issue Commercial Paper.

                  (b)      Seller may, upon at least ten (5) Business Days prior
written notice to the Agent, terminate in whole or reduce in part, the unused
portion of the Purchase Limit; PROVIDED THAT each partial reduction of the
Purchase Limit shall be in an amount equal to $10,000,000 (or a larger integral
multiple of $1,000,000 if in excess thereof).

         Section 1.2       Incremental Purchases. Seller shall provide the Agent
with at least two (2) Business Days' prior written notice in a form set forth as
Exhibit II hereto of each Incremental Purchase (each, a "PURCHASE NOTICE"). Each
Purchase Notice shall be subject to Section 6.2 hereof and, except as set forth
below, shall be irrevocable and shall specify the requested Purchase Price
(which shall not be less than $1,000,000 or a larger integral multiple of
$100,000) and the Purchase Date (which, in the case of any Incremental Purchase
after the initial Purchase hereunder, shall only be on a Settlement Date).
Following receipt of a Purchase Notice, the Agent will determine whether Blue
Ridge will fund the requested Incremental Purchase through the issuance of
Commercial Paper or through a Liquidity Funding. If Blue Ridge determines to
fund an Incremental Purchase through a Liquidity Funding, Seller may cancel the
Purchase Notice or, in the absence of such a cancellation, the Incremental
Purchase will be funded through a Liquidity Funding. On each Purchase Date, upon
satisfaction of the applicable conditions precedent set forth in Article VI,
Blue Ridge shall deposit to the Facility Account, in immediately available
funds, as soon as possible and in no event later than 2:00 p.m. (New York time),
an amount equal to the requested Purchase Price.

         Section 1.3       Decreases. Seller shall provide the Agent with prior
written notice in conformity with the Required Notice Period (a "REDUCTION
NOTICE") of any proposed reduction of Aggregate Invested Amount. Such Reduction
Notice shall designate (i) the date (the "PROPOSED REDUCTION DATE") upon which
any such reduction of Aggregate Invested Amount shall occur (which date shall
give effect to the applicable Required Notice Period), and (ii) the amount of
Aggregate Invested Amount to be reduced which shall be applied ratably to all
Receivable Interests in accordance with the respective Invested Amounts thereof
(the "AGGREGATE REDUCTION"). Only one (1) Reduction Notice shall be outstanding
at any time.

         Section 1.4       Deemed Collections; Purchase Limit.

                  (a)      If on any day:

                  (i)      the Outstanding Balance of any Receivable is reduced
         or cancelled as a result of any defective or rejected goods or
         services, any cash discount or any other adjustment by any Originator
         or any Affiliate thereof, or as a result of any governmental or
         regulatory action, or


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                  (ii)     the Outstanding Balance of any Receivable is reduced
         or canceled as a result of a setoff in respect of any claim by the
         Obligor thereof (whether such claim arises out of the same or a related
         or an unrelated transaction), or

                  (iii)    the Outstanding Balance of any Receivable is reduced
         on account of the obligation of any Originator or any Affiliate thereof
         to pay to the related Obligor any rebate or refund, or

                  (iv)     the Outstanding Balance of any Receivable is less
         than the amount included in calculating the Net Pool Balance for
         purposes of any Monthly Report (for any reason other than receipt of
         Collections or such Receivable becoming a Defaulted Receivable), or

                  (v)      any of the representations or warranties of Seller
         set forth in Section 5.1(i), (j), (r), (s), (t) or (u) were not true
         when made with respect to any Receivable, or

                  (vi)     any Obligor on a Factoring Company Receivable
         exercises any recourse to the applicable Originator,

then, on such day, Seller shall be deemed to have received a Collection of such
Receivable (A) in the case of clauses (i)-(iv) above, in the amount of such
reduction or cancellation or the difference between the actual Outstanding
Balance and the amount included in calculating such Net Pool Balance, as
applicable; (B) in the case of clause (v) above, in the amount of the
Outstanding Balance of such Receivable; and (C) in the case of clause (vi)
above, in the amount of the recourse exercised; and, in each of the foregoing
cases, effective as of the next succeeding Settlement Date shall pay to the
Agent's Account the amount of any such Collection deemed to have been received.

                  (b)      Seller shall ensure that the Aggregate Invested
Amount at no time exceeds the Purchase Limit. If at any time the Aggregate
Invested Amount exceeds the Purchase Limit, Seller shall pay to the Agent not
later than within 2 Business Days after discovering such excess an amount to be
applied to reduce the Aggregate Invested Amount (as allocated by the Agent),
such that after giving effect to such payment the Aggregate Invested Amount is
less than or equal to the Purchase Limit.

                  (c)      Seller shall also ensure that the Receivable
Interests shall at no time exceed in the aggregate 100%. If the aggregate of the
Receivable Interests exceeds 100%, Seller shall pay to the Agent within 2
Business Days after discovering such excess an amount to be applied to reduce
the Aggregate Invested Amount (as allocated by the Agent), such that after
giving effect to such payment the aggregate of the Receivable Interests equals
or is less than 100%.

         Section 1.5       Payment Requirements and Computations. All amounts to
be paid or deposited by any Seller Party pursuant to any provision of this
Agreement shall be paid or deposited in accordance with the terms hereof no
later than 12:00 noon (New York time) on the day when due in immediately
available funds, and if not received before 12:00 noon (New York


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time) shall be deemed to be received on the next succeeding Business Day. If
such amounts are payable to the Agent for the account of Blue Ridge, they shall
be paid to the Agent's Account, for the account of Blue Ridge until otherwise
notified by the Agent. Upon notice to Seller, the Agent may debit the Facility
Account for all amounts due and payable hereunder. All computations of CP Costs,
Yield, per annum fees calculated as part of any CP Costs, per annum fees
hereunder and per annum fees under the Fee Letter shall be made on the basis of
a year of 360 days for the actual number of days elapsed. If any amount
hereunder shall be payable on a day which is not a Business Day, such amount
shall be payable on the next succeeding Business Day.

         Section 1.6       Broken Funding Costs. Any Broken Funding Costs
incurred due to a prepayment pursuant to Section 1.4(b) or (c) hereof shall be
reasonably allocated by the Agent taking into account similar Broken Funding
Costs incurred due to payments or prepayments made by any Person on the same day
as the Seller herein by other facilities utilizing the same Pooled Commercial
Paper utilized pursuant hereto.

                                  ARTICLE II.

                            PAYMENTS AND COLLECTIONS

         Section 2.1       Payments of Recourse Obligations. Seller hereby
promises to pay the following (collectively, the "RECOURSE OBLIGATIONS"):

                  (a)      all amounts due and owing under Section 1.3 or 1.4 on
         the dates specified therein;

                  (b)      the fees set forth in the Fee Letter on the dates
         specified therein;

                  (c)      all accrued and unpaid Yield on the Receivable
         Interests accruing Yield at the Alternate Base Rate or the Default Rate
         on each Settlement Date applicable thereto;

                  (d)      all accrued and unpaid Yield on the Receivable
         Interests accruing Yield at the LIBO Rate on the last day of each
         Tranche Period applicable thereto;

                  (e)      all accrued and unpaid CP Costs on the Receivable
         Interests funded with Commercial Paper on each Settlement Date; and

                  (f)      all Broken Funding Costs and Indemnified Amounts upon
         demand.

         Section 2.2       Collections Prior to the Facility Termination Date;
Repayment of Certain Demand Advances.

                  (a)      Prior to the Facility Termination Date, any Deemed
Collections received by the Servicer and Blue Ridge's Portion of any Collections
received by the Servicer shall be set aside and held in trust by the Servicer
for the payment of any accrued and unpaid Aggregate Unpaids or for a
Reinvestment as provided in this Section 2.2. If at any time any Collections are

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received by the Servicer prior to the Facility Termination Date, Seller hereby
requests and Blue Ridge hereby agrees to make, simultaneously with such receipt,
a reinvestment (each, a "REINVESTMENT") with Blue Ridge's Portion of the balance
of each and every Collection received by the Servicer such that after giving
effect to such Reinvestment, the Invested Amount of such Receivable Interest
immediately after such receipt and corresponding Reinvestment shall be equal to
the Invested Amount immediately prior to such receipt.

                  (b)      On each Settlement Date prior to the Facility
Termination Date, the Servicer shall remit to the Agent's Account the amounts
set aside during the preceding Settlement Period that have not been subject to a
Reinvestment and (after deduction of its Servicing Fee) apply such amounts (if
not previously paid in accordance with Section 2.1) to the Aggregate Unpaids in
the order specified:

                  FIRST, ratably to the payment of all accrued and unpaid CP
         Costs, Yield and Broken Funding Costs (if any) on the Invested Amount
         of the Receivable Interests to the extent that they are then due and
         owing,

                  SECOND, ratably to the payment of all accrued and unpaid fees
         under the Fee Letter (if any) that are then due and owing,

                  THIRD, if required under Section 1.3 or 1.4, to the ratable
         reduction of the Aggregate Invested Amount, and

                  FOURTH, for the ratable payment of all other unpaid Recourse
         Obligations, if any, that are then due and owing.

The balance, if any, shall be paid to Seller or otherwise in accordance with
Seller's instructions.

                  (c)      If the Collections are insufficient to pay the
Servicing Fee and the Aggregate Unpaids specified above on any Settlement Date,
Seller shall make demand upon Unifi for repayment of any outstanding Demand
Advances in an aggregate amount equal to the lesser of (i) the amount of such
shortfall in Collections, and (ii) the aggregate outstanding principal balance
of the Demand Advances, together with all accrued and unpaid interest thereon,
and Unifi hereby agrees to pay such amount to the Agent's Account on such
Settlement Date.

         Section 2.3       Repayment of Demand Advances on the Facility
Termination Date; Collections

                  (a)      On the Facility Termination Date, Unifi hereby agrees
to repay the aggregate outstanding principal balance of all Demand Advances,
together with all accrued and unpaid interest thereon, to the Agent's Account,
without demand or notice of any kind, all of which are hereby expressly waived
by Unifi.

                  (b)      On the Facility Termination Date and on each day
thereafter, the Servicer shall set aside and hold in trust, for the Secured
Parties, all Collections received on each such day. On and after the Facility
Termination Date, the Servicer shall, on each Settlement Date and

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on each other Business Day specified by the Agent (after deduction of any
accrued and unpaid Servicing Fee as of such date): (i) remit to the Agent's
Account the amounts set aside pursuant to the preceding sentence, and (ii) apply
such amounts to reduce the Aggregate Unpaids as follows:

                  FIRST, to the reimbursement of the Agent's costs of collection
         and enforcement of this Agreement,

                  SECOND, ratably to the payment of all accrued and unpaid CP
         Costs, Yield and Broken Funding Costs (if any) on the Invested Amount
         of the Receivable Interests to the extent that they are then due and
         payable,

                  THIRD, ratably to the payment of all accrued and unpaid fees
         under the Fee Letter,

                  FOURTH, to the ratable reduction of the Aggregate Invested
         Amount,

                  FIFTH, for the ratable payment of all other Aggregate Unpaids,
         and

                  SIXTH, after the Final Payout Date, to Seller.

         Section 2.4       Payment Rescission. No payment of any of the
Aggregate Unpaids shall be considered paid or applied hereunder to the extent
that, at any time, all or any portion of such payment or application is
rescinded by application of law or judicial authority, or must otherwise be
returned or refunded for any reason. Seller shall remain obligated for the
amount of any payment or application so rescinded, returned or refunded, and
shall promptly pay to the Agent (for application to the Person or Persons who
suffered such rescission, return or refund) the full amount thereof, plus
interest thereon at the Default Rate from the date of any such rescission,
return or refunding.

         Section 2.5       Clean Up Call. In addition to Seller's rights
pursuant to Section 1.3, Seller shall have the right (after providing written
notice to the Agent in accordance with the Required Notice Period), at any time
following the reduction of the Aggregate Invested Amount to a level that is less
than 10.0% of the original Purchase Limit, to repurchase all, but not less than
all, of the then outstanding Receivable Interests. The purchase price in respect
thereof shall be an amount equal to the Aggregate Unpaids through the date of
such repurchase, payable in immediately available funds to the Agent's Account.
Such repurchase shall be without representation, warranty or recourse of any
kind by, on the part of, or against Blue Ridge or the Agent other than a
representation and warranty by the Agent that such Receivables and the Related
Security are free and clear of any Lien created by or through the Agent.


                                  ARTICLE III.

                            COMMERCIAL PAPER FUNDING

         Section 3.1       CP Costs. Seller shall pay CP Costs with respect to
the Invested Amount of all Receivable Interests funded through the issuance of
Commercial Paper. Each Receivable

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Interest that is funded substantially with Pooled Commercial Paper will accrue
CP Costs each day on a pro rata basis, based upon the percentage share that the
Invested Amount in respect of such Receivable Interest represents in relation to
all assets held by Blue Ridge and funded substantially with related Pooled
Commercial Paper.

         Section 3.2       Calculation of CP Costs. Not later than the 3rd
Business Day immediately preceding each Monthly Reporting Date, Blue Ridge shall
calculate the aggregate amount of CP Costs applicable to its Receivable
Interests for the Calculation Period then most recently ended and shall notify
Seller and Servicer of such aggregate amount.

         Section 3.3       CP Costs Payments. On each Settlement Date, Seller
shall, in accordance with the provisions of Article II hereof, pay to the Agent
(for the benefit of Blue Ridge) an aggregate amount equal to all accrued and
unpaid CP Costs in respect of the Invested Amount of all Receivable Interests
funded with Commercial Paper for the Calculation Period then most recently
ended.

         Section 3.4       Default Rate. From and after the occurrence of an
Amortization Event, all Receivable Interests shall accrue Yield at the Default
Rate.

                                  ARTICLE IV.

                               LIQUIDITY FUNDINGS

         Section 4.1       Liquidity Fundings. Prior to the occurrence of an
Amortization Event, the outstanding Invested Amount of each Receivable Interest
funded with a Liquidity Funding shall accrue Yield for each day during its
Tranche Period at either the LIBO Rate or the Alternate Base Rate in accordance
with the terms and conditions hereof. Until Seller gives the required notice to
the Agent of another Yield Rate in accordance with Section 4.4, the initial
Yield Rate for any Receivable Interest funded with a Liquidity Funding shall be
the Alternate Base Rate (unless the Default Rate is then applicable). If any
portion of an undivided interest in a Receivable Interest initially funded with
Commercial Paper is sold to the Liquidity Banks pursuant to the Liquidity
Agreement, such portion of such undivided interest in such Receivable Interest
shall be deemed to have a Tranche Period commencing on the date of such sale.

         Section 4.2       Yield Payments. On the Settlement Date for each
Receivable Interest that is funded with a Liquidity Funding, Seller shall pay to
the Agent (for the benefit of the Liquidity Banks) an aggregate amount equal to
the accrued and unpaid Yield thereon for the entire Tranche Period of each such
Liquidity Funding in accordance with Article II.

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         Section 4.3       Selection and Continuation of Tranche Periods.(a)
With consultation from (and approval by) the Agent, Seller shall from time to
time request Tranche Periods for the Receivable Interests funded with Liquidity
Fundings, PROVIDED THAT if at any time any Liquidity Funding is outstanding,
Seller shall always request Tranche Periods such that at least one Tranche
Period shall end on the date specified in clause (A) of the definition of
Settlement Date.

                  (b)      Seller or the Agent, upon notice to and consent by
the other received at least three (3) Business Days prior to the end of a
Tranche Period (the "TERMINATING TRANCHE") for any Liquidity Funding, may,
effective on the last day of the Terminating Tranche: (i) divide any such
Liquidity Funding into multiple Liquidity Fundings, (ii) combine any such
Liquidity Funding with one or more other Liquidity Fundings that have a
Terminating Tranche ending on the same day as such Terminating Tranche or (iii)
combine any such Liquidity Funding with a new Liquidity Funding to be made by
the Liquidity Banks on the day such Terminating Tranche ends.

         Section 4.4       Liquidity Funding Yield Rates. Seller may select the
LIBO Rate (subject to Section 4.5 below) or the Alternate Base Rate for each
Liquidity Funding. Seller shall by 12:00 noon (New York time): (i) at least
three (3) Business Days prior to the expiration of any Terminating Tranche with
respect to which the LIBO Rate is being requested as a Yield Rate with a new
Tranche Period and (ii) at least one (1) Business Day prior to the expiration of
any Terminating Tranche with respect to which the Alternate Base Rate is being
requested as a Yield Rate with a new Tranche Period, give the Agent irrevocable
notice of the new Yield Rate for the Liquidity Funding associated with such
Terminating Tranche. Until Seller gives notice to the Agent of another Yield
Rate, the initial Yield Rate for any Receivable Interest assigned or
participated to the Liquidity Banks pursuant to the Liquidity Agreement shall be
the Alternate Base Rate (unless the Default Rate is then applicable).

         Section 4.5       Suspension of the LIBO Rate (a) If any Liquidity Bank
notifies the Agent that it has determined that funding its ratable share of the
Liquidity Fundings at a LIBO Rate would violate any applicable law, rule,
regulation, or directive of any governmental or regulatory authority, whether or
not having the force of law, or that (i) deposits of a type and maturity
appropriate to match fund its Liquidity Funding at such LIBO Rate are not
available or (ii) such LIBO Rate does not accurately reflect the cost of
acquiring or maintaining a Liquidity Funding at such LIBO Rate, then the Agent
shall suspend the availability of such LIBO Rate and require Seller to select
the Alternate Base Rate for any Liquidity Funding accruing Yield at such LIBO
Rate.

                  (b)      If less than all of the Liquidity Banks give a notice
to the Agent pursuant to Section 4.5(a), each Liquidity Bank which gave such a
notice shall be obliged, at the request of Seller, Blue Ridge or the Agent, to
assign all of its rights and obligations hereunder to (i) another Liquidity Bank
or (ii) another funding entity nominated by Seller or the Agent that is an
Eligible Assignee willing to participate in the Liquidity Agreement through the
Liquidity Termination Date in the place of such notifying Liquidity Bank;
PROVIDED THAT (i) the notifying Liquidity Bank receives payment in full of all
Aggregate Unpaids owing to it (whether due or

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accrued), and (ii) the replacement Liquidity Bank otherwise satisfies the
requirements of the Liquidity Agreement.


         Section 4.6       Default Rate. From and after the occurrence of an
Amortization Event, all Liquidity Fundings shall accrue Yield at the Default
Rate.

                                   ARTICLE V.

                         REPRESENTATIONS AND WARRANTIES

         Section 5.1       Representations and Warranties of the Seller Parties.
Each Seller Party hereby represents and warrants to the Agent and Blue Ridge, as
to itself, as of the date hereof and as of the date of each Incremental Purchase
and the date of each Reinvestment that:

                  (a)      Existence and Power. Such Seller Party's jurisdiction
of organization is correctly set forth in the preamble to this Agreement. Such
Seller Party is duly organized under the laws of that jurisdiction and no other
state or jurisdiction, and such jurisdiction must maintain a public record
showing the organization to have been organized. Such Seller Party is validly
existing and in good standing under the laws of its state of organization. Such
Seller Party is duly qualified to do business and is in good standing as a
foreign entity, and has and holds all organizational power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is conducted except where
the failure to so qualify or so hold could not reasonably be expected to have a
Material Adverse Effect.

                  (b)      Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by such Seller Party of this Agreement and
each other Transaction Document to which it is a party, and the performance of
its obligations hereunder and thereunder and, in the case of Seller, Seller's
use of the proceeds of Purchases made hereunder, are within its corporate powers
and authority and have been duly authorized by all necessary corporate action on
its part. This Agreement and each other Transaction Document to which such
Seller Party is a party has been duly executed and delivered by such Seller
Party.

                  (c)      No Conflict. The execution and delivery by such
Seller Party of this Agreement and each other Transaction Document to which it
is a party, and the performance of its obligations hereunder and thereunder do
not contravene or violate (i) its certificate or articles of incorporation or
by-laws, (ii) any law, rule or regulation applicable to it, (iii) any
restrictions under any agreement, contract or instrument to which it is a party
or by which it or any of its property is bound, or (iv) any order, writ,
judgment, award, injunction or decree binding on or affecting it or its
property, and do not result in the creation or imposition of any Adverse Claim
on assets of such Seller Party or its Subsidiaries (except as created hereunder)
except, in any case, where such contravention or violation could not reasonably
be expected to have a Material Adverse Effect; and no transaction contemplated
hereby requires compliance with any bulk sales act or similar law.

<PAGE>   10

                  (d)      Governmental Authorization. Other than the filing of
the financing statements required hereunder, no authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to which it is a
party and the performance of its obligations hereunder and thereunder.

                  (e)      Actions, Suits. There are no actions, suits or
proceedings pending, or to the best of such Seller Party's knowledge,
threatened, against or affecting such Seller Party, or any of its properties, in
or before any court, arbitrator or other body, that could reasonably be expected
to have a Material Adverse Effect. Such Seller Party is not in default with
respect to any order of any court, arbitrator or governmental body which default
would reasonably be expected to have a Material Adverse Effect.

                  (f)      Binding Effect. This Agreement and each other
Transaction Document to which such Seller Party is a party constitute the legal,
valid and binding obligations of such Seller Party enforceable against such
Seller Party in accordance with their respective terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

                  (g)      Accuracy of Information. All information heretofore
furnished by such Seller Party or any of its Affiliates to the Agent or Blue
Ridge for purposes of or in connection with this Agreement, any of the other
Transaction Documents or any transaction contemplated hereby or thereby is true
and accurate in every material respect on the date such information is stated or
certified and does not, as of such date, contain any material misstatement of
fact or omit to state a material fact or any fact necessary to make the
statements contained therein not misleading.

                  (h)      Use of Proceeds. No proceeds of any Purchase
hereunder will be used (i) for a purpose that violates, or would be inconsistent
with, (A) Section 7.2(e) of this Agreement or (B) Regulation T, U or X
promulgated by the Board of Governors of the Federal Reserve System from time to
time or (ii) to acquire any security in any transaction which is subject to
Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.

                  (i)      Good Title. Seller is the legal and beneficial owner
of the Receivables and Related Security with respect thereto, free and clear of
any Adverse Claim, except as created by the Transaction Documents (and with
respect to any Related Security in which the Seller's rights therein are a
security interest, the rights of the owner of such Related Security). There have
been duly filed all financing statements or other similar instruments or
documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect Seller's ownership interest (or security interest in
the case of certain Related Security) in each Receivable, its Collections and
the Related Security.

                  (j)      Perfection. This Agreement is effective to create a
valid security interest in favor of the Agent for the benefit of the Secured
Parties in the Purchased Assets to secure payment of the Aggregate Unpaids, free
and clear of any Adverse Claim except as created by the

<PAGE>   11

Transactions Documents (and with respect to any Related Security in which the
Seller's rights therein are a security interest, the rights of the owner of such
Related Security). There have been duly filed all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect the Agent's (on behalf of the
Secured Parties) security interest in the Purchased Assets.

                  (k)      Places of Business and Locations of Records. The
principal places of business and chief executive office of such Seller Party and
the offices where it keeps all of its Records are located at the address(es)
listed on Exhibit III or such other locations of which the Agent has been
notified in accordance with Section 7.2(a) in jurisdictions where all action
required by Section 13.3(a) has been taken and completed. Seller's Federal
Employer Identification Number is correctly set forth on Exhibit III.

                  (l)      Collections. The conditions and requirements set
forth in Section 7.1(j) and Section 8.2 have at all times been satisfied and
duly performed. The names, addresses and jurisdictions of organization of all
Collection Banks, together with the account numbers of the Collection Accounts
of Seller at each Collection Bank and the post office box number of each
Lock-Box, are listed on Exhibit IV. Seller has not granted any Person, other
than the Agent as contemplated by this Agreement, dominion and control of any
Lock-Box or Collection Account, or the right to take dominion and control of any
such Lock-Box or Collection Account at a future time or upon the occurrence of a
future event.

                  (m)      Material Adverse Effect. (i) The initial Servicer
represents and warrants that since June 25, 2000, no event has occurred that
would have a material adverse effect on the financial condition or operations of
the initial Servicer and its Subsidiaries or the ability of the initial Servicer
to perform its obligations under this Agreement, and (ii) Seller represents and
warrants that since the date of this Agreement, no event has occurred that would
have a material adverse effect on (A) the financial condition or operations of
Seller, (B) the ability of Seller to perform its obligations under the
Transaction Documents, or (C) the collectibility of the Receivables generally or
any material portion of the Receivables.

                  (n)      Names. The name in which Seller has executed this
Agreement is identical to the name of Seller as indicated on the public record
of its state of organization which shows Seller to have been organized. In the
past five (5) years or since its creation, whichever period is shorter, Seller
has not used any corporate names, trade names or assumed names other than the
name in which it has executed this Agreement.

                  (o)      Ownership of Seller. Unifi owns, directly or
indirectly, 100% of the issued and outstanding capital stock of Seller, free and
clear of any Adverse Claim. Such capital stock is validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of Seller.

                  (p)      Not a Holding Company or an Investment Company. Such
Seller Party is not a "holding company" or a "subsidiary holding company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended, or any successor

<PAGE>   12

statute. Such Seller Party is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or any successor statute.

                  (q)      Compliance with Law. Such Seller Party has complied
in all respects with all applicable laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect. Each Receivable, together with the Contract related
thereto, does not contravene any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations relating to truth in
lending, fair credit billing, fair credit reporting, equal credit opportunity,
fair debt collection practices and privacy), and no part of such Contract is in
violation of any such law, rule or regulation, except where such contravention
or violation could not reasonably be expected to have a Material Adverse Effect.

                  (r)      Compliance with Credit and Collection Policy. Such
Seller Party has complied in all material respects with the Credit and
Collection Policy with regard to each Receivable and the related Contract, and
has not made any change to such Credit and Collection Policy, except such
material change as to which the Agent has been notified in accordance with
Section 7.1(a)(vii).

                  (s)      Payments to Applicable Originator. With respect to
each Receivable transferred to Seller under the Receivables Sale Agreement,
Seller has given reasonably equivalent value to the applicable Originator in
consideration therefor and such transfer was not made for or on account of an
antecedent debt. No transfer by any Originator of any Receivable under the
Receivables Sale Agreement is or may be voidable under any section of the
Bankruptcy Reform Act of 1978 (11 U.S.C.ss.ss.101 et seq.), as amended.

                  (t)      Enforceability of Contracts. Each Contract with
respect to each Receivable is effective to create, and has created, a legal,
valid and binding obligation of the related Obligor to pay the Outstanding
Balance of the Receivable created thereunder and any accrued interest thereon,
enforceable against the Obligor in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

                  (u)      Eligible Receivables. Each Receivable included in the
Net Pool Balance as an Eligible Receivable on the date of any Monthly Report was
an Eligible Receivable on such date.

                  (v)      Purchase Limit and Maximum Receivable Interests.
Immediately after giving effect to each Incremental Purchase hereunder, the
Aggregate Invested Amount is less than or equal to the Purchase Limit and the
aggregate of the Receivable Interests does not exceed 100%.

                  (w)      Accounting. The manner in which such Seller Party
accounts for the transactions contemplated by this Agreement and the Receivables
Sale Agreement does not jeopardize the true sale analysis.

<PAGE>   13

                  (x)      Plans. Such Seller Party does not have any Plans.

                                  ARTICLE VI.

                             CONDITIONS OF PURCHASES

         Section 6.1       Conditions Precedent to Initial Incremental Purchase.
The initial Incremental Purchase of a Receivable Interest under this Agreement
is subject to the conditions precedent that (a) the Agent shall have received on
or before the date of such Purchase those documents listed on Schedule A, (b)
Seller shall have been capitalized with the Initial Contribution Receivables and
(c) the Agent shall have received all fees and expenses required to be paid on
such date pursuant to the terms of this Agreement and the Fee Letter.

         Section 6.2       Conditions Precedent to All Purchases and
Reinvestments. Each Incremental Purchase and each Reinvestment shall be subject
to the further conditions precedent that (a) in the case of each such Purchase:
(i) the Servicer shall have delivered to the Agent on or prior to the date of
such Purchase, in form and substance satisfactory to the Agent, all Monthly
Reports as and when due under Section 8.5 and (ii) upon the Agent's request, the
Servicer shall have delivered to the Agent at least three (3) days prior to such
Purchase an interim Monthly Report showing the amount of Eligible Receivables;
(b) the Agent shall have received such other approvals, opinions or documents as
it may reasonably request and (c) on each Purchase Date, the following
statements shall be true (and acceptance of the proceeds of such Incremental
Purchase or Reinvestment shall be deemed a representation and warranty by Seller
that such statements are then true):

                           (i)      the representations and warranties made by
                  it and set forth in Section 5.1 are true and correct on and as
                  of the date of such Incremental Purchase or Reinvestment as
                  though made on and as of such Purchase Date;

                           (ii)     no event has occurred and is continuing, or
                  would result from such Incremental Purchase or Reinvestment,
                  that will constitute an Amortization Event, and no event has
                  occurred and is continuing, or would result from such
                  Incremental Purchase or Reinvestment, that would constitute an
                  Unmatured Amortization Event; and

                           (iii)    the Aggregate Invested Amount does not
                  exceed the Purchase Limit and the aggregate Receivable
                  Interests do not exceed 100%.

It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or Blue Ridge, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Agent, which right may be exercised at any time on demand of the Agent, to
rescind the related Purchase and direct Seller to pay to the Agent's Account,
for the benefit of Blue Ridge, an amount equal to the

<PAGE>   14

Collections prior to the Facility Termination Date that shall have been applied
to the affected Reinvestment.

                                  ARTICLE VII.

                                    COVENANTS

         Section 7.1       Affirmative Covenants of the Seller Parties. Until
the date on which the Aggregate Unpaids have been indefeasibly paid in full and
this Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, as set forth below:

                  (a)      Reporting. Unifi will maintain, for itself and each
of its Subsidiaries, a system of accounting established and administered in
accordance with GAAP, and furnish or cause to be furnished to the Agent:

                           (i)      Annual Reporting. Within 90 days after the
         close of its respective fiscal years, audited, unqualified consolidated
         financial statements (which shall include balance sheets, statements of
         income and retained earnings and a statement of cash flows) for Unifi
         and its Subsidiaries for such fiscal year certified in a manner
         acceptable to the Agent by independent public accountants reasonably
         acceptable to the Agent.

                           (ii)     Quarterly Reporting. Within 45 days after
         the close of the first three (3) quarterly periods of each of its
         fiscal year, consolidated balance sheets of Unifi and its Subsidiaries
         as at the close of each such period and consolidated statements of
         income and retained earnings and a consolidated statement of cash flows
         for Unifi and its Subsidiaries for the period from the beginning of
         such fiscal year to the end of such quarter, all certified by its chief
         financial officer.

                           (iii)    Compliance Certificate. Together with the
         financial statements required hereunder, a compliance certificate in
         substantially the form of Exhibit V signed by Unifi's Authorized
         Officer and dated the date of such annual financial statement or such
         quarterly financial statement, as the case may be.

                           (iv)     Shareholders Statements and Reports.
         Promptly upon the furnishing thereof to the shareholders of such Seller
         Party copies of all financial statements, reports and proxy statements
         so furnished.

                           (v)      S.E.C. Filings. Promptly upon the filing
         thereof, copies of all registration statements and annual, quarterly,
         monthly or other regular reports which any Seller Party or any of its
         Affiliates files with the Securities and Exchange Commission.

                           (vi)     Copies of Notices. Promptly upon its receipt
         of any notice, request for consent, financial statements,
         certification, report or other communication under or in connection
         with any Transaction Document from any Person other than the Agent or
         Blue Ridge, copies of the same.

<PAGE>   15

                           (vii)    Change in Credit and Collection Policy. At
         least thirty (30) days prior to the effectiveness of any material
         change in or material amendment to the Credit and Collection Policy, a
         copy of the Credit and Collection Policy then in effect and a notice
         (A) indicating such change or amendment, and (B) if such proposed
         change or amendment would be reasonably likely to adversely affect the
         collectibility of the Receivables or decrease the credit quality of any
         newly created Receivables, requesting the Agent's consent thereto.

                           (viii)   Fiscal Months. By no later than November 15
         of each calendar year, an updated Schedule B setting forth the next 13
         Fiscal Months.

                           (ix)     Other Information. Promptly, from time to
         time, such other information, documents, records or reports relating to
         the Receivables or the condition or operations, financial or otherwise,
         of such Seller Party as the Agent may from time to time reasonably
         request in order to protect the interests of the Agent, for the benefit
         of Blue Ridge, under or as contemplated by this Agreement.

                  (b)      Notices. Such Seller Party will notify the Agent in
writing of any of the following promptly upon learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken with
respect thereto:

                           (i)      Amortization Events or Unmatured
         Amortization Events. The occurrence of each Amortization Event and each
         Unmatured Amortization Event, by a statement of an Authorized Officer
         of such Seller Party.

                           (ii)     Material Adverse Effect. The occurrence of
         any event or condition that has had, or could reasonably be expected to
         have, a Material Adverse Effect.

                           (iii)    Termination Date. The occurrence of the
         "TERMINATION DATE" under and as defined in the Receivables Sale
         Agreement.

                           (iv)     Defaults Under Other Agreements. The
         occurrence of a default or an event of default under any other
         financing arrangement pursuant to which such Seller Party is a debtor
         or an obligor PROVIDED, no notice shall be required with regard to
         defaults or events of defaults occurring pursuant to any financing
         arrangement that, when aggregated with all other defaulted financing
         arrangement, for which no notice was delivered, aggregates less than
         $50,000,000.

                           (v)      Notices under Receivables Sale Agreement.
         Copies of all notices delivered by any Originator or Seller under the
         Receivables Sale Agreement.

                           (vi)     Downgrade of Servicer. Any downgrade in the
         rating of any Indebtedness of Servicer by S&P or Moody's, setting forth
         the Indebtedness affected and the nature of such change.

<PAGE>   16

                  (c)      Compliance with Laws and Preservation of Corporate
Existence. Such Seller Party will comply in all respects with all applicable
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, except where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect. Such Seller Party
will preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and remain
qualified in good standing as a foreign corporation in each jurisdiction where
its business is conducted, except where the failure to so preserve and maintain
or qualify could not reasonably be expected to have a Material Adverse Effect.

                  (d)      Audits. Such Seller Party will furnish to the Agent
from time to time such information with respect to it and the Receivables as the
Agent may reasonably request. Such Seller Party will, from time to time during
regular business hours as requested by the Agent upon reasonable notice and at
the sole cost of such Seller Party, permit the Agent, or its agents or
representatives (and shall cause each Originator to permit the Agent or its
agents or representatives): (i) to examine and make copies of and abstracts from
all Records in the possession or under the control of such Person relating to
the Purchased Assets, including, without limitation, the related Contracts, and
(ii) to visit the offices and properties of such Person for the purpose of
examining such materials described in clause (i) above, and to discuss matters
relating to such Person's financial condition or the Purchased Assets or any
Person's performance under any of the Transaction Documents or any Person's
performance under the Contracts and, in each case, with any of the officers or
employees of Seller or the Servicer having knowledge of such matters (each of
the foregoing examinations and visits described in clause (i) and (ii) above , a
"REVIEW"); PROVIDED, HOWEVER, that, so long as no Amortization Event has
occurred and is continuing, (A) the Seller Parties shall only be responsible for
the costs and expenses of one (1) Review in any one calendar year, and (B) the
Agent will not request more than four (4) Reviews in any one calendar year.

                  (e)      Keeping and Marking of Records and Books.

                  (i)      The Servicer will (and will cause each Originator to)
         maintain and implement administrative and operating procedures
         (including, without limitation, an ability to recreate records
         evidencing Receivables in the event of the destruction of the originals
         thereof), and keep and maintain all documents, books, records and other
         information reasonably necessary or advisable for the collection of all
         Receivables (including, without limitation, records adequate to permit
         the immediate identification of each new Receivable and all Collections
         of and adjustments to each existing Receivable). The Servicer will (and
         will cause each Originator to) give the Agent notice of any material
         change in the administrative and operating procedures referred to in
         the previous sentence.

                  (ii)     Such Seller Party will (and will cause each
         Originator to): (A) on or prior to the date hereof, mark its master
         data processing records and other books and records relating to the
         Receivables with a legend, acceptable to the Agent, describing the
         Agent's security interest in the Purchased Assets and (B) upon the
         request of the Agent following

<PAGE>   17

         the occurrence of an Amortization Event: (x) mark each Contract with a
         legend describing the Agent's security interest and (y) deliver to the
         Agent all Contracts (including, without limitation, all multiple
         originals of any such Contract constituting an instrument, a
         certificated security or chattel paper) relating to the Receivables.

                  (f)      Compliance with Contracts and Credit and Collection
Policy. Such Seller Party will (and will cause each Originator to) timely and
fully (i) perform and comply with all provisions, covenants and other promises
required to be observed by it under the Contracts related to the Receivables,
and (ii) comply in all respects with the Credit and Collection Policy in regard
to each Receivable and the related Contract.

                  (g)      Performance and Enforcement of Receivables Sale
Agreement. Seller will, and will require each Originator to, perform each of
their respective obligations and undertakings under and pursuant to the
Receivables Sale Agreement, will purchase Receivables thereunder in strict
compliance with the terms thereof and will vigorously enforce the rights and
remedies accorded to Seller under the Receivables Sale Agreement. Seller will
take all actions to perfect and enforce its rights and interests (and the rights
and interests of the Agent, as Seller's assignee) under the Receivables Sale
Agreement as the Agent may from time to time reasonably request, including,
without limitation, making claims to which it may be entitled under any
indemnity, reimbursement or similar provision contained in the Receivables Sale
Agreement.

                  (h)      Ownership. Seller will (or will cause each Originator
to) take all necessary action to (i) vest legal and equitable title to the
Purchased Assets purchased under the Receivables Sale Agreement irrevocably in
Seller, free and clear of any Adverse Claims (other than Adverse Claims in favor
of the Agent, for the benefit of the Secured Parties) including, without
limitation, the filing of all financing statements or other similar instruments
or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect Seller's interest in such Purchased Assets and such
other action to perfect, protect or more fully evidence the interest of Seller
therein as the Agent may reasonably request), and (ii) establish and maintain,
in favor of the Agent, for the benefit of the Secured Parties, a valid and
perfected first priority security interest in all Purchased Assets, free and
clear of any Adverse Claims, including, without limitation, the filing of all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect the
Agent's (for the benefit of the Secured Parties) security interest in the
Purchased Assets and such other action to perfect, protect or more fully
evidence the interest of the Agent for the benefit of the Secured Parties as the
Agent may reasonably request.

                  (i)      Reliance. Seller acknowledges that the Agent and Blue
Ridge are entering into the transactions contemplated by this Agreement in
reliance upon Seller's identity as a legal entity that is separate from each
Originator and Unifi. Therefore, from and after the date of execution and
delivery of this Agreement, Seller shall take all reasonable steps, including,
without limitation, all steps that the Agent or Blue Ridge may from time to time
reasonably request, to maintain Seller's identity as a separate legal entity and
to make it manifest to third parties that Seller is an entity with assets and
liabilities distinct from those of each Originator, Unifi and any Affiliates
thereof (other than Seller) and not just a division of any Originator, Unifi

<PAGE>   18

or any such Affiliate. Without limiting the generality of the foregoing and in
addition to the other covenants set forth herein, Seller will:

                           (A)      conduct its own business in its own name and
                  require that all full-time employees of Seller, if any,
                  identify themselves as such and not as employees of any
                  Originator or Unifi (including, without limitation, by means
                  of providing appropriate employees with business or
                  identification cards identifying such employees as Seller's
                  employees);

                           (B)      compensate all employees, consultants and
                  agents directly, from Seller's own funds, for services
                  provided to Seller by such employees, consultants and agents
                  and, to the extent any employee, consultant or agent of Seller
                  is also an employee, consultant or agent of any Originator,
                  Unifi or any Affiliate thereof, allocate the compensation of
                  such employee, consultant or agent between Seller and such
                  Originator, Unifi or such Affiliate, as applicable, on a basis
                  that reflects the services rendered to Seller and such
                  Originator, Unifi or such Affiliate, as applicable;

                           (C)      clearly identify its offices (by signage or
                  otherwise) as its offices and, if such office is located in
                  the offices of any Originator or Unifi, Seller shall lease
                  such office at a fair market rent;

                           (D)      have a separate telephone number, which will
                  be answered only in its name and separate stationery and
                  checks in its own name;

                           (E)      conduct all transactions with each
                  Originator, Unifi and the Servicer (including, without
                  limitation, any delegation of its obligations hereunder as
                  Servicer) strictly on an arm's-length basis, allocate all
                  overhead expenses (including, without limitation, telephone
                  and other utility charges) for items shared between Seller and
                  such Originator or Unifi on the basis of actual use to the
                  extent practicable and, to the extent such allocation is not
                  practicable, on a basis reasonably related to actual use;

                           (F)      at all times have a Board of Directors
                  consisting of three members, at least one member of which is
                  an Independent Director;

                           (G)      observe all corporate formalities as a
                  distinct entity, and ensure that all corporate actions
                  relating to (A) the selection, maintenance or replacement of
                  the Independent Director, (B) the dissolution or liquidation
                  of Seller or (C) the initiation of, participation in,
                  acquiescence in or consent to any bankruptcy, insolvency,
                  reorganization or similar proceeding involving Seller, are
                  duly authorized by unanimous vote of its Board of Directors
                  (including the Independent Director);

                           (H)      maintain Seller's books and records separate
                  from those of each Originator, Unifi and any Affiliate thereof
                  and otherwise readily identifiable

<PAGE>   19

                  as its own assets rather than assets of any Originator, Unifi
                  or any Affiliate thereof;

                           (I)      prepare its financial statements separately
                  from those of each Originator and Unifi and insure that any
                  consolidated financial statements of any Originator, Unifi or
                  any Affiliate thereof that include Seller and that are filed
                  with the Securities and Exchange Commission or any other
                  governmental agency have notes clearly stating that Seller is
                  a separate corporate entity and that its assets will be
                  available first and foremost to satisfy the claims of the
                  creditors of Seller;

                           (J)      except as herein specifically otherwise
                  provided, maintain the funds or other assets of Seller
                  separate from, and not commingled with, those of any
                  Originator, Unifi or any Affiliate thereof and only maintain
                  bank accounts or other depository accounts to which Seller
                  alone is the account party, into which Seller alone makes
                  deposits and from which Seller alone (or the Agent hereunder)
                  has the power to make withdrawals;

                           (K)      pay all of Seller's operating expenses from
                  Seller's own assets (except for certain payments by any
                  Originator, Unifi or other Persons pursuant to allocation
                  arrangements that comply with the requirements of this Section
                  7.1(i));

                           (L)      operate its business and activities such
                  that: it does not engage in any business or activity of any
                  kind, or enter into any transaction or indenture, mortgage,
                  instrument, agreement, contract, lease or other undertaking,
                  other than the transactions contemplated and authorized by
                  this Agreement and the Receivables Sale Agreement; and does
                  not create, incur, guarantee, assume or suffer to exist any
                  indebtedness or other liabilities, whether direct or
                  contingent, other than (1) as a result of the endorsement of
                  negotiable instruments for deposit or collection or similar
                  transactions in the ordinary course of business, (2) the
                  incurrence of obligations under this Agreement, (3) the
                  incurrence of obligations, as expressly contemplated in the
                  Receivables Sale Agreement, to make payment to the applicable
                  Originator thereunder for the purchase of Receivables from
                  such Originator under the Receivables Sale Agreement, and (4)
                  the incurrence of operating expenses in the ordinary course of
                  business of the type otherwise contemplated by this Agreement;

                           (M)      maintain its corporate charter in conformity
                  with this Agreement, such that it does not amend, restate,
                  supplement or otherwise modify its Certificate of
                  Incorporation or By-Laws in any respect that would impair its
                  ability to comply with the terms or provisions of any of the
                  Transaction Documents, including, without limitation, Section
                  7.1(i) of this Agreement;

                           (N)      maintain the effectiveness of, and continue
                  to perform under the Receivables Sale Agreement and the
                  Performance Undertaking, such

<PAGE>   20

                  that it does not amend, restate, supplement, cancel, terminate
                  or otherwise modify the Receivables Sale Agreement or the
                  Performance Undertaking, or give any consent, waiver,
                  directive or approval thereunder or waive any default, action,
                  omission or breach under the Receivables Sale Agreement or the
                  Performance Undertaking or otherwise grant any indulgence
                  thereunder, without (in each case) the prior written consent
                  of the Agent;

                           (O)      maintain its corporate separateness such
                  that it does not merge or consolidate with or into, or convey,
                  transfer, lease or otherwise dispose of (whether in one
                  transaction or in a series of transactions, and except as
                  otherwise contemplated herein) all or substantially all of its
                  assets (whether now owned or hereafter acquired) to, or
                  acquire all or substantially all of the assets of, any Person,
                  nor at any time create, have, acquire, maintain or hold any
                  interest in any Subsidiary;

                           (P)      maintain at all times the Required Capital
                  Amount (as defined in the Receivables Sale Agreement) and
                  refrain from making any dividend, distribution, redemption of
                  capital stock or payment of any subordinated indebtedness
                  which would cause the Required Capital Amount to cease to be
                  so maintained; and

                           (Q)      take such other actions as are necessary on
                  its part to ensure that the facts and assumptions set forth in
                  the opinion issued by Kilpatrick Stockton LLP, as counsel for
                  Seller, in connection with the closing or initial Purchase
                  under this Agreement and relating to substantive consolidation
                  issues, and in the certificates accompanying such opinion,
                  remain true and correct in all material respects at all times.

                  (j)      Collections. Such Seller Party will cause (1) all
proceeds from all Lock-Boxes to be directly deposited by a Collection Bank into
a Collection Account and (2) each Lock-Box and Collection Account to be subject
at all times to a Collection Account Agreement that is in full force and effect;
provided, however, that such Seller Party will obtain a Collection Account
Agreement with the Bank of Montreal within 30 days from the date hereof. In the
event any payments relating to the Purchased Assets are remitted directly to
Seller or any Affiliate of Seller, Seller will remit (or will cause all such
payments to be remitted) directly to a Collection Bank and deposited into a
Collection Account within two (2) Business Days following receipt thereof, and,
at all times prior to such remittance, Seller will itself hold or, if
applicable, will cause such payments to be held in trust for the exclusive
benefit of the Agent and Blue Ridge. Seller will maintain exclusive ownership,
dominion and control (subject to the terms of this Agreement) of each Lock-Box
and Collection Account and shall not grant the right to take dominion and
control of any Lock-Box or Collection Account at a future time or upon the
occurrence of a future event to any Person, except to the Agent as contemplated
by this Agreement.

<PAGE>   21

                  (k)      Taxes. Such Seller Party will file all tax returns
and reports required by law to be filed by it and will promptly pay all taxes
and governmental charges at any time owing, except any such taxes which are not
yet delinquent or are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books. Seller will pay when due any taxes payable in
connection with the Receivables, exclusive of taxes on or measured by income or
gross receipts of the Agent or Blue Ridge.

                  (l)      Payment to Applicable Originator. With respect to any
Receivable purchased by Seller from any Originator, such sale shall be effected
under, and in strict compliance with the terms of, the Receivables Sale
Agreement, including, without limitation, the terms relating to the amount and
timing of payments to be made to such Originator in respect of the purchase
price for such Receivable.

         Section 7.2       Negative Covenants of the Seller Parties. Until the
date on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:

                  (a)      Name Change, Offices and Records. Such Seller Party
will not change its name, identity or structure (within the meaning of any
applicable enactment of the UCC), relocate its chief executive office at any
time while the location of its chief executive office is relevant to perfection
of the Agent's security interest, for the benefit of the Secured Parties, in the
Receivables, Related Security and Collections, or change any office where
Records are kept unless it shall have: (i) given the Agent at least forty-five
(45) days' prior written notice thereof and (ii) delivered to the Agent all
financing statements, instruments and other documents requested by the Agent in
connection with such change or relocation.

                  (b)      Change in Payment Instructions to Obligors. Except as
may be required by the Agent pursuant to Section 8.2(b), such Seller Party will
not add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless the Agent shall have received, at least ten (10) days
before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
PROVIDED, HOWEVER, that the Servicer may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing Collection Account.

                  (c)      Modifications to Contracts and Credit and Collection
Policy. Such Seller Party will not, and will not permit any Originator to, make
any change to the Credit and Collection Policy that could adversely affect the
collectibility of the Receivables or decrease the credit quality of any newly
created Receivables. Except as provided in Section 8.2(d), the Servicer will
not, and will not permit any Originator to, extend, amend or otherwise modify
the terms of any Trade Receivable or any Contract related thereto other than in
accordance with the Credit and Collection Policy. Such Seller Party will not,
and will not permit any Originator to,

<PAGE>   22

enter into any amendment to the Contracts governing any Factoring Receivable
without prior notice to the Agent.

                  (d)      Sales, Liens. Seller will not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, or create or suffer to exist any Adverse Claim upon (including,
without limitation, the filing of any financing statement) or with respect to,
any of the Purchased Assets, or assign any right to receive income with respect
thereto (other than, in each case, the creation of a security interest therein
in favor of the Agent as provided for herein), and Seller will defend the right,
title and interest of the Secured Parties in, to and under any of the foregoing
property, against all claims of third parties claiming through or under Seller
or any Originator. Seller will not create or suffer to exist any mortgage,
pledge, security interest, encumbrance, lien, charge or other similar
arrangement on any of its inventory.

                  (e)      Use of Proceeds. Seller will not use the proceeds of
the Purchases for any purpose other than (i) paying for Receivables and Related
Security under and in accordance with the Receivables Sale Agreement, including
without limitation, making payments on the Subordinated Notes to the extent
permitted thereunder and under the Receivables Sale Agreement, (ii) making
Demand Advances to Unifi at any time prior to the Facility Termination Date
while it is acting as Servicer and no Amortization Event or Unmatured
Amortization Event exists and is continuing, (iii) paying its ordinary and
necessary operating expenses when and as due, and (iv) making Restricted Junior
Payments to the extent permitted under this Agreement.

                  (f)      Termination Date Determination. Seller will not
designate the Termination Date (as defined in the Receivables Sale Agreement),
or send any written notice to any Originator in respect thereof, without the
prior written consent of the Agent, except with respect to the occurrence of
such Termination Date arising pursuant to Section 5.1(d) of the Receivables Sale
Agreement.

                  (g)      Restricted Junior Payments. Seller will not make any
Restricted Junior Payment if after giving effect thereto, Seller's Net Worth (as
defined in the Receivables Sale Agreement) would be less than the Required
Capital Amount (as defined in the Receivables Sale Agreement).

                  (h)      Seller Indebtedness. Seller will not incur or permit
to exist any Indebtedness or liability on account of deposits except: (i) the
Aggregate Unpaids, (ii) the Subordinated Loans, (iii) other current accounts
payable arising in the ordinary course of business and not overdue, and (iv)
other Indebtedness permitted by the Transaction Documents.

                  (i)      Prohibition on Additional Negative Pledges. No Seller
Party will enter into or assume any agreement (other than this Agreement and the
other Transaction Documents) prohibiting the creation or assumption of any
Adverse Claim upon the Purchased Assets except as contemplated by the
Transaction Documents, or otherwise prohibiting or restricting any transaction
contemplated hereby or by the other Transaction Documents, and no Seller Party
will enter into or assume any agreement creating any Adverse Claim upon the
Subordinated Notes.

<PAGE>   23

                                 ARTICLE VIII.

                          ADMINISTRATION AND COLLECTION

         Section 8.1       Designation of Servicer.

                  (a)      The servicing, administration and collection of the
Receivables shall be conducted by such Person (the "SERVICER") so designated
from time to time in accordance with this Section 8.1. Unifi is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Servicer pursuant to the terms of this Agreement. The Agent may at any time
following the occurrence of an Amortization Event designate as Servicer any
Person to succeed Unifi or any successor Servicer; PROVIDED THAT the Rating
Agency Condition is satisfied.

                  (b)      Unifi may delegate, and Unifi hereby advises the
Agent and Blue Ridge that it has delegated, to the Originators, as sub-servicers
of the Servicer, certain of its duties and responsibilities as Servicer
hereunder in respect of the Receivables originated by such Originator. Without
the prior written consent of the Agent and the Required Liquidity Banks, Unifi
shall not be permitted to delegate any of its duties or responsibilities as
Servicer to any Person other than (i) Seller, (ii) the Originators, and (iii)
with respect to certain Defaulted Receivables, outside collection agencies in
accordance with its customary practices. Neither Seller nor any Originator shall
be permitted to further delegate to any other Person any of the duties or
responsibilities of the Servicer delegated to it by Unifi. If at any time the
Agent shall designate as Servicer any Person other than Unifi, all duties and
responsibilities theretofore delegated by Unifi to Seller or the Originators
may, at the discretion of the Agent, be terminated forthwith on notice given by
the Agent to Unifi and to Seller and the Originators.

                  (c)      Notwithstanding the foregoing subsection (b): (i)
Unifi shall be and remain primarily liable to the Agent and Blue Ridge for the
full and prompt performance of all duties and responsibilities of the Servicer
hereunder and (ii) the Agent and Blue Ridge shall be entitled to deal
exclusively with Unifi in matters relating to the discharge by the Servicer of
its duties and responsibilities hereunder. The Agent and Blue Ridge shall not be
required to give notice, demand or other communication to any Person other than
Unifi in order for communication to the Servicer and its sub-servicer or other
delegate with respect thereto to be accomplished. Unifi, at all times that it is
the Servicer, shall be responsible for providing any sub-servicer or other
delegate of the Servicer with any notice given to the Servicer under this
Agreement.

         Section 8.2       Duties of Servicer.

                  (a)      The Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Receivable from time to
time, all in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and Collection
Policy.

                  (b)      The Servicer will instruct all Obligors to pay all
Collections directly to a Lock-Box or Collection Account. The Servicer shall
effect a Collection Account Agreement

<PAGE>   24

substantially in the form of Exhibit VI with each bank party to a Collection
Account at any time. In the case of any remittances received in any Lock-Box or
Collection Account that shall have been identified, to the satisfaction of the
Servicer, to not constitute Collections or other proceeds of the Receivables or
the Related Security, the Servicer shall promptly remit such items to the Person
identified to it as being the owner of such remittances. From and after the date
the Agent delivers to any Collection Bank a Collection Notice pursuant to
Section 8.3, the Agent may request that the Servicer, and the Servicer thereupon
promptly shall instruct all Obligors with respect to the Receivables, to remit
all payments thereon to a new depositary account specified by the Agent and, at
all times thereafter, Seller and the Servicer shall not deposit or otherwise
credit, and shall not permit any other Person to deposit or otherwise credit to
such new depositary account any cash or payment item other than Collections.

                  (c)      The Servicer shall administer the Collections in
accordance with the procedures described herein and in Article II. The Servicer
shall set aside and hold in trust for the account of Seller and Blue Ridge their
respective shares of the Collections in accordance with Article II. The Servicer
shall, upon the request of the Agent, segregate, in a manner acceptable to the
Agent, all cash, checks and other instruments received by it from time to time
constituting Collections from the general funds of the Servicer or Seller prior
to the remittance thereof in accordance with Article II. If the Servicer shall
be required to segregate Collections pursuant to the preceding sentence, the
Servicer shall segregate and deposit with a bank designated by the Agent such
allocable share of Collections of Receivables set aside for Blue Ridge on the
first Business Day following receipt by the Servicer of such Collections, duly
endorsed or with duly executed instruments of transfer.

                  (d)      The Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Servicer determines to be
appropriate to maximize Collections thereof; PROVIDED, HOWEVER, that such
extension or adjustment shall not alter the status of such Receivable as a
Delinquent Receivable or Defaulted Receivable or limit the rights of the Agent
or Blue Ridge under this Agreement. Notwithstanding anything to the contrary
contained herein, the Agent shall have the absolute and unlimited right to
direct the Servicer to commence or settle any legal action with respect to any
Receivable or to foreclose upon or repossess any Related Security.

                  (e)      The Servicer shall hold in trust for Seller and the
Agent and Blue Ridge all Records that (i) evidence or relate to the Receivables,
the related Contracts and Related Security or (ii) are otherwise necessary or
desirable to collect the Receivables and shall, as soon as practicable upon
demand of the Agent, deliver or make available to the Agent all such Records, at
a place selected by the Agent. The Servicer shall, as soon as practicable
following receipt thereof turn over to Seller any cash collections or other cash
proceeds received with respect to Indebtedness not constituting Receivables. The
Servicer shall, from time to time at the request of the Agent or Blue Ridge,
furnish to Blue Ridge (promptly after any such request) a calculation of the
amounts set aside for Blue Ridge pursuant to Article II.

                  (f)      Any payment by an Obligor in respect of any
indebtedness owed by it to Originator or Seller shall, except as otherwise
specified by such Obligor or otherwise required by

<PAGE>   25

contract or law and unless otherwise instructed by the Agent, be applied as a
Collection of any Receivable of such Obligor (starting with the oldest such
Receivable) to the extent of any amounts then due and payable thereunder before
being applied to any other receivable or other obligation of such Obligor.

         Section 8.3       Collection Notices. The Agent is authorized at any
time after the occurrence of an Amortization Event to date and to deliver to the
Collection Banks the Collection Notices. Seller hereby transfers to the Agent
for the benefit of Blue Ridge, effective when the Agent delivers such notice,
the exclusive ownership and control of each Lock-Box and the Collection
Accounts. In case any authorized signatory of Seller whose signature appears on
a Collection Account Agreement shall cease to have such authority before the
delivery of such notice, such Collection Notice shall nevertheless be valid as
if such authority had remained in force. Seller hereby authorizes the Agent, and
agrees that the Agent shall be entitled (i) at any time after delivery of the
Collection Notices, to endorse Seller's name on checks and other instruments
representing Collections, (ii) at any time after the occurrence of an
Amortization Event, to enforce the Receivables, the related Contracts and the
Related Security, and (iii) at any time after the occurrence of an Amortization
Event, to take such action as shall be necessary or desirable to cause all cash,
checks and other instruments constituting Collections of Receivables to come
into the possession of the Agent rather than Seller.

         Section 8.4       Responsibilities of Seller. Anything herein to the
contrary notwithstanding, the exercise by the Agent, on behalf of Blue Ridge, of
the Agent's rights hereunder shall not release the Servicer, any Originator or
Seller from any of their duties or obligations with respect to any Receivables
or under the related Contracts. The Agent and Blue Ridge shall have no
obligation or liability with respect to any Receivables or related Contracts,
nor shall any of them be obligated to perform the obligations of Seller or any
Originator thereunder.

         Section 8.5       Monthly Reports. The Servicer shall prepare and
forward to the Agent (i) on each Monthly Reporting Date, a Monthly Report and an
electronic file of the data contained therein and (ii) at such times as the
Agent shall reasonably request, a listing by Obligor of all Receivables together
with an aging of such Receivables.

         Section 8.6       Servicing Fee. As compensation for the Servicer's
servicing activities on their behalf, the Servicer shall be paid the Servicing
Fee in arrears on each Settlement Date out of Collections.


                                  ARTICLE IX.

                               AMORTIZATION EVENTS

         Section 9.1       Amortization Events. The occurrence of any one or
more of the following events shall constitute an Amortization Event:

<PAGE>   26

                  (a)      Any Seller Party shall fail to make (i) any payment
or deposit in respect of principal required to be made by it under the
Transaction Documents when due, (ii) any payment or deposit required in respect
of interest to be made by it under the Transaction Documents when due and such
failure continues for 3 consecutive Business Days and (iii) any payment or
deposit required in respect of anything other than principal or interest and
such failure continues for 10 consecutive Business Days; PROVIDED, HOWEVER, that
no Amortization Event shall occur under this Section 9.1(a) as a result of any
late payment or deposit which is cured within one (1) Business Day if such late
payment was due to circumstances beyond such Seller Party's control.

                  (b)      Any representation, warranty, certification or
statement made by any Seller Party in any Transaction Document to which it is a
party or in any other document delivered pursuant thereto shall prove to have
been incorrect in any material respect when made or deemed made; PROVIDED THAT
the materiality threshold in the preceding clause shall not be applicable with
respect to any representation or warranty which itself contains a materiality
threshold; and, PROVIDED FURTHER, that any misrepresentation or certification
for which the Agent has actually received a Deemed Collection shall not
constitute an Amortization Event hereunder.

                  (c)      Any Seller Party shall fail to perform or observe any
covenant contained in (i) Section 7.2(d) through and including 7.2(i); (ii)
Section 7.2(a) and 7.2(e) and such failure shall continue for 10 consecutive
Business Days provided such failure can reasonably be cured or (iii) Section 8.5
when due and such failure to shall continue for 1 Business Day.

                  (d)      Any Seller Party shall fail to perform or observe any
other covenant or agreement under any Transaction Documents and such failure
shall continue for thirty (30) consecutive days; PROVIDED, HOWEVER, that in the
case of a failure to perform or observe any such covenant or agreement of the
Servicer which the Servicer is unable to cure within such thirty (30) day period
after diligent efforts, the Servicer shall be permitted an additional thirty
(30) days to cure such nonperformance or nonobservance.

                  (e)      Failure of Seller to pay any Indebtedness (other than
the Aggregate Unpaids) when due and such failure shall continue beyond any
applicable grace period with respect thereto, if any, or the default by Seller
in the performance of any term, provision or condition contained in any
agreement under which any such Indebtedness was created or is governed, the
effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any such Indebtedness of Seller shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled payment)
prior to the date of maturity thereof.

                  (f)      Failure of Unifi or any of its Subsidiaries other
than Seller to pay Indebtedness in excess of $10,000,000 in aggregate principal
amount (hereinafter, "MATERIAL INDEBTEDNESS") when due and such failure shall
continue beyond any applicable grace period with respect thereto, if any; or the
default by Unifi or any of its Subsidiaries other than Seller in the performance
of any term, provision or condition contained in any agreement under which any
Material Indebtedness was created or is governed, the effect of which is to
cause, or to permit the holder or holders of such Material Indebtedness to
cause, such Material Indebtedness to become

<PAGE>   27

due prior to its stated maturity; or any Material Indebtedness of Unifi or any
of its Subsidiaries other than Seller shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled payment) prior to
the date of maturity thereof.

                  (g)      An Event of Bankruptcy shall occur with respect to
any Seller Party or any of their respective Subsidiaries.

                  (h)      As at the end of any Calculation Period:

                           (i)      the three-month rolling average Delinquency
         Ratio shall exceed 3.0%,

                           (ii)     the three-month rolling average Default
         Trigger Ratio shall exceed 2.9%, or

                           (iii)    the three-month rolling average Dilution
         Ratio shall exceed 4.0%.

                  (i)      A Change of Control shall occur.

                  (j)      (i) One or more final judgments for the payment of
money in an aggregate amount of $10,750 or more shall be entered against Seller
or (ii) one or more final judgments for the payment of money in an amount in
excess of $10,000,000, individually or in the aggregate, shall be entered
against Unifi or any of its Subsidiaries (other than Seller on claims not
covered by insurance or as to which the insurance carrier has denied its
responsibility, and such judgment shall continue unsatisfied and in effect for
sixty (60) consecutive days without a stay of execution.

                  (k)      The "TERMINATION DATE" under and as defined in the
Receivables Sale Agreement shall occur under the Receivables Sale Agreement or
any Originator shall for any reason cease to transfer, or cease to have the
legal capacity to transfer, or otherwise be incapable of transferring
Receivables to Seller under the Receivables Sale Agreement.

                  (l)      This Agreement shall terminate in whole or in part
(except in accordance with its terms), or shall cease to be effective or to be
the legally valid, binding and enforceable obligation of Seller, or any Obligor
shall directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, or the Agent for the benefit of Blue Ridge
shall cease to have a valid and perfected first priority security interest in
the Purchased Assets.

                  (m)      On any Settlement Date, after giving effect to the
turnover of Collections by the Servicer on such date and the application thereof
to the Aggregate Unpaids in accordance with this Agreement, the Aggregate
Invested Amount shall exceed the Purchase Limit.

                  (n)      The Internal Revenue Service shall file notice of a
lien pursuant to Section 6323 of the Tax Code with regard to any of the
Purchased Assets and such lien shall not have

<PAGE>   28

been released within seven (7) days, or the PBGC shall, or shall indicate its
intention to, file notice of a lien pursuant to Section 4068 of ERISA with
regard to any of the Purchased Assets.

                  (o)      Any event shall occur which (i) materially and
adversely impairs the ability of the Originators to originate Receivables of a
credit quality that is at least equal to the credit quality of the Receivables
sold or contributed to Seller on the date of this Agreement or (ii) has, or
could be reasonably expected to have a Material Adverse Effect.

                  (p)      The Performance Undertaking shall cease to be
effective or to be the legally valid, binding and enforceable obligation of
Performance Guarantor, or Performance Guarantor shall directly or indirectly
contest in any manner such effectiveness, validity, binding nature or
enforceability of its obligations thereunder.

         Section 9.2       Remedies. Upon the occurrence and during the
continuation of an Amortization Event, the Agent may, or upon the direction of
the Required Liquidity Banks shall, take any of the following actions: (i)
replace the Person then acting as Servicer, (ii) declare the Facility
Termination Date to have occurred, whereupon Reinvestments shall immediately
terminate and the Facility Termination Date shall forthwith occur, all without
demand, protest or further notice of any kind, all of which are hereby expressly
waived by each Seller Party; PROVIDED, HOWEVER, that upon the occurrence of an
Event of Bankruptcy with respect to any Seller Party, the Facility Termination
Date shall automatically occur, without demand, protest or any notice of any
kind, all of which are hereby expressly waived by each Seller Party, (iii)
deliver the Collection Notices to the Collection Banks, (iv) exercise all rights
and remedies of a secured party upon default under the UCC and other applicable
laws, and (v) notify Obligors of the Agent's security interest in the
Receivables and other Purchased Assets. The aforementioned rights and remedies
shall be without limitation, and shall be in addition to all other rights and
remedies of the Agent and Blue Ridge otherwise available under any other
provision of this Agreement, by operation of law, at equity or otherwise, all of
which are hereby expressly preserved, including, without limitation, all rights
and remedies provided under the UCC, all of which rights shall be cumulative.


                                   ARTICLE X.

                                 INDEMNIFICATION

         Section 10.1      Indemnities by the Seller Parties. Without limiting
any other rights that the Agent or Blue Ridge may have hereunder or under
applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand to)
the Agent, Blue Ridge, each of the Liquidity Banks and each of the respective
assigns, officers, directors, agents and employees of the foregoing (each, an
"INDEMNIFIED PARTY") from and against any and all damages, losses, claims,
taxes, liabilities, costs, expenses and for all other amounts payable, including
reasonable attorneys' fees actually incurred and disbursements (all of the
foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by Blue Ridge or
any of its Liquidity Banks of an interest in the Receivables, and (B) the
Servicer hereby agrees to indemnify (and pay

<PAGE>   29

upon demand to) each Indemnified Party for Indemnified Amounts awarded against
or incurred by any of them arising out of the Servicer's activities as Servicer
hereunder EXCLUDING, HOWEVER, in all of the foregoing instances under the
preceding clauses (A) and (B):

                  (a)      Indemnified Amounts to the extent a final judgment of
         a court of competent jurisdiction holds that such Indemnified Amounts
         resulted from gross negligence or willful misconduct on the part of the
         Indemnified Party seeking indemnification;

                  (b)      Indemnified Amounts to the extent the same includes
         losses in respect of Receivables that are uncollectible on account of
         the insolvency, bankruptcy or lack of creditworthiness of the related
         Obligor; or

                  (c)      taxes on or measured by the overall net income of
         such Indemnified Party imposed by the jurisdiction in which such
         Indemnified Party's principal executive office is located and any
         jurisdiction in which such Indemnified Party (i) is doing business
         (except to the extent it is deemed to be doing business in such
         jurisdiction based on the Agreement or any other Transaction Document)
         and (ii) is paying such taxes, and, in any event, to the extent that
         the computation of such taxes is consistent with the characterization
         for income tax purposes of the acquisition by Blue Ridge of Receivables
         as a loan or loans by Blue Ridge to Seller secured by the Receivables,
         the Related Security, the Collection Accounts and the Collections;

PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of Blue Ridge to any Seller
Party for amounts otherwise specifically provided to be paid by such Seller
Party under the terms of this Agreement. Without limiting the generality of the
foregoing indemnification, Seller shall indemnify the Agent and Blue Ridge for
Indemnified Amounts (including, without limitation, losses in respect of
uncollectible receivables, regardless of whether reimbursement therefor would
constitute recourse to Seller or the Servicer) relating to or resulting from:

                           (i)      any representation or warranty made by any
                  Seller Party or any Originator (or any officers of any such
                  Person) under or in connection with this Agreement, any other
                  Transaction Document or any other information or report
                  delivered by any such Person pursuant hereto or thereto, which
                  shall have been false or incorrect when made or deemed made;

                           (ii)     the failure by Seller, the Servicer or any
                  Originator to comply with any applicable law, rule or
                  regulation with respect to any Receivable or Contract related
                  thereto, or the nonconformity of any Receivable or Contract
                  included therein with any such applicable law, rule or
                  regulation or any failure of any Originator to keep or perform
                  any of its obligations, express or implied, with respect to
                  any Contract;

<PAGE>   30

                           (iii)    any failure of Seller, the Servicer or any
                  Originator to perform its duties, covenants or other
                  obligations in accordance with the provisions of this
                  Agreement or any other Transaction Document;

                           (iv)     any products liability, personal injury or
                  damage suit, or other similar claim arising out of or in
                  connection with merchandise, insurance or services that are
                  the subject of any Contract or any Receivable;

                           (v)      any dispute, claim, offset or defense (other
                  than discharge in bankruptcy of the Obligor) of the Obligor to
                  the payment of any Receivable (including, without limitation,
                  a defense based on such Receivable or the related Contract not
                  being a legal, valid and binding obligation of such Obligor
                  enforceable against it in accordance with its terms), or any
                  other claim resulting from the sale of the merchandise or
                  service related to such Receivable or the furnishing or
                  failure to furnish such merchandise or services;

                           (vi)     the commingling of Collections of
                  Receivables at any time with other funds;

                           (vii)    any investigation, litigation or proceeding
                  related to or arising from this Agreement or any other
                  Transaction Document, the transactions contemplated hereby,
                  the use of the proceeds of any Purchase, the Purchased Assets
                  or any other investigation, litigation or proceeding relating
                  to Seller, the Servicer or any Originator in which any
                  Indemnified Party becomes involved as a result of any of the
                  transactions contemplated hereby;

                           (viii)   any inability to litigate any claim against
                  any Obligor in respect of any Receivable as a result of such
                  Obligor being immune from civil and commercial law and suit on
                  the grounds of sovereignty or otherwise from any legal action,
                  suit or proceeding;

                           (ix)     any Amortization Event of the type described
                  in Section 9.1(g);

                           (x)      any failure of Seller to acquire and
                  maintain legal and equitable title to, and ownership of any of
                  the Purchased Assets from the applicable Originator, free and
                  clear of any Adverse Claim (other than as created hereunder);
                  or any failure of Seller to give reasonably equivalent value
                  to any Originator under the Receivables Sale Agreement in
                  consideration of the transfer by such Originator of any
                  Receivable, or any attempt by any Person to void such transfer
                  under statutory provisions or common law or equitable action;

                           (xi)     any failure to vest and maintain vested in
                  the Agent for the benefit of Blue Ridge, or to transfer to the
                  Agent for the benefit of the Secured Parties, a valid first
                  priority perfected security interests in the Purchased Assets,
                  free and clear of any Adverse Claim (except as created by the
                  Transaction Documents);

<PAGE>   31

                           (xii)    the failure to have filed, or any delay in
                  filing, financing statements or other similar instruments or
                  documents under the UCC of any applicable jurisdiction or
                  other applicable laws with respect to any Purchased Assets,
                  and the proceeds thereof, whether at the time of any Purchase
                  or at any subsequent time;

                           (xiii)   any action or omission by any Seller Party
                  which reduces or impairs the rights of the Agent or Blue Ridge
                  with respect to any Purchased Assets or the value of any
                  Purchased Assets;

                           (xiv)    any attempt by any Person to void any
                  Purchase or the Agent's security interest in the Purchased
                  Assets under statutory provisions or common law or equitable
                  action; and

                           (xv)     the failure of any Receivable included in
                  the calculation of the Net Pool Balance as an Eligible
                  Receivable to be an Eligible Receivable at the time so
                  included.

         Section 10.2      Increased Cost and Reduced Return. If after the date
hereof, any Funding Source shall be charged any fee, expense or increased cost
on account of the adoption of any applicable law, rule or regulation (including
any applicable law, rule or regulation regarding capital adequacy) or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency (a "REGULATORY CHANGE"): (i) that subjects any
Funding Source to any charge or withholding on or with respect to any Funding
Agreement or a Funding Source's obligations under a Funding Agreement, or on or
with respect to the Receivables, or changes the basis of taxation of payments to
any Funding Source of any amounts payable under any Funding Agreement (except
for changes in the rate of tax on the overall net income of a Funding Source or
taxes excluded by Section 10.1) or (ii) that imposes, modifies or deems
applicable any reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of a Funding
Source, or credit extended by a Funding Source pursuant to a Funding Agreement
or (iii) that imposes any other condition the result of which is to increase the
cost to a Funding Source of performing its obligations under a Funding
Agreement, or to reduce the rate of return on a Funding Source's capital as a
consequence of its obligations under a Funding Agreement, or to reduce the
amount of any sum received or receivable by a Funding Source under a Funding
Agreement or to require any payment calculated by reference to the amount of
interests or loans held or interest received by it, then, upon demand by the
Agent, Seller shall pay to the Agent, for the benefit of the relevant Funding
Source, such amounts charged to such Funding Source or such amounts to otherwise
compensate such Funding Source for such increased cost or such reduction.

         Section 10.3      Other Costs and Expenses. Seller shall pay to the
Agent and Blue Ridge on demand all costs and out-of-pocket expenses in
connection with the preparation, execution, delivery and administration of this
Agreement, the transactions contemplated hereby and the

<PAGE>   32

other documents to be delivered hereunder, including without limitation, the
cost of Blue Ridge's auditors auditing the books, records and procedures of
Seller, reasonable fees and out-of-pocket expenses of legal counsel for Blue
Ridge and the Agent actually incurred with respect thereto and with respect to
advising Blue Ridge and the Agent as to their respective rights and remedies
under this Agreement. Seller shall pay to the Agent on demand any and all costs
and expenses of the Agent and Blue Ridge, if any, including reasonable counsel
fees actually incurred and expenses in connection with the enforcement of this
Agreement and the other documents delivered hereunder and in connection with any
restructuring or workout of this Agreement or such documents, or the
administration of this Agreement following an Amortization Event. Seller shall
reimburse Blue Ridge on demand for all other costs and expenses incurred by Blue
Ridge ("OTHER Costs"), including, without limitation, the cost of auditing Blue
Ridge's books by certified public accountants, the cost of rating the Commercial
Paper by independent financial rating agencies, and the reasonable fees and
out-of-pocket expenses of counsel for Blue Ridge or any counsel for any
shareholder of Blue Ridge with respect to advising Blue Ridge or such
shareholder as to matters relating to Blue Ridge's operations.

         Section 10.4      Allocations. Blue Ridge shall allocate the liability
for Other Costs among Seller and other Persons with whom Blue Ridge has entered
into agreements to purchase interests in or finance receivables and other
financial assets ("OTHER CUSTOMERS"). If any Other Costs are attributable to
Seller and not attributable to any Other Customer, Seller shall be solely liable
for such Other Costs. However, if Other Costs are attributable to Other
Customers and not attributable to Seller, such Other Customer shall be solely
liable for such Other Costs. All allocations to be made pursuant to the
foregoing provisions of this Article X shall be made by Blue Ridge in its sole
discretion and shall be binding on Seller and the Servicer.

                                  ARTICLE XI.

                                   THE AGENT

         Section 11.1      Authorization and Action. Blue Ridge, on behalf of
itself and its assigns, hereby designates and appoints Wachovia to act as its
agent under the Liquidity Agreement, this Agreement and under each other
Transaction Document, and authorizes the Agent to take such actions as agent on
its behalf and to exercise such powers as are delegated to the Agent by the
terms of the Liquidity Agreement, this Agreement and the other Transaction
Documents together with such powers as are reasonably incidental thereto,
including, without limitation, the power to perfect all security interests
granted under the Transaction Documents. The provisions of Article 6 of the
Liquidity Agreement are hereby incorporated by this reference with the same
force and effect as if fully set forth herein, and shall govern the relationship
between the Agent, on the one hand, and Blue Ridge, on the other.

<PAGE>   33

                                  ARTICLE XII.

                         ASSIGNMENTS AND PARTICIPATIONS

         Section 12.1      Assignments and Participations by Blue Ridge. Each of
the parties hereto, on behalf of its successors and assigns, hereby agrees and
consents to the complete or partial sale by Blue Ridge of all or any portion of
its rights under, interest in, title to and obligations under this Agreement to
the Liquidity Banks pursuant to the Liquidity Agreement, regardless of whether
such sale constitutes an assignment or the sale of a participation in such
rights and obligations.

         Section 12.2      Prohibition on Assignments by Seller Parties. No
Seller Party may assign any of its rights or obligations under this Agreement
without the prior written consent of the Agent and Blue Ridge and without
satisfying the Rating Agency Condition.

                                 ARTICLE XIII.

                                 MISCELLANEOUS

         Section 13.1      Waivers and Amendments.

                  (a)      No failure or delay on the part of the Agent or Blue
Ridge in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies herein
provided shall be cumulative and nonexclusive of any rights or remedies provided
by law. Any waiver of this Agreement shall be effective only in the specific
instance and for the specific purpose for which given.

                  (b)      No provision of this Agreement may be amended,
supplemented, modified or waived except in writing in accordance with the
provisions of this Section 13.1(b). Blue Ridge, Seller and the Agent, at the
direction of the Required Liquidity Banks, may enter into written modifications
or waivers of any provisions of this Agreement, PROVIDED, HOWEVER, that no such
modification or waiver shall:

                           (i)      without the consent of Blue Ridge and each
                  affected Liquidity Bank, (A) extend the Liquidity Termination
                  Date or the date of any payment or deposit of Collections by
                  Seller or the Servicer, (B) reduce the rate or extend the time
                  of payment of Yield or any CP Costs (or any component of Yield
                  or CP Costs), (C) reduce any fee payable to the Agent for the
                  benefit of Blue Ridge, (D) change the Invested Amount of any
                  Receivable Interest, (E) amend, modify or waive any provision
                  of the definition of Required Liquidity Banks or this Section
                  13.1(b), (F) consent to or permit the assignment or transfer
                  by Seller of any of its rights and obligations under this
                  Agreement, (G) change the definition of "ELIGIBLE RECEIVABLE,"
                  "LOSS RESERVE," "DILUTION RESERVE," "YIELD RESERVE,"
                  "SERVICING RESERVE," "SERVICING FEE RATE," "REQUIRED RESERVE"
                  or "REQUIRED

<PAGE>   34

                  RESERVE FACTOR FLOOR" or (H) amend or modify any defined term
                  (or any defined term used directly or indirectly in such
                  defined term) used in clauses (A) through (G) above in a
                  manner that would circumvent the intention of the restrictions
                  set forth in such clauses; or

                           (ii)     without the written consent of the then
                  Agent, amend, modify or waive any provision of this Agreement
                  if the effect thereof is to affect the rights or duties of
                  such Agent,

AND ANY MATERIAL AMENDMENT, WAIVER OR OTHER MODIFICATION OF THIS AGREEMENT SHALL
REQUIRE SATISFACTION OF THE RATING AGENCY CONDITION.

         Section 13.2      Notices. Except as provided in this Section 13.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or (iii)
if given by any other means, when received at the address specified in this
Section 13.2. Seller hereby authorizes the Agent to effect Purchases and Tranche
Period and Yield Rate selections based on telephonic notices made by any Person
whom the Agent in good faith believes to be acting on behalf of Seller. Seller
agrees to deliver promptly to the Agent a written confirmation of each
telephonic notice signed by an authorized officer of Seller; PROVIDED, HOWEVER,
the absence of such confirmation shall not affect the validity of such notice.
If the written confirmation differs from the action taken by the Agent, the
records of the Agent shall govern absent manifest error.

         Section 13.3      Protection of Agent's Security Interest.(a) Seller
agrees that from time to time, at its expense, it will promptly execute and
deliver all instruments and documents, and take all actions, that may be
necessary or desirable, or that the Agent may reasonably request, to perfect,
protect or more fully evidence the Agent's security interest in the Purchased
Assets, or to enable the Agent or Blue Ridge to exercise and enforce their
rights and remedies hereunder. At any time after the occurrence of an
Amortization Event, the Agent may, or the Agent may direct Seller or the
Servicer to, notify the Obligors of Receivables, at Seller's expense, of the
ownership or security interests of Blue Ridge under this Agreement and may also
direct that payments of all amounts due or that become due under any or all
Receivables be made directly to the Agent or its designee. Seller or the
Servicer (as applicable) shall, at the Agent's request, withhold the identities
of the Agent and Blue Ridge in any such notification.

                  (b)      If any Seller Party fails to perform any of its
obligations hereunder, the Agent or Blue Ridge may (but shall not be required
to) perform, or cause performance of, such obligations, and the Agent's or Blue
Ridge's costs and expenses incurred in connection therewith shall be payable by
Seller as provided in Section 10.3. Each Seller Party irrevocably authorizes the
Agent at any time and from time to time in the sole discretion of the Agent, and
appoints the

<PAGE>   35

Agent as its attorney-in-fact, to act on behalf of such Seller Party (i) to
execute on behalf of Seller as debtor and to file financing statements necessary
or desirable in the Agent's sole discretion to perfect and to maintain the
perfection and priority of the interest of Blue Ridge in the Receivables and
(ii) to file a carbon, photographic or other reproduction of this Agreement or
any financing statement with respect to the Receivables as a financing statement
in such offices as the Agent in its sole discretion deems necessary or desirable
to perfect and to maintain the perfection and priority of the Agent's security
interest in the Purchased Assets, for the benefit of the Secured Parties. This
appointment is coupled with an interest and is irrevocable. From and after July
1, 2001: (A) each of the Seller Parties hereby authorizes the Agent to file
financing statements and other filing or recording documents with respect to the
Receivables and Related Security (including any amendments thereto, or
continuation or termination statements thereof), without the signature or other
authorization of such Seller Party, in such form and in such offices as the
Agent reasonably determines appropriate to perfect or maintain the perfection of
the security interest of the Agent hereunder, (B) each of the Seller Parties
acknowledges and agrees that it is not authorized to, and will not, file
financing statements or other filing or recording documents with respect to the
Receivables or Related Security (including any amendments thereto, or
continuation or termination statements thereof), without the express prior
written approval by the Agent, consenting to the form and substance of such
filing or recording document, and (C) each of the Seller Parties approves,
authorizes and ratifies any filings or recordings made by or on behalf of the
Agent in connection with the perfection of the security interests in favor of
Seller or the Agent, PROVIDED, however, that Seller or Agent shall promptly
notify each Seller Party of, and provide a copy to each Seller Party of, any
such filing.

         Section 13.4      Confidentiality.

                  (a)      Each of the Seller Parties shall maintain and shall
cause each of its employees and officers to maintain the confidentiality of this
Agreement and the other confidential or proprietary information with respect to
the Agent and Blue Ridge and their respective businesses obtained by it or them
in connection with the structuring, negotiating and execution of the
transactions contemplated herein, except that such Seller Party and its officers
and employees may disclose such information to such Seller Party's external
accountants and attorneys and as required by any applicable law or order of any
judicial or administrative proceeding.

                  (b)      Anything herein to the contrary notwithstanding, each
Seller Party hereby consents to the disclosure of any nonpublic information with
respect to it (i) to the Agent, the Liquidity Banks or Blue Ridge by each other,
(ii) by the Agent or Blue Ridge to any prospective or actual assignee or
participant of any of them and (iii) by the Agent to any rating agency,
Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to Blue Ridge or any entity organized for the purpose of purchasing,
or making loans secured by, financial assets for which Wachovia acts as the
administrative agent and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing, PROVIDED THAT each such
Person is informed of the confidential nature of such information and agrees to
maintain such information as confidential in accordance with the provisions of
this Agreement. In addition, Blue Ridge and the Agent may disclose any such
nonpublic information pursuant to

<PAGE>   36

any law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings (whether or not having the
force or effect of law).

         Section 13.5      Bankruptcy Petition. Seller, the Servicer, the Agent
and each Liquidity Bank hereby covenants and agrees that, prior to the date that
is one year and one day after the payment in full of all outstanding senior
indebtedness of Blue Ridge, it will not institute against, or join any other
Person in instituting against, Blue Ridge any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.

         Section 13.6      Limitation of Liability. Except with respect to any
claim arising out of the willful misconduct or gross negligence of Blue Ridge,
the Agent or any Liquidity Bank, no claim may be made by any Seller Party or any
other Person against Blue Ridge, the Agent or any Liquidity Bank or their
respective Affiliates, directors, officers, employees, attorneys or agents for
any special, indirect, consequential or punitive damages in respect of any claim
for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and each Seller Party hereby waives,
releases, and agrees not to sue upon any claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.

         Section 13.7      CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK without regard to
the principles of conflicts of laws thereof OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW (except in the case of the other Transaction Documents,
to the extent otherwise expressly stated therein) AND EXCEPT TO THE EXTENT THAT
THE PERFECTION OF THE OWNERSHIP INTEREST OF SELLER OR THE SECURITY INTEREST OF
THE AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, IN ANY OF THE COLLATERAL IS
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

         Section 13.8      CONSENT TO JURISDICTION. EACH PARTY TO THIS AGREEMENT
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT, AND EACH SUCH PARTY
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY
PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST

<PAGE>   37

THE AGENT OR ANY PURCHASER OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER
PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK,
NEW YORK.

         Section 13.9      WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
TO THE MAXIMUM EXTENT PERMITTED BY LAW TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY SELLER PARTY PURSUANT TO THIS
AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.

         Section 13.10     Integration; Binding Effect; Survival of Terms.(a)
This Agreement and each other Transaction Document contain the final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof superseding all prior
oral or written understandings.

                  (b)      This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns (including any trustee in bankruptcy). This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; PROVIDED, HOWEVER, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by any Seller
Party pursuant to Article V, (ii) the indemnification and payment provisions of
Article X, and Sections 13.4 and 13.5 shall be continuing and shall survive any
termination of this Agreement.

                  (c)      Each of the Seller Parties, Blue Ridge and the Agent
hereby acknowledges and agrees that the Liquidity Banks are hereby made express
third party beneficiaries of this Agreement and each of the other Transaction
Documents.

         Section 13.11     Counterparts; Severability; Section References. This
Agreement 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 when taken together shall constitute one and
the same Agreement. Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of a signature page to this Agreement. Any provisions of
this Agreement which are prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. Unless otherwise
expressly indicated, all references herein to "ARTICLE," "SECTION," "SCHEDULE"
or "EXHIBIT" shall mean articles and sections of, and schedules and exhibits to,
this Agreement.

<PAGE>   38

         Section 13.12     Characterization.

                  (a)      It is the intention of the parties hereto that each
Purchase hereunder shall constitute and be treated as an absolute and
irrevocable sale, which Purchase shall provide the Blue Ridge with the full
benefits of ownership of the applicable Receivable Interest. Except as
specifically provided in this Agreement, each sale of a Receivable Interest
hereunder is made without recourse to Seller; PROVIDED, HOWEVER, that (i) Seller
shall be liable to Blue Ridge and the Agent for all representations, warranties,
covenants and indemnities made by Seller pursuant to the terms of this
Agreement, and (ii) such sale does not constitute and is not intended to result
in an assumption by Blue Ridge or the Agent or any assignee thereof of any
obligation of Seller or any Originator or any other person arising in connection
with the Receivables, the Related Security, or the related Contracts, or any
other obligations of Seller or any Originator.

                  (b)      In addition to any ownership interest which the Agent
or Blue Ridge may from time to time acquire pursuant hereto, Seller hereby
grants to the Agent for the ratable benefit of Blue Ridge a valid and perfected
security interest in all of Seller's right, title and interest in, to and under
all Receivables now existing or hereafter arising, the Collections, each
Lock-Box, each Collection Account, all Related Security, all other rights and
payments relating to such Receivables, and all proceeds of any thereof prior to
all other liens on and security interests therein to secure the prompt and
complete payment of the Aggregate Unpaids. The Agent, on behalf of Blue Ridge,
shall have, in addition to the rights and remedies that it may have under this
Agreement, all other rights and remedies provided to a secured creditor under
the UCC and other applicable law, which rights and remedies shall be cumulative.


<PAGE>   39


                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers or
attorneys-in-fact as of the date hereof.

UNIFI RECEIVABLES, LLC


By:   Charles F. McCoy
   ---------------------------------------
Name: Charles F. McCoy
Title: V.P. & Secretary

                  Address: 7201 West Friendly Avenue
                           Greensboro, North Carolina  27410


UNIFI, INC.


By:   Charles F. McCoy
   ---------------------------------------
Name: Charles F. McCoy
Title: V.P., Secretary & General Counsel

                  Address: 7201 West Friendly Avenue
                           Greensboro, North Carolina  27410


                           [Unifi RPA Signature Page]

<PAGE>   40






BLUE RIDGE ASSET FUNDING CORPORATION

BY:  WACHOVIA BANK, N.A., ITS ATTORNEY-IN-FACT


By:   David Goodson
      -----------------------------------
      Name:  David Goodson
      Title: Assistant Vice President

             Address:
                     --------------------

WACHOVIA BANK, N.A., as a Liquidity Bank and as Agent


By:    Kevin T. McConnell
   --------------------------------------
Name:  Kevin T. McConnell
Title: Senior Vice President

Address:
         -------------------------



                    [Blue Ridge/Wachovia RPA Signature Page]