SECURITIES AND EXCHANGE COMMISSION
                          Washington, D. C. 20549
                                 FORM 10-K

               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                              [FEE REQUIRED]

For the fiscal year ended                         Commission File
     June 30, 1996                                 Number 1-10542
- --------------------------                       ----------------
                                  UNIFI, INC.                     
                            ----------------------
           (Exact name of Registrant as specified in its charter)

   New York                                            11-2165495 
- -------------------------------                 -----------------
(State or other jurisdiction of                 (I.R.S. Employer
incorporation or organization)                Identification No.)

7201 West Friendly Avenue
Greensboro, North Carolina                              27410   
- ---------------------------------------   ----------------------
(Address of principal executive offices)              (Zip Code)

Registrant's telephone no., including a/c:         (910) 294-4410 
                                             -------------------
Securities registered pursuant to Section 12(b) of the Act:
                                            Name of Each Exchange
        Title of Class                       On Which Registered 
- ------------------------------           -----------------------
Common Stock, par value $.10 per share    New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None
                                                             ----
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.             Yes  X   No     
                                                   ----     ----
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.                                           [   ]
                                                     -----
Aggregate market value of the voting stock held by nonaffiliates
of the Registrant as of August 5, 1996, based on a closing price
of $27.50 per share:                               $1,683,620,153 
            
Number of shares outstanding as of August 5, 1996:     64,494,523


<PAGE> 
              Documents Incorporated By Reference

Portions of the Annual Report to Shareholders of Unifi, Inc. for
the fiscal year ended June 30, 1996, are incorporated by
reference into Parts I and II hereof.

Portions of the definitive proxy statement for the Annual Meeting
of the Shareholders of Unifi, Inc., to be held on October 24,
1996, are incorporated by reference into Part III.

Exhibits, Financial Statement Schedules and Reports on Form 8-K
index is located on pages IV-1 through IV-6.


<PAGE>

                                PART I


Item 1.  Business:
- ------------------

     Unifi, Inc., a New York corporation formed in 1969, together 
with its subsidiaries, hereinafter set forth, (the "Company" or
"Unifi"), is engaged predominantly in the business of processing
yarns by:  texturing of synthetic filament polyester and nylon
fiber; and spinning of cotton and cotton blend fibers.  

     The Company's texturing operation mainly involves purchasing
partially oriented yarn (POY), which is either raw polyester or
nylon filament fiber, from chemical manufacturers and using high
speed machines to draw, heat and twist the POY to produce yarns
having various physical characteristics, depending upon its
ultimate end use.  The Company's spinning operation mainly
involves the spinning on open-end spindles of cotton, cotton and
undyed synthetic blends, and cotton and pre-dyed polyester blends
into yarns of different strengths and thickness. 

     The Company currently sells textured polyester yarns, nylon
yarns, dyed yarns, covered yarns, spun yarns made of cotton,
cotton and undyed synthetic blends, pre-dyed cotton blends, and
cotton and pre-dyed polyester blends domestically and
internationally to weavers and knitters who produce fabrics for
the apparel, industrial, hosiery, home furnishing, auto
upholstery, activewear, and underwear markets.

     The Company, internationally, has manufacturing facilities
in Letterkenny, County Donegal, Republic of Ireland, which
texturizes polyester, as well as producing its own polymer (POY).

     SOURCES AND AVAILABILITY OF RAW MATERIALS:

     A.  POY.  The primary suppliers of POY to the Company are E.
I. DuPont de Nemours and Company, Hoechst Celanese Corporation,
Wellman Industries, Cookson Fibers, Inc., and Nan Ya Plastics
Corp. of America with the majority of the Company's POY being
supplied by DuPont.  Although the Company is heavily dependent
upon a limited number of suppliers, the Company has not had and
does not anticipate any material difficulty in obtaining its raw
POY.

     B.  Cotton.  The Company buys its cotton, which is a
commodity and is traded on established markets, from brokers such
as Staple Cotton Coop., Dunavant Enterprises, Conti-Cotton,
HoHenBerg Brothers Co., Allenberg Cotton Co., and Carolina Cotton
Growers.  The Company has not had and does not anticipate any
material difficulty in obtaining cotton.

     PATENTS AND LICENSES:  The Company currently has several
patents and registered trademarks, none of which it considers
material to its business as a whole.  

                              I-1

<PAGE>

     CUSTOMERS:  The Company in fiscal year ended June 30, 1996,
sold textured and spun yarns to approximately 1,000 customers,
one customer's purchases were approximately 12% of net sales
during said period, the ten largest customers accounted for 
approximately 33% of total net sales and the Company does not
believe that it is dependent on any one customer.

     BACKLOG:  The Company, other than in connection with certain
foreign sales and for textured yarns that are package dyed
according to customers' specifications, does not manufacture to
order.  The Company's products can be used in many ways and can
be thought of in terms of a commodity subject to the laws of
supply and demand and, therefore, does not have what is
considered a backlog of orders.  In addition, the Company does
not consider its products to be seasonal ones.

     COMPETITIVE CONDITIONS:  The textile industry in which the
Company currently operates is keenly competitive.  The Company
processes and sells high-volume commodity products, pricing is
highly competitive with product quality and customer service
being essential for differentiating the competitors within the
industry.  Product quality insures manufacturing efficiencies for
the customer.  The Company's polyester and nylon yarns, dyed
yarns, covered yarns and cotton and cotton blend yarns compete
with a number of other domestic producers of such yarns.  In the
sale of polyester filament yarns major competitors are Atlas Yarn
Company, Inc., Burlington Industries, Inc., and Milliken &
Company; in the sale of nylon yarns, dyed yarns, and covered
yarns major competitors are Jefferson Mills, Inc., Spanco Yarns,
Inc., Regal Manufacturing Company, and Spectrum Dyed Yarns, Inc.;
and in the sale of cotton and cotton blend yarns major
competitors are Parkdale Mills, Inc., Avondale Mills, Inc.,
Harriett & Henderson, Mayo Yarns, Inc., and TNS Mills, Inc. 

     RESEARCH AND DEVELOPMENT:  The estimated amount spent during
each of the last three fiscal years on Company-sponsored and
Customer-sponsored research and development activities is
considered immaterial.

     COMPLIANCE WITH CERTAIN GOVERNMENT REGULATIONS:  Management
of the Company believes that the operation of the Company's
production facilities and the disposal of waste materials are
substantially in compliance with applicable laws and regulations.

     EMPLOYEES:  The number of employees of the Company is
approximately 6,700 full-time employees. 

     FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC
INTERNATIONAL OPERATIONS AND EXPORT SALES:  The information
included under the heading "Business Segments and Foreign
Operations" on Page 23 of the Annual Report of the Company to 
Shareholders for the fiscal year ended June 30, 1996, is
incorporated herein by reference.

                              I-2


<PAGE>


I
tem 2.  Description of Property:
- ---------------------------------

     The Company currently maintains a total of 21 manufacturing
and warehousing facilities and one central distribution center in
North Carolina, one manufacturing and related warehousing
facility in Staunton, Virginia, one central distribution center
in Fort Payne, Alabama, and one manufacturing and related
warehousing facility in Letterkenny, County of Donegal, Republic
of Ireland.  All of these facilities, which contain approximately
7,922,953 square feet of floor space, are owned in fee and
management believes they are in good condition, well maintained,
and are suitable and adequate for present production.  

     The Company leases sales offices and/or apartments in New
York City, Coleshill, England, and Lyon, France, and has a
representative office in Tokyo, Japan.

     The Company also leases its corporate headquarters building
at 7201 West Friendly Avenue, Greensboro, North Carolina, which
consists of a building containing approximately 121,125 square
feet located on a tract of land containing approximately 8.99
acres.  This property is leased from NationsBank, Trustee under
the Unifi, Inc. Profit Sharing Plan and Trust, and Wachovia Bank
& Trust Company, N.A., Independent Trustee.  On May 20, 1996, the
Company exercised its option to extend the term of the lease on
this property for five (5) years, through March 13, 2002. 
Reference is made to a copy of the lease agreement attached to
the Registrant's Annual Report on Form 10-K as Exhibit (10d) for
the fiscal year ended June 28, 1987, which is by reference 
incorporated herein.

     The information included under "Leases, Commitments and
Concentrations of Credit Risk" on Pages 22 and 23 of the Annual
Report of the Company to Shareholders for fiscal year ended June
30, 1996, is incorporated herein by reference.


Item 3.  Legal Proceedings:
- ---------------------------

     The Company is not currently involved in any litigation
which is considered material, as that term is used in Item 103 of
Regulation S-K.
                                     

Item 4.  Submission of Matters to a Vote of Security Holders:
- -------------------------------------------------------------

     No matters were submitted to a vote of security holders
during the fourth quarter for the fiscal year ended June 30,
1996.  

                                   I-3

<PAGE>


                                  PART II


Item 5.  Market for the Registrant's Common Equity and Related
- --------------------------------------------------------------
         Stockholder Matters.
         --------------------

     (a)(c)  PRICE RANGE OF COMMON STOCK AND DIVIDENDS PAID.

     The information included under the heading "Market and
Dividend Information (Unaudited)" on Page 28 of the Annual Report
of the Company  to Shareholders for the fiscal year ended June
30, 1996, is incorporated herein by reference.

     (b)  Approximate Number of Equity Security Holders:

     Title of Class                      Number of Record Holders 
                                          (as of August 5, 1996)

Common Stock, $.10 par value                           1,206

     (c)  CASH DIVIDEND POLICY.  In April 1990, the Board of
Directors of the Company adopted a resolution that it intended to
pay a cash dividend in quarterly installments equal to
approximately thirty percent (30%) of the earnings after taxes of
the Company for the previous year, payable as hereafter declared
by the Board of Directors.  Prior to this action by the Board of
Directors, the Company had since 1978 followed a policy of
retaining earnings for working capital, acquisitions, capital
expansion and modernization of existing facilities.  The Company
paid a quarterly dividend of $.13 per share on its common stock
for each quarter of the 1996 fiscal year. The Board of Directors
in July 1996, declared a cash dividend in the amount of $.11 per
share on each issued and outstanding share of the common stock of
the Company, payable on August 9, 1996, to shareholders of record
at the close of business on August 2, 1996.


Item 6.  Selected Financial Data:
- ---------------------------------

     The financial data for the five fiscal years included under
the heading "Summary of Selected Financial Data" on Page 27 of
the Annual Report of the Company to Shareholders for the fiscal
year ended June 30, 1996, is incorporated herein by reference. 


Item 7.  Management's Discussion and Analysis of Financial
- ----------------------------------------------------------         
         Condition and Results of Operations:
         ------------------------------------

     The information included under the heading "Management's
Review and Analysis of Operations and Financial Position" on
Pages 24, 25, and 26 of the Annual Report of the Company to
Shareholders for the fiscal year ended June 30, 1996, is
incorporated herein by reference.

                                   II-1

<PAGE>


I
tem 8.  Financial Statements and Supplementary Data:
- -----------------------------------------------------

     The report of independent auditors, consolidated financial
statements and notes beginning on Page 13 and ending on Page 23
and the information included under the heading "Quarterly Results
(Unaudited)" on Page 27 of the Annual Report of the Company to
Shareholders for the fiscal year ended June 30, 1996, are
incorporated herein by reference.



Item 9.  Change in and Disagreements With Accountants on
- --------------------------------------------------------
         Accounting and Financial Disclosure:
         ------------------------------------

     The Company has not changed accountants nor are there any
disagreements with its accountants, Ernst & Young LLP, on
accounting and financial disclosure that should be reported
pursuant to Item 304 of Regulation S-K. 

                                   II-2

<PAGE>

                                 PART III


Item 10.  Directors and Executive Officers of Registrant and
- ------------------------------------------------------------
          Compliance with Section 16(a) of the Exchange Act:
          --------------------------------------------------

     (a)  Directors of Registrant:  The information included
under the headings "Election of Directors", "Nominees for
Election as Directors", "Security Holding of Directors, Nominees,
and Executive Officers", "Directors' Compensation", and
"Committees of the Board of Directors", beginning on Page 2 and
ending on Page 5 of the definitive proxy statement filed with the
Commission since the close of the Registrant's fiscal year ended
June 30, 1996, and within 120 days after the close of said fiscal
year, are incorporated herein by reference.

     (b)  Identification of Executive Officers:

Chairman of The Board of Directors
- ----------------------------------

     G. Allen Mebane   Mr. Mebane is 67 and has been an Executive
Officer and member of the Board of Directors of the Company since
1971, and served as President and Chief Executive Officer of the
Company, relinquishing these positions in 1980 and 1985,
respectively.  He was the Chairman of the Board of Directors for
many years, Chairman of the Executive Committee from 1974 to
1995, and was elected as one of the three members of the Office
of Chairman on August 8, 1991.  On October 22, 1992, Mr. Mebane
was again elected as Chairman of the Board of Directors.  

President and Chief Executive Officer 
- -------------------------------------

     William T. Kretzer  Mr. Kretzer is 50 and served as a Vice
President or Executive Vice President from 1971 until 1985.  He
has been the President and Chief Executive Officer since 1985. 
He has been a member of the Board of Directors since 1985 and has
been Chairman of the Executive Committee since 1995.  

Executive Vice Presidents
- -------------------------

     Jerry W. Eller   Mr. Eller is 55 and has been a Vice
President or Executive Vice President since 1975.  He has been a
member of the Board of Directors since 1985 and is a member of
the Executive Committee.

     Robert A. Ward  Mr. Ward is 56 and has been a Vice President
or Executive Vice President since 1974.  He has been a member of
the Board of Directors since its inception in 1971 and is a
member of the Executive Committee.  

                              III-1

<PAGE>

     G. Alfred Webster  Mr. Webster is 48 and has been a Vice
President or Executive Vice President since 1979.  He has been a
member of the Board of Directors since 1986 and is a member of
the Executive Committee.

Senior Vice Presidents
- ----------------------

     Kenneth L. Huggins  Mr. Huggins is 52, had been an employee
of Macfield, Inc.,  since 1970 and, at the time of the Macfield
merger with Unifi, was serving as a Vice President of Macfield,
and President of Macfield's Dyed Yarn Division.  He was a
Director of Macfield from 1989 until August 8, 1991, when
Macfield, merged into and with Unifi.  He is Senior Vice
President and also Assistant to the President.

     Raymond W. Maynard  Mr. Maynard is 53 and has been a Vice
President of the Company since June 27, 1971, and a Senior Vice
President since October 22, 1992. 

     These officers were elected by the Board of Directors of the
Registrant at the Annual Meeting of the Board of Directors held
on October 19, 1995.  Each officer was elected to serve until the
next Annual Meeting of the Board of Directors or until his
successor was elected and qualified.

     (c)  Family Relationship:  Mr. Mebane, Chairman of the
Board, and Mr. C. Clifford Frazier, Jr., the Secretary of the
Registrant, are first cousins.  Except for this relationship,
there is no family relation between any of the Officers.

     (d)  Compliance with Section 16(a) of the Exchange Act: 
Based solely upon the review of the Form 3's and 4's and
amendments thereto, furnished to the Company during the most
recent fiscal year, no Form 3's or Form 4's were filed late by a
director, officer, or beneficial owner of more than ten percent
of any class of equity securities of the Company.  The Company
received written representation from reporting persons that Form
5's were not required.


Item 11.  Executive Compensation:
- ---------------------------------

     The information set forth under the headings "Compensation
and Option Committees Interlocks and Insider Participation in
Compensation Decisions", "Executive Officers and Their
Compensation", "Employment and Termination Agreements", "Options
Granted", "Option Exercises and Option/SAR Values",  the "Report
of the Compensation and Incentive Stock Option Committees on
Executive Compensation", and the "Performance Graph-Shareholder
Return on Common Stock", beginning on Page 6 and ending on Page
10 of the Company's definitive proxy statement filed with the
Commission since the close of the Registrant's fiscal year ended
June 30, 1996, and within 120 days after the close of said fiscal
year, are incorporated herein by reference.
                              
     For additional information regarding executive compensation
reference is made to Exhibits (10l), (10m), and (10n) of this
Form 10-K.
                              III-2

<PAGE>


Item 12.  Security Ownership of Certain Beneficial Owners and Management:
- -------------------------------------------------------------------------

     Security ownership of certain beneficial owners and
management is the same as reported under the heading "Information
Relating to Principal Security Holders" on Page 2 of the
definitive proxy statement and under the heading "Security
Holding of Directors, Nominees and Executive Officers" on Page 4
and Page 5 of the definitive proxy statement filed with the
Commission pursuant to Regulation 14(a) within 120 days after the
close of the fiscal year ended June 30, 1996, which are hereby
incorporated by reference.


Item 13.  Certain Relationships and Related Transactions:
- ---------------------------------------------------------

     The information included under the heading "Compensation and
Option Committees Interlocks and Insider Participation In
Compensation Decisions", on Page 6 of the definitive proxy
statement filed with the Commission since the close of the
Registrant's fiscal year ended June 30, 1996, and within 120 days
after the close of said fiscal year, is incorporated herein by 
reference.

                                   III-3

<PAGE>

                                SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities and Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, 
thereunto duly authorized.

                              UNIFI, INC.

September 27, 1996       BY:  ROBERT A. WARD
                              Robert A. Ward, Executive Vice
                              President - Finance and
                              Administration

September 27, 1996       BY:  WILLIAM T. KRETZER       
                              William T. Kretzer, President
                              (Chief Executive Officer)


September 27, 1996       BY:  WILLIS C. MOORE               
                              Willis C. Moore, Vice President
                              (Principal Financial and Accounting
                              Officer)

Pursuant to the requirements of the Securities and Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the dates indicated:

September 27, 1996  Chairman            G. ALLEN MEBANE           
                    and Director        G. Allen Mebane


September 27, 1996  President, Chief    WILLIAM T. KRETZER 
                    Executive Officer   William T. Kretzer
                    and Director

September 27, 1996  Executive Vice      ROBERT A. WARD
                    President and       Robert A. Ward
                    Director

September 27, 1996  Executive Vice      JERRY W. ELLER 
                    President and       Jerry W. Eller
                    Director

September 27, 1996  Executive Vice      G. ALFRED WEBSTER
                    President and       G. Alfred Webster
                    Director


<PAGE>

September 27, 1996  Director            CHARLES R. CARTER 
                                        Charles R. Carter


September 27, 1996  Director            KENNETH G. LANGONE
                                        Kenneth G. Langone


September 27, 1996  Director            
                                        J.B. Davis


September 27, 1996  Director            DONALD F. ORR               
                                        Donald F. Orr  


<PAGE>


                                  PART IV


Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.
- --------------------------------------------------------------------------

(a)  1.  Financial Statements

     The following financial statements and report of independent
auditors included in the Annual Report of Unifi, Inc. to its
Shareholders for the fiscal year ended June 30, 1996, are incorporated
herein by reference.  With the exception of the aforementioned
information and the information incorporated by reference in

Items 1, 2, 5, 6, 7 and 8 herein, the 1996 Annual Report to
shareholders is not deemed to be filed as part of this report.
                                          
                                                            Annual
                                                            Report
                                                            Pages
                                                            -------

     Consolidated Balance Sheets at June 30, 1996
       and June 25, 1995                                       14

     Consolidated Statements of Income for the   
       Years Ended June 30, 1996, June 25, 1995,
       and June 26, 1994                                       15

     Consolidated Statements of Changes in       
       Shareholders' Equity for the Years Ended  
       June 30, 1996, June 25, 1995 and June 26, 
       1994                                                    16
 
     Consolidated Statements of Cash Flows for   
       the Years Ended June 30, 1996, June 25,   
       1995 and June 26, 1994                                  17

     Notes to Consolidated Financial Statements             18 - 23

     Report of Independent Auditors                            13

(a)  2.  Financial Statement Schedules                     Form 10-K
                                                             Pages 
     
     Schedules for the three years ended June 30, 1996:     
       II - Valuation and Qualifying Accounts                 IV-6
        
     Schedules other than those above are omitted because they
are not required, are not applicable, or the required information
is given in the consolidated financial statements or notes
thereto.
                              IV-1

<PAGE>

     Individual financial statements of the Registrant have been
omitted because it is primarily an operating company and all
subsidiaries included in the consolidated financial statements
being filed, in the aggregate, do not have minority equity
interest and/or indebtedness to any person other than the
Registrant or its consolidated subsidiaries in amounts which
together exceed 5% of the total assets as shown by the most
recent year end consolidated balance sheet.

(a)  3.  Exhibits

     (2a-1)    Form of Agreement and Plan of Merger, dated as of
               May 24, 1991, by and between Unifi, Inc. and
               Macfield, Inc., including exhibits, filed as 
               Exhibit 2.1 to Unifi, Inc.'s Registration 
               Statement on Form S-4 (Registration No. 33-40828),
               which is incorporated herein by reference.

     (2a-2)    Form 8-K, filed by Unifi, Inc. in relation to the
               confirmation of the merger of Macfield, Inc. with
               and into Unifi, Inc. and related exhibits, filed 
               with the Securities and Exchange Commission on 
               August 8, 1991, which is incorporated herein by
               reference.

     (2a-3)    Form of Agreement and Reverse Triangular Merger, 
               dated February 10, 1993, by and between Unifi, 
               Inc. and Vintage Yarns, Inc., filed as Exhibit 2.1
               to Unifi, Inc.'s Registration Statement on Form 
               S-4 (Registration No. 33-58282), which is 
               incorporated herein by reference.

     (2a-4)    Form 8-K, filed by Unifi, Inc. in relation to the
               confirmation of the Reverse Triangular Merger, 
               where Vintage Yarns, Inc. became a wholly-owned 
               subsidiary of Unifi, and related exhibits, filed 
               with the Securities and Exchange Commission on May
               10, 1993, which is incorporated herein by 
               reference.

     (2a-5)    Form of Agreement and Plan of Triangular Merger,
               dated July 15, 1993, by and between Unifi, Inc. 
               and Pioneer Yarn Mills, Inc., Pioneer Spinning, 
               Inc., Edenton Cotton Mills, Inc., and Pioneer 
               Cotton Mill, Inc., (the "Pioneer Corporations"),
               filed as Exhibit 2.1 to Unifi, Inc's Registrations
               Statement on Form S-4 (Registration No. 33-65454),
               which is incorporated herein by reference.

     (2a-6)    Form 8-K, filed by Unifi, Inc. for the purpose of
               reporting the Pioneer Corporations' Interim 
               Combined Financial Statements (Unaudited) and 
               Unifi, Inc.'s, and the Pioneer Corporations' 
               Proforma Combined Interim Financial Information 
               (Unaudited), and related exhibits, filed with the
               Securities and Exchange Commission on September 2,
               1993, which is incorporated herein by reference.

     (2a-7)    Form 8-K, filed by Unifi, Inc. for the purpose of
               reporting the Pioneer Corporations' merger with 
               and into USY, and related exhibits filed with the 
               Securities and Exchange Commission on November 5,
               1993, which is incorporated herein by reference.

                                   IV-2

<PAGE>

     (3a)      Restated Certificate of Incorporation of Unifi, 
               Inc., dated July 21, 1994, (filed as Exhibit (3a)
               with the Company's Form 10-K for the Fiscal Year 
               ended June 26, 1994), which is incorporated herein
               by reference.

     (3b)      Restated By-Laws of Unifi, Inc., filed herewith.

     (4a)      Specimen Certificate of Unifi, Inc.'s common 
               stock, filed as Exhibit 4(a) to the Registration 
               Statement on Form S-1, (Registration No. 2-45405),
               which is incorporated herein by reference.

     (10a)     *Unifi, Inc. 1982 Incentive Stock Option Plan, as
               amended, filed as Exhibit 28.2 to the Registration
               Statement on Form S-8, (Registration No. 
               33-23201), which is incorporated herein by 
               reference.

     (10b)     *Unifi, Inc. 1987 Non-Qualified Stock Option Plan,
               as amended, filed as Exhibit 28.3 to the 
               Registration Statement on Form S-8, (Registration
               No. 33-23201), which is incorporated herein by 
               reference.

     (10c)     *Unifi, Inc. 1992 Incentive Stock Option Plan, 
               effective July 16, 1992, (filed as Exhibit (10c) 
               with the Company's Form 10-K for the fiscal year 
               ended June 27, 1993), and included as Exhibit 99.2
               to the Registration Statement on Form S-8 
               (Registration No. 33-53799), which are 
               incorporated herein by reference.

     (10d)     *Unifi, Inc.'s Registration Statement for selling
               Shareholders, who are Directors and Officers of 
               the Company, who acquired the shares as stock 
               bonuses from the Company, filed on Form S-3 
               (Registration No. 33-23201), which is incorporated
               herein by reference.

     (10e)     Unifi Spun Yarns, Inc.'s 1992 Employee Stock 
               Option Plan filed as Exhibit 99.3 to the 
               Registration Statement on Form S-8 (Registration
               No. 33-53799), which is incorporated herein by 
               reference.
     
     (10f)     *Unifi, Inc.'s 1996 Incentive Stock Option Plan
               adopted in April, 1996, subject to shareholders' 
               approval at their annual meeting in October, 1996,
               filed herewith. 

     (10g)     *Unifi, Inc.'s 1996 Non-Qualified Stock Option
               Plan adopted in April, 1996, subject to 
               shareholders' approval at their annual meeting in
               October, 1996, filed herewith. 

     (10h)     Lease Agreement, dated March 2, 1987, between 
               NationsBank, Trustee under the Unifi, Inc. Profit
               Sharing Plan and Trust, Wachovia Bank and Trust 
               Co., N.A., Independent Fiduciary, and Unifi, Inc.,
               (filed as Exhibit (10d) with the Company's Form 
               10-K for the fiscal year ended June 28, 1987), 
               which is incorporated herein by reference.

                              IV-3

<PAGE>

    (10i)      Factoring Contract and Security Agreement and a 
               Letter Amendment thereto, all dated as of May 25,
               1994, by and between Unifi, Inc. and CIT 
               Group/DCC, Inc., (filed as Exhibit (10g) with the
               Company's Form 10-K for the fiscal year ended
               June 26, 1994), which are incorporated herein by
               reference.

    (10j)      Factoring Contract and Security Agreement, dated 
               as of May 2, 1988, between Macfield, Inc., and 
               First Factors Corp., and First Amendment thereto,
               dated September 28, 1990, (both filed as Exhibit 
               (10g) with the Company's Form 10-K for the fiscal
               year ended June 30, 1991), and Second Amendment to
               the Factoring Contract and Security Agreement, 
               dated March 1, 1992, (filed as Exhibit (10g)
               with the Company's Form 10-K for the fiscal year 
               ended June 28, 1992), and Letter Agreement dated 
               August 31, 1993 and Amendment to Factoring 
               Contract and Security Agreement dated January 5, 
               1994, (filed as Exhibit (10h) with the Company's 
               Form 10-K for the fiscal year ended June 26,
               1994), which are incorporated herein by reference. 

     (10k)     Factoring Agreement dated August 23, 1995, and a
               Letter Amendment thereto dated October 16, 1995,
               by and between Unifi, Inc. and Republic Factors 
               Corp., filed herewith.

     (10l)     *Employment Agreement between Unifi, Inc. and G.
               Allen Mebane, dated July 19, 1990, (filed as 
               Exhibit (10h) with the Company's Form 10-K for the
               fiscal year ended June 30, 1991), which is 
               incorporated herein by reference.

     (10m)     *Employment Agreement between Unifi, Inc. and
               William T. Kretzer, dated July 19, 1990, (filed as
               Exhibit 10(i) with the Company's Form 10-K for the
               fiscal year ended June 30, 1991), and Amendment to
               Employment Agreement between Unifi, Inc. and 
               William T. Kretzer, dated October 22, 1992 (filed
               as Exhibit (10j) with the Company's Form 10-K for
               fiscal year ended June 27, 1993), which are        
               incorporated herein by reference. 

     (10n)     *Severance Compensation Agreement between Unifi, 
               Inc. and William T. Kretzer, dated July 20, 1996,
               expiring on July 19, 1999 (similar agreements were
               signed with G. Allen Mebane, Robert A. Ward, Jerry
               W. Eller and G. Alfred Webster), filed herewith.

     (10o)     Credit Agreement, dated April 15, 1996, by and
               between Unifi, Inc. and The Several Lenders from 
               Time to Time Party thereto and NationsBank, N.A. 
               as agent, filed herewith.

     (11)      Computation of Earnings per share.

     (13a)     Portions of Unifi, Inc.'s 1996 Annual Report to
               Shareholders which are incorporated herein by 
               reference, as a part of this Form 10-K for fiscal
               year ended June 30, 1996, filed herewith.

                              IV-4


<PAGE>

     (13b-1)   Report of Independent Auditors/Ernst & Young LLP -
               on the Consolidated Financial Statements of Unifi,
               Inc. as of June 30, 1996 and each of the three 
               years in the period ended June 30, 1996.

     (21)      Subsidiaries of Unifi, Inc.

     (23)      Consent of Ernst & Young LLP

     (27)      Financial Data Schedule

(b)  Reports on Form 8-K
     
     (i)       Form 8-K dated April 15, 1996 and filed with the commission
               on April 26, 1996, was filed during the Company's fourth
               quarter to report the redemption of its $230 million, six
               percent (6%) Convertible Subordinated Notes due in 2002.  


*  NOTE:  These Exhibits are management contracts or compensatory
plans or arrangements required to be filed as an exhibit to this
Form 10-K pursuant to Item 14(c) of this report.

                                   IV-5

<PAGE>

<TABLE>
               SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                         UNIFI, INC. AND SUBSIDIARIES
                                   JUNE 30, 1996
                                   (in thousands)
<CAPTION>
                  
 COLUMN A      COLUMN B       COLUMN C       COLUMN D  COLUMN E
 --------      --------       ---------      --------  ---------
                               Additions
                         -------------------
                                        
               Balance   Charged   Charged to          Balance 
                  at       to       Other                 at
            Beginning of Costs and Accounts- Deductions-End of
Description    Period    Expenses  Describe  Describe  Period  
- -----------------------------------------------------------------
  
  
Allowance for doubtful accounts:
<C>        <S>            <S>       <S>       <S>         <S>  
Year ended June 30, 1996   
           $  6,452       $3,660    $ -       $(3,517)(a) $  6,595

Year ended June 25, 1995       
              4,302        5,524      -        (3,374)(a)    6,452

Year ended June 26, 1994       
              3,675        4,626     25        (4,024)(a)    4,302
  
  (a)     Includes uncollectible accounts written off and        
customer claims paid, net of certain recoveries.
  
      
Unrealized (gains)/losses on certain investments:
  
Year ended June 30, 1996
           $ (1,835)      $ -    $ 1,835  (b)    $ -     $    -

Year ended June 25, 1995
              1,445         -     (3,280) (c)      -       (1,835)

Year ended June 26, 1994
              1,488         -        (43) (c)      -        1,445
  
<FN>  
  (b) Represents the change in fair market value of the related
      investment securities and the entry to reflect the
      disposition of the underlying investments.
  (c) Represents the change in fair market value of the related
      investment securities.
</FN>
</TABLE>

                              IV-6






                              Exhibit (3b)                                     

                             RESTATED BY-LAWS
                                    OF
                                UNIFI, INC.

- -----------------------------------------------------------------

                            TABLE OF CONTENTS


                                ARTICLE I  
                               SHAREHOLDERS


Section 1.01 - Annual Meeting...................................1
Section 1.02 - Special Meetings ................................1
Section 1.03 - Notice of Meetings
               of Shareholders..................................1
Section 1.04 - Waivers of Notice................................3
Section 1.05 - Quorum...........................................3
Section 1.06 - Fixing Record Date...............................3
Section 1.07 - List of Shareholders
               at Meeting.......................................4
Section 1.08 - Proxies..........................................4
Section 1.09 - Selection of Duties
               of Inspectors....................................7
Section 1.10 - Qualification of Voters..........................8
Section 1.11 - Vote of Shareholders............................10
Section 1.12 - Written Consent of
               Shareholders....................................10



                               ARTICLE II
                               DIRECTORS 


Section 2.01 - Management of Business;
               Qualification of Directors......................11
Section 2.02 - Number of Directors.............................12
Section 2.03 - Classification and
               Election........................................12
Section 2.04 - Newly Created Directorships
               and Vacancies...................................12
Section 2.05(a) - Resignations.................................13
Section 2.05(b) - Removal of Directors.........................14
Section 2.06 - Quorum of Directors.............................14
Section 2.07 - Annual Meetings.................................14
Section 2.08 - Regular Meetings................................15
Section 2.09 - Special Meetings................................15
Section 2.10 - Compensation....................................15
Section 2.11 - Committees......................................15

                               -i-
<PAGE>

Section 2.12 - Interested Directors............................16
Section 2.13 - Loans to Directors..............................17
Section 2.14 - Consent to Action...............................17



                             ARTICLE III
                              OFFICERS


Section 3.01 - Election or Appointment;
               Number..........................................18
Section 3.02 - Term............................................18
Section 3.03
 - Removal.........................................19
Section 3.04 - Authority.......................................19
Section 3.05 - Voting Securities Owned
               by the Corporation..............................19



                            ARTICLE IV  
                          CAPITAL STOCK


Section 4.01 - Stock Certificates..............................20
Section 4.02 - Transfers.......................................21
Section 4.03 - Registered Holders..............................21
Section 4.04 - New Certificates................................21



                           ARTICLE V            
               FINANCIAL NOTICES TO SHAREHOLDERS


Section 5.01 - Dividends.......................................22
Section 5.02 - Share Distribution and
               Changes.........................................22
Section 5.03 - Cancellation of Reacquired
               Shares..........................................23
Section 5.04 - Reduction of Stated Capital.....................24
Section 5.05 - Application of Capital Surplus
               to Elimination of a Deficit.....................24
Section 5.06 - Conversion of Shares............................24








                               -ii-
<PAGE>
  

                           ARTICLE VI   
                        INDEMNIFICATION


Section 6.01 - Right to Indemnification........................25
Section 6.02 - Right of Claimant to
               Bring Suit......................................27
Section 6.03 - Nonexclusiveness................................28
Section 6.04 - Insurance for Indemnification
               of Directors and Officers.......................29



                            ARTICLE VII 
                           MISCELLANEOUS


Section 7.01 - Offices.........................................30
Section 7.02 - Seal............................................30
Section 7.03 - Checks..........................................30
Section 7.04 - Fiscal Year.....................................30
Section 7.05 - Books and Records...............................30
Section 7.06 - Duty of Directors and
               Officers........................................31
Section 7.07 - When Notice or Lapse of
               Time Unnecessary; Notices
               Dispensed With When Delivery
               is Prohibited...................................31
Section 7.08 - Entire Board....................................32
Section 7.09 - Amendment of By-Laws............................32
Section 7.10 - Nonapplication of North Carolina
               Shareholder Protection Act......................33
Section 7.11 - Section Headings................................33


















                               -iii-
<PAGE>
  

                        RESTATED BY-LAWS
                                OF
                             UNIFI, INC.

                             ARTICLE I
                            Shareholders


     Section 1.01.  Annual Meeting.  The Annual Meeting of
Shareholders for the election of Directors and the transaction of
such other business as may come before it shall be held on such
date in each calendar year, not later than the one hundred
fiftieth (150) day after the close of the Corporation's preceding
fiscal year, and at such place as shall be fixed by the President
and stated in the notice or waiver of notice of the meeting. 



     Section 1.02.  Special Meetings.  Special meetings of the
shareholders, for any purpose of purposes, may be called at any
time by any Director, the President, any Vice President, the
Treasurer or the Secretary or by resolution of the Board of
Directors.  Special meetings of the shareholders shall be held at
such place as shall be fixed by the person or persons calling the
meeting and stated in the notice or waiver of notice of the
meeting.



     Section 1.03.  Notice of Meetings of Shareholders.  Whenever
shareholders are required or permitted to take any action at a
meeting, written notice shall state the place, date and hour of
the meeting and, unless it is the Annual Meeting, indicate that
it is being issued by or at the direction of the person or
persons calling the meeting.  Notice of a special meeting shall
also state the purpose or purposes for which the meeting is
called.  If, at any meeting, action is proposed to be taken which
would, if taken, entitle shareholders fulfilling the requirements
of Section 623 of the Business Corporation Law to receive payment
for their shares, the notice of such meeting shall include a
statement of that purpose to that effect.  A copy of the notice
of any meeting shall be given, personally or by mail, not less
than ten nor more than fifty days before the date of the meeting,
to each shareholder entitled to vote at such meeting.  If mailed,
such notice is given when deposited in the United States mail,
with postage thereon prepaid, directed to the shareholder at his
address as it appears on the record of shareholders, or, if he
shall have filed with the Secretary of the Corporation a written
request that notices to him be mailed to some other address, then
directed to him at such other address.


<PAGE>
     When a meeting is adjourned to another time or place, it
shall not be necessary to give any notice of the adjourned
meeting if the time and place to which the meeting is adjourned
are announced at the meeting at which the adjournment is taken,
and at the adjourned meeting any business may be transacted that
might have been transacted on the original date of the meeting. 
However, if after the adjournment, the Board of Directors fixes a
new record date for the adjourned meeting, a notice of the
adjourned meeting shall be given to each shareholder of record on
the new record date entitled to notice under the next preceding
paragraph. 


<PAGE>
     Section 1.04.  Waivers of Notice.  Notice of meeting need
not be given to any shareholder who submits a signed Waiver of
Notice, in person or by proxy, whether before or after the
meeting.  The attendance of any shareholder at a meeting, in
person or by proxy, without protesting prior to the conclusion of
the meeting the lack of notice of such meeting, shall constitute
a Waiver of Notice by him.


     Section 1.05.  Quorum.  The holders of a majority of the
shares entitled to vote thereat shall constitute a quorum at a
meeting of shareholders for the transaction of any business,
provided that when a specified item of business is required to be
voted on by a class or series, voting as a class, the holders of
a majority of the shares of such class or series shall constitute
a quorum for the transaction of such specified item of business.  

   When a quorum is once present to organize a meeting, it is not
broken by the subsequent withdrawal of any shareholders. 

   The shareholders present may adjourn the meeting despite the
absence of a quorum and at any such adjourned meeting at which
the requisite amount of voting stock shall be represented, any
business may be transacted which might have been transacted at
the meeting as originally noticed.


     Section 1.06.  Fixing Record Date.  For the purpose of
determining the shareholders entitled to notice of or to vote at
any meeting of shareholders or any adjournment thereof, or to
express consent to or dissent from any proposal without a
meeting, or for the purpose of determining shareholders entitled
to receive payment of any dividend or the allotment of any
rights, or for the purpose of any other action, the Board of
Directors may fix, in advance, a date as the record date for any
such determination of shareholders.  Such date shall not be more
than fifty nor less than ten days before the date of such
meeting, nor more than fifty days prior to any other action.     
When a determination of shareholders of record entitled to notice
of or to vote at any meeting or shareholders has been made as
provided in this Section, such determination shall apply to any
adjournment thereof, unless the Board of Directors fixes a new
record date under this Section for the adjourned meeting. 



<PAGE>
     Section 1.07.  List of Shareholders at Meeting.  A list of
shareholders as of the record date, certified by the corporate
officer responsible for its preparation or by a transfer agent,
shall be produced at any meeting of shareholders upon the request 
thereat or prior thereto of any shareholder.  If the right to
vote at any meeting is challenged, the inspectors of election, or
person presiding thereat, shall require such list of shareholders
to be produced as evidence of the right of the persons challenged
to vote at such meeting, and all persons who appear from such
list to be shareholders entitled to vote thereat may vote at such
meeting. 




     Section 1.08.  Proxies.  Every shareholder entitled to vote
at a meeting of shareholders or to express consent or dissent
without a meeting may authorize another person or persons to act
for him by proxy. 


     Every proxy must be signed by the shareholder or his
attorney-in-fact.  No proxy shall be valid after the expiration
of eleven months from the date thereof unless otherwise provided
in the proxy.  Every proxy shall be revocable at the pleasure of
the shareholder executing it, except as otherwise provided in
this Section.


     The authority of the holder of a proxy to act shall not be
revoked by the incompetence or death of the shareholder who
executed the proxy unless, before the authority is exercised,
written notice of an adjudication of such incompetence or of such
death is received by the Corporate Officer responsible for
maintaining the list of shareholders.


     Except when other provision shall have been made by written
agreement between the parties, the record holder of shares which
are held by a pledgee as security or which belong to another,
upon demand therefor and payment of necessary expenses thereof,
shall issue to the pledgor or to such owner of such shares a
proxy to vote or take other action thereon.


     A shareholder shall not sell his vote or issue a proxy to
vote to any person for any sum of money or anything of value,
except as authorized in this Section and Section 620 of the
Business Corporation Law.

<PAGE>
     A proxy which is entitled "irrevocable proxy" and which
states that it is irrevocable, is irrevocable when it is held by
any of the following or a nominee of any of the following:

     (1)  A Pledgee;

     (2)  A person who has purchased or agreed to purchase the
          shares;

     (3)  A creditor or creditors of the Corporation who extend   
          or continue credit to the Corporation in consideration  
          of the proxy if the proxy states that it was given in
          consideration of such extension or continuation of
          credit, the amount thereof, and the name of the person
          extending or continuing credit;

     (4)  A person who has contracted to perform services as an
          Officer of the Corporation, if a proxy is required by   
          the contract of employment, if the proxy states that it 
          was given in consideration of such contract of          
          employment, the name of the employee and the period of  
          employment contracted for;

     (5)  A person designated by or under an agreement under
          paragraph (a) of said Section 620.


     Notwithstanding a provision in a proxy, stating that it is
irrevocable, the proxy becomes revocable after the pledge is
redeemed, or the debt of the Corporation is paid, or the period
of employment provided for in the contract of employment has
terminated, or the agreement under paragraph (a) of said Section
620 has terminated, and becomes revocable, in a case provided for
in subparagraph (3) or (4) above, at the end of the period, if
any, specified therein as the period during which it is
irrevocable, or three years after the date of the proxy,
whichever period is less, unless the period of irrevocability is
renewed from time to time by the execution of a new irrevocable
proxy as provided in this Section.  This paragraph does not
affect the duration of a proxy under the second paragraph of this
Section. 


<PAGE>
     A proxy may be revoked, notwithstanding a provision making
it irrevocable, by a purchaser of shares without knowledge of the
existence of the provision unless the existence of the proxy and
its irrevocability is noted conspicuously on the face or back of
the certificate representing such shares.

 
<PAGE>
    Section 1.09.  Selection and Duties of Inspectors.  The Board
of Directors, in advance of any shareholders' meeting, may
appoint one or more inspectors to act at the meeting or any
adjournment thereof.  If inspectors are not so appointed, the
person presiding at a shareholders' meeting may, and on the
request of any shareholder entitled to vote thereat shall,
appoint one or more inspectors.  In case any person appointed
failed to appear or act, the vacancy may be filled by appointment
made by the Board in advance of the meeting or at the meeting by
the person presiding thereat.  Each inspector, before entering
upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector at such meeting
with strict impartiality and according to the best of his
ability.


     The inspectors shall determine the number of shares
outstanding and the voting power of each, the shares represented
at the meeting, the existence of a quorum, the validity and
effect of proxies, and shall receive votes, ballots or consents,
hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes,
ballots or consents, determine the result, and do such acts as
are proper to conduct the election or vote with fairness to all
shareholders.  On request of the person presiding at the meeting
or any shareholder entitled to vote thereat, the inspectors shall
make a report in writing of any challenge, question or matter
determined by them and execute a certificate of any fact found by
them.  Any report or certificate made by them shall be prima
facie evidence of the facts stated and of the vote as certified
by them.


     Unless appointed by the Board of Directors or requested by a
shareholder, as above provided in this Section, inspectors shall
be dispensed with at all meetings of shareholders.      The vote
upon any question before any shareholders' meeting need not be by
ballot.

<PAGE>
     Section 1.10.  Qualification of Voters.  Every shareholder
of record shall be entitled at every meeting of shareholders to
one vote for every share standing in his name on the record of
shareholders, except as expressly provided otherwise in this
Section and except as otherwise expressly provided in the
Certificate of Incorporation of the Corporation.


     Treasury shares and shares held by another domestic or
foreign corporation of any type or kind, if a majority of the
shares entitled to vote in the election of Directors of such
other corporation is held by the Corporation, shall not be shares
entitled to vote or to be counted in determining the total number
of outstanding shares. 


     Shares held by an administrator, executor, guardian,
conservator, committee, or other fiduciary, except a Trustee, may
be voted by him, either in person or by proxy, without transfer
of such shares into his name.  Shares held by a Trustee may be
voted by him, either in person or by proxy, only after the shares
have been transferred into his name as Trustee or into the name
of his nominee. 


     Shares held by or under the control of a receiver may be
voted by him without the transfer thereof into his name if
authority so to do is contained in an order of the court by which
such receiver was appointed. 


     A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the
name of the pledgee, or a nominee of the pledgee.


      Redeemable shares which have been called for redemption
shall not be deemed to be outstanding shares for the purpose of
voting or determining the total number of shares entitled to vote
on any matter on and after the date on which written notice of
redemption has been sent to holders thereof and a sum sufficient
to redeem such shares has been deposited with a bank or trust
company with irrevocable instruction and authority to pay the
redemption price to the holders of the shares upon surrender of
certificates therefor. 


     Shares standing in the name of another domestic or foreign
corporation of any type or kind may be voted by such Officer,
agent or proxy as the By-Laws of such corporation may provide,
or, in the absence of such provision, as the Board of Directors
of such corporation may determine.

<PAGE>
     When shares are registered on the record of shareholders of
the Corporation in the name of, or have passed by operation of
law or by virtue of any deed of trust or other instrument to two
or more fiduciaries, and if the fiduciaries shall be equally
divided as to voting such shares, any court having jurisdiction
of their accounts, upon petition by any of such fiduciaries or by
any party in interest, may direct the voting of such shares for
the best interest of the beneficiaries.  This paragraph shall not
apply in any case where the instrument or order of the court
appointing such fiduciaries shall otherwise direct how such
shares shall be voted.


     Notwithstanding the foregoing paragraphs of this Section,
the Corporation shall be protected in treating the persons whose
names shares stand on the record of shareholders as the owners
thereof for all purposes.

<PAGE>
     Section 1.11.  Vote of Shareholders.  Directors shall be
elected by a plurality of the votes cast at a meeting of
shareholders by the holders of shares entitled to vote in the
election. Whenever any corporate action, other than the election
of Directors, is to be taken by vote of the shareholders, it
shall, except as otherwise required by the Business Corporation
Law or by the Certificate of Incorporation of the Corporation, be
authorized by a majority of the votes cast at a meeting of
shareholders by the holders of shares entitled to vote thereon. 


     Section 1.12.  Written Consent of Shareholders.  Whenever
under the Business Corporation Law shareholders are required or
permitted to take any action by vote, such action may be taken
without a meeting on written consent, setting forth the action so
taken, signed by the holders of all outstanding shares entitled
to vote thereon.  This paragraph shall not be construed to alter
or modify the provisions of any section of the Business
Corporation Law or any provision in the Certificate of
Incorporation of the Corporation not inconsistent with the
Business Corporation Law under which the written consent of the
holders of less than all outstanding shares is sufficient for
corporate action.


     Written consent thus given by the holders of all outstanding
shares entitled to vote shall have the same effect as a unanimous
vote of shareholders.

<PAGE>
                            ARTICLE II
                             Directors



    Section 2.01.  Management of Business; Qualifications of
Directors.  The business of the Corporation shall be managed by
its Board of Directors, each of whom shall be at least twenty-one
years of age. 


     Directors need not be Stockholders.


     The Board of Directors, in addition to the powers and
authority expressly conferred upon it herein, by statute, by the
Certificate of Incorporation of the Corporation and otherwise, is
hereby empowered to exercise all such powers as may be exercised
by the Corporation, except as expressly provided otherwise by the
statutes of the State of New York, by the Certificate of
Incorporation of the Corporation and these By-Laws.


<PAGE>
     Section 2.02.  Number of Directors.  The number of Directors
which shall constitute the entire Board shall be nine (9), but
this number may be increased and subsequently again increased or
decreased from time to time by the affirmative vote of the
majority of Directors, except that the number of Directors shall
not be less than nine (9).


     Section 2.03.  Classification and Election.  (a)  The 
Directors shall be divided into three classes designated as Class
1, Class 2 and Class 3.  All classes shall be as nearly equal in
number as possible and no class shall include less than three (3)
Directors.  The term of office of the Directors initially
classified shall be as follows:  Class 1 shall expire at the next
(1992) Annual Meeting of the Shareholders, Class 2 shall expire
at the second succeeding (1993) Annual Meeting of the
Shareholders, and Class 3 shall expire at the third succeeding
(1994) Annual Meeting of the Shareholders.  (b)  At each Annual
Meeting after such initial classification, Directors to replace
those whose terms expired at such Annual Meeting shall be elected
to hold office until the third succeeding Annual Meeting of the
Shareholders.  A Director shall hold office until the Annual
Meeting for the year in which his term expires and subject to
prior death, resignation, retirement, or removal from office,
until his successor shall be elected and qualified. 


     Section 2.04.  Newly Created Directorship and Vacancies. 
Newly created Directorships or any decrease in Directorship shall
be apportioned among the classes as to make all classes as nearly
equal in number as possible.  Newly created Directorships
resulting from an increase in the number of Directors and
vacancies caused by death, resignation, retirement, or removal
from office, subject to Section 2.05(b), may be filled by the
majority of the Directors voting on the particular matter, if a
quorum is present.  If the number of Directors then in office is
less than a quorum, such newly created Directorships and
vacancies may be filled by the affirmative vote of a majority of
the Directors in office.  When the number of Directors is
increased by the Board, and the newly created Directorships are
filled by the Board, there shall be no classification of the
additional Directors until the next Annual Meeting of the
shareholders.  Any Director elected by the Board to fill a
vacancy shall serve until the next meeting of the shareholders,
at which the election of the Directors is in the regular order of
business, and until his successor is elected and qualified.     
In no case will a decrease in the number of Directors shorten the
term of an incumbent Director.


<PAGE>
     Section 2.05(a).  Resignations.  Any Director of the
Corporation may resign at any time by giving written notice to
the Board of Directors, the President or the Secretary of the
Corporation.  Such resignation shall take effect at the time
specified therein, if any, or if no time is specified therein,
then upon receipt of such notice by the addressee; and, unless
otherwise provided therein, the acceptance of such resignation
shall not be necessary to make it effective.



<PAGE>
     Section 2.05(b).  Removal of Directors.  Any or all of the
Directors may be removed at any time (i) for cause by vote of the
shareholders or by action on the Board of Directors or (ii)
without cause by vote of the shareholders, except as expressly
provided otherwise by Section 706 of the Business Corporation
Law.  The Board of Directors shall fill vacancies occurring in
the Board by reason of removal of Directors for cause.  Vacancies
occurring by reason of removal without cause shall be filled by
the Shareholders.


     Section 2.06.  Quorum of Directors.  At all meetings of the
Board of Directors, a majority of the number of Directors then
office shall be necessary and sufficient to constitute a quorum
for the transaction of business and the act of a majority of the
Directors present at any meeting at which there is a quorum shall
be the act of the Board of Directors, except as expressly
provided otherwise by the statutes of the State of New York and
except as provided in the third sentence of Section 2.04, in
Section 2.11 and Section 7.09 hereof.


     A majority of the Directors present, whether or not a quorum
is present, may adjourn any meeting of the Directors to another
time and place.  Notice of any adjournment need not be given if
such time and place are announced at the meeting. 


     Section 2.07.  Annual Meeting.  The Board of Directors shall 
meet immediately following the adjournment of the Annual Meeting
of shareholders in each year at the same place and no notice of
such meeting shall be necessary.
<PAGE>

     Section 2.08.  Regular Meetings.  Regular meetings of the
Board of Directors may be held at such time and place as shall
from time to time be fixed by the Board and no notice thereof
shall be necessary.


     Section 2.09.  Special Meetings.  Special meetings may be
called at any time by any Director, the President, any Vice
President, the Treasurer, or the Secretary or by resolution of
the Board of Directors.  Special meetings shall be held at such
place as shall be fixed by the person or persons calling the
meeting and stated in the notice or waiver of notice of the
meeting.


     Section 2.10.  Compensation.  Directors shall receive such
fixed sums and expenses of attendance for attendance at each
meeting of the Board or of any committee and/or such salary as
may be determined from time to time by the Board of Directors;
provided that nothing herein contained shall be construed to
preclude any Director from serving the Corporation in any other
capacity and receiving compensation therefor.


     Section 2.11.  Committees.  The Board of Directors, by
resolution adopted by a majority of the entire Board, may
designate from among its members an Executive Committee and other
committees, each consisting of three or more Directors, and each
of which, to the extent provided in the resolution, shall have
the authority of the Board of Directors, except that no such
committee shall have authority as to the following matters: 

     (a)  The submission to shareholders of any action that needs 
          shareholder's authorization under the Business          
        
          Corporation Law.

     (b)  The filling of vacancies in the Board of Directors or 
          in any committee.

     (c)  The fixing of compensation of the Directors for serving
          on the Board of Directors or on any committee.

     (d)  The amendment or repeal of the By-Laws, or the adoption
          of new By-Laws.

     (e)  The amendment or repeal of any resolution of the Board  
          of Directors which by its terms shall not be so  
          amendable or repealable.

     The Board may designate one or more Directors as alternate
members of any such committee, who may replace any absent member
or members at any meeting of such committee.  Each such committee
shall serve at the pleasure of the Board of Directors. 

     Regular meetings of any such committee shall be held at such
time and place as shall from time to time be fixed by such
committee and no notice thereof shall be necessary.  Special
meetings may be called at any time by any Officer of the
Corporation or any member of such committee.  Notice of each
special meeting of each such committee shall be given (or waived)
in the same manner as notice of a special meeting of the Board of
Directors.  A majority of the members of any such committee shall
constitute a quorum for the transaction of business and the act
of a majority of the members present at the time of the vote, if
a quorum is present at such time, shall be the act of the
committee.


     Section 2.12.  Interested Directors.  No contract or other
transaction between the Corporation and one or more of its
Directors, or between the Corporation and any other corporation,
firm, association or other entity in which one or more of the
Corporation's Directors are Directors or Officers, or are
financially interested, shall be either void or voidable for this
reason alone or by reason alone that such Director or Directors
are present at the meeting of the Board of Directors, or of a
committee thereof, which approves such contract or transaction,
or that his or their votes are counted for such purpose: 

     (1)  If the fact of such common Directorship, Officership or
          financial interest is disclosed or known to the Board 
          or committee, and the Board or committee approves such
          contract or transaction by a vote sufficient for such
          purpose without counting the vote or votes of such
          interested Director or Directors;

     (2)  If such common Directorship, Officership or financial
          interest is disclosed or known to the shareholders
          entitled to vote thereon, and such contract or
          transaction is approved by vote of the shareholders; or

     (3)  If the contract or transaction is fair and reasonable 
          as to the Corporation at the time it is approved by the
          Board, a committee of the shareholders.


     Common or interested Directors may be counted in determining
the presence of a quorum at a meeting of the Board or of a
committee which approves such contract or transaction.


<PAGE>
     Section 2.13.  Loans to Directors.  A loan shall not be made
by the Corporation to any Director unless it is authorized by
vote of the shareholders.  For this purpose, the shares of the
Director who would be the borrower shall not be shares entitled
to vote.  A loan made in violation of this Section shall be a
violation of the duty to the Corporation of the Directors
approving it, but the obligation of the borrower with respect to
the loan shall not be affected thereby. 


     Section 2.14.  Consent to Action.  Any action required or
permitted to be taken by the Board of Directors or any committee
thereof may be taken without a meeting if all members of the
Board or committee consent in writing, whether done before or
after the action so taken, to the adoption of a resolution
authorizing the action.  The resolution and the written consent
thereto shall be filed with the Minutes of the proceeding of the
Board or the committee.


<PAGE>
                           ARTICLE III
                            Officers


     Section 3.01.  Election or Appointment:  Number.  The
Officers shall be a Chairman, a Vice-Chairman, a President, a
Secretary, a Treasurer, and such number of Executive
Vice-Presidents, Vice-Presidents, Assistant Secretaries and
Assistant Treasurers, and such other Officers as the Board may
from time to time determine. Any person may hold two or more
offices at the same time, except the offices of President and
Secretary.  Any Officer, except the Chairman, Vice-Chairman and
the President of the Corporation, may but does not need to be
chosen from among the Board of Directors.



     Section 3.02.  Term.  Subject to the provisions of Section
3.03 hereof, all officers shall be elected or appointed to hold
office until the meeting of the Board of Directors following the
next Annual Meeting of shareholders, and each officer shall hold
office for the term for which he is elected or appointed and
until his successor has been elected or appointed and qualified. 


     The Board may require any Officer to give security for the
faithful performance of his duties.


<PAGE>
     Section 3.03.  Removal.  Any Officer elected or appointed by
the Board of Directors may be removed by the Board with or
without cause.


     The removal of an Officer without cause shall be without
prejudice to his contract rights, if any.  The election or
appointment of an Officer shall not of itself create contract
rights.



     Section 3.04.  Authority.  Any Director or such other person
as may be designated by the Board of Directors, and in the
absence of such Director or other person, the President shall be
the Chief Executive Officer of the Corporation.  The Chairman
shall oversee the general operations of the Corporation and set
company policy which would be implemented, interpreted and
carried out by the President and Chief Executive Officer who will
report directly to the Chairman.  The Chairman shall preside at
all meetings of the Board of Directors unless some other person
is designated by the Board. 



     Section 3.05.  Voting Securities Owned by the Corporation. 
Powers of attorney, proxies, waivers or notice of meeting,
consents and other instruments relating to securities owned by
the Corporation may be executed in the name of and on behalf of
the Corporation by the President or any Vice-President and any
such officer may, in the name of and on behalf of the
Corporation, take all such action as any such officer may deem
advisable to vote in person or by proxy at any meeting of
security holders of any Corporation in which the Corporation may
own securities and at any such meeting shall possess and may
exercise any and all rights and powers incident to the ownership
of such securities and which, as the owner thereof, the
Corporation might have exercised and possessed if present.  The
Board of Directors may, by resolution, from time to time confer
like powers upon any other person or persons. 


<PAGE>
                           ARTICLE IV
                          Capital Stock



     Section 4.01.  Stock Certificates.  The shares of the
Corporation shall be represented by certificates signed by the
Chairman of the Board or the President or a Vice-President and
the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer of the Corporation, and may be sealed with
the seal of the Corporation or a facsimile thereof.  The
signatures of the Officers upon a certificate may be facsimiles
if the certificate is countersigned by a transfer agent or
registered by a registrar other than the Corporation itself or
its employee.  In case any Officer who has signed or whose
facsimile signature has been placed upon a certificate shall have
ceased to be such Officer before such certificate is issued, it
may be issued by the Corporation with the same effect as if he
were such Officer at the date of issue.


     Each certificate representing shares shall also set fort
such additional material as is required by subdivisions (b) and
(c) of Section 508 of the Business Corporation Law.


<PAGE>
     Section 4.02.  Transfers.  Stock of the Corporation shall be
transferable in the manner prescribed by the laws of the State of
New York and in these By-Laws  Transfers of stock shall be made
on the books of the Corporation only by the person named in the
certificate or by attorney lawfully constituted in writing and
upon the surrender of the certificate therefor, which shall be
canceled before the new certificate shall be issued. 



     Section 4.03.  Registered Holders.  The Corporation shall be
entitled to treat and shall be protected in treating the persons
in whose names shares or any warrants, rights or options stand on
the record of shareholders, warrant holders, right holders or
option holders, as the case may be, as the owners thereof for all
purposes and shall not be bound to recognize any equitable or
other claim to, or interest in, any such share, warrant, right or
option on the part of any other person, whether or not the
Corporation shall have notice thereof, except as expressly
provided otherwise by the Statutes of the State of New York.      



     Section 4.04.  New Certificates.  The Corporation may issue
a new certificate of stock in the place of any certificate
theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the Directors may, in their discretion, require
the owner of the lost, stolen or destroyed certificate, or his
legal representatives, to give the Corporation a bond sufficient
(in the judgment of the Directors) to indemnify the Corporation
against any claim that may be made against it on account of the
alleged loss or theft of any such certificate or the issuance of
such new certificate.  A new certificate may be issued without
requiring any bond when, in the judgment of the Directors, it is
proper so to do.

     
<PAGE>
                           ARTICLE V
               Financial Notices to Shareholders



     Section 5.01.  Dividends.  When any dividend is paid or any
other distribution is made, in whole or in part, from sources
other than earned surplus, it shall be accompanied by a written
notice (1) disclosing the amounts by which such dividend or
distribution affects stated capital, capital surplus and earned
surplus, or (2) if such amounts are not determinable at the time
of such notice, disclosing the approximate effect of such
dividend or distribution upon stated capital, capital surplus and
earned surplus and stating that such amounts are not yet
determinable.



     Section 5.02.  Share Distribution and Changes.  Every
distribution to shareholders of certificates representing a share
distribution or a change of shares which affects stated capital,
capital surplus or earned surplus shall be accompanied by a
written notice (1) disclosing the amounts by which such
distribution or change affects stated capital, capital surplus or
earned surplus, or (2) if such amounts are not determinable at
the time of such notice, disclosing the approximate effect of
such distribution or change upon stated capital, capital surplus
and earned surplus and stating that such amounts are not yet
determinable.


     When issued shares are changed in any manner which affects
stated capital, capital surplus or earned surplus, and no
distribution to shareholders of certificates representing any
shares resulting from such change is made, disclosure of the
effect of such change upon the stated capital, capital surplus
and earned surplus shall be made in the next financial statement
covering the period in which such change is made that is
furnished by the Corporation to holders of shares of the class or
series so changed or, if practicable, in the first notice of
dividend or share distribution or change that is furnished to
such shareholders between the date of the change and shares and
the next such financial statement, and in any event within six
months of the date of such change.


<PAGE>
     Section 5.03.  Cancellation of Reacquired Shares.  When
reacquired shares other than converted shares are canceled, the
stated capital of the Corporation shall be reduced by the amount
of stated capital then represented by such shares plus any stated
capital not theretofore allocated to any designated class or
series which is thereupon allocated to the shares canceled.  The
amount by which stated capital has been reduced by cancellation
of required shares during a stated period of time shall be
disclosed in the next financial statement covering such period
that is furnished by the Corporation to all its shareholders or,
if practicable, in the first notice of dividend or share
distribution that is furnished to the holders of each class or
series of its shares between the end of the period and the next
such financial statement, and in any event to all its
shareholders within six months of the date of the reduction of
capital.


<PAGE>
     Section 5.04.  Reduction of Stated Capital.  When a
reduction of stated capital has been effected under Section 516
of the Business Corporation Law, the amount of such reduction
shall be disclosed in the next financial statement covering the
period in which such reduction is made that is furnished by the
Corporation to all its shareholders or, if practicable, in the
first notice of dividend or share distribution that is furnished
to the holders of each class or series of its shares between the
date of such reduction and the next such financial statement, and
in any event to all its shareholders within six months of the
date of such reduction.



     Section 5.05.  Application of Capital Surplus to Elimination
of a Deficit.  Whenever the Corporation shall apply any part or
all of its capital surplus to the elimination of any deficit in
the earned surplus account, such application shall be disclosed
in the next financial statement covering the period in which such
elimination is made that is furnished by the Corporation to all
its shareholders or, if practicable, in the first notice of
dividend or share distribution that is furnished to holders of
each class or series of its shares between the date of such
elimination and the next such financial statement, and in any
event to all its shareholders within six months of the date of
such action.



     Section 5.06.  Conversion of Shares.  Should the Corporation
issue any convertible shares, then, when shares have been
converted, disclosure of the conversion of shares during a stated
period of time and its effect, if any, upon stated capital shall
be made in the next financial statement covering such period that
is furnished by the Corporation to all its shareholders or, if
practicable, in the first notice of dividend or share
distribution that is furnished to the holders of each class or
series of its shares between the end of such period and the next
financial statement, and in any event to all its shareholders
within six months of the date of the conversion of shares.


<PAGE>
                          ARTICLE VI
                        Indemnification



     Section 6.01.  Right to Indemnification.  The Corporation
shall indemnify, defend and hold harmless any person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or other, including
appeals, by reason of the fact that he is or was a Director,
Officer or employee of the Corporation, or is or was serving at
the request of the Corporation as a Director, Officer or employee
of any Corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in
an official capacity as a Director, Officer or employee or in any
other capacity while serving as a Director, Officer or employee,
to the fullest extent authorized by the New York Business
Corporation Law, as the same exists or may hereafter be amended,
against all expenses, liability and loss (including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and
amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith; provided,
however, that except as provided in Section 6.02 hereof with
respect to proceedings seeking to enforce rights to
indemnification, the Corporation shall indemnify any such person
seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if the proceeding (or part
thereof) was authorized by the Board of Directors of the
Corporation.



     The right to indemnification conferred in this Article shall
be a contract right and shall include the right to be paid by the
Corporation expenses incurred in defending any such proceeding in
advance of its final disposition; provided, however, that if
required by law at the time of such payment, the payment of such
expenses incurred by a Director or Officer in his capacity as a
Director or Officer (and not in any other capacity in which
service was or is rendered by such person while a Director or
Officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of such
proceeding, shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such Director or Officer,
to repay all amounts so advanced if it should be determined
ultimately that such Director or Officer is not entitled to be
indemnified under this Section or otherwise.


<PAGE>
     "Employee" as used herein, includes both an active employee
in the Corporation's service, as well as a retired employee who
is or has been a party to a written agreement under which he
might be, or might have been, obligated to render services to the
Corporation.


<PAGE>
     Section 6.02.  Right of Claimant to Bring Suit.  If a claim
under Section 6.01 is not paid in full by the Corporation within
sixty (60) days or, in cases of advances of expenses, twenty (20)
days after a written claim has been received by the Corporation,
the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to
be paid also the expense of prosecuting such claim.  It shall be
a defense to any such action (other than an action brought to
enforce claim for expenses incurred in defending any proceeding
in advance of its final disposition where the required
undertaking has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it
permissible under the New York Business Corporation Law for the
Corporation to indemnify the claimant for the amount claimed, but
the burden of proving such defence shall be on the Corporation. 
Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its shareholders) to
have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the
circumstances because he has met the applicable standard of
conduct set forth in the New York Business Law, nor an actual
determination by the Corporation (including its Board of
Directors, independent legal counsel, or its shareholders) that
the claimant had not met such applicable standard of conduct
shall be a defense to the action or create a presumption that
claimant had not met the applicable standard of conduct.  The
Corporation shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Article that the procedures
and presumptions of this Article are not valid, binding and
enforceable and shall stipulate in any such proceeding that the
Corporation is bound by all provisions of this Article.


<PAGE>
     Section 6.03.  Nonexclusiveness.  The indemnification and
advances of expenses granted pursuant to, or provided by, this
Article shall not be deemed exclusive of any other rights to
which a Director or Officer seeking indemnification or
advancement or expenses may be entitled, whether contained in the
Certificate of Incorporation or these By-Laws, and the Board of
Directors is authorized, from time to time in its discretion, to
enter into agreements with one or more Directors, Officers and
other persons providing for the maximum indemnification allowed
by applicable law.



     The right to indemnification and the payment of expenses
incurred in defending a proceeding in advance of its final
disposition conferred in this Article (a) shall apply to acts or
omissions antedating the adoption of this By-Law, (b) shall be
severable, (c) shall not be exclusive of other rights to which
any Director, Officer or employee may now or hereafter become
entitled apart from this Article, (d) shall continue as to a
person who has ceased to be such Director, Officer or employee
and (e) shall inure to the benefit of the heirs, Executors and
Administrators of such a person.


<PAGE>
     Section 6.04.  Insurance for Indemnification of Directors
and Officers.  The Corporation shall have the power to purchase
and maintain insurance (a) to indemnify the Corporation for any
obligations which it incurs as the result of the indemnification
of Directors and Officers under the provisions of this Article;
(b) to indemnify Directors and Officers in instances which they
may be indemnified by the Corporation under the provisions of
this Article; and (c) to indemnify Directors and Officers in
instances in which they may not otherwise be indemnified by the
Corporation under the provisions of this Article, provided the
contract of insurance covering such Directors and Officers
provides, in a manner acceptable to the Superintendent of
Insurance of the State of New York, for a retention amount and
for co-insurance.



     No insurance under the preceding paragraph of this Section
may provide for any payment, other than the cost of defense, to
or on behalf of any Director of Officer:  (i) if a judgment or
other final adjudication adverse to the insured Director or
Officer establishes that his acts of active and deliberate
dishonesty were material to the cause of action so adjudicated or
that he personally gained in fact a financial profit or other
advantage to which he was not legally entitled, or (ii) in
relation to any risk the insurance of which is prohibited under
the insurance laws of the State of New York.
<PAGE>

                        ARTICLE VII

                       Miscellaneous


     Section 7.01.  Offices.  The principal office of the
Corporation shall be in the City of New York, County of New York,
State of New York.  The Corporation may also have offices at
other places, within and/or without the State of New York.      



     Section 7.02.  Seal.  The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its
incorporation and the words "Corporate Seal of New York".



     Section 7.03.  Checks.  All checks or demands for money
shall be signed by such person or persons as the Board of
Directors may from time to time determine.



     Section 7.04.  Fiscal Year.  The fiscal year of the
Corporation shall begin on the 1st day of July in each year and
shall end on the 30th day of June of the ensuing year and the
first fiscal year shall end on June 30, 1969. 



     Section 7.05.  Books and Records.  The Corporation shall
keep correct and complete books and records of accounts and shall
keep minutes of the proceedings of its shareholders, Board of
Directors and Executive Committee, if any, and shall keep at the
office of the Corporation in New York State or at the office of
its transfer agent or registrar in New York State, a record
containing the names and addresses of all shareholders, the
number and class of shares held by each and the dates when they
respectively became the owners of record thereof.  Any of the
foregoing books, minutes or records may be in written form or in
any other form capable of being converted into written form
within a reasonable time.


<PAGE>
     Section 7.6.  Duty of Directors and Officers.  Directors and
Officers shall discharge the duties of their respective positions
in good faith and with that degree of diligence, care and skill
which ordinarily prudent men would exercise under similar
circumstances in like positions.  In discharging their duties,
Directors and Officers, when acting in good faith, may rely upon
financial statements of the Corporation represented to them to be
correct by the President or the Officer of the Corporation having
charge of its books of accounts, or stated in a written report by
an independent public or certified public accountant or firm of
such accountants fairly to reflect the financial condition of the
Corporation.



     Section 7.07.  When Notice or Lapse of Time Unnecessary;
Notice Dispensed With When Delivery is Prohibited.  Whenever,
under the Business Corporation Law or the Certificate of
Incorporation or the By-Law of the Corporation or by the terms of
any agreement or instrument, the Corporation or the Board of
Directors or any committee thereof is authorized to take any
action after notice to any person or persons or after the lapse
of a prescribed period of time, such action may be taken without
notice and without the lapse of such period of time, if at any
time before or after such action is completed the person or
persons entitled to such notice or entitled to participate in the
action to be taken or, in the case of a shareholder, by his
attorney-in-fact, submit a signed waiver of notice of such
requirements.


     Whenever any notice or communication is required to be given
to any person by the Business Corporation Law, the Certificate of
Incorporation of the Corporation or theses By-Laws, or by the
terms of any agreement or instrument, or as a condition precedent
to taking any corporate action and communication with such person
is then unlawful under any statute of the State of New York or of
the United States or any regulation, proclamation or order issued
under said statutes, then the giving of such notice or
communication to such person shall not be required and there
shall be no duty to apply for license or other permission to do
so.  Any affidavit, certificate or other instrument which is
required to be made or filed as proof of the giving of any notice
or communication required the Business Corporation Law shall, if
such notice or communication to any person is dispensed with
under this paragraph, include a statement that such notice or
communication was not given to any person with whom communication
is unlawful.  Such affidavit, certificate or other instrument
shall be as effective for all purposes as though such notice or
communication had been personally given to such person. 


<PAGE>
     Section 7.08.  Entire Board.  As used in these By-Laws, the
term "Entire Board" means the total number of Directors which the
Corporation would have if there were no vacancies.



     Section 7.09.  Amendment of By-Laws.  These By-Laws may be
amended or repealed and new By-Laws adopted by the Board of
Directors or by vote of the holders of the shares at the time
entitled to vote of the holders of the shares at the time
entitled to vote in the election of any Directors, except that
any amendment by the Board changing the number of Directors shall
require the vote of a majority of the Entire Board and except
that any By-Laws adopted by the Board may be amended or repealed
by the shareholders entitled to vote thereon as provided in the
Business Corporation Law.


     If any By-Law regulating an impending election of Directors
is adopted, amended or repealed by the Board, the shall be set
forth in the notice of the next meeting of shareholders for the
election of Directors the By-Law so adopted, amended or repealed,
together with a concise statement of the changes made.


<PAGE>
     Section 7.10  Nonapplication of North Carolina Shareholder
Protection Act.  The provisions of North Carolina General
Statutes 55-75 through 55-79 shall not be applicable to this
Corporation.



     Section 7.11.  Section Headings.  The Headings to the
Articles and Sections of these By-Laws have been inserted for
convenience of reference only and shall not be deemed to be a
part of these By-Laws.


                               Exhibit (10f)

                                UNIFI, INC.

                     1996 INCENTIVE STOCK OPTION PLAN


                                 ARTICLE I

1.1  NAME & PURPOSE:  The name of the Plan is the "Unifi, Inc. 1996
Incentive Stock Option Plan" (the "Plan").  The Plan is for the
purposes of securing and retaining the services of key employees
for Unifi, Inc., and its subsidiaries, as that term is defined in
Section 424(f) of the 1986 Internal Revenue Code, as amended,
(the "Subsidiaries").  The Board of Directors of the Unifi, Inc.
believes the Plan will promote continuity of management and
increase incentive and personal interest in the future of the
Unifi, Inc. and its subsidiaries by those who are primarily
responsible not only for its regular operations, but also for
shaping and carrying out the long-range plans of Unifi, Inc. and
assisting in its continued growth.

     The purpose will be affected through the granting of stock
options as herein provided, which options are intended to
constitute "incentive stock options" ("Options") within the
meaning of Section 422 of the 1986 Internal Revenue Code, as
amended, (the "Code").

1.2  DEFINITIONS:   Wherever used in the Plan, the following
terms shall have the meaning set forth below:

     (a)  "Corporation" shall mean Unifi, Inc., its subsidiaries,
     and any successor corporation.

     (b)  "Board of Directors"
 shall mean the Board of Directors
     of the Corporation and any committee of Directors authorized
     by such Board to act on its behalf with reference to the Plan.

     (c)  "Committee" shall mean the Stock Option Committee.  The
     Committee shall be appointed by the Board of Directors, shall
     consist of not less than three nor more than five outside
     Directors, none of whom shall be eligible to receive Options
     under the Plan.  All members of the Committee shall serve at
     the pleasure of the Board of Directors.

     (d)  "Common Stock" shall mean the common stock of the
     Corporation identified as such on the most recent balance
     sheet of the Corporation.

     (e)  "Disability" shall mean a condition resulting from an
     accident or illness which in the opinion of the Committee
     permanently and totally prevents an optionee from carrying out
     his or her duties with the Corporation.

     (f)  "Fair Market Value" shall be deemed to be the closing
     price of the Corporation's Common Stock on the New York Stock
     Exchange on the day on which the option is granted.

     (g)  "Severance Date" shall mean, as determined by the
     Committee, the date on which an individual's employment with
     the Corporation terminates.  Whether any leave of absence
     shall constitute termination of employment for the purpose of
     the Plan shall be determined in each case by the Committee, in
     its sole discretion.  Whether a plant closing, moving the
     production of a product from one facility to another, or
     layoffs of 50 or more people shall constitute termination of
     employment for the purpose of the Plan shall be determined in
     each of said events by the Executive Committee of the Board of
     Directors, in its sole discretion.


                              ARTICLE II

2.1  STOCKHOLDER APPROVAL AND EFFECTIVE DATE:   The Plan will
be presented to the holders of the Corporation's Common Stock
at the next Annual Meeting which has been scheduled to be held
on October 24, 1996.  If the Plan is approved by the
Shareholders, the effective date of the Plan is April 18,
1996.  In the event the Plan is not approved by the holders of
the Corporation's Common Stock, the Plan automatically
terminates and any Options granted under the Plan shall be
void and of no further force or effect.  No Options granted
under this Plan can be exercised prior to the Plan being
approved by the Corporation's Common Stock shareholders.


                             ARTICLE III

3.1  PLAN ADMINISTRATION:   The Plan is to be administered by
the Stock Option Committee.  The Committee is authorized to
establish such rules and regulations and to appoint such
agents as it deems appropriate for the proper administration
of the Plan and to take such steps in connection with the Plan
or the benefits provided thereunder as it deems necessary or
advisable.  The Committee shall have exclusive jurisdiction to
select the key employees to whom options shall be granted,
determine the number of shares subject to each option,
determine the time or times when options will be granted,
determine the option price of the shares subject to options
which shall not be less than the Fair Market Value of the
Corporation's Common Stock on the date the option is granted,
determine the time when each option may be exercised provided
however, that no options can be exercised until after the Plan
has been approved by the holders of the Corporation's Common
Stock, as provided in Section 2.1, or within less than six (6)
months from date of grant, whichever date occurs last,
establish such other provisions in the option agreement as the
Committee may deem necessary or desirable, consistent with the
terms of the Plan, and to determine all other questions
relating to the administration of the Plan.

3.2  PLAN INTERPRETATION:   The Board of Directors may make
such rules and regulations and establish the procedures for
the administration of the Plan as it deems appropriate.  In
the event of any dispute or disagreement as to the
interpretation of the Plan or of any rule, regulation or
procedure or, as to any question, right or obligation arising
from or relating to the Plan, the decision of the Board of
Directors shall be final and binding upon all persons.   The
decision of the Committee with respect to any questions
arising as to the employees selected to receive options and
the number of shares authorized in said option, under the
Plan, shall be controlling.

3.3  REGISTRATION AND LISTING ON STOCK EXCHANGE:  The Board of
Directors shall determine the restrictions, if any, to be
placed on certificates issued upon the exercise of Options and
whether the stock issued under this Plan will be registered
with the Securities and Exchange Commission and listed on a
stock exchange.  The decision of the Board of Directors shall
be final and binding upon all persons.


                              ARTICLE IV

4.1  AGGREGATE AMOUNT OF STOCK SUBJECT TO PLAN:   The maximum
aggregate number of shares of the Corporation's Common Stock
which might be used pursuant to the exercise of options
granted hereunder shall be 1,000,000 shares of the
Corporation's authorized but unissued Common Stock, which
shares are hereby reserved for issue solely subject to the
provisions of this Plan.  Adjustments may be made in the
aggregate amount of stock which may be issued under the Plan
pursuant to the provisions of Section 11.1.  If for any reason
any option granted under the Plan shall terminate or expire or
be surrendered without having been exercised in full, the
shares subject to such option but not purchased thereunder
shall again be available for options to be granted hereunder.


                              ARTICLE V

5.1  OPTION AGREEMENT:   Each option under this Plan shall be
evidenced by an Option Agreement which shall be signed by an
Officer for the Corporation and by the Optionee, which shall
contain such provisions that may be approved by the Committee
and shall be in accordance with the Plan but may include
additional provisions and restrictions, providing that the
same are not inconsistent with the Plan or applicable
provisions of the Code.


                              ARTICLE VI

6.1  ELIGIBILITY:   Options may be granted only to key
employees, including Officers, whether or not they are
Directors of the Corporation or one of its Subsidiaries.  A
Director of the Corporation, or a Subsidiary, who is not also
such an employee, will not be eligible to receive an option. 
In determining the employees to whom options may be granted,
and the number of shares to be covered by each option, subject
to the limitations as set forth in Section 8.1 of this Plan,
the Committee will take into account the duties of the
respective employees, his or her present and potential
contribution to the success of the Corporation, the
anticipated number of years of effective service remaining,
and such other factors as they may deem relevant in connection
with accomplishing the purposes of the Plan.  Subject to the
limitations set forth in this Plan, an eligible employee who
has been granted an option may be granted an additional option
or options if the Committee shall so determine.


                             ARTICLE VII

7.1  GRANT OF OPTIONS:   The Committee is hereby authorized by
majority vote of its members to grant stock options within the
limitations set forth in Section 8.1, from time to time on the
Corporation's behalf to any one or more persons, who, at the
time of such grant, are full-time employees and meet the
eligibility requirements as set forth in Section 6.1 of the
Plan.  These are intended to be incentive stock options within
the meaning of Section 422 of the Internal Revenue Code of
1986, as amended, to the maximum allowed by said Section. 
Options granted under the Plan (i) must be granted within ten
(10) years from April 18, 1996, subject to the provisions of
Section 10.1(b) of this Plan, and (ii) to the extent they are
incentive stock options, otherwise comply with Section 422 of
the Code, as amended.  More than one option may be granted to
an optionee pursuant to the Plan.


                             ARTICLE VIII

8.1   LIMITATIONS:   The aggregate number of shares of Common
Stock for which options may be granted to eligible employees
under this Plan at any one time is unlimited, subject to the
provisions of Section 4.1, of this Plan, provided, that if as
a result of any grant hereunder the aggregate Fair Market
Value (determined as of the time the option is granted) of the
stock with respect to which incentive stock options are
exercisable for the first time by such employee during any
calendar year, under this and all other incentive stock option
plans (as defined in Section 422 of the Code, as amended) of
the Corporation, would exceed $100,000.00, any excess amount
will be treated as non-qualified stock options.


                              ARTICLE IX

9.1  PURCHASE PRICE:   The purchase price for a share of the
Common Stock, subject to any option granted hereunder, shall
not be less than 100% of the Fair Market Value of the Common
Stock on the date of the granting of the option.  In case an
option is granted to any person then owning beneficially more
than ten percent (10%) of the voting power of all classes of
the Corporation's Common Stock, said purchase price per share
of Common Stock subject to the option shall not be less than
110% of the Fair Market Value of the Common Stock on the date
of granting of the option.


                              ARTICLE X

10.1  EXERCISE OF OPTIONS:

     (a)  An option may be exercised at any time or from time
     to time, as to any part or all the shares which shall be
     covered thereby provided, however, options shall not be
     exercisable prior to the expiration of six (6) months
     following the date on which the option was granted,
     subject to this Plan having been approved by the holders
     of the Common Stock of the Corporation as provided in
     Section 2.1 hereof;

     (b) subject to the provisions of this Plan with respect
     to termination of employment under Sections 12.1, 12.2
     and 12.3 herein, the period during which each option may
     be exercised shall be fixed by the Committee at the time
     such option is granted.  In no event however, shall any
     option granted to a person then owning more than ten
     percent (10%) of the voting power of all classes of the
     Corporation's Common Stock be exercisable by its terms
     after the expiration of five (5) years from the date of
     grant thereof, nor shall any other option granted under
     this Plan be exercisable by its terms after the
     expiration of ten (10) years from the date of the grant
     thereof;

     (c) no shares shall be delivered pursuant to any exercise
     of an option until the requirements of such laws and
     regulations as may be deemed by the Committee to be
     applicable to them are satisfied and until payment in
     full in cash or for exchange in shares of the
     Corporation's Common Stock, previously owned by the
     optionee, at the Fair Market Value of said stock on the
     date of exercise, or such other terms and conditions as
     may be determined by the Committee.  No optionee, or the
     legal representative, legatee, or distributee of an
     optionee, shall be deemed to be a holder of any shares
     subject to any option unless and until the certificate or
     certificates for them have been issued.


                              ARTICLE XI

11.1  CAPITAL ADJUSTMENTS AFFECTING STOCK:   In the event of
a capital adjustment resulting from a stock dividend, stock
split, reorganization, merger, consolidation, or a combination
or exchange of shares, the number of shares of stock subject
to this Plan and the number of shares under option shall be
adjusted consistent with such capital adjustment.  The price
of any share under option shall be adjusted so that there will
be no change in the aggregate purchase price payable under
exercise of any such option.  The granting of an option
pursuant to this Plan shall not affect in any way the right or
power of the Corporation to make adjustments, reorganizations,
reclassifications, or changes of its capital or business
structure or to merge, consolidate, dissolve, liquidate, or
sell or transfer all or any part of its business or assets.


                             ARTICLE XII

12.1  TERMINATION OF EMPLOYMENT:   An optionee whose
employment terminates for reasons other than disability,
retirement or determined by the Board of Directors or
Committee not to be a termination of employment as provided in
Section 1.1(g) of this Plan, shall have no right to exercise
any existing option granted under this Plan.

12.2  DEATH OF OPTIONEE:   In the event of the death of an
optionee, the administrator of the deceased optionee's estate,
the executor under his or her Last Will and Testament, or the
person or persons to whom such stock option shall have been
validly transferred by such executor or administrator,
pursuant to the Last Will and Testament or the Intestate
Succession Laws of the State of North Carolina, shall have the
right, within three (3) months from the date of the optionee's
death, but not beyond the expiration date of the option, to
exercise such option to the extent exercisable by the optionee
at the date of his or her death.

12.3  DISABILITY:  In the event of the termination of the
optionee's employment due to disability, the optionee shall
have the right, within twelve (12) months from his or her
severance date, but not beyond the expiration date of such
option, to exercise such option to the extent exercisable on
such severance date.


                             ARTICLE XIII

13.1  EMPLOYMENT:   The establishment of this Plan and the
granting of any options thereunder shall not be construed as
conferring on any employee or optionee any right to continued
employment, and the employment of any optionee may be
terminated without regard to the effect which such action
might have upon him or her as an optionee.


                             ARTICLE XIV

14.1  NON-TRANSFERABILITY:   The terms of any option granted
under this Plan shall include a provision making such option
nontransferable by the optionee, except upon death, and
exercisable during the optionee's lifetime only by the
optionee.


                         ARTICLE XV                         

15.1  AMENDMENT, MODIFICATIONS & TERMINATION OF THE PLAN:  
The Board of Directors at any time may terminate and/or in any
respect amend and modify the Plan provided, however, that no
such action by the Board of Directors, without approval of the
Corporation's common shareholders, may:  (a) increase the
total number of shares which may be made subject to options
granted under the Plan in the aggregate; (b) change the manner
of determining the option price as set forth under Section 9.1
hereof; (c) materially modify the requirements as to
eligibility for participation in the Plan; (d) extend the
period in which options may be granted or exercised, as
provided in Sections 7.1 and 10.1 hereof; and (e) withdraw the
administration of the Plan from a Committee of the Board of
Directors, no members of which are eligible to receive options
under the Plan.


                             ARTICLE XVI

16.1  OTHER TERMS:   Any option granted under this Plan shall
contain such other and additional terms not inconsistent with
the terms of this Plan, which are deemed necessary or
desirable by the Committee or the Board of Directors, and such
other terms shall include those which together with the terms
herein set forth shall constitute such option as an incentive
stock option within the meaning of Section 422 of the Internal
Revenue Code.



                          Exhibit (10g)

                         UNIFI, INC.

              1996 NON-QUALIFIED STOCK OPTION PLAN



1.   NAME OF PLAN:  The name of the Plan is the "Unifi, Inc. 1996
Non-Qualified Stock Option Plan" (the "Plan").  

2.   PURPOSE:  The purpose of this Plan is to enhance the
interests of Unifi, Inc. (Corporation), its shareholders and
subsidiaries, by increasing its ability to secure and retain
officers and other key employees upon whose judgment, initiative
and effort the Corporation is largely dependent for the
successful conduct of its business, by offering officers and key
employees an opportunity to acquire or increase such persons
stock interest in the Corporation, and to attract well qualified
individuals who are not full time employees of the Corporation or
its subsidiaries, to serve as Directors of the Corporation or its
subsidiaries ("Outside Directors").

     The purpose will be affected through the granting of stock
options as herein provided, such options DO NOT QUALIFY AS
"INCENTIVE STOCK OPTIONS" WITHIN THE MEANING OF SECTION 422 OF
THE 1986 INTERNAL REVENUE CODE, AS AMENDED, (the "Code") AND ARE,
THEREFORE, NON-QUALIFIED STOCK OPTIONS.

3.   EFFECTIVE DATE OF PLAN AND SHAREHOLDER APPROVAL:  The
effective date of the Plan is April 18, 1996, the date of its
approval by the
 Board, provided however, if the Plan is not
approved by the shareholders of the Corporation, representing a
majority of the voting power at the shareholders' annual meeting
on October 24, 1996, the Plan shall terminate and any Options
granted thereunder shall be null and void, and shall have no
force or effect.

4.   DEFINITIONS:   Wherever used in the Plan, the following
terms shall have the meaning set forth below:

     (a)  "Corporation" shall mean Unifi, Inc.

     (b)  "Board" shall mean the Board of Directors of the 
     Corporation.

     (c)  "Committee" shall mean the standing committee of the 
     Board of Directors or a subcommittee of a standing committee
     of the Board of Directors, if any, authorized by the Board
     to administer the Plan.  If the Board delegates the
     authority of administering the Plan to a Committee, it shall
     consist of not less than three nor more than five
     non-employee Directors.  All members of the Committee shall
     serve at the pleasure of the Board.


     (d)  "Common Stock" shall mean the common stock of the 
     Corporation identified as such on the most recent balance 
     sheet of the Corporation.

     (e)  "Date of Grant" shall mean the date the option is
     granted under the Plan.

     (f)  "Option" shall mean options granted under the Plan.

     (g)  "Optionee" shall mean the person to whom an Option,
     which has not expired, has been granted under the Plan.

     (h)  "Subsidiary or Subsidiaries" shall mean a sponsor-type
     subsidiary corporation or companies of the Corporation as 
     defined in 424 of the Code.

5.   ADMINISTRATION OF PLAN:  (a)  The Plan shall be administered
by the Board, or by a Committee appointed by the Board (the
"Committee").  If the Plan is administered by the Committee, it
shall report all actions taken by it to the Board.  Options may
be granted to members of the Committee only by a majority of the
members of the Board, excluding those members of the Committee.

     (b)  The Board or Committee shall have full and final
authority in its discretion, subject to the provisions of the
Plan, to determine the individuals to whom and the time or times
at which Options shall be granted and the number of shares and
the purchase price of common stock covered by each Option, to
construe and interpret the Plan, to determine the terms and
provisions of the respective Option agreements which need not be
identical, including without limitations, terms covering the
payment of the Option price, and make all other determinations
and take all other actions deemed necessary or advisable for the
proper administration of the Plan.  All such actions and
determinations shall be conclusive and binding for all purposes
upon all persons.

     (c)  In the event a Committee is authorized by the Board to
administer the Plan, it shall select one of its members as the
Chairman and shall hold its meeting at such times and places as
it deems advisable.  At least one-half of its members shall
constitute a quorum and all determinations of the Committee shall
be made by a majority of its members who are present.  Any
decision or determination reduced to writing and signed by a
majority of all of the members shall be fully as effective as if
made by a majority vote at a meeting duly called and held.
 
6.   STOCK SUBJECT TO PLAN:  The aggregate number of shares of
the Corporation's Common Stock to be reserved and which may be
issued upon exercