<PAGE>   1

                                                                   EXHIBIT (10k)

                 FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER

         THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER dated as of August
14, 2001 (this "Amendment") is by and among UNIFI, INC., a New York corporation
(the "Borrower"), the Borrower's Domestic Subsidiaries party hereto
(individually a "Guarantor" and collectively the "Guarantors"), the Lenders
party hereto and BANK OF AMERICA, N.A., as Administrative Agent for the Lenders
(in such capacity, the "Administrative Agent"). All capitalized terms used
herein and not otherwise defined shall have the meanings provided in the Credit
Agreement (as defined below).

                                   WITNESSETH:

         WHEREAS, the Borrower, the Guarantors, the Lenders and the
Administrative Agent entered into that certain Credit Agreement dated as of
December 20, 2000 (as amended and modified from time to time, the "Credit
Agreement");

         WHEREAS, the Borrower notified the Administrative Agent on July 24,
2001 of the existence of an Event of Default under the Credit Agreement as a
result of the failure of the Credit Parties to comply with the terms of Section
7.11(i) of the Credit Agreement as of the fiscal quarter ended June 24, 2001
(the "Acknowledged Event of Default");

         WHEREAS, the Borrower has asked the Lenders to waive exercising their
rights and remedies arising under the Credit Agreement and the other Credit
Documents as a result of the Acknowledged Event of Default until October 31,
2001 (the "Waiver Termination Date"), including their right to accelerate the
full outstanding balance of the Credit Party Obligations. The Administrative
Agent and the Lenders have agreed to do so, but only upon the terms and
conditions set forth herein;

         WHEREAS, the parties hereto have agreed to amend the Credit Agreement
         as set forth herein;

         NOW, THEREFORE, in consideration of the agreements contained herein and
other good and valuable consideration, the parties hereby agree as follows:

         1.       Reaffirmation of Existing Debt. The Credit Parties acknowledge
and confirm that (a) the Borrower's obligation to repay the outstanding
principal amount of the Loans and to reimburse the Issuing Lender for any
drawing on a Letter of Credit is unconditional and not subject to any offsets,
defenses or counterclaims, (b) the Administrative Agent and the Lenders have
performed fully all of their respective obligations under the Credit Agreement
and the other Credit Documents, and (c) by entering into this Amendment, the
Lenders do not waive or release (except as specifically provided herein) any
term or condition of
<PAGE>   2

the Credit Agreement or any of the other Credit Documents or any of their rights
or remedies under such Credit Documents or applicable law or any of the
obligations of any Credit Party thereunder.

         2.       Waiver. Subject to the terms and conditions of this Amendment,
the Administrative Agent and the Lenders agree to waive exercising their rights
under the Credit Agreement and the other Credit Documents (other than this
Amendment), to the extent and only to the extent such rights arise exclusively
as a result of the Acknowledged Event of Default; provided, however, the
Administrative Agent and the Lenders shall be free to exercise any or all of
their rights and remedies arising on account of any Default or Event of Default
under the Credit Agreement or any other Credit Document, including without
limitation the Acknowledged Event of Default, at any time after the occurrence
of a Waiver Termination Event (as defined below) or the Waiver Termination Date.
The term "Waiver Termination Event" shall mean the existence or occurrence of
any Default or Event of Default under the Credit Agreement or any other Credit
Document (including a breach of any term of this Amendment) other than the
Acknowledged Event of Default.

         3.       Amended Definitions. The following definitions in Section 1.1
of the Credit Agreement are hereby amended as follows:

                  (a)      The definition of "Applicable Percentage" is amended
         and restated in its entirety to read as follows:

                           "Applicable Percentage" means, (i) with respect to
                  Eurodollar Loans, Swingline CD Loans and Letter of Credit
                  Fees, 2.0%, (ii) with respect to Base Rate Loans 0% and (iii)
                  with respect to Facility Fees, 0.5%.

                  (b)      The definition of "Revolving Committed Amount" is
         amended and restated in its entirety to read as follows:

                           "Revolving Committed Amount" means ONE HUNDRED FIFTY
                  MILLION DOLLARS ($150,000,000), as such amount may be reduced
                  pursuant to Section 3.4 or increased pursuant to Section
                  2.1(f).

                  (c)      The definition of "Utilization Fee" is deleted in its
         entirety.

         4.       Schedule 2.1(a). Schedule 2.1(a) is hereby amended and
replaced in its entirety with Schedule 2.1(a) attached hereto.

         5.       Conditions Precedent. This Amendment shall become immediately
effective (the "Effective Date") upon the receipt by the Administrative Agent of
the following, each in form and substance satisfactory to the Administrative
Agent and the Lenders:

                  (a)      Executed Amendment. Receipt by the Administrative
         Agent of a duly executed copy of this Amendment.


                                       2
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                  (b)      Opinions of Counsel. The Administrative Agent shall
         have received an opinion, or opinions, dated as of the Effective Date
         from counsel to the Credit Parties.

                  (c)      Amendment Fee. Payment by the Credit Parties to the
         Administrative Agent, for the pro rata benefit of each Lender approving
         this Amendment prior to August 14, 2001, an amendment fee of $150,000.

         6.       Miscellaneous.

                  (a)      The term "Credit Agreement" as used in each of the
         Credit Documents shall hereafter mean the Credit Agreement as amended
         by this Amendment. Except as herein specifically agreed, the Credit
         Agreement and the obligations of the Credit Parties thereunder and
         under the other Credit Documents are hereby ratified and confirmed and
         shall remain in full force and effect according to their terms.

                  (b)      The Credit Parties represent and warrant to the
         Lenders that (i) the representations and warranties of the Credit
         Parties set forth in Section 6 of the Credit Agreement are true and
         correct as of the date hereof, (ii) no event has occurred and is
         continuing which constitutes a Default or an Event of Default (other
         than the Acknowledged Event of Default) and (iii) no Credit Party has
         any counterclaims, offsets, credits or defenses to the Credit Documents
         and the performance of its obligations thereunder, or if any Credit
         Party has any such claims, counterclaims, offsets, credits or defenses
         to the Credit Documents or any transaction related to the Credit
         Documents, the same are hereby waived, relinquished and released in
         consideration of the Lenders' execution and delivery of this Amendment.

                  (c)      This Amendment may be executed in any number of
         counterparts, each of which when so executed and delivered shall be an
         original, but all of which shall constitute one and the same
         instrument. It shall not be necessary in making proof of this Amendment
         to produce or account for more than one such counterpart.

                  (d)      THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
         ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.

                  (e)      This Amendment shall be binding upon and inure to the
         benefit of the parties hereto and their respective successors and
         assigns.

                  (f)      Each Credit Party hereby represents and warrants as
         follows:

                           (i)      Each Credit Party has taken all necessary
                  action to authorize the execution, delivery and performance of
                  this Amendment.

                           (ii)     This Amendment has been duly executed and
                  delivered by the Credit Parties and constitutes legal, valid
                  and binding obligations of the Credit


                                       3
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                  Parties, enforceable in accordance with its terms, except as
                  such enforceability may be subject to (A) bankruptcy,
                  insolvency, reorganization, fraudulent conveyance or transfer,
                  moratorium or similar laws affecting creditors' rights
                  generally and (B) general principles of equity (regardless of
                  whether such enforceability is considered in a proceeding at
                  law or in equity).

                           (iii)    No consent, approval, authorization or order
                  of, or filing, registration or qualification with, any court
                  or governmental authority or third party is required in
                  connection with the execution, delivery or performance by any
                  Credit Party of this Amendment.

                  (g)      The Guarantors (i) acknowledge and consent to all of
         the terms and conditions of this Amendment, (ii) affirm all of their
         obligations under the Credit Documents and (iii) agree that this
         Amendment and all documents executed in connection herewith do not
         operate to reduce or discharge the Guarantors' obligations under the
         Credit Agreement or the other Credit Documents.

                  (h)      This Amendment, together with the other Credit
         Documents, represents the entire agreement of the parties and
         supersedes all prior agreements and understandings, oral or written, if
         any, relating to the Credit Documents or the transactions contemplated
         herein and therein.

                  [remainder of page intentionally left blank]


                                       4
<PAGE>   5

         Each of the parties hereto has caused a counterpart of this Amendment
to be duly executed and delivered as of the date first above written.

BORROWER:                           UNIFI, INC., a New York corporation

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

GUARANTORS:                         UNIFI SALES & DISTRIBUTION, INC.,
                                    a North Carolina corporation

                                    By:      Charles F. McCoy
                                       -----------------------------------------
                                    Name:    Charles F. McCoy
                                         ---------------------------------------
                                    Title:   VP & Secretary
                                          --------------------------------------



                                    UNIFI MANUFACTURING, INC.,
                                    a North Carolina corporation

                                    By:      Charles F. McCoy
                                       -----------------------------------------
                                    Name:    Charles F. McCoy
                                         ---------------------------------------
                                    Title:   VP & Secretary
                                          --------------------------------------


                                    UNIFI EQUIPMENT LEASING, LLC,
                                    a North Carolina limited liability company

                                    By:      Charles F. McCoy
                                       -----------------------------------------
                                    Name:    Charles F. McCoy
                                         ---------------------------------------
                                    Title:   VP & Secretary
                                          --------------------------------------


                                    UNIFI MANUFACTURING VIRGINIA, LLC,
                                    a North Carolina limited liability company


                                    By:      Charles F. McCoy
                                       -----------------------------------------
                                    Name:    Charles F. McCoy
                                         ---------------------------------------
                                    Title:   VP & Secretary
                                          --------------------------------------


<PAGE>   6

                                    UNIFI EXPORT SALES, LLC,
                                    a North Carolina limited liability company

                                    By:      Charles F. McCoy
                                       -----------------------------------------
                                    Name:    Charles F. McCoy
                                         ---------------------------------------
                                    Title:   VP & Secretary
                                          --------------------------------------

                                    UNIFI INTERNATIONAL SERVICE, INC.,
                                    a North Carolina corporation

                                    By:      Charles F. McCoy
                                       -----------------------------------------
                                    Name:    Charles F. McCoy
                                         ---------------------------------------
                                    Title:   VP & Secretary
                                          --------------------------------------

                                    UNIFI TECHNICAL FABRICS, LLC,
                                    a North Carolina limited liability company

                                    By:      Charles F. McCoy
                                       -----------------------------------------
                                    Name:    Charles F. McCoy
                                         ---------------------------------------
                                    Title:   VP & Secretary
                                          --------------------------------------

                                    SPANCO INDUSTRIES, INC.,
                                    a North Carolina corporation

                                    By:      Charles F. McCoy
                                       -----------------------------------------
                                    Name:    Charles F. McCoy
                                         ---------------------------------------
                                    Title:   VP & Secretary
                                          --------------------------------------

                                    SPANCO INTERNATIONAL, INC.,
                                    a North Carolina corporation

                                    By:      Charles F. McCoy
                                       -----------------------------------------
                                    Name:    Charles F. McCoy
                                         ---------------------------------------
                                    Title:   VP & Secretary
                                          --------------------------------------

                                    UNIFI TEXTURED POLYESTER, LLC,
                                    a North Carolina limited liability company

                                    By:      Charles F. McCoy
                                       -----------------------------------------
                                    Name:    Charles F. McCoy
                                         ---------------------------------------
                                    Title:   VP & Secretary
                                          --------------------------------------


<PAGE>   7

                                    GLENTOUCH YARN COMPANY, LLC,
                                    a North Carolina limited liability company

                                    By:      Charles F. McCoy
                                       -----------------------------------------
                                    Name:    Charles F. McCoy
                                         ---------------------------------------
                                    Title:   VP & Secretary
                                          --------------------------------------


<PAGE>   8

LENDERS:                            BANK OF AMERICA, N.A., individually in its
                                    capacity as a Lender and in its capacity as
                                    the Administrative Agent

                                    By:      E. Phifer Helms
                                       -----------------------------------------
                                    Name:    E. Phifer Helms
                                         ---------------------------------------
                                    Title:   Managing Director
                                          --------------------------------------

                                    CREDIT SUISSE FIRST BOSTON

                                    By:      Bill O'Daly
                                       -----------------------------------------
                                    Name:    Bill O'Daly
                                         ---------------------------------------
                                    Title:   Assistant Vice President
                                          --------------------------------------

                                    WACHOVIA BANK, N.A.

                                    By:      Michael H. Trainor
                                       -----------------------------------------
                                    Name:    Michael H. Trainor
                                         ---------------------------------------
                                    Title:   Vice President
                                          --------------------------------------

                                    CITIBANK, N.A.

                                    By:      Dennis I. Bermack
                                       -----------------------------------------
                                    Name:    Dennis I. Bermack
                                         ---------------------------------------
                                    Title:   Managing Director
                                          --------------------------------------

                                    THE CHASE MANHATTAN BANK

                                    By:      Thomas H. Bell
                                       -----------------------------------------
                                    Name:    Thomas H. Bell
                                         ---------------------------------------
                                    Title:   VP
                                          --------------------------------------

                                    FIRST UNION NATIONAL BANK

                                    By:      David J.C. Silander
                                       -----------------------------------------
                                    Name:    David J.C. Silander
                                         ---------------------------------------
                                    Title:   Vice President
                                          --------------------------------------


<PAGE>   9

                                    THE INDUSTRIAL BANK OF JAPAN, LIMITED

                                    By:      James W. Masters
                                       -----------------------------------------
                                    Name:    James W. Masters
                                         ---------------------------------------
                                    Title:   Senior Vice President
                                          --------------------------------------

                                    BANK HAPOALIM B.M.

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

<PAGE>   10

                                                                       EXHIBIT I

                                   DEFINITIONS

                  AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS SHALL HAVE THE
FOLLOWING MEANINGS (SUCH MEANINGS TO BE EQUALLY APPLICABLE TO BOTH THE SINGULAR
AND PLURAL FORMS OF THE TERMS DEFINED):

                  "ADJUSTED DILUTION RATIO" means, at any time, the rolling
average of the Dilution Ratio for the 12 Calculation Periods then most recently
ended.

                  "ADVERSE CLAIM" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person.

                  "AFFILIATE" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person or any Subsidiary of such Person. A
Person shall be deemed to control another Person if the controlling Person owns
10% or more of any class of voting securities of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of stock, by contract or otherwise.

                  "AGENT" has the meaning set forth in the preamble to this
Agreement.

                  "AGENT'S ACCOUNT" means account #8735-098787 at Wachovia Bank,
N.A., ABA #053100494.

                  "AGGREGATE INVESTED AMOUNT" means, on any date of
determination, the aggregate Invested Amount of all Receivable Interests
outstanding on such date.

                  "AGGREGATE REDUCTION" has the meaning specified in Section
1.3.

                  "AGGREGATE UNPAIDS" means, at any time, an amount equal to the
sum of (i) the Aggregate Invested Amount, plus (ii) all Recourse Obligations
(whether due or accrued) at such time.

                  "AGREEMENT" means this Receivables Purchase Agreement, as it
may be amended or modified and in effect from time to time.

                  "ALTERNATE BASE RATE" means for any day, the rate per annum
equal to the higher as of such day of (i) the Prime Rate, or (ii) one-half of
one percent (0.50%) above the Federal Funds Rate. For purposes of determining
the Alternate Base Rate for any day, changes in the Prime Rate or the Federal
Funds Rate shall be effective on the date of each such change.

                  "AMORTIZATION DATE" means the earliest to occur of (i) the day
on which any of the conditions precedent set forth in Section 6.2 are not
satisfied, (ii) the Business Day


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immediately prior to the occurrence of an Event of Bankruptcy with respect to
any Seller Party, (iii) the Business Day specified in a written notice from the
Agent following the occurrence of any other Amortization Event, and (iv) the
date which is 5 Business Days after the Agent's receipt of written notice from
Seller that it wishes to terminate the facility evidenced by this Agreement.

                  "AMORTIZATION EVENT" has the meaning specified in Article IX.

                  "APPROVED FACTORING OBLIGOR" means any of The CIT Group, Inc.,
GE Capital Corporation or HSBC Bank.

                  "APPROVED JURISDICTION" means (a) the United States or any
political subdivision thereof, or (b) Canada or any province thereof other than
Quebec or Newfoundland.

                  "AUTHORIZED OFFICER" means, with respect to any Person, its
president, corporate controller, treasurer or chief financial officer.

                  "BLUE RIDGE" has the meaning set forth in the preamble to this
Agreement.

                  "BLUE RIDGE'S PORTION" means, on any date of determination,
the sum of the percentages represented by the Receivable Interests.

                  "BROKEN FUNDING COSTS" means for any Receivable Interest
which: (i) has its Invested Amount reduced without compliance by Seller with the
notice requirements hereunder, except as otherwise specified in this Agreement
or (ii) does not become subject to an Aggregate Reduction following the delivery
of any Reduction Notice as a result of the Seller failing to pay any or all of
the amount of such Aggregate Reduction or (iii) is assigned by Blue Ridge to the
Liquidity Banks under the Liquidity Agreement or terminated prior to the date on
which it was originally scheduled to end; an amount equal to the excess, if any,
of (A) the CP Costs or Yield (as applicable) that would have accrued during the
remainder of the Tranche Periods or the tranche periods for Commercial Paper
determined by the Agent to relate to such Receivable Interest (as applicable)
subsequent to the date of such reduction, assignment or termination (or in
respect of clause (ii) above, the date such Aggregate Reduction was designated
to occur pursuant to the Reduction Notice) of the Invested Amount of such
Receivable Interest if such reduction, assignment or termination had not
occurred or such Reduction Notice had not been delivered, over (B) the sum of
(x) to the extent all or a portion of such Invested Amount is allocated to
another Receivable Interest, the amount of CP Costs or Yield actually accrued
during the remainder of such period on such Invested Amount for the new
Receivable Interest, and (y) to the extent such Invested Amount is not allocated
to another Receivable Interest, the income, if any, actually received during the
remainder of such period by the holder of such Receivable Interest from
investing the portion of such Invested Amount not so allocated. All Broken
Funding Costs shall be due and payable hereunder upon demand.

                  "BUSINESS DAY" means any day on which banks are not authorized
or required to close in New York, New York or Atlanta, Georgia, Greensboro,
North Carolina and The Depository Trust Company of New York is open for
business, and, if the applicable Business


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<PAGE>   12

Day relates to any computation or payment to be made with respect to the LIBO
Rate, any day on which dealings in dollar deposits are carried on in the London
interbank market.

                  "CALCULATION PERIOD" means each Fiscal Month or portion
thereof which elapses during the term of the Agreement. The first Calculation
Period shall commence on the date of the initial Purchase hereunder and the
final Calculation Period shall terminate on the Final Payout Date.

                  "CHANGE OF CONTROL" means (a) the acquisition by any Person,
or two or more Persons acting in concert (who are not as of the Closing Date,
beneficial owners of any voting Equity Interests of Unifi), of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 20% or more of the
outstanding shares of voting stock of Unifi, or (b) Unifi ceases to own 100% of
the outstanding shares of voting stock of Seller.

                  "COLLECTION ACCOUNT" means each concentration account,
depositary account, lock-box account or similar account in which any Collections
are collected or deposited and which is listed on Exhibit IV.

                  "COLLECTION ACCOUNT AGREEMENT" means an agreement
substantially in the form of Exhibit VI among an Originator, Servicer, Seller,
the Agent and a Collection Bank.

                  "COLLECTION BANK" means, at any time, any of the banks holding
one or more Collection Accounts.

                  "COLLECTION NOTICE" means a notice, in substantially the form
of Annex A to Exhibit VI, from the Agent to a Collection Bank.

                  "COLLECTIONS" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all Finance Charges or other related amounts accruing in
respect thereof and all cash proceeds of Related Security with respect to such
Receivable.

                  "COMMERCIAL PAPER" means promissory notes of Blue Ridge issued
by Blue Ridge in the commercial paper market.

                  "CONTINGENT OBLIGATION" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees, endorses,
contingently agrees to purchase or provide funds for the payment of, or
otherwise becomes or is contingently liable upon, the obligation or liability of
any other Person, or agrees to maintain the net worth or working capital or
other financial condition of any other Person, or otherwise assures any creditor
of such other Person against loss, including, without limitation, any comfort
letter, operating agreement, take-or-pay contract or application for a letter of
credit.

                  "CONTRACT" means, (a) with respect to any Trade Receivable,
any and all instruments, agreements, invoices or other writings pursuant to
which such Trade Receivable


                                      I-3
<PAGE>   13

arises or which evidences such Trade Receivable, and (b) with respect to any
Factoring Receivable, any and all factoring agreements, instruments, invoices,
statements or other writings pursuant to which such Factoring Receivable arises
or which evidences such Factoring Receivable.

                  "CP COSTS" means, for each day, the sum of (i) discount or
interest accrued on Pooled Commercial Paper on such day, plus (ii) any and all
accrued commissions in respect of placement agents and Commercial Paper dealers,
and issuing and paying agent fees incurred, in respect of such Pooled Commercial
Paper for such day, plus (iii) other costs associated with funding small or
odd-lot amounts with respect to all receivable purchase or financing facilities
which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual
of income net of expenses received on such day from investment of collections
received under all receivable purchase or financing facilities funded
substantially with Pooled Commercial Paper, minus (v) any payment received on
such day net of expenses in respect of Broken Funding Costs related to the
prepayment of any investment of Blue Ridge pursuant to the terms of any
receivable purchase or financing facilities funded substantially with Pooled
Commercial Paper. In addition to the foregoing costs, if Seller shall request
any Purchase during any period of time determined by the Agent in its sole
discretion to result in incrementally higher CP Costs applicable to such
Purchase, the principal associated with any such Purchase shall, during such
period, be deemed to be funded by Blue Ridge in a special pool (which may
include capital associated with other receivable purchase or financing
facilities) for purposes of determining such additional CP Costs applicable only
to such special pool and charged each day during such period against such
principal.

                  "CREDIT AND COLLECTION POLICY" means Seller's credit and
collection policies and practices relating to Contracts and Trade Receivables
existing on the date hereof and summarized in Exhibit VII hereto, as modified
from time to time in accordance with this Agreement.

                  "CUT-OFF DATE" means the last day of a Calculation Period.

                  "DAYS SALES OUTSTANDING" means, as of any day, an amount equal
to the product of (x) 91, multiplied by (y) the amount obtained by dividing (i)
the aggregate outstanding balance of Receivables as of the most recent Cut-Off
Date, by (ii) the aggregate amount of Receivables created during the three (3)
Calculation Periods including and immediately preceding such Cut-Off Date.

