Document:

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                                  EXHIBIT (10f)

                               SECURITY AGREEMENT

         SECURITY AGREEMENT, dated as of December 7, 2001, between UNIFI INC., a
New York corporation ("Company"), and certain of its domestic Subsidiaries
(individually a "Subsidiary Borrower", and collectively the "Subsidiary
Borrowers"; and together with the Company, individually a "Grantor" and
collectively the "Grantors") and BANK OF AMERICA, N.A., in its capacity as Agent
for Lenders.

                              W I T N E S S E T H:

         WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof by and among Grantors, Agent and Lenders (including all annexes, exhibits
and schedules thereto, as from time to time amended, restated, supplemented or
otherwise modified, the "Credit Agreement"), Lenders have agreed to make the
Loans and issue Letters of Credit on behalf of Grantors;

         WHEREAS, in order to induce Agent and Lenders to enter into the Credit
Agreement and the other Loan Documents and to induce Lenders to make the Loans
to the Grantors and issue Letters of Credit on behalf of the Grantors as
provided for in the Credit Agreement, Grantors have agreed to grant a continuing
Lien on the Collateral (as hereinafter defined) to secure the Obligations;

         NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

         1. DEFINED TERMS. The following terms shall have the following
respective meanings:

         "Accounts" means all of the Grantors' now owned or hereafter acquired
or arising accounts, as defined in the UCC, including any rights to payment for
the sale or lease of goods or rendition of services, whether or not they have
been earned by performance, and all medical receivables.

         "Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person or which owns, directly or indirectly, ten percent (10%) or
more of the outstanding equity interest of such Person. A Person shall be deemed
to control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting
securities, by contract, or otherwise.

         "Assigned Contracts" means, collectively, all of the Grantors' rights
and remedies under, and all moneys and claims for money due or to become due to
the Borrower or any of the

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Grantors under those contracts set forth on Schedule VII hereto, and any other
material contracts, and any and all amendments, supplements, extensions, and
renewals thereof including all rights and claims of any Grantor now or hereafter
existing: (i) under any insurance, indemnities, warranties, and guarantees
provided for or arising out of or in connection with any of the foregoing
agreements; (ii) for any damages arising out of or for breach or default under
or in connection with any of the foregoing contracts; (iii) to all other amounts
from time to time paid or payable under or in connection with any of the
foregoing agreements; or (iv) to exercise or enforce any and all covenants,
remedies, powers and privileges thereunder.

         "Chattel Paper" means all of the Grantors' now owned or hereafter
acquired chattel paper, as defined in the UCC, including electronic chattel
paper.

         "Deposit Accounts" means all "deposit accounts" as such term is defined
in the UCC, now or hereafter held in the name of any Grantor.

         "Documents" means all documents as such term is defined in the UCC,
including bills of lading, warehouse receipts or other documents of title, now
owned or hereafter acquired by any Grantor.

         "General Intangibles" means all of the Grantors' now owned or hereafter
acquired general intangibles, choses in action and causes of action and all
other intangible personal property of any Grantor of every kind and nature
(other than Accounts), including, without limitation, all contract rights,
payment intangibles, Proprietary Rights, corporate or other business records,
inventions, designs, blueprints, plans, specifications, patents, patent
applications, trademarks, service marks, trade names, trade secrets, goodwill,
copyrights, computer software, customer lists, registrations, licenses,
franchises, tax refund claims, any funds which may become due to any Grantor in
connection with the termination of any employee benefit plan or any rights
thereto and any other amounts payable to any Grantor from any employee benefit
plan, rights and claims against carriers and shippers, rights to
indemnification, business interruption insurance and proceeds thereof, property,
casualty or any similar type of insurance and any proceeds thereof, proceeds of
insurance covering the lives of key employees on which any Grantor is
beneficiary, rights to receive dividends, distributions, cash, Instruments and
other property in respect of or in exchange for pledged equity interests or
Investment Property and any letter of credit, guarantee, claim, security
interest or other security held by or granted to any Grantor.

         "Instruments" means all instruments as such term is defined in the UCC,
now owned or hereafter acquired by any Grantor.

         "Inventory" means all of the Grantors' now owned and hereafter acquired
inventory, goods and merchandise, wherever located, to be furnished under any
contract of service or held for sale or lease, all returned goods, raw
materials, work-in-process, finished goods (including embedded software), other
materials and supplies of any kind, nature or description which are used or
consumed in the Grantors' business or used in connection with the packing,
shipping, advertising, selling or finishing of such goods, merchandise, and all
documents of title or other Documents representing them.

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         "Letter-of-Credit Rights" means "letter-of-credit rights" as such term
is defined in the UCC, now owned or hereafter acquired by any Grantor, including
rights to payment or performance under a letter of credit, whether or not any
Grantor, as beneficiary, has demanded or is entitled to demand payment or
performance.

         "Payment Account" means each bank account established pursuant to this
Security Agreement, to which the proceeds of Accounts and other Collateral are
deposited or credited, and which is maintained in the name of the Agent or any
Grantor, as the Agent may determine, on terms acceptable to the Agent.

         "Proprietary Rights" means all of the Grantors' now owned and hereafter
arising or acquired: licenses, franchises, permits, patents, patent rights,
copyrights, works which are the subject matter of copyrights, trademarks,
service marks, trade names, trade styles, patent, trademark and service mark
applications, and all licenses and rights related to any of the foregoing, and
all other rights under any of the foregoing, all extensions, renewals, reissues,
divisions, continuations, and continuations-in-part of any of the foregoing, and
all rights to sue for past, present and future infringement of any of the
foregoing.

         "Software" means all "software" as such term is defined in the UCC, now
owned or hereafter acquired by any Grantor, other than software embedded in any
category of Goods, including all computer programs and all supporting
information provided in connection with a transaction related to any program.

         "Supporting Obligations" means all supporting obligations as such term
is defined in the UCC.

         "UCC" means the Uniform Commercial Code, as in effect from time to
time, of the State of North Carolina or of any other state the laws of which are
required as a result thereof to be applied in connection with the issue of
perfection of security interests.

         "Uniform Commercial Code jurisdiction" means any jurisdiction that has
adopted "Revised Article 9" of the UCC on or after July 1, 2001.

         All other capitalized terms used but not otherwise defined herein have
the meanings given to them in the Credit Agreement or in Annex A thereto. All
other undefined terms contained in this Security Agreement, unless the context
indicates otherwise, have the meanings provided for by the UCC to the extent the
same are used or defined therein.

         2. GRANT OF LIEN.

                  (a) As security for all Obligations, each of the Grantors
         hereby grants to the Agent, for the benefit of the Agent and the
         Lenders, a continuing security interest in, lien on, assignment of and
         right of set-off against, all of the following property and assets of
         each such respective Grantor, whether now owned or existing or
         hereafter acquired or arising, regardless of where located:

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                           (i) all Accounts;

                           (ii) all Inventory;

                           (iii) all contract rights, including Assigned
                  Contracts;

                           (iv) all Chattel Paper;

                           (v) all Documents;

                           (vi) all Instruments;

                           (vii) all Supporting Obligations and
                  Letter-of-Credit Rights;

                           (viii) all General Intangibles (including payment
                  intangibles and Software);

                           (ix) all of the Grantors' Deposit Accounts, credits,
                  and balances with and other claims against the Agent or any
                  Lender or any of their Affiliates or any other financial
                  institution with which any Grantor maintains deposits,
                  including any Payment Accounts;

                           (x) all books, records and other property related to
                  or referring to any of the foregoing, including books,
                  records, account ledgers, data processing records, computer
                  software and other property and General Intangibles at any
                  time evidencing or relating to any of the foregoing; and

                           (xi) all accessions to, substitutions for and
                  replacements, products and proceeds of any of the foregoing,
                  including, but not limited to, proceeds of any insurance
                  policies, claims against third parties, and condemnation or
                  requisition payments with respect to all or any of the
                  foregoing.

All of the foregoing and all other property of any Grantor in which the Agent or
any Lender may at any time be granted a Lien as collateral for the Obligations,
is herein collectively referred to as the "Collateral."

                  (b) All of the Obligations shall be secured by all of the
         Collateral.

         3. PERFECTION AND PROTECTION OF SECURITY INTEREST.

                  (a) Each Grantor shall, at its expense, perform all steps
         requested by the Agent at any time to perfect, maintain, protect, and
         enforce the Agent's Liens, including: (i) executing and filing
         financing or continuation statements, and amendments thereof, in form
         and substance reasonably satisfactory to the Agent; (ii) delivering to
         the Agent warehouse receipts covering any portion of the Collateral
         located in warehouses and for

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         which warehouse receipts are issued and certificates of title covering
         any portion of the collateral for which certificates of title have been
         issued; (iii) when an Event of Default has occurred and is continuing,
         transferring Inventory to warehouses or other locations designated by
         the Agent; (iv) placing notations on the Grantors' books of account to
         disclose the Agent's security interest; and (v) taking such other steps
         as are deemed necessary or desirable by the Agent to maintain and
         protect the Agent's Liens. Each Grantor agrees that a carbon,
         photographic, photostatic, or other reproduction of this Security
         Agreement or of a financing statement is sufficient as a financing
         statement.

                  (b) Unless Agent shall otherwise consent in writing (which
         consent may be revoked), each Grantor shall deliver to Agent all
         Collateral consisting of negotiable Documents, certificated securities
         (accompanied by stock papers executed in blank), Chattel Paper and
         Instruments promptly after such Grantor receives the same.

                  (c) Each Grantor shall in all instances use its commercially
         reasonable best efforts to obtain signed acknowledgements of Agent's
         Liens from bailees having possession of any Collateral that they hold
         for the benefit of Agent and each Grantor shall use its commercially
         reasonable best efforts to obtain waivers or subordinations of Liens
         from landlords and mortgagees unless the Agent shall have agreed in its
         sole discretion to make Reserves against the Borrowing Base for rent
         under such leases.

                  (d) If required by the terms of the Credit Agreement and not
         waived by Agent in writing (which waiver may be revoked), each Grantor
         shall obtain authenticated control agreements from each issuer of
         uncertificated securities, securities intermediary, or commodities
         intermediary issuing or holding any financial assets or commodities to
         or for such Grantor.

                  (e) If a Grantor is or becomes the beneficiary of a letter of
         credit, such Grantor shall promptly notify Agent thereof and enter into
         a tri-party agreement with Agent and the issuer and/or confirmation
         bank with respect to Letter-of-Credit Rights assigning such
         Letter-of-Credit Rights to Agent and directing all payments thereunder
         to the Payment Account, all in form and substance reasonably
         satisfactory to Agent.

                  (f) Each Grantor shall take all steps necessary to grant the
         Agent control of all electronic chattel paper in accordance with the
         Code and all "transferable records" as defined in the Uniform
         Electronic Transactions Act.

                  (g) Each Grantor hereby irrevocably authorizes the Agent at
         any time and from time to time to file in any filing office in any
         Uniform Commercial Code jurisdiction any initial financing statements
         and amendments thereto that (a) indicate the Collateral as being of an
         equal or lesser scope or with greater detail, and (b) contain any other
         information required by part 5 of Article 9 of the UCC of the State of
         North Carolina for the sufficiency or filing office acceptance of any
         financing statement or amendment, including (i) whether such Grantor is
         an organization, the type of organization and any organization
         identification number issued to such Grantor, and (ii) in the case of a
         financing statement filed as a fixture filing or indicating Collateral
         as

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         as-extracted collateral or timber to be cut, a sufficient description
         of real property to which the Collateral relates. Each Grantor agrees
         to furnish any such information to the Agent promptly upon request.
         Each Grantor also ratifies its authorization for the Agent to have
         filed in any Uniform Commercial Code jurisdiction any like initial
         financing statements or amendments thereto if filed prior to the date
         hereof.

                  (h) Unless otherwise consented by Agent, each Grantor shall
         promptly after the filing of any commercial tort claim (as defined in
         the UCC) acquired by it, enter into a supplement to this Security
         Agreement, granting to Agent a Lien in such commercial tort claim.

                  (i) From time to time, each Grantor shall, upon the Agent's
         request, execute and deliver confirmatory written instruments pledging
         to the Agent, for the ratable benefit of the Agent and the Lenders, the
         Collateral, but the Grantor's failure to do so shall not affect or
         limit any security interest or any other rights of the Agent or any
         Lender in and to the Collateral with respect to such Grantor. So long
         as the Credit Agreement is in effect and until all Obligations have
         been fully satisfied, the Agent's Liens shall continue in full force
         and effect in all Collateral (whether or not deemed eligible for the
         purpose of calculating the Availability or as the basis for any
         advance, loan, extension of credit, or other financial accommodation).

                  (j) [reserved].

                  (k) No Reincorporation. Without limiting the prohibitions on
         mergers involving the Grantors contained in the Credit Agreement, no
         Grantor shall reincorporate or reorganize itself under the laws of any
         jurisdiction other than the jurisdiction in which it is incorporated or
         organized as of the date hereof or change its type of entity as
         identified on Schedule II without the prior written consent of Agent.

                  (l) Terminations Amendments Not Authorized. Each Grantor
         acknowledges that it is not authorized to file any financing statement
         or amendment or termination statement with respect to any financing
         statement without the prior written consent of Agent and agrees that it
         will not do so without the prior written consent of Agent, subject to
         such Grantor's rights under Section 9-509(d)(2).

                  (m) No Restriction on Payments to Agent. No Grantor shall
         enter into any Contract that restricts or prohibits the grant of a
         security interest in Accounts, Chattel Paper, Instruments or payment
         intangibles or the proceeds of the foregoing to Agent.

         4. LOCATION OF COLLATERAL. (a) Each Grantor represents and warrants to
the Agent and the Lenders that: (A) Schedule I is a correct and complete list of
the location of such Grantor's chief executive office, the location of its books
and records, the locations of the Collateral, and the locations of all of its
other places of business; and (b) Schedule I correctly identifies any of such
facilities and locations that are not owned by a Grantor and sets forth the
names of the owners and lessors or sublessors of such facilities and locations.
Each Grantor covenants and agrees that it will not (i) maintain any Collateral
at any location other than those

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locations listed for such Grantor on Schedule I, (ii) otherwise change or add to
any of such locations, or (iii) change the location of its chief executive
office from the location identified in Schedule I, unless it gives the Agent at
least thirty (30) days' prior written notice thereof and executes any and all
financing statements and other documents that the Agent reasonably requests in
connection therewith. Without limiting the foregoing, each Grantor represents
that all of its Inventory (other than Inventory in transit) is, and covenants
that all of its Inventory will be, located either (a) on premises owned by such
Grantor, (b) on premises leased by such Grantor, provided that the Agent has
received an executed landlord waiver from the landlord of such premises in form
and substance satisfactory to the Agent, (c) in a warehouse or with a bailee,
provided that the Agent has received an executed bailee letter from the
applicable Person in form and substance satisfactory to the Agent or (d) on
premises leased by such Grantor provided that such Grantor has notified the
Agent of the amount of the monthly rent for such premises and the Agent has made
adequate reserves therefor.

         5. JURISDICTION OF ORGANIZATION. Schedule II hereto identifies each
Grantor's name as of the Closing Date as it appears in official filings in the
state of its incorporation or other organization, the type of entity of each
such Grantor (including corporation, partnership, limited partnership or limited
liability company), organizational identification number issued by Grantor's
state of incorporation or organization or a statement that no such number has
been issued and the jurisdiction in which such Grantor is incorporated or
organized. Each Grantor has only one state of incorporation or organization.

         6. TITLE TO, LIENS ON, AND SALE AND USE OF COLLATERAL. Each Grantor
represents and warrants to the Agent and the Lenders and agrees with the Agent
and the Lenders that: (a) such Grantor has rights in and the power to transfer
all of the Collateral free and clear of all Liens whatsoever, except for
Permitted Liens; (b) the Agent's Liens in the Collateral will not be subject to
any prior Lien except for those Liens identified in clauses (c), (d) and (e) of
the definition of Permitted Liens; and (c) such Grantor will use, store, and
maintain the Collateral with all reasonable care and will use such Collateral
for lawful purposes only.

         7. APPRAISALS. At such reasonable times as the Agent requests, each
Grantor shall, at its expense, provide the Agent with appraisals or updates
thereof of any or all of the Collateral from an appraiser, and prepared on a
basis, satisfactory to the Agent, such appraisals and updates to include,
without limitation, information required by applicable law and regulation and by
the internal policies of the Lenders; provided, however, so long as no Default
or Event of Default exists, no Grantor shall be responsible for the expense of
more than two (2) such appraisals per calendar year.

         8. ACCESS AND EXAMINATION. The Agent, accompanied by any Lender which
so elects, may at all reasonable times during regular business hours (and at any
time when a Default or Event of Default exists and is continuing) have access
to, examine, audit, make extracts from or copies of and inspect any or all of
the Grantors' records, files, and books of account and the Collateral, and
discuss the Grantors' affairs with the Grantors' officers and management. Each
Grantor will deliver to the Agent any instrument necessary for the Agent to
obtain records from any service bureau maintaining records for such Grantor. The
Agent may, and at the direction of the Required Lenders shall, at any time when
a Default or Event of

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Default exists, and at the Grantors' expense, make copies of all of the
Grantors' books and records, or require each Grantor to deliver such copies to
the Agent. The Agent may, without expense to the Agent, use such of the
Grantors' respective personnel, supplies, and Real Estate as may be reasonably
necessary for maintaining or enforcing the Agent's Liens. The Agent shall have
the right, at any time, in the Agent's name or in the name of a nominee of the
Agent, to verify the validity, amount or any other matter relating to the
Accounts, Inventory, or other Collateral, by mail, telephone, or otherwise.

         9. COLLATERAL REPORTING. Each Grantor shall provide the Agent with the
documents specified in Section 5.2 of the Credit Agreement, each in form
satisfactory to the Agent and at the times specified in Section 5.2 of the
Credit Agreement, or more frequently if requested by the Agent. If any of a
Grantor's records or reports of the Collateral are prepared by an accounting
service or other agent, each Grantor hereby authorizes such service or agent to
deliver such records, reports, and related documents to the Agent, for
distribution to the Lenders.

         10. ACCOUNTS.

                  (a) Each Grantor hereby represents and warrants to the Agent
         and the Lenders, with respect to such Grantor's Accounts, that: (i)
         each existing Account represents, and each future Account will
         represent, a bona fide sale or lease and delivery of goods by such
         Grantor, or rendition of services by such Grantor, in the ordinary
         course of such Grantor's business; (ii) each existing Account is, and
         each future Account will be, for a liquidated amount payable by the
         Account Debtor thereon on the terms set forth in the invoice therefor
         or in the schedule thereof delivered to the Agent, without any offset,
         deduction, defense, or counterclaim except those known to such Grantor
         and disclosed to the Agent and the Lenders pursuant to this Security
         Agreement; (iii) no payment will be received with respect to any
         Account, and no credit, discount, or extension, or agreement therefor
         will be granted on any Account, except as reported to the Agent and the
         Lenders in Borrowing Base Certificates delivered in accordance with
         this Security Agreement; (iv) each copy of an invoice delivered to the
         Agent by such Grantor will be a genuine copy of the original invoice
         sent to the Account Debtor named therein; and (v) all goods described
         in any invoice representing a sale of goods will have been delivered to
         the Account Debtor and all services of such Grantor described in each
         invoice will have been performed.

                  (b) No Grantor shall re-date any invoice or sale or make sales
         on extended dating beyond that customary in such Grantor's business or
         extend or modify any Account.

                  (c) No Grantor shall accept any note or other instrument
         (except a check or other instrument for the immediate payment of money)
         with respect to any Account without the Agent's written consent. If the
         Agent consents to the acceptance of any such instrument, it shall be
         considered as evidence of the Account and not payment thereof and such
         Grantor will promptly deliver such instrument to the Agent, endorsed by
         such Grantor to the Agent in a manner satisfactory in form and
         substance to the Agent.

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         Regardless of the form of presentment, demand, notice of protest with
         respect thereto, such Grantor shall remain liable thereon until such
         instrument is paid in full.

                  (d) With respect to any disputes and claims in excess of
         $250,000 with any Account Debtor, each Grantor agrees to settle,
         contest, or adjust such dispute or claim at no expense to the Agent or
         any Lender. No discount, credit or allowance shall be granted to any
         such Account Debtor without the Agent's prior written consent, except
         for discounts, credits and allowances made or given in the ordinary
         course of a Grantor's business when no Event of Default exists
         hereunder. The Agent may at all times when an Event of Default exists
         hereunder, settle or adjust disputes and claims directly with Account
         Debtors for amounts and upon terms which the Agent or the Required
         Lenders, as applicable, shall consider advisable and, in all cases, the
         Agent will credit such Grantor's Loan Account with the net amounts
         received by the Agent in payment of any Accounts.

                  (e) If an Account Debtor returns any Inventory to any Grantor
         when no Event of Default exists, then such Grantor shall promptly
         determine the reason for such return and shall issue a credit
         memorandum to the Account Debtor in the appropriate amount. In the
         event any Account Debtor returns Inventory to a Grantor when an Event
         of Default exists, such Grantor, upon the request of the Agent, shall:
         (i) hold the returned Inventory in trust for the Agent; (ii) segregate
         all returned Inventory from all of its other property; (iii) dispose of
         the returned Inventory solely according to the Agent's written
         instructions; and (iv) not issue any credits or allowances with respect
         thereto without the Agent's prior written consent. All returned
         Inventory shall be subject to the Agent's Liens thereon. Whenever any
         Inventory is returned, the related Account shall be deemed ineligible
         to the extent of the amount owing by the Account Debtor with respect to
         such returned Inventory and such returned Inventory shall not be
         Eligible Inventory.

         11. COLLECTION OF ACCOUNTS; PAYMENTS.

                  (a) Until the Agent notifies the Grantors to the contrary,
         each Grantor shall make collection of all Accounts and other Collateral
         for the Agent, shall receive all payments as the Agent's trustee, and
         shall immediately deliver all payments in their original form duly
         endorsed in blank into a Payment Account established for the account of
         such Grantor at a Clearing Bank acceptable to the Agent, subject to a
         Blocked Account Agreement. On or prior to the date hereof, each Grantor
         shall establish a lock-box service for collections of Accounts at a
         Clearing Bank acceptable to the Agent and subject to a Blocked Account
         Agreement and other documentation acceptable to the Agent. Each Grantor
         shall instruct all Account Debtors to make all payments directly to the
         address established for such service. If, notwithstanding such
         instructions, any Grantor receives any proceeds of Accounts, it shall
         receive such payments as the Agent's trustee, and shall immediately
         deliver such payments to the Agent in their original form duly endorsed
         in blank or deposit them into a Payment Account, as the Agent may
         direct. All collections received in any lock-box or Payment Account or
         directly by any Grantor or the Agent, and all funds in any Payment
         Account or other account to which such collections are deposited shall
         be subject to the Agent's sole control and withdrawals by

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         such Grantor shall not be permitted. The Agent or the Agent's designee
         may, at any time after the occurrence of an Event of Default, notify
         Account Debtors that the Accounts have been assigned to the Agent and
         of the Agent's security interest therein, and may collect them directly
         and charge the collection costs and expenses to the Loan Account as a
         Revolving Loan. So long as an Event of Default has occurred and is
         continuing, each Grantor, at the Agent's request, shall execute and
         deliver to the Agent such documents as the Agent shall require to grant
         the Agent access to any post office box in which collections of
         Accounts are received.

                  (b) If sales of Inventory are made or services are rendered
         for cash, each Grantor shall immediately deliver to the Agent or
         deposit into a Payment Account the cash which such Grantor receives.

                  (c) All payments including immediately available funds
         received by the Agent at a bank account designated by it, will be the
         Agent's sole property for its benefit and the benefit of the Lenders
         and will be credited to the Loan Account (conditional upon final
         collection) immediately upon receipt.

                  (d) In the event the Grantors repay all of the Obligations
         upon the termination of the Credit Agreement or upon acceleration of
         the Obligations, other than through the Agent's receipt of payments on
         account of the Accounts or proceeds of the other Collateral, such
         payment will be credited (conditioned upon final collection) to the
         Grantor's Loan Account upon the Agent's receipt of immediately
         available funds.

         12. INVENTORY; PERPETUAL INVENTORY.

                  (a) Each Grantor represents and warrants to the Agent and the
         Lenders and agrees with the Agent and the Lenders that all of the
         Inventory owned by such Grantor is and will be held for sale or lease,
         or to be furnished in connection with the rendition of services, in the
         ordinary course of such Grantor's business, and is and will be fit for
         such purposes. Each Grantor will keep its Inventory in good and
         marketable condition, except for damaged or defective goods arising in
         the ordinary course of such Grantor's business. No Grantor will,
         without the prior written consent of the Agent, acquire or accept any
         Inventory on consignment or approval. Each Grantor agrees that all
         Inventory produced by such Grantor in the United States of America will
         be produced in accordance with the Federal Fair Labor Standards Act of
         1938, as amended, and all rules, regulations, and orders thereunder.
         Each Grantor will conduct a physical or cycle count of the Inventory at
         least once per Fiscal Year, and after and during the continuation of an
         Event of Default, at such other times as the Agent requests. Each
         Grantor will maintain a perpetual inventory reporting system at all
         times. No Grantor will, without the Agent's written consent, sell any
         Inventory on a bill-and-hold, guaranteed sale, sale and return, sale on
         approval, consignment, or other repurchase or return basis.

                  (b) In connection with all Inventory financed by Letters of
         Credit, each Grantor will, at the Agent's request, instruct all
         suppliers, carriers, forwarders, customs brokers, warehouses or others
         receiving or holding cash, checks, Inventory, Documents

<PAGE>

         or Instruments in which the Agent holds a security interest to deliver
         them to the Agent and/or subject to the Agent's order, and if they
         shall come into such Grantor's possession, to deliver them, upon
         request, to the Agent in their original form. Each Grantor shall also,
         at the Agent's request, designate the Agent as the consignee on all
         bills of lading and other negotiable and non-negotiable documents.

         13. ASSIGNED CONTRACTS. Each Grantor shall fully perform all of its
obligations under each of the Assigned Contracts, and shall enforce all of its
rights and remedies thereunder, in each case, as it deems appropriate in its
business judgment; provided, however, that no Grantor shall take any action or
fail to take any action with respect to its Assigned Contracts which would cause
the termination of a material Assigned Contract. Without limiting the generality
of the foregoing, each Grantor shall take all action necessary or appropriate to
permit, and shall not take any action which would have any materially adverse
effect upon, the full enforcement of all indemnification rights under its
Assigned Contracts. Each Grantor shall deposit into the Payment Account or remit
directly to the Agent for application to the Obligations in such order as the
Required Lenders shall determine, all amounts received by such Grantor as
indemnification or otherwise pursuant to its Assigned Contracts. If any Grantor
shall fail after the Agent's demand to pursue diligently any right under its
Assigned Contracts, or if an Event of Default then exists, the Agent may, and at
the direction of the Required Lenders shall, directly enforce such right in its
own or such Grantor's name and may enter into such settlements or other
agreements with respect thereto as the Agent or the Required Lenders, as
applicable, shall determine. In any suit, proceeding or action brought by the
Agent for the benefit of the Lenders under any Assigned Contract for any sum
owing thereunder or to enforce any provision thereof, each Grantor shall
indemnify and hold the Agent and Lenders harmless from and against all expense,
loss or damage suffered by reason of any defense, setoff, counterclaims,
recoupment, or reduction of liability whatsoever of the obligor thereunder
arising out of a breach by such Grantor of any obligation thereunder or arising
out of any other agreement, indebtedness or liability at any time owing from
such Grantor to or in favor of such obligor or its successors. All such
obligations of the Grantors shall be and remain enforceable only against the
Grantors and shall not be enforceable against the Agent or the Lenders.
Notwithstanding any provision hereof to the contrary, each Grantor shall at all
times remain liable to observe and perform all of its duties and obligations
under its Assigned Contracts, and the Agent's or any Lender's exercise of any of
their respective rights with respect to the Collateral shall not release such
Grantor from any of such duties and obligations. Neither the Agent nor any
Lender shall be obligated to perform or fulfill any of the Grantors' duties or
obligations under its Assigned Contracts or to make any payment thereunder, or
to make any inquiry as to the nature or sufficiency of any payment or property
received by it thereunder or the sufficiency of performance by any party
thereunder, or to present or file any claim, or to take any action to collect or
enforce any performance, any payment of any amounts, or any delivery of any
property.

         14. DOCUMENTS, INSTRUMENTS, AND CHATTEL PAPER. Each Grantor represents
and warrants to the Agent and the Lenders that (a) all Documents, Instruments,
and Chattel Paper describing, evidencing, or constituting Collateral, and all
signatures and endorsements thereon, are and will be complete, valid, and
genuine, and (b) all goods evidenced by such Documents, Instruments, Letter of
Credit Rights and Chattel Paper are and will be owned by such Grantor, free and
clear of all Liens other than Permitted Liens. If a Grantor

<PAGE>

retains possession of any Chattel Paper or Instruments with Agent's consent,
such Chattel Paper and Instruments shall be marked with the following legend:
"This writing and the obligations evidenced or served hereby are subject to the
security interest of Bank of America, N.A., as Agent, for the benefit of Agent
and certain Lenders."

         15. RIGHT TO CURE. The Agent may, in its discretion, and shall, at the
direction of the Required Lenders, pay any amount or do any act required of any
Grantor hereunder or under any other Loan Document in order to preserve or
protect the Collateral or the Agent's Liens therein, and which such Grantor
fails to pay or do, including payment of any judgment against such Grantor, any
insurance premium, any warehouse charge, any finishing or processing charge, any
landlord's or bailee's claim, and any other Lien upon or with respect to the
Collateral; provided that any payments made by the Agent under this Section 15
shall not at any one time outstanding exceed 10% of the Borrowing Base but not
in excess of the Maximum Revolver Amount; provided further, that the Majority
Lenders may at any time revoke the Agent's authorization to make such payments.
All payments that the Agent makes under this Section 15 and all out-of-pocket
costs and expenses that the Agent pays or incurs in connection with any action
taken by it hereunder shall be charged to such Grantor's Loan Account as a
Revolving Loan. Any payment made or other action taken by the Agent under this
Section 15 shall be without prejudice to any right to assert an Event of Default
hereunder and to proceed thereafter as herein provided.

         16. POWER OF ATTORNEY. Each Grantor hereby appoints the Agent and the
Agent's designee as such Grantor's attorney, with power: (a) to endorse such
Grantor's name on any checks, notes, acceptances, money orders, or other forms
of payment or security that come into the Agent's or any Lender's possession;
(b) to sign such Grantor's name on any invoice, bill of lading, warehouse
receipt or other negotiable or non-negotiable Document constituting Collateral,
on drafts against customers, on assignments of Accounts, on notices of
assignment, financing statements and other public records and to file any such
financing statements by electronic means with or without a signature as
authorized or required by applicable law or filing procedure; (c) so long as any
Event of Default has occurred and is continuing, to notify the post office
authorities to change the address for delivery of such Grantor's mail to an
address designated by the Agent and to receive, open and dispose of all mail
addressed to such Grantor and concurrent with such notification, the Agent
shall, if not otherwise prohibited by applicable law, notify the Grantor of such
action; (d) to send requests for verification of Accounts to customers or
Account Debtors; (e) to complete in such Grantor's name or the Agent's name, any
order, sale or transaction, obtain the necessary Documents in connection
therewith, and collect the proceeds thereof; (f) to clear Inventory through
customs in such Grantor's name, the Agent's name or the name of the Agent's
designee, and to sign and deliver to customs officials powers of attorney in
such Grantor's name for such purpose; (g) to the extent that such Grantor's
authorization given in Section 3(g) of this Security Agreement is not
sufficient, to file such financing statements with respect to this Security
Agreement, with or without such Grantor's signature, or to file a photocopy of
this Security Agreement in substitution for a financing statement, as the Agent
may deem appropriate and to execute in such Grantor's name such financing
statements and amendments thereto and continuation statements which may require
such Grantor's signature; and (h) to do all things necessary to carry out the
Credit Agreement and this Security Agreement. Each Grantor ratifies and approves
all acts of such attorney. None

<PAGE>

of the Lenders or the Agent nor their attorneys will be liable for any acts or
omissions or for any error of judgment or mistake of fact or law except for
their willful misconduct. This power, being coupled with an interest, is
irrevocable until the Credit Agreement has been terminated and the Obligations
have been fully satisfied.

         17. THE AGENT'S AND LENDERS' RIGHTS, DUTIES AND LIABILITIES.

                  (a) Each Grantor assumes all responsibility and liability
         arising from or relating to the use, sale, license or other disposition
         of the Collateral. The Obligations shall not be affected by any failure
         of the Agent or any Lender to take any steps to perfect the Agent's
         Liens or to collect or realize upon the Collateral, nor shall loss of
         or damage to the Collateral release any Grantor from any of the
         Obligations. Following the occurrence and during the continuation of an
         Event of Default, the Agent may (but shall not be required to), and at
         the direction of the Required Lenders shall, without notice to or
         consent from any Grantor, sue upon or otherwise collect, extend the
         time for payment of, modify or amend the terms of, compromise or settle
         for cash, credit, or otherwise upon any terms, grant other indulgences,
         extensions, renewals, compositions, or releases, and take or omit to
         take any other action with respect to the Collateral, any security
         therefor, any agreement relating thereto, any insurance applicable
         thereto, or any Person liable directly or indirectly in connection with
         any of the foregoing, without discharging or otherwise affecting the
         liability of any Grantor for the Obligations or under the Credit
         Agreement or any other agreement now or hereafter existing between the
         Agent and/or any Lender and any Grantor.

                  (b) It is expressly agreed by Grantors that, anything herein
         to the contrary notwithstanding, each Grantor shall remain liable under
         each of its contracts and each of its licenses to observe and perform
         all the conditions and obligations to be observed and performed by it
         thereunder. Neither Agent nor any Lender shall have any obligation or
         liability under any contract or license by reason of or arising out of
         this Security Agreement or the granting herein of a Lien thereon or the
         receipt by Agent or any Lender of any payment relating to any contract
         or license pursuant hereto. Neither Agent nor any Lender shall be
         required or obligated in any manner to perform or fulfill any of the
         obligations of any Grantor under or pursuant to any contract or
         license, or to make any payment, or to make any inquiry as to the
         nature or the sufficiency of any payment received by it or the
         sufficiency of any performance by any party under any contract or
         license, or to present or file any claims, or to take any action to
         collect or enforce any performance or the payment of any amounts which
         may have been assigned to it or to which it may be entitled at any time
         or times.

                  (c) Agent may at any time after a Default or an Event of
         Default has occurred and is continuing (or if any rights of set-off
         (other than set-offs against an Account arising under the contract
         giving rise to the same Account) or contra accounts may be asserted
         with respect to the following), without prior notice to any Grantor,
         notify Account Debtors, and other Persons obligated on the Collateral
         that Agent has a security interest therein, and that payments shall be
         made directly to Agent, for itself and the benefit of Lenders. Upon the
         request of Agent, each Grantor shall so notify Account

<PAGE>

         Debtors and other Persons obligated on the Collateral. Once any such
         notice has been given to any Account Debtor or other Person obligated
         on the Collateral, no Grantor shall give any contrary instructions to
         such Account Debtor or other Person without Agent's prior written
         consent.

                  (d) Agent may at any time in Agent's own name or in the name
         of a Grantor communicate with Account Debtors, parties to Contracts and
         obligors in respect of Instruments to verify with such Persons, to
         Agent's satisfaction, the existence, amount and terms of Accounts,
         payment intangibles, Instruments or Chattel Paper. If a Default or
         Event of Default shall have occurred and be continuing, each Grantor,
         at its own expense, shall cause the independent certified public
         accountants then engaged by such Grantor to prepare and deliver to
         Agent and each Lender at any time and from time to time promptly upon
         Agent's request the following reports with respect to such Grantor: (i)
         a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii)
         trial balances; and (iv) a test verification of such Accounts as Agent
         may request. Each Grantor, at its own expense, shall deliver to Agent
         the results of each physical verification, if any, which such Grantor
         may in its discretion have made, or caused any other Person to have
         made on its behalf, of all or any portion of its Inventory.

         18. PATENT, TRADEMARK AND COPYRIGHT COLLATERAL.

                  (a) No Grantor has any interest in, or title to, any patent,
         material trademark or copyright except as set forth in Schedule III
         hereto. This Security Agreement is effective to create a valid and
         continuing Lien on and, upon filing of the Notice of Security Interest
         in Copyrights with the United States Copyright Office and filing of
         both the Notice of Security Interest in Patents and the Notice of
         Security Interest in Trademarks with the United States Patent and
         Trademark Office, perfected Liens in favor of Agent on each Grantor's
         patents, material trademarks and copyrights and such perfected Liens
         are enforceable as such as against any and all creditors of and
         purchasers from such Grantor. Upon filing of the Notice of Security
         Interest in Copyrights, in the form of Schedule IV hereto, with the
         United States Copyright Office and filing of both the Notice of
         Security Interest in Patents, in the form of Schedule V hereto, and the
         Notice of Security Interest in Trademarks, in the form of Schedule VI
         hereto, with the United States Patent and Trademark Office and the
         filing of appropriate financing statements, all action necessary or
         desirable to protect and perfect Agent's Lien on such Grantor's
         patents, material trademarks or copyrights shall have been duly taken.

                  (b) [Reserved]

                  (c) In no event shall any Grantor, either directly or through
         any agent, employee, licensee or designee, file an application for the
         registration of any patent, material trademark or copyright with the
         United States Patent and Trademark Office, the United States Copyright
         Office or any similar office or agency without giving Agent prior
         written notice thereof, and, upon request of Agent, each Grantor shall
         execute and deliver any and all Notices of Security Interest in
         Copyrights, Notices of Security Interest in Patents and/or Notices of
         Security Interest in Trademarks as Agent may request to

<PAGE>

         evidence Agent's Lien on such patent, material trademark or copyright,
         and the General Intangibles of such Grantor relating thereto or
         represented thereby.

                  (d) Each Grantor shall take all actions necessary or requested
         by Agent to maintain and pursue each application, to obtain the
         relevant registration and to maintain the registration of each of the
         patents, material trademarks and copyrights (now or hereafter
         existing), including the filing of applications for renewal, affidavits
         of use, affidavits of noncontestability and opposition and interference
         and cancellation proceedings.

                  (e) In the event that any of the patent, trademark or
         copyright Collateral is infringed upon, or misappropriated or diluted
         by a third party, the affected Grantor shall, unless it shall
         reasonably determine that such patent, trademark or copyright
         Collateral is in no way material to the conduct of its business or
         operations, promptly sue for infringement, misappropriation or dilution
         and to recover any and all damages for such infringement,
         misappropriation or dilution, and shall take such other actions as
         Agent shall deem appropriate under the circumstances to protect such
         patent, trademark or copyright Collateral.

         19. INDEMNIFICATION. In any suit, proceeding or action brought by Agent
or any Lender relating to any Collateral for any sum owing with respect thereto
or to enforce any rights or claims with respect thereto, each Grantor will save,
indemnify and keep Agent and Lenders harmless from and against all expense
(including reasonable attorneys' fees and expenses), loss or damage suffered by
reason of any defense, setoff, counterclaim, recoupment or reduction of
liability whatsoever of the Account Debtor or other Person obligated on the
Collateral, arising out of a breach by such Grantor of any obligation thereunder
or arising out of any other agreement, indebtedness or liability at any time
owing to, or in favor of, such obligor or its successors from such Grantor,
except in the case of Agent or any Lender, to the extent such expense, loss, or
damage is attributable solely to the gross negligence or willful misconduct of
Agent or such Lender as finally determined by a court of competent jurisdiction.
All such obligations of such Grantor shall be and remain enforceable against and
only against such Grantor and shall not be enforceable against Agent or any
Lender.

         20. LIMITATION ON LIENS ON COLLATERAL. No Grantor shall create, permit
or suffer to exist, and each Grantor shall defend the Collateral against, and
take such other action as is necessary to remove, any Lien on the Collateral
except Permitted Liens, and shall defend the right, title and interest of Agent
and Lenders in and to any of such Grantor's rights under the Collateral against
the claims and demands of all Persons whomsoever.

         21. [Reserved]

         22. REMEDIES; RIGHTS UPON DEFAULT.

                  (a) In addition to all other rights and remedies granted to it
         under this Security Agreement, the Credit Agreement, the other Loan
         Documents and under any other instrument or agreement securing,
         evidencing or relating to any of the Obligations, if any

<PAGE>

         Event of Default shall have occurred and be continuing, Agent may
         exercise all rights and remedies of a secured party under the UCC.
         Without limiting the generality of the foregoing, each Grantor
         expressly agrees that in any such event Agent, without demand of
         performance or other demand, advertisement or notice of any kind
         (except the notice specified below of time and place of public or
         private sale) to or upon such Grantor or any other Person (all and each
         of which demands, advertisements and notices are hereby expressly
         waived to the maximum extent permitted by the UCC and other applicable
         law), may forthwith enter upon the premises of such Grantor where any
         Collateral is located through self-help, without judicial process,
         without first obtaining a final judgment or giving such Grantor or any
         other Person notice and opportunity for a hearing on Agent's claim or
         action and may collect, receive, assemble, process, appropriate and
         realize upon the Collateral, or any part thereof, and may forthwith
         sell, lease, license, assign, give an option or options to purchase, or
         sell or otherwise dispose of and deliver said Collateral (or contract
         to do so), or any part thereof, in one or more parcels at a public or
         private sale or sales, at any exchange at such prices as it may deem
         acceptable, for cash or on credit or for future delivery without
         assumption of any credit risk. Agent or any Lender shall have the right
         upon any such public sale or sales and, to the extent permitted by law,
         upon any such private sale or sales, to purchase for the benefit of
         Agent and Lenders, the whole or any part of said Collateral so sold,
         free of any right or equity of redemption, which equity of redemption
         each Grantor hereby releases. Such sales may be adjourned and continued
         from time to time with or without notice. Agent shall have the right to
         conduct such sales on each Grantor's premises or elsewhere and shall
         have the right to use such Grantor's premises without charge for such
         time or times as Agent deems necessary or advisable.

                  (b) Each Grantor further agrees, at Agent's request, to
         assemble the Collateral and make it available to Agent at a place or
         places designated by Agent which are reasonably convenient to Agent and
         such Grantor, whether at such Grantor's premises or elsewhere. Until
         Agent is able to effect a sale, lease, or other disposition of
         Collateral, Agent shall have the right to hold or use Collateral, or
         any part thereof, to the extent that it deems appropriate for the
         purpose of preserving Collateral or its value or for any other purpose
         deemed appropriate by Agent. Agent shall have no obligation to any
         Grantor to maintain or preserve the rights of such Grantor as against
         third parties with respect to Collateral while Collateral is in the
         possession of Agent. Agent may, if it so elects, seek the appointment
         of a receiver or keeper to take possession of Collateral and to enforce
         any of Agent's remedies (for the benefit of Agent and Lenders), with
         respect to such appointment without prior notice or hearing as to such
         appointment. Agent shall apply the net proceeds of any such collection,
         recovery, receipt, appropriation, realization or sale to the
         Obligations as provided in the Credit Agreement, and only after so
         paying over such net proceeds, and after the payment by Agent of any
         other amount required by any provision of law, need Agent account for
         the surplus, if any, to such Grantor. To the maximum extent permitted
         by applicable law, each Grantor waives all claims, damages, and demands
         against Agent or any Lender arising out of the repossession, retention
         or sale of the Collateral except such as arise solely out of the gross
         negligence or willful misconduct of Agent or such Lender as finally
         determined by a court of competent jurisdiction. Each Grantor agrees
         that ten (10) days prior notice by Agent of the time and

<PAGE>

         place of any public sale or of the time after which a private sale may
         take place is reasonable notification of such matters. Each Grantor
         shall remain liable for any deficiency if the proceeds of any sale or
         disposition of the Collateral are insufficient to pay all Obligations,
         including any attorneys' fees or other expenses incurred by Agent or
         any Lender to collect such deficiency.

                  (c) Except as otherwise specifically provided herein, each
         Grantor hereby waives presentment, demand, protest or any notice (to
         the maximum extent permitted by applicable law) of any kind in
         connection with this Security Agreement or any Collateral.

                  (d) To the extent that applicable law imposes duties on the
         Agent to exercise remedies in a commercially reasonable manner, each
         Grantor acknowledges and agrees that it is not commercially
         unreasonable for the Agent (a) to fail to incur expenses reasonably
         deemed significant by the Agent to prepare Collateral for disposition
         or otherwise to complete raw material or work in process into finished
         goods or other finished products for disposition, (b) to fail to obtain
         third party consents for access to Collateral to be disposed of, or to
         obtain or, if not required by other law, to fail to obtain governmental
         or third party consents for the collection or disposition of Collateral
         to be collected or disposed of, (c) to fail to exercise collection
         remedies against Account Debtors or other Persons obligated on
         Collateral or to remove Liens on or any adverse claims against
         Collateral, (d) to exercise collection remedies against Account Debtors
         and other Persons obligated on Collateral directly or through the use
         of collection agencies and other collection specialists, (e) to
         advertise dispositions of Collateral through publications or media of
         general circulation, whether or not the Collateral is of a specialized
         nature, (f) to contact other Persons, whether or not in the same
         business as such Grantor, for expressions of interest in acquiring all
         or any portion of such Collateral, (g) to hire one or more professional
         auctioneers to assist in the disposition of Collateral, whether or not
         the Collateral is of a specialized nature, (h) to dispose of Collateral
         by utilizing internet sites that provide for the auction of assets of
         the types included in the Collateral or that have the reasonable
         capacity of doing so, or that match buyers and sellers of assets, (i)
         to dispose of assets in wholesale rather than retail markets, (j) to
         disclaim disposition warranties, such as title, possession or quiet
         enjoyment, (k) to purchase insurance or credit enhancements to insure
         the Agent against risks of loss, collection or disposition of
         Collateral or to provide to the Agent a guaranteed return from the
         collection or disposition of Collateral, or (l) to the extent deemed
         appropriate by the Agent, to obtain the services of other brokers,
         investment bankers, consultants and other professionals to assist the
         Agent in the collection or disposition of any of the Collateral. Each
         Grantor acknowledges that the purpose of this Section 22(d) is to
         provide non-exhaustive indications of what actions or omissions by the
         Agent would not be commercially unreasonable in the Agent's exercise of
         remedies against the Collateral and that other actions or omissions by
         the Agent shall not be deemed commercially unreasonable solely on
         account of not being indicated in this Section 22(d). Without
         limitation upon the foregoing, nothing contained in this Section 22(d)
         shall be construed to grant any rights to any Grantor or to impose any
         duties on Agent that would not have been granted or imposed by this
         Security Agreement or by applicable law in the absence of this Section
         22(d).

<PAGE>

         23. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY. For the purpose of
enabling Agent to exercise rights and remedies under Section 22 hereof
(including, without limiting the terms of Section 22 hereof, in order to take
possession of, hold, preserve, process, assemble, prepare for sale, market for
sale, sell or otherwise dispose of Collateral) at such time as Agent shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to Agent, for the benefit of Agent and Lenders, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to any Grantor) to use, license or sublicense any Intellectual
Property now owned or hereafter acquired by any Grantor, and wherever the same
may be located, and including in such license access to all media in which any
of the licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof.

         24. LIMITATION ON AGENT'S AND LENDERS' DUTY IN RESPECT OF COLLATERAL.
Agent and each Lender shall use reasonable care with respect to the Collateral
in its possession or under its control. Neither Agent nor any Lender shall have
any other duty as to any Collateral in its possession or control or in the
possession or control of any agent or nominee of Agent or such Lender, or any
income thereon or as to the preservation of rights against prior parties or any
other rights pertaining thereto.

         25. MISCELLANEOUS.

                  (a) Reinstatement. This Security Agreement shall remain in
         full force and effect and continue to be effective should any petition
         be filed by or against any Grantor for liquidation or reorganization,
         should any Grantor become insolvent or make an assignment for the
         benefit of any creditor or creditors or should a receiver or trustee be
         appointed for all or any significant part of any Grantor's assets, and
         shall continue to be effective or be reinstated, as the case may be, if
         at any time payment and performance of the Obligations, or any part
         thereof, is, pursuant to applicable law, rescinded or reduced in
         amount, or must otherwise be restored or returned by any obligee of the
         Obligations, whether as a "voidable preference," "fraudulent
         conveyance," or otherwise, all as though such payment or performance
         had not been made. In the event that any payment, or any part thereof,
         is rescinded, reduced, restored or returned, the Obligations shall be
         reinstated and deemed reduced only by such amount paid and not so
         rescinded, reduced, restored or returned.

                  (b) Notices. Except as otherwise provided herein, whenever it
         is provided herein that any notice, demand, request, consent, approval,
         declaration or other communication shall or may be given to or served
         upon any of the parties by any other party, or whenever any of the
         parties desires to give and serve upon any other party any
         communication with respect to this Security Agreement, each such
         notice, demand, request, consent, approval, declaration or other
         communication shall be in writing and shall be given in the manner, and
         deemed received, as provided for in the Credit Agreement.

<PAGE>

                  (c) Severability. Whenever possible, each provision of this
         Security Agreement shall be interpreted in a manner as to be effective
         and valid under applicable law, but if any provision of this Security
         Agreement shall be prohibited by or invalid under applicable law, such
         provision shall be ineffective to the extent of such prohibition or
         invalidity without invalidating the remainder of such provision or the
         remaining provisions of this Security Agreement. This Security
         Agreement is to be read, construed and applied together with the Credit
         Agreement and the other Loan Documents which, taken together, set forth
         the complete understanding and agreement of Agent, Lenders and the
         Grantors with respect to the matters referred to herein and therein.

                  (d) No Waiver; Cumulative Remedies. Neither Agent nor any
         Lender shall by any act, delay, omission or otherwise be deemed to have
         waived any of its rights or remedies hereunder, and no waiver shall be
         valid unless in writing, signed by Agent and then only to the extent
         therein set forth. A waiver by Agent of any right or remedy hereunder
         on any one occasion shall not be construed as a bar to any right or
         remedy which Agent would otherwise have had on any future occasion. No
         failure to exercise nor any delay in exercising on the part of Agent or
         any Lender, any right, power or privilege hereunder, shall operate as a
         waiver thereof, nor shall any single or partial exercise of any right,
         power or privilege hereunder preclude any other or future exercise
         thereof or the exercise of any other right, power or privilege. The
         rights and remedies hereunder provided are cumulative and may be
         exercised singly or concurrently, and are not exclusive of any rights
         and remedies provided by law. None of the terms or provisions of this
         Security Agreement may be waived, altered, modified or amended except
         by an instrument in writing, duly executed by Agent and the Grantors.

                  (e) Limitation by Law. All rights, remedies and powers
         provided in this Security Agreement may be exercised only to the extent
         that the exercise thereof does not violate any applicable provision of
         law, and all the provisions of this Security Agreement are intended to
         be subject to all applicable mandatory provisions of law that may be
         controlling and to be limited to the extent necessary so that they
         shall not render this Security Agreement invalid, unenforceable, in
         whole or in part, or not entitled to be recorded, registered or filed
         under the provisions of any applicable law.

                  (f) Termination of this Security Agreement. Subject to Section
         25(a) hereof, this Security Agreement shall terminate upon the
         satisfactory collateralization of all Letters of Credit and the payment
         in full in cash of all other Obligations (other than indemnification
         Obligations as to which no claim has been asserted).

                  (g) Successors and Assigns. This Security Agreement and all
         obligations of the Grantors hereunder shall be binding upon the
         successors and assigns of each Grantor (including any
         debtor-in-possession on behalf of any Grantor) and shall, together with
         the rights and remedies of Agent, for the benefit of Agent and Lenders,
         hereunder, inure to the benefit of Agent and Lenders, all future
         holders of any instrument evidencing any of the Obligations and their
         respective successors and assigns. No sales of participations, other
         sales, assignments, transfers or other dispositions of any agreement
         governing or instrument evidencing the Obligations or any portion
         thereof or interest therein shall in

<PAGE>

         any manner affect the Lien granted to Agent, for the benefit of Agent
         and Lenders, hereunder. No Grantor may assign, sell, hypothecate or
         otherwise transfer any interest in or obligation under this Security
         Agreement.

                  (h) Counterparts. This Security Agreement may be authenticated
         in any number of separate counterparts, each of which shall
         collectively and separately constitute one and the same agreement. This
         Security Agreement may be authenticated by manual signature, facsimile
         or, if approved in writing by Agent, electronic means, all of which
         shall be equally valid.

                  (i) Governing Law. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
         ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
         CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS SECURITY AGREEMENT AND THE
         OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
         ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA
         APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE, AND ANY
         APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH GRANTOR HEREBY
         CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN
         MECKLENBURG COUNTY, CITY OF CHARLOTTE, SHALL HAVE EXCLUSIVE
         JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY
         GRANTOR, AGENT AND LENDERS PERTAINING TO THIS SECURITY AGREEMENT OR ANY
         OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING
         TO THIS SECURITY AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS,
         PROVIDED, THAT AGENT, LENDERS AND GRANTORS ACKNOWLEDGE THAT ANY APPEALS
         FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
         MECKLENBURG COUNTY, CITY OF CHARLOTTE, AND, PROVIDED, FURTHER, NOTHING
         IN THIS SECURITY AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT
         FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
         JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
         OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
         AGENT. EACH GRANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
         JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND
         EACH GRANTOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON
         LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS
         AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
         AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH GRANTOR HEREBY WAIVES
         PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
         ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
         COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
         MAIL ADDRESSED TO SUCH GRANTOR AT THE ADDRESS SET FORTH IN SECTION 14.8
         OF THE CREDIT AGREEMENT AND THAT SERVICE SO MADE

<PAGE>

         SHALL BE DEEMED COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR
         THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

                  (j) Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN
         CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND
         ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE
         PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
         ARBITRATION RULES), THE PARTIES DESIRE THAT DISPUTES ARISING HEREUNDER
         OR RELATING HERETO BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE
         LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE
         JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT
         TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE
         ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG
         AGENT, LENDERS, AND THE GRANTORS ARISING OUT OF, CONNECTED WITH,
         RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED IN CONNECTION
         WITH, THIS SECURITY AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
         TRANSACTIONS RELATED HERETO OR THERETO.

                  (k) Section Titles. The Section titles contained in this
         Security Agreement are and shall be without substantive meaning or
         content of any kind whatsoever and are not a part of the agreement
         between the parties hereto.

                  (l) No Strict Construction. The parties hereto have
         participated jointly in the negotiation and drafting of this Security
         Agreement. In the event an ambiguity or question of intent or
         interpretation arises, this Security Agreement shall be construed as if
         drafted jointly by the parties hereto and no presumption or burden of
         proof shall arise favoring or disfavoring any party by virtue of the
         authorship of any provisions of this Security Agreement.

                  (m) Advice of Counsel. Each of the parties represents to each
         other party hereto that it has discussed this Security Agreement and,
         specifically, the provisions of Section 25(i) and Section 25(j), with
         its counsel.

                  (n) Benefit of Lenders. All Liens granted or contemplated
         hereby shall be for the benefit of Agent and Lenders, and all proceeds
         or payments realized from Collateral in accordance herewith shall be
         applied to the Obligations in accordance with the terms of the Credit
         Agreement.

<PAGE>

         IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be executed and delivered by its duly authorized officer as of the
date first set forth above.

GRANTORS:
                                      UNIFI, INC., a New York corporation

                                      By:    WILLIS C. MOORE, III
                                             -----------------------------------
                                      Name:  Willis C. Moore III
                                      Title: Executive Vice President & CFO

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

                                      By:    WILLIS C. MOORE, III
                                             -----------------------------------
                                      Name:  Willis C. Moore III
                                      Title: Executive Vice President & CFO

                                      UNIFI MANUFACTURING, INC.,
                                      a North Carolina corporation

                                      By:    WILLIS C. MOORE, III
                                             -----------------------------------
                                      Name:  Willis C. Moore III
                                      Title: Executive Vice President & CFO

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

                                      By:    WILLIS C. MOORE, III
                                             -----------------------------------
                                      Name:  Willis C. Moore III
                                      Title: Executive Vice President & CFO

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

                                      By:    WILLIS C. MOORE, III
                                             -----------------------------------
                                      Name:  Willis C. Moore III
                                      Title: Executive Vice President & CFO

<PAGE>

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

                                      By:    WILLIS C. MOORE, III
                                             -----------------------------------
                                      Name:  Willis C. Moore III
                                      Title: Executive Vice President & CFO

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

                                      By:    WILLIS C. MOORE, III
                                             -----------------------------------
                                      Name:  Willis C. Moore III
                                      Title: Executive Vice President & CFO

<PAGE>

AGENT:
                                      Bank of America, N.A., as the Agent

                                      By:    DAVID M. ANDERSON
                                             -----------------------------------
                                      Name:  DAVID M. ANDERSON
                                      Title: SVP<PAGE>

                                  EXHIBIT (10g)

                              EMPLOYMENT AGREEMENT

                                 BY AND BETWEEN

                                 BRIAN R. PARKE

                                       AND

                                   UNIFI, INC.

                           Effective January 23, 2002

<PAGE>

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT ("Agreement") is effective January 23, 2002
(the "Effective Date") by and between UNIFI, INC., a New York Corporation (the
"Company"), and BRIAN R. PARKE (the "Executive");

                                   WITNESSETH:

         WHEREAS, Executive is presently serving as President and Chief
Executive Officer of the Company and is an integral part of the Company's
management; and

         WHEREAS, Executive became an employee of the Company in 1984, served as
President of Unifi Textured Yarns Europe (UTYE) in Ireland from October 1997
until January 20, 1999, when he moved to the U.S. and became President and Chief
Operating Officer of the Company; and

         WHEREAS, Executive was elected a Director of the Company by the Board
of Directors on July 22, 1999, and by the Shareholders on October 21, 1999, and
was elected President and Chief Executive Officer of the Company in January
2000; and

         WHEREAS, Executive, through his knowledge and experience in the textile
business is exceptionally well qualified, fitted and equipped to continue to
serve the Company as its President and Chief Executive Officer; and

         WHEREAS, the Company deems it to be in its best interest to retain the
unique experience, ability and leadership of the Executive as its President and
Chief Executive Officer in accordance with the terms of this Agreement.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the Company and the Executive hereby agree as follows:

         1. EMPLOYMENT. The Company hereby agrees to continue to employ the
Executive, and the Executive agrees to continue to serve the Company, in the
capacities described herein during the Period of Employment (as defined in
Section 2 of this Agreement), in accordance with the terms and conditions of
this Agreement.

         2. PERIOD OF EMPLOYMENT. The term "Period of Employment" shall mean the
period which commences on the Effective Date and, unless earlier terminated
pursuant to Section 6, ends on December 31, 2005; provided, however, that the
Period of Employment shall automatically be extended on a day by day basis so
that the remaining term of the Period of Employment shall always be three (3)
years until such date as either the Company or the Executive shall have
terminated such automatic extension provision by giving written notice to the
other.

                                       1

<PAGE>

         3. DUTIES DURING THE PERIOD OF EMPLOYMENT.

            3.1 DUTIES. During the Period of Employment, the Executive shall be
employed as the President and Chief Executive Officer of the Company with
overall charge and responsibility for the business and affairs of the Company.
The Executive shall report to the Company's Board of Directors (the "Board")
through its Chairman (the "Chairman") and shall perform such duties as the
Executive shall reasonably be directed to perform by the Board.

            3.2 SCOPE. During the Period of Employment, the Executive shall
devote substantially all of his business time and attention to the business and
affairs of the Company. It shall not be a violation of this Agreement for the
Executive to (I) serve on corporate, civic or charitable boards or committees,
(ii) deliver lectures, fulfill speaking engagements or teach occasional courses
or seminars at educational institutions, or (iii) manage personal investments,
so long as such activities under clauses (I), (ii) and (iii) do not interfere,
in any substantial respect, with the Executive's responsibilities hereunder.

         4. COMPENSATION AND OTHER PAYMENTS.

            4.1 SALARY. During the Period of Employment, the Company shall pay
the Executive an annualized base salary of not less than seven hundred fifty
thousand dollars ($750,000.00) per year (the "Base Salary"). The Executive's
Base Salary shall be paid in accordance with the Company's payroll policy. The
Compensation Committee of the Board ("Committee") shall review the Base Salary
on an annual basis during the Period of Employment. Based upon such reviews, the
Committee may increase, but shall not decrease, the Base Salary. Any increase in
Base Salary shall not serve to limit or reduce any other obligation to the
Executive under this Agreement.

            4.2 OTHER COMPENSATION. The Board may at its discretion award the
Executive other additional compensation and bonuses during the Period of
Employment.

         5. OTHER EXECUTIVE BENEFITS.

            5.1 REGULAR REIMBURSED BUSINESS EXPENSES. The Company shall promptly
reimburse the Executive for all expenses and disbursements reasonably incurred
by the Executive in the performance of his duties hereunder during the Period of
Employment.

            5.2 BENEFIT PLANS. The Executive and his eligible family members
shall be entitled to participate on terms no less favorable to the Executive
than the terms offered to other senior executives of the Company in any group
and/or executive life, hospitalization or disability insurance plan, health
program, vacation policy, 401(k) plan and similar benefit plans (qualified,
non-qualified and supplemental) or other fringe benefits (it being understood
that items such as stock options are not fringe benefits) of the Company
(collectively referred to as the "Benefits). Anything contained herein to the
contrary notwithstanding, the Benefits described herein shall not duplicate
benefits made available to the Executive pursuant to any other provision of this
Agreement.

                                       2
<PAGE>

         6. TERMINATION.

            6.1 DEATH OR DISABILITY. This Agreement and the Period of Employment
shall terminate automatically upon the Executive's death. If the Company
determines in good faith that the Disability of the Executive has occurred
(pursuant to the definition of "Disability" set forth below), it may give to the
Executive written notice of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the thirtieth (30th) day after receipt by the Executive
of such notice given at any time after a period of one hundred twenty (120)
consecutive days of Disability or a period of one hundred eighty (180) days of
Disability within any twelve (12) consecutive months, and, in either case, while
such Disability is continuing ("Disability Effective Date"); provided that,
within the thirty (30) days after such receipt, the Executive shall not have
returned to full-time performance of the Executive's duties. For purposes of
this Agreement, "Disability" means the Executive's inability to substantially
perform his duties hereunder, with reasonable accommodation as reasonably
determined by the Board. Until the Disability Effective Date, the Executive
shall be entitled to all compensation provided for under Section 4 hereof. It is
understood that nothing in this Section 6.1 shall serve to limit the Company's
obligations under Section 7.2 hereof.

            6.2 BY THE COMPANY FOR CAUSE. During the Period of Employment, the
Company may terminate the Executive's employment immediately for "Cause." For
purposes of this Agreement, "Cause" shall mean that (i) the Executive has been
convicted of a felony involving theft or moral turpitude, or (ii) engaged in
conduct that constitutes willful gross neglect or willful gross misconduct with
respect to employment duties which results in material economic harm to the
Company; provided, however, that for the purposes of determining whether conduct
constitutes willful gross misconduct, no act on Executive's part shall be
considered "willful" unless it is done by the Executive in bad faith and without
reasonable belief that the Executive's action was in the best interests of the
Company. Notwithstanding the foregoing, the Company may not terminate the
Executive's employment for Cause unless (i) a determination that Cause exists is
made and approved by a majority of the Company's Board of Directors, (ii) the
Executive is given at least ten (10) days written notice of the Board meeting
called to make such determination, and (iii) the Executive is given the
opportunity to address such meeting.

            6.3 BY EXECUTIVE FOR GOOD REASON. During the Period of Employment,
the Executive's employment hereunder may be terminated by the Executive for Good
Reason upon fifteen (15) business days' written notice. For purposes of this
Agreement, "Good Reason" shall mean, without the Executive's consent:

                6.3.1. Assignment to the Executive of any duties inconsistent in
any material respect with the Executive's position (including status, offices,
titles and reporting relationships), authority, duties or responsibilities as
contemplated by Section 3 of this Agreement, or any other action by the Company
which results in a significant diminution in such position, authority, duties or
responsibilities, excluding any isolated and inadvertent action not taken in bad
faith and which is remedied by the Company within ten business (10) days after
receipt of notice thereof given by the Executive;

                                       3

<PAGE>

                6.3.2. Any failure by the Company to comply with any of the
provisions of Section 4 or 5 of this Agreement other than an isolated and
inadvertent failure not committed in bad faith and which is remedied by the
Company within ten business (10) days after receipt of notice thereof given by
the Executive;

                6.3.3. Delivery by the Company of a notice discontinuing the
automatic extension provision of Section 2 of this Agreement; or

                6.3.4. Any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement.

            6.4 OTHER THAN FOR CAUSE OR GOOD REASON. The Executive or the
Company may terminate this Agreement for any reason other than for Good Reason
or Cause, respectively, upon the Executive providing the Company with ninety
(90) days written notice and upon the Company providing the Executive thirty
(30) days written notice. If the Executive terminates the Agreement for any
reason, he shall have no liability to the Company or its subsidiaries or
affiliates as a result thereof. If the Company terminates the Agreement, or if
the Agreement terminates because of the death of the Executive, the obligations
of the Company shall be as set forth in Section 7 hereof.

            6.5 NOTICE OF TERMINATION. A Notice of Termination shall communicate
any termination by the Company or by the Executive to the other party hereto
given in accordance with Section 13.b. of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (I) indicates
the specific termination provision in this Agreement relied upon, (ii) sets
forth in reasonable detail, if necessary, the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated, and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination
date. The failure by the Executive or Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of the basis
for termination shall not waive any right of such party hereunder or preclude
such party from asserting such fact or circumstance in enforcing his or its
rights hereunder.

            6.6 DATE OF TERMINATION. "Date of Termination" means the date
specified in the Notice of Termination; provided, however, that if the
Executive's employment is terminated by reason of death or Disability, the Date
of Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.

         7. OBLIGATIONS OF THE COMPANY UPON TERMINATION. The following
provisions describe the obligations of the Company to the Executive under this
Agreement upon termination of his employment. However, except as explicitly
provided in this Agreement, nothing in this Agreement shall limit or otherwise
adversely affect any rights which the Executive may have under applicable law,
under any other agreement with the Company, or under any compensation or benefit
plan, program, policy or practice of the Company.

                                       4

<PAGE>

            7.1 TERMINATION BY THE COMPANY FOR CAUSE OR RESIGNATION WITHOUT GOOD
REASON. In the event this Agreement terminates by reason of the termination of
the Executive's Employment by the Company for Cause or by reason of the
resignation of the Executive other than for Good Reason, the Company shall pay
to the Executive all Accrued Obligations (as defined below) in a lump sum in
cash within thirty (30) days after the Date of Termination. "Accrued
Obligations" shall mean, as of the Date of Termination, the sum of (A) the
Executive's Base Salary through the Date of Termination to the extent not
theretofore paid, (B) the amount of any bonus, incentive compensation, and other
cash compensation accrued by the Executive as of the Date of Termination to the
extent not theretofore paid and (C) any vacation pay, expense reimbursements and
other cash entitlements accrued by the Executive as of the Date of Termination
to the extent not theretofore paid.

            7.2 RESIGNATION WITH GOOD REASON; TERMINATION WITHOUT CASE;
DISABILITY. If (I) the Company shall terminate the Executive's employment other
than for Cause, (ii) the Executive shall terminate his employment at any time
for Good Reason or (iii) the Executive's employment shall terminate due to
Disability, the Executive shall receive in addition to the Accrued Obligations,
the following:

                7.2.1 For the remainder of the Period of Employment (determined
without regard to the termination thereof pursuant to Section 6) or for three
(3) years (which ever is longer), the Company shall continue to pay the
Executive the Base Salary in accordance with Section 4.1 of this Agreement as if
the Executive's employment had not been terminated.

                7.2.2 Immediate full vesting in (i.e. full exercisability for)
any stock options previously granted to the Executive by the Company and not yet
vested as of the Date of Termination;

                7.2.3 Continued exercisability, through the end of their
respective full original terms, for all vested options, whether previously
vested or vesting under this subsection 7.2;

                7.2.4 Immediate full vesting in all other otherwise unvested
shares of restricted stock of the Company or other equity-based awards (if any)
previously awarded to the Executive, with immediate termination of all
restrictions on such awards;

                7.2.5 Receipt of any other compensation and Benefits accrued or
earned and vested (if applicable) by the Executive as of the Date of Termination
(but not duplicative of the Accrued Obligations);

                7.2.6 For the remainder of the Period of Employment (determined
without regard to the termination thereof pursuant to Section 6) or for three
(3) years (which ever is longer), the Company shall continue health,
prescription drug, dental, disability and life insurance benefits to the
Executive and/or the Executive's eligible family members at least equal to those
which would have been provided to them in accordance with Section 5.2 of this
Agreement if the Executive's employment had not been terminated; and

                                       5
<PAGE>

                7.2.7 All reasonable relocation costs of the Executive and his
family back to Ireland, which relocation costs shall be grossed-up for any
applicable taxes.

            7.3 COBRA RIGHTS. It is understood that the Executive's rights under
this Section 7 are in lieu of all other rights which the Executive may otherwise
have had upon termination of employment under this Agreement; provided, however,
that no provision of this Agreement is intended to adversely affect the
Executive's rights under the Consolidate Omnibus Budget Reconciliation Act of
1985.

         8. DISCLOSURE OF CONFIDENTIAL INFORMATION.Executive agrees that:

            (A) During the term of this Agreement and for a period of five (5)
            years after his Date of Termination, he will not disclose or make
            available to any person or other entity any trade secrets,
            Confidential Information, or "know-how" relating to the Company's,
            its affiliates' and subsidiaries', businesses without written
            authority from the Board, unless he is compelled to disclose it by
            judicial process.

                        Confidential Information - shall mean all information
            about the Company, its affiliates or subsidiaries, or relating to
            any of their products, services or any phase of their operations,
            not generally known to their Competitors or which is not public
            information, which Executive knows or acquired knowledge of during
            the term of his employment with the Company.

            (B) Documents - under no circumstances shall Executive remove from
            the Company' offices any of the Company's books, records, documents,
            files, computer discs or information, reports, presentations,
            customer lists, or any copies of such documents for use outside of
            his employment with the Company, except as specifically authorized
            in writing by the Board.

         9. NON-COMPETE. Executive agrees that during the Period of Employment
and after his Date of Termination for as long as he is receiving the Base Salary
payments provided for in Section 7 of this Agreement that he will not, directly
or indirectly:

            (A) Seek employment or consulting arrangements with or offer advice,
            suggestions, or input to any Competitor of the Company; or

            (B) Own any interest in, other than ownership of less than two
            percent (2%) of any class of stock of a publicly held corporation,
            manage, operate, control, be employed by, render advisory services
            to, act as a consultant to, participate in, assess or be connected
            with any Competitor of the Company, unless approved by the Board; or

            (C) Solicit, induce, or attempt to induce any past or current
            customer of the Company (a) to cease doing business in whole or in
            part with or through the Company; or (b) to do business with any
            other person, firm, partnership,

                                       6
<PAGE>

            corporation, or other entity which sales products or performs
            services materially similar to or competitive with those provided by
            the Company; or

            (D) Initiate, encourage or solicit for employment any person who is
            now employed or during the term of this Agreement becomes employed
            by the Company (or whose activities or services are dedicated to the
            Company).

                        Competitor - shall mean any individual, partnership,
            joint venture, firm, corporation, limited liability company,
            business trust, association, trust or other enterprise (whether or
            not incorporated) engaged in the business of developing, producing,
            manufacturing, selling and/or distributing a product or providing
            services similar to any product produced or service provided by the
            Company, its affiliates or subsidiaries.

         10. REMEDY FOR VIOLATION OF SECTIONS 8 and 9. The Executive
acknowledges that he has been given adequate consideration and benefits to
support the enforcement of the provisions provided for in Sections 8 and 9 of
this Agreement and that the Company has no adequate remedy at law and will be
irreparably harmed if the Executive breaches or threatens to breach the
provisions of Sections 8 or 9 of this Agreement, and therefore, agrees that the
Company shall be entitled to injunctive relief to prevent any breach or
threatened breach of such Sections and that the Company shall be entitled to
specific performance of the terms of such Sections in addition to any other
legal or equitable remedy it may have. Nothing in this Agreement shall be
construed as prohibiting the Company from pursuing any other remedies at law or
in equity that it may have or any other rights that it may have under any other
agreement.

         11. ARBITRATION. Any dispute or controversy between the Company and the
Executive, whether arising out of or relating to this Agreement, the breach of
this Agreement, or otherwise, shall be settled by arbitration administered by
the American Arbitration Association ("AAA") in accordance with its Commercial
Arbitration Rules then in effect, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. Any
arbitration shall be held before a single arbitrator who shall be selected by
the mutual agreement of the Company and the Executive, unless the parties are
unable to agree to an arbitrator, in which case, the arbitrator will be selected
under the procedures of the AAA. The arbitrator shall have the authority to
award any remedy or relief that a court of competent jurisdiction could order or
grant, including, without limitation, the issuance of an injunction. However,
either party may, without inconsistency with this arbitration provision, apply
to any court having jurisdiction over such dispute relief until the arbitration
award is rendered or the controversy is otherwise resolved. Except as necessary
in court proceedings to enforce this arbitration provision or an award rendered
hereunder, or to obtain interim relief, neither a party nor an arbitrator may
disclose the existence, content or results of any arbitration hereunder without
the prior written consent of the Company and the Executive. The Company and the
Executive acknowledge that this Agreement evidences a transaction involving
interstate commerce. Notwithstanding any choice of law provision included in
this Agreement, the United States Federal Arbitration Act shall govern the
interpretation and enforcement of this arbitration provision. The arbitration
proceeding shall be conducted in Greensboro, North Carolina or such

                                       7
<PAGE>

other location to which the parties may agree. The Company shall pay the costs
of any arbitrator appointed hereunder.

         12. SUCCESSORS.

            a. This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's heirs and
legal representatives.

            b. This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

            c. As used in this Agreement, the term "Company" shall include any
successor to the Company's business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.

         13. MISCELLANEOUS.

            a. This Agreement shall be governed by and construed in accordance
with the laws of the State of North Carolina, without reference to principles of
conflicts of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

            b. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party, by overnight
courier, or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

            If to the Executive:
            Brian R. Parke
            1510 Edgedale Road
            Greensboro, NC  27408

            If to the Company:
            Unifi, Inc.
            7201 W. Friendly Avenue
            Greensboro, NC  27410
            Attn:  General Counsel (currently Charles F. McCoy)

or to such other address as either of the parties shall have furnished to the
other in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.

            c. None of the provisions of this Agreement shall be deemed to
impose a penalty.

                                       8
<PAGE>

            d. The obligations contained in this Agreement (specifically
including Sections 8 and 9) shall survive the termination of this Agreement.
Additionally, the Executive acknowledges that the restrictions and covenants
contained in Section 9 are reasonable and necessary to protect the legitimate
business interests of the Company and will not impose an economic hardship on
the Executive. If any provision of this Agreement is held to be in any respect
illegal, invalid or unenforceable under present or future law, such provisions
shall be fully severable and this Agreement shall be construed and enforced as
if such illegal, invalid or unenforceable provisions had never comprised a part
hereof, and the remaining provisions hereof shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom. Furthermore, in lieu of such illegal,
invalid or unenforceable provision, the same shall be reformed and modified
automatically by the Compensation Committee as a part hereof to be as similar in
terms to such illegal, invalid or unenforceable provision as may be possible and
be legal, valid and enforceable.

            e. Any party's failure to insist upon strict compliance with any
provision hereof shall not be deemed to be a waiver of such provision or any
other provision hereof.

            f. This Agreement supersedes any prior employment agreement or
understandings, written or oral between the Company and the Executive and
contains the entire understanding of the Company and the Executive with respect
to the subject matter hereof.

            g. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates written below.

                                 UNIFI, INC.

                                 By: CHARLES F. MCCOY
                                     -------------------------------------------
                                     Charles F. McCoy
                                     Vice President, Secretary & General Counsel

                                 By: DONALD F. ORR
                                     -------------------------------------------
                                     Donald F. Orr,
                                     Chairman of the Compensation Committee
                                     of the Board of Directors

                                 BRIAN R. PARKE

                                     BRIAN R. PARKE                       (Seal)
                                     -------------------------------------------

                                       9

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