                  "DEEMED COLLECTIONS" means Collections deemed received by
Seller under Section 1.4(a).

                  "DEFAULT HORIZON RATIO" means, as of any Cut-Off Date, the
ratio (expressed as a decimal) computed by dividing (i) the aggregate sales
generated by the Originators during the 4 Calculation Periods ending on such
Cut-Off Date, by (ii) the Net Pool Balance as of such Cut-off Date.

                  "DEFAULT RATE" means a rate per annum equal to the sum of (i)
the Alternate Base Rate plus (ii) 2.00%, changing when and as the Alternate Base
Rate changes.


                                      I-4
<PAGE>   14

                  "DEFAULT RATIO" means, as of any Cut-Off Date, the ratio
(expressed as a percentage) computed by dividing (x) the total amount of
Eligible Receivables which became Defaulted Receivables during the Calculation
Period that includes such Cut-Off Date, by (y) the aggregate sales generated by
the Originators during the Calculation Period occurring 5 months prior to the
Calculation Period ending on such Cut-Off Date.

                  "DEFAULT TRIGGER RATIO" means, as of any Cut-Off Date, the
ratio (expressed as a percentage) computed by dividing (a) the total amount of
Defaulted Receivables as of such Cut-Off Date, by (b) the aggregate Outstanding
Balance of all Receivables as of such Cut-Off Date.

                  "DEFAULTED RECEIVABLE" means a Receivable: (i) as to which the
Obligor thereof has suffered an Event of Bankruptcy; (ii) which, consistent with
the Credit and Collection Policy, would be written off Seller's books as
uncollectible; or (iii) as to which any payment, or part thereof, remains unpaid
for 91 days or more from the original due date for such payment.

                  "DELINQUENCY RATIO" means, at any time, a percentage equal to
(i) the aggregate Outstanding Balance of all Receivables that were Delinquent
Receivables at such time divided by (ii) the aggregate Outstanding Balance of
all Receivables at such time.

                  "DELINQUENT RECEIVABLE" means a Receivable as to which any
payment, or part thereof, remains unpaid for 61-90 days from the original due
date for such payment.

                  "DEMAND ADVANCE" means any advance made by Seller to Unifi at
any time while it is acting as the Servicer, which advance (a) is payable upon
demand, (b) is not evidenced by an instrument, chattel paper or a certificated
security, (c) bears interest at a market rate determined by Seller and the
Servicer from time to time, (d) is not subordinated to any other Indebtedness or
obligation of the Servicer, and (e) may not be offset by Unifi against amounts
due and owing from Seller to it under its Subordinated Note; PROVIDED, HOWEVER,
that no Demand Advance may be made after the Facility Termination Date or on any
date prior to the Facility Termination Date on which an Amortization Event or an
Unmatured Amortization Event exists and is continuing.

                  "DILUTION" means the amount of any reduction or cancellation
of the Outstanding Balance of a Receivable as described in Section 1.4(a).

                  "DILUTION HORIZON RATIO" means, as of any Cut-off Date, a
ratio (expressed as a decimal), computed by dividing (i) the aggregate sales
generated by the Originators during the 2 Calculation Periods ending on such
Cut-Off Date, by (ii) the Net Pool Balance as of such Cut-Off Date.

                  "DILUTION RATIO" means, as of any Cut-Off Date, a ratio
(expressed as a percentage), computed by dividing (i) the total amount of
decreases in Outstanding Balances due to Dilutions during the Calculation Period
ending on such Cut-Off Date, by (ii) the aggregate sales generated by the
Originators during the Calculation Period prior to the Calculation Period ending
on such Cut-Off Date.


                                      I-5
<PAGE>   15

                  "DILUTION RESERVE" means, for any Calculation Period, the
product (expressed as a percentage) of:

                  (a) the sum of (i) two (2) times the Adjusted Dilution Ratio
         as of the immediately preceding Cut-Off Date, plus (ii) the Dilution
         Volatility Component as of the immediately preceding Cut-Off Date,
         TIMES

                  (b) the Dilution Horizon Ratio as of the immediately preceding
         Cut-Off Date.

                  "DILUTION VOLATILITY COMPONENT" means the product (expressed
as a percentage) of (i) the difference between (a) the highest three (3)-month
rolling average Dilution Ratio over the past 12 Calculation Periods and (b) the
Adjusted Dilution Ratio, and (ii) a fraction, the numerator of which is equal to
the amount calculated in (i)(a) of this definition and the denominator of which
is equal to the amount calculated in (i)(b) of this definition.

                  "DOWNGRADED LIQUIDITY BANK" means a Liquidity Bank which has
been the subject of a Downgrading Event.

                  "DOWNGRADING EVENT" with respect to any Person means the
lowering of the rating with regard to the short-term securities of such Person
to below (i) A-1 by S&P, or (ii) P-1 by Moody's.

                  "ELIGIBLE ASSIGNEE" means a commercial bank having a combined
capital and surplus of at least $250,000,000 with a rating of its (or its parent
holding company's) short-term securities equal to or higher than (i) A-1 by S&P
and (ii) P-1 by Moody's.

                  "ELIGIBLE RECEIVABLE" means, at any time, a Receivable:

                           (i)      the Obligor of which is not an Affiliate of
                  any of the parties hereto;

                           (ii)     the Obligor of which (a) if a natural
                  person, is a resident of an Approved Jurisdiction, or (b) if a
                  corporation or other business organization, is organized under
                  the laws of an Approved Jurisdiction and has its chief
                  executive office in an Approved Jurisdiction; PROVIDED,
                  HOWEVER, that in no event will Eligible Receivables owing from
                  Obligors which are residents of or organized under the laws of
                  Canada or any of its provinces other than Quebec and
                  Newfoundland exceed 10% of total Receivables;

                           (iii)    the Obligor of which (a) is not a state or
                  local government, governmental subdivision or agency, and (b)
                  is not the Federal government, governmental subdivision or
                  agency unless Seller has complied with the Federal Assignment
                  of Claims Act and any other applicable statute or regulation
                  restricting the assignment of claims against such Obligor or
                  the direct enforcement by any assignee of the applicable
                  Originator against such Obligor,


                                      I-6
<PAGE>   16

                           (iv)     the Obligor of which is an Approved
                  Factoring Obligor (if such Receivable is a Factoring
                  Receivable),

                           (v)      which is not a Defaulted Receivable,

                           (vi)     which, if such Receivable is a Trade
                  Receivable, constitutes an "account" or "chattel paper" under
                  Article 9 of the UCC of all applicable jurisdictions,

                           (vii)    in which, the perfection of the Seller's
                  interest under the Receivables Sale Agreement, and the Agent's
                  interest, for the benefit of the Purchaser, under this
                  Agreement, is governed by the laws of a jurisdiction where the
                  Uniform Commercial Code - Secured Transactions is in force;

                           (viii)   the Obligor of which is not the Obligor of
                  Receivables as to which not more than 25% of the aggregate
                  unpaid balance of all Receivables of such Obligor of which are
                  Defaulted Receivables;

                           (ix)     the original term of which has not been
                  extended,

                           (x)      which by its terms is due and payable within
                  30 days of the original billing date therefor,

                           (xi)     which is denominated and payable only in
                  United States dollars in the United States,

                           (xii)    which constitutes the legal, valid and
                  binding obligation of the related Obligor enforceable against
                  such Obligor in accordance with its terms subject to no
                  offset, counterclaim or other defense,

                           (xiii)   which arises under a Contract which (A) does
                  not require the Obligor under such Contract to consent to the
                  transfer, sale, pledge or assignment of the rights and duties
                  of the applicable Originator or any of its assignees under
                  such Contract and (B) does not contain a confidentiality
                  provision that purports to restrict the ability of Blue Ridge
                  to exercise its rights under this Agreement, including,
                  without limitation, its right to review the Contract,

                           (xiv)    which, if such Receivable is a Trade
                  Receivable, represents an obligation to pay a specified sum of
                  money, contingent only upon the sale of goods or the provision
                  of services by the applicable Originator, which sale or
                  provision has occurred,

                           (xv)     which, together with the Contract related
                  thereto, does not contravene any law, rule or regulation
                  applicable thereto (including, without limitation, any law,
                  rule and regulation relating to truth in lending, fair credit
                  billing, fair credit reporting, equal credit opportunity, fair
                  debt collection practices


                                      I-7
<PAGE>   17

                  and privacy) and with respect to which no part of the Contract
                  related thereto is in violation of any such law, rule or
                  regulation,

                           (xvi)    which satisfies all applicable requirements
                  of the Credit and Collection Policy,

                           (xvii)   which was generated in the ordinary course
                  of the applicable Originator's business,

                           (xviii)  which, if such Receivable is a Trade
                  Receivable, arises solely from the sale of goods or the
                  provision of services to the related Obligor by the applicable
                  Originator,

                           (xix)    which is not subject to any dispute,
                  counterclaim, right of rescission, set-off, counterclaim or
                  any other defense (including defenses arising out of
                  violations of usury laws) of the applicable Obligor against
                  the applicable Originator or any other Adverse Claim, and the
                  Obligor thereon holds no right as against such Originator to
                  cause such Originator to repurchase the goods or merchandise
                  the sale of which shall have given rise to such Receivable
                  (except with respect to sale discounts effected pursuant to
                  the Contract, or defective goods returned in accordance with
                  the terms of the Contract); PROVIDED, HOWEVER, that if such
                  dispute, offset, counterclaim or defense affects only a
                  portion of the Outstanding Balance of such Receivable, then
                  such Receivable may be deemed an Eligible Receivable to the
                  extent of the portion of such Outstanding Balance which is not
                  so affected, and PROVIDED, FURTHER, that Receivables of any
                  Obligor which has any accounts payable by the applicable
                  Originator or by a wholly-owned Subsidiary of such Originator
                  (thus giving rise to a potential offset against such
                  Receivables) may be treated as Eligible Receivables to the
                  extent that the Obligor of such Receivables has agreed
                  pursuant to a written agreement in form and substance
                  satisfactory to the Agent, that such Receivables shall not be
                  subject to such offset,

                           (xx)     as to which the applicable Originator has
                  satisfied and fully performed all obligations on its part with
                  respect to such Receivable required to be fulfilled by it, and
                  no further action is required to be performed by any Person
                  with respect thereto other than payment thereon by the
                  applicable Obligor,

                           (xxi)    as to which each of the representations and
                  warranties contained in Sections 5.1(g), (i), (j), (r), (s),
                  (t) and (u) is true and correct, and

                           (xxii)   all right, title and interest to and in
                  which has been validly transferred by the applicable
                  Originator directly to Seller under and in accordance with the
                  Receivables Sale Agreement, and Seller has good and marketable
                  title thereto free and clear of any Adverse Claim (other than
                  as created under this Agreement).


                                      I-8
<PAGE>   18

                  "EQUITY INTERESTS" means, with respect to any Person, any and
all shares, interests, participations or other equivalents, including membership
interests (however designated, whether voting or non-voting), of capital of such
Person, including, if such Person is a partnership, partnership interests
(whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, such partnership, whether outstanding on the date
hereof or issued after the date of this Agreement.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any rule or regulation issued
thereunder.

                  "ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with Unifi within the meaning of Section
414(b) or (c) of the Tax Code (and Sections 414(m) and (o) of the Tax Code for
purposes of provisions relating to Section 412 of the Tax Code).

                  "EVENT OF BANKRUPTCY" shall be deemed to have occurred with
respect to a Person if either:

                  (a) a case or other proceeding shall be commenced, without the
         application or consent of such Person, in any court, seeking the
         liquidation, reorganization, debt arrangement, dissolution, winding up,
         or composition or readjustment of debts of such Person, the appointment
         of a trustee, receiver, custodian, liquidator, assignee, sequestrator
         or the like for such Person or all or substantially all of its assets,
         or any similar action with respect to such Person under any law
         relating to bankruptcy, insolvency, reorganization, winding up or
         composition or adjustment of debts, and such case or proceeding shall
         continue undismissed, or unstayed and in effect, for a period of 60
         consecutive days; or an order for relief in respect of such Person
         shall be entered in an involuntary case under the federal bankruptcy
         laws or other similar laws now or hereafter in effect; or

                  (b) such Person shall commence a voluntary case or other
         proceeding under any applicable bankruptcy, insolvency, reorganization,
         debt arrangement, dissolution or other similar law now or hereafter in
         effect, or shall consent to the appointment of or taking possession by
         a receiver, liquidator, assignee, trustee (other than a trustee under a
         deed of trust, indenture or similar instrument), custodian,
         sequestrator (or other similar official) for, such Person or for any
         substantial part of its property, or shall make any general assignment
         for the benefit of creditors, or shall be adjudicated insolvent, or
         admit in writing its inability to pay its debts generally as they
         become due, or, if a corporation or similar entity, its board of
         directors shall vote to implement any of the foregoing.

                  "FACILITY ACCOUNT" means Seller's account no. 8731051555 at
Wachovia.

                  "FACILITY TERMINATION DATE" means the earlier of (i) the
Liquidity Termination Date and (ii) the Amortization Date.


                                      I-9
<PAGE>   19

                  "FACTORING COMPANY RECEIVABLE" means all of an Originator's
rights to payment (whether of purchase price, proceeds of advances, or
otherwise) from any factor who has purchased or financed any indebtedness or
obligation that would meet the definition of a "Trade Receivable" but for the
first proviso in such definition.

                  "FEDERAL BANKRUPTCY CODE" means Title 11 of the United States
Code entitled "Bankruptcy," as amended and any successor statute thereto.

                  "FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate per annum for each day during such period equal to (i)
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (ii) if such rate is not so
published for any day which is a Business Day, the average rate of the
quotations at approximately 11:30 a.m. (New York time) for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.

                  "FEE LETTER" means that certain letter agreement dated as of
December 19, 2000 among Seller, Unifi and the Agent, as it may be amended,
restated or otherwise modified and in effect from time to time.

                  "FINAL PAYOUT DATE" means the date on which all Aggregate
Unpaids have been paid in full and the Purchase Limit has been reduced to zero.

                  "FINANCE CHARGES" means, with respect to a Contract, any
finance, interest, late payment charges or similar charges owing by an Obligor
pursuant to such Contract.

                  "FISCAL MONTH" means the fiscal months of the Seller as set
forth on Schedule B attached hereto.

                  "FUNDING AGREEMENT" means (i) this Agreement, (ii) the
Liquidity Agreement and (iii) any other agreement or instrument executed by any
Funding Source with or for the benefit of Blue Ridge.

                  "FUNDING SOURCE" means (i) any Liquidity Bank or (ii) any
insurance company, bank or other funding entity providing liquidity, credit
enhancement or back-up purchase support or facilities to Blue Ridge.

                  "GAAP" means generally accepted accounting principles in
effect in the United States of America as of the date of this Agreement.

                  "INCREMENTAL PURCHASE" means a purchase of one or more
Receivable Interests which increases the total outstanding Aggregate Invested
Amount hereunder.


                                      I-10
<PAGE>   20

                  "INDEBTEDNESS" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) capitalized lease obligations, (vi) net liabilities under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and
(viii) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.

                  "INDEMNIFIED AMOUNTS" has the meaning specified in Section
10.1.

                  "INDEMNIFIED PARTY" has the meaning specified in Section 10.1.

                  "INDEPENDENT DIRECTOR" shall mean a member of the Board of
Directors of Seller who is not at such time, and has not been at any time during
the preceding five (5) years: (A) a director, officer, employee or affiliate of
Unifi, any Originator or any of their respective Subsidiaries or Affiliates
(other than Seller), or (B) the beneficial owner (at the time of such
individual's appointment as an Independent Director or at any time thereafter
while serving as an Independent Director) of any of the outstanding common
shares of Seller, any Originator, or any of their respective Subsidiaries or
Affiliates, having general voting rights.

                  "INVESTED AMOUNT" of any Receivable Interest means, at any
time, (A) the Purchase Price of such Receivable Interest, minus (B) the sum of
the aggregate amount of Collections and other payments received by the Agent
which in each case are applied to reduce such Invested Amount in accordance with
the terms and conditions of this Agreement; PROVIDED THAT such Invested Amount
shall be restored (in accordance with Section 2.5) in the amount of any
Collections or other payments so received and applied if at any time the
distribution of such Collections or payments are rescinded, returned or refunded
for any reason.

                  "LIBO RATE" means, for any Tranche Period, the rate per annum
determined on the basis of the offered rate for deposits in U.S. dollars of
amounts equal or comparable to the Invested Amount offered for a term comparable
to such Tranche Period, which rates appear on a Bloomberg L.P. terminal,
displayed under the address "US0001M [Index] Q [Go]" effective as of 11:00 A.M.,
London time, two Business Days prior to the first day of such Tranche Period,
PROVIDED that if no such offered rates appear on such page, the LIBO Rate for
such Tranche Period will be (a) the arithmetic average (rounded upwards, if
necessary, to the next higher 1/100th of 1%) of rates quoted by not less than
two major banks in New York, New York, selected by the Agent, at approximately
10:00 a.m.(New York time), two Business Days prior to the first day of such
Tranche Period, for deposits in U.S. dollars offered by leading European banks
for a period comparable to such Tranche Period in an amount comparable to the
Invested Amount, divided by (b) one minus the maximum aggregate reserve
requirement (including all basic, supplemental, marginal or other reserves)
which is imposed against the Agent in respect of Eurocurrency liabilities, as
defined in Regulation D of the Board of Governors of the Federal


                                      I-11
<PAGE>   21

Reserve System as in effect from time to time (expressed as a decimal),
applicable to such Tranche Period. The LIBO Rate shall be rounded, if necessary,
to the next higher 1/16 of 1%.

                  "LIQUIDITY AGREEMENT" means that certain Liquidity Asset
Purchase Agreement dated as of December 19, 2000, by and among Blue Ridge, the
Agent and the banks from time to time party thereto, as the same may be amended,
restated and/or otherwise modified from time to time in accordance with the
terms thereof.

                  "LIQUIDITY BANK" means each bank from time to time party to
the Liquidity Agreement (other than the Agent acting in its capacity as the
Agent thereunder).

                  "LIQUIDITY COMMITMENT" means, as to each Liquidity Bank, its
commitment under the Liquidity Agreement. The Liquidity Commitments, in the
aggregate, shall equal 102% of the Purchase Limit hereunder.

                  "LIQUIDITY FUNDING" means a purchase by any Liquidity Bank
pursuant to its Liquidity Commitment of all or any portion of, or any undivided
interest in, a Receivable Interest.

                  "LIQUIDITY TERMINATION DATE" means the earlier to occur of the
following:

                  (a)      the date on which the Liquidity Banks' Liquidity
         Commitments expire, cease to be available to Blue Ridge or otherwise
         cease to be in full force and effect; or

                  (b)      the date on which a Downgrading Event with respect to
         a Liquidity Bank shall have occurred and been continuing for not less
         than 30 days, and either (i) the Downgraded Liquidity Bank shall not
         have been replaced by an Eligible Assignee pursuant to the Liquidity
         Agreement, or (ii) the Liquidity Commitment of such Downgraded
         Liquidity Bank shall not have been funded or collateralized in such a
         manner that will avoid a reduction in or withdrawal of the credit
         rating applied to the Commercial Paper to which such Liquidity
         Agreement applies by any of the rating agencies then rating such
         Commercial Paper.

                  "LOCK-BOX" means each locked postal box with respect to which
a bank who has executed a Collection Account Agreement has been granted
exclusive access for the purpose of retrieving and processing payments made on
the Receivables and which is listed on Exhibit IV.

                  "LOSS RESERVE" means, for any Calculation Period, the product
(expressed as a percentage) of (a) 2.0, times (b) the highest three-month
rolling average Default Ratio during the 12 Calculation Periods ending on the
immediately preceding Cut-Off Date, times (c) the Default Horizon Ratio as of
the immediately preceding Cut-Off Date.

                  "MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the financial condition or operations of any Seller Party and its
Subsidiaries, (ii) the ability of any Seller Party to perform its obligations
under this Agreement or the Performance Guarantor to perform its obligations
under the Performance Undertaking, (iii) the legality, validity or
enforceability of this


                                      I-12
<PAGE>   22

Agreement or any other Transaction Document, (iv) the Agent's security interest,
for the benefit of the Secured Parties, in the Receivables generally or in any
significant portion of the Receivables, the Related Security or the Collections
with respect thereto, or (v) the collectibility of the Receivables generally or
of any material portion of the Receivables.

                  "MONTHLY REPORT" means a report, in substantially the form of
Exhibit VIII hereto (appropriately completed), furnished by the Servicer to the
Agent pursuant to Section 8.5.

                  "MONTHLY REPORTING DATE" means the 15th day of each month
after the date of this Agreement (or if any such day is not a Business Day, the
next succeeding Business Day thereafter).

                  "MOODY'S" means Moody's Investors Service, Inc.

                  "NET POOL BALANCE" means, at any time, the aggregate
Outstanding Balance of all Eligible Receivables at such time reduced by the
aggregate amount by which the Outstanding Balance of all Eligible Receivables of
each Obligor and its Affiliates exceeds the Obligor Concentration Limit for such
Obligor.

                  "OBLIGOR" means a Person obligated to make payments pursuant
to a Contract.

                  "OBLIGOR CONCENTRATION LIMIT" means, at any time, in relation
to the aggregate Outstanding Balance of Receivables owed by any single Obligor
and its Affiliates (if any), the applicable concentration limit shall be
determined as follows for Obligors who have short term unsecured debt ratings
currently assigned to them by S&P and Moody's (or in the absence thereof, the
equivalent long term unsecured senior debt ratings), the applicable
concentration limit shall be determined according to the following table:

<TABLE>
<CAPTION>
                                                         Allowable % of Eligible
               S&P Rating            Moody's Rating            Receivables
               ----------            --------------      -----------------------

         <S>                     <C>                     <C>
                  A-1+                    P-1                     10%

                   A-1                    P-1                      8%

                   A-2                    P-2                      6%

                   A-3                    P-3                      3%

         Below A-3 or Not Rated     Below P-3 or Not
            by either S&P or     Rated by either S&P or          2.5%
                Moody's                 Moody's
</TABLE>

; PROVIDED, HOWEVER, that (a) if any Obligor has a split rating, the applicable
rating will be the lower of the two, (b) if any Obligor is not rated by either
S&P or Moody's, the applicable Obligor Concentration Limit shall be the one set
forth in the last line of the table above, and (c) subject to satisfaction of
the Rating Agency Condition and/or an increase in the percentage set forth in
clause (a)(i) of the definition of "REQUIRED RESERVE," upon Seller's request
from time to time, the Agent may agree to a higher percentage of Eligible
Receivables for a particular Obligor and its Affiliates (each such higher
percentage, a "SPECIAL CONCENTRATION LIMIT"), it being


                                      I-13
<PAGE>   23

understood that any Special Concentration Limit may be cancelled by the Agent
upon not less than five (5) Business Days' written notice to the Seller Parties.

                  "ORIGINATOR" means each of Unifi Sales & Distribution, Inc., a
North Carolina corporation, and Unifi Export Sales, LLC, a North Carolina
limited liability company, in its capacity as a seller under the Receivables
Sale Agreement.

                  "OUTSTANDING BALANCE" of any Receivable at any time means the
then outstanding principal balance thereof.

                  "PARTICIPANT" has the meaning set forth in Section 12.2.

                  "PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.

                  "PENSION PLAN" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which Unifi sponsors or maintains,
or to which it makes, is making, or is obligated to make contributions, or in
the case of a multiple employer plan (as described in Section 4064(a) of ERISA)
has made contributions at any time during the immediately preceding five plan
years.

                  "PERFORMANCE GUARANTOR" means Unifi, Inc.

                  "PERFORMANCE UNDERTAKING" means that certain Performance
Undertaking, dated as of December 19, 2000 by Performance Guarantor in favor of
Seller, substantially in the form of Exhibit IX, as the same may be amended,
restated or otherwise modified from time to time.

                  "PERSON" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock company,
trust, unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.

                  "PLAN" means an employee benefit plan (as defined in Section
3(3) of ERISA) which Unifi or any of its ERISA Affiliates sponsors or maintains
or to which Unifi or any of its ERISA Affiliates makes, is making, or is
obligated to make contributions and includes any Pension Plan, other than a Plan
maintained outside the United States primarily for the benefit of Persons who
are not U.S. residents.

                  "POOLED COMMERCIAL PAPER" means Commercial Paper notes of Blue
Ridge subject to any particular pooling arrangement by Blue Ridge, but excluding
Commercial Paper issued by Blue Ridge for a tenor and in an amount specifically
requested by any Person in connection with any agreement effected by Blue Ridge.

                  "PRIME RATE" means a rate per annum equal to the prime rate of
interest announced from time to time by Wachovia (which is not necessarily the
lowest rate charged to any customer), changing when and as said prime rate
changes.

                  "PROPOSED REDUCTION DATE" has the meaning set forth in Section
1.3.


                                      I-14
<PAGE>   24

                  "PURCHASE" means an Incremental Purchase or a Reinvestment.

                  "PURCHASE DATE" means each Business Day on which a Purchase is
made hereunder.

                  "PURCHASE LIMIT" means $100,000,000.

                  "PURCHASE NOTICE" has the meaning set forth in Section 1.2.

                  "PURCHASE PRICE" means, with respect to any Incremental
Purchase of a Receivable Interest, the amount paid to Seller for such Receivable
Interest which shall not exceed the least of (i) the amount requested by Seller
in the applicable Purchase Notice, (ii) the unused portion of the Purchase Limit
on the applicable purchase date and (iii) the excess, if any, of the Net Pool
Balance (less the Required Reserve) on the applicable purchase date over the
aggregate outstanding amount of Aggregate Invested Amount determined as of the
date of the most recent Monthly Report, taking into account such proposed
Incremental Purchase.

                  "PURCHASED ASSETS" means all of Seller's right, title and
interest, whether now owned and existing or hereafter arising in and to all of
the Receivables, the Related Security, the Collections and all proceeds of the
foregoing.

                  "RATING AGENCY CONDITION" means that Blue Ridge has received
written notice from S&P and Moody's that an amendment, a change or a waiver will
not result in a withdrawal or downgrade of the then current ratings on Blue
Ridge's Commercial Paper.

                  "RECEIVABLE" means a Trade Receivable or a Factoring Company
Receivable.

                  "RECEIVABLE INTEREST" means, at any time, an undivided
percentage ownership interest (computed as set forth below) associated with a
designated amount of Invested Amount, selected pursuant to the terms and
conditions hereof in (i) each Receivable arising prior to the time of the most
recent computation or recomputation of such undivided interest, (ii) all Related
Security with respect to each such Receivable, and (iii) all Collections with
respect to, and other proceeds of, each such Receivable. Each such undivided
percentage interest shall equal:

                                    IA + RR
                             ----------------------
                                      NPB

                  WHERE:

                  IA       = the Invested Amount of such Receivable Interest.

                  NPB      = the Net Pool Balance.

                  RR       = the Required Reserve.

Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Facility Termination Date, each
Receivable Interest shall be automatically


                                      I-15
<PAGE>   25

recomputed (or deemed to be recomputed) on each day prior to the Facility
Termination Date. The variable percentage represented by any Receivable Interest
as computed (or deemed recomputed) as of the close of the business day
immediately preceding the Facility Termination Date shall remain constant at all
times thereafter.

                  "RECEIVABLES SALE AGREEMENT" means that certain Receivables
Sale Agreement, dated as of December 19, 2000, among the Originators and Seller,
as the same may be amended, restated or otherwise modified from time to time.

                  "RECORDS" means, with respect to any Receivable, all Contracts
and other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.

                  "RECOURSE OBLIGATIONS" has the meaning set forth in Section
2.1.

                  "REDUCTION NOTICE" has the meaning set forth in Section 1.3.

                  "REGULATORY CHANGE" has the meaning set forth in Section 10.2.

                  "REINVESTMENT" has the meaning set forth in Section 2.2.

                  "RELATED SECURITY" means, with respect to any Receivable:

                  (i) all of Seller's right, title and interest in and to the
         Related Security (under and as defined in the Receivables Sale
         Agreement),

                  (ii) all of Seller's right, title and interest in, to and
         under the Receivables Sale Agreement in respect of such Receivable,

                  (iii) all of Seller's right, title and interest in and to the
         Demand Advances, and

                  (iv) all proceeds of any of the foregoing.

                  "REQUIRED LIQUIDITY BANKS" means, at any time, Liquidity Banks
with Liquidity Commitments in excess of 50% of the aggregate amount of all
Liquidity Commitments.

                  "REQUIRED NOTICE PERIOD" means the number of days required
notice set forth below applicable to the Aggregate Reduction indicated below:


                                      I-16
<PAGE>   26

<TABLE>
<CAPTION>
                          AGGREGATE REDUCTION               REQUIRED NOTICE PERIOD
                          -------------------               ----------------------
                 <S>                                        <C>

                 less than 25% of the Purchase Limit            2 Business Days

                 greater than 25% but less than 50% of
                 the Purchase Limit                             5 Business Days

                 50% or more of the Purchase Limit             10 Business Days
</TABLE>

                  "REQUIRED RESERVE" means, on any day during a Calculation
Period, the product of (a) the greater of (i) the Required Reserve Factor Floor
and (ii) the sum of the Loss Reserve, the Yield Reserve, the Dilution Reserve
and the Servicing Reserve, times (b) the Net Pool Balance as of the Cut-Off Date
immediately preceding such Calculation Period.

                  "REQUIRED RESERVE FACTOR FLOOR" means, for any Calculation
Period, the sum (expressed as a percentage) of (a) 10% plus (b) the product of
the Adjusted Dilution Ratio and the Dilution Horizon Ratio, in each case, as of
the immediately preceding Cut-Off Date.

                  "RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of Seller now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock or in any junior class of stock of
Seller, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of capital stock of Seller now or hereafter outstanding, (iii) any
payment or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to the Subordinated Loans (as defined in the Receivables Sale
Agreement), (iv) any payment made to redeem, purchase, repurchase or retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of capital stock of Seller now or hereafter
outstanding, and (v) any payment of management fees by Seller (except for
reasonable management fees to any Originator or its Affiliates in reimbursement
of actual management services performed).

                  "S&P" means Standard and Poor's Ratings Services, a division
of The McGraw Hill Companies, Inc.

                  "SECURED PARTIES" means the Indemnified Parties.

                  "SELLER" has the meaning set forth in the preamble to this
Agreement.

                  "SELLER PARTIES" means, collectively, (a) Seller, and (b) at
any time while Unifi is acting as the Servicer or the Performance Guarantor,
Unifi.


                                      I-17
<PAGE>   27

                  "SERVICER" means at any time the Person (which may be the
Agent) then authorized pursuant to Article VIII to service, administer and
collect Receivables.

                  "SERVICING FEE" means, for each day in a Calculation Period:

                  (a) an amount equal to (i) the Servicing Fee Rate (or, at any
         time while Unifi or one of its Affiliates is the Servicer, such lesser
         percentage as may be agreed between Seller and the Servicer on an arms'
         length basis based on then prevailing market terms for similar
         services), TIMES (ii) the aggregate Outstanding Balance of all
         Receivables at the close of business on the Cut-Off Date immediately
         preceding such Calculation Period, TIMES (iii) 1/360; or

                  (b) on and after the Servicer's reasonable request made at any
         time when Unifi or one of its Affiliates is no longer acting as
         Servicer hereunder, an alternative amount specified by the successor
         Servicer not exceeding (i) 110% of such Servicer's reasonable costs and
         expenses of performing its obligations under this Agreement during the
         preceding Calculation Period, DIVIDED BY (ii) the number of days in the
         current Calculation Period.

                  "SERVICING FEE RATE" means 1.0% per annum.

                  "SERVICING RESERVE" means, for any Calculation Period, the
product (expressed as a percentage) of (a) the Servicing Fee Rate, TIMES (b) a
fraction, the numerator of which is the highest Days Sales Outstanding for the
most recent 12 Calculation Periods and the denominator of which is 360.

                  "SETTLEMENT DATE" means (A) the 2nd Business Day after each
Monthly Reporting Date, and (B) the last day of the relevant Tranche Period in
respect of each Receivable Interests funded through a Liquidity Funding.

                  "SETTLEMENT PERIOD" means (A) in respect of each Receivable
Interest funded through the issuance of Commercial Paper, the immediately
preceding Calculation Period, and (B) in respect of each Receivable Interest
funded through a Liquidity Funding, the entire Tranche Period of such Liquidity
Funding.

                  "SUBSIDIARY" of a Person means (i) any corporation more than
50% of the outstanding securities having ordinary voting power of which shall at
the time be owned or controlled, directly or indirectly, by such Person or by
one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, association, limited liability company,
joint venture or similar business organization more than 50% of the ownership
interests having ordinary voting power of which shall at the time be so owned or
controlled.

                  "TAX CODE" means the Internal Revenue Code of 1986, as the
same may be amended from time to time.

                  "TERMINATING TRANCHE" has the meaning set forth in Section
4.3(b).


                                      I-18
<PAGE>   28

                  "TRADE RECEIVABLE" means all indebtedness and other
obligations owed to an Originator (at the times it arises, and before giving
effect to any transfer or conveyance under the Receivables Sale Agreement) or
Seller (after giving effect to the transfers under the Receivables Sale
Agreement) or in which such Originator or Seller has a security interest or
other interest, including, without limitation, any indebtedness, obligation or
interest constituting an account, chattel paper, instrument or general
intangible, arising in connection with the sale of goods or the rendering of
services by such Originator and further includes, without limitation, the
obligation to pay any Finance Charges with respect thereto; PROVIDED, HOWEVER,
the term "TRADE RECEIVABLE" shall not include any such indebtedness or
obligations which have been factored by the applicable Originator. Indebtedness
and other rights and obligations arising from any one transaction, including,
without limitation, indebtedness and other rights and obligations represented by
an individual invoice, shall constitute a Receivable separate from a Receivable
consisting of the indebtedness and other rights and obligations arising from any
other transaction; PROVIDED, FURTHER, that any indebtedness, rights or
obligations referred to in the immediately preceding sentence shall be a
Receivable regardless or whether the account debtor or such Originator treats
such indebtedness, rights or obligations as a separate payment obligation.

                  "TRANCHE PERIOD" means, with respect to any Receivable
Interest funded through a Liquidity Funding:

                  (a)      if Yield for such Receivable Interest is calculated
         on the basis of the LIBO Rate, a period of one, two, three or six
         months, or such shorter period as may be mutually agreeable to the
         Agent and Seller, commencing on a Business Day selected by Seller or
         the Agent pursuant to this Agreement. Such Tranche Period shall end on
         the day in the applicable succeeding calendar month which corresponds
         numerically to the beginning day of such Tranche Period, PROVIDED,
         HOWEVER, that if there is no such numerically corresponding day in such
         succeeding month, such Tranche Period shall end on the last Business
         Day of such succeeding month; or

                  (b)      if Yield for such Receivable Interest is calculated
         on the basis of the Alternate Base Rate, a period commencing on a
         Business Day selected by Seller and agreed to by the Agent, PROVIDED
         THAT no such period shall exceed one month.

If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, PROVIDED, HOWEVER,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche Period which
commences before the Facility Termination Date and would otherwise end on a date
occurring after the Facility Termination Date, such Tranche Period shall end on
the Facility Termination Date. The duration of each Tranche Period which
commences after the Facility Termination Date shall be of such duration as
selected by the Agent.

                  "TRANSACTION DOCUMENTS" means, collectively, this Agreement,
each Purchase Notice, the Receivables Sale Agreement, the Performance
Undertaking, each Collection Account Agreement, the Fee Letter, each
Subordinated Note (as defined in the Receivables Sale


                                      I-19
<PAGE>   29

Agreement) and all other instruments, documents and agreements executed and
delivered in connection herewith.

                  "UCC" means the Uniform Commercial Code as from time to time
in effect in the specified jurisdiction.

                  "UNIFI" has the meaning specified in the preamble to this
Agreement.

                  "UNMATURED AMORTIZATION EVENT" means an event which, with the
passage of time or the giving of notice, or both, would constitute an
Amortization Event.

                  "WACHOVIA" means Wachovia Bank, N.A. in its individual
capacity and its successors.

                  "YIELD" means for each Tranche Period relating to a Receivable
Interest funded through a Liquidity Funding, an amount equal to the product of
the applicable Yield Rate for such Receivable Interest multiplied by the
Invested Amount of such Receivable Interest for each day elapsed during such
Tranche Period, annualized on a 360 day basis.

                  "YIELD RATE" means, with respect to each Receivable Interest
funded through a Liquidity Funding, the LIBO Rate, the Alternate Base Rate or
the Default Rate, as applicable.

                  "YIELD RESERVE" means, for any Calculation Period, the product
(expressed as a percentage) of (i) 1.5 times (ii) the Alternate Base Rate as of
the immediately preceding Cut-Off Date times (iii) a fraction the numerator of
which is the highest Days Sales Outstanding for the most recent 12 Calculation
Periods and the denominator of which is 360.

                  ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE
CONSTRUED IN ACCORDANCE WITH GAAP. ALL TERMS USED IN ARTICLE 9 OF THE UCC IN THE
STATE OF NEW YORK, AND NOT SPECIFICALLY DEFINED HEREIN, ARE USED HEREIN AS
DEFINED IN SUCH ARTICLE 9.


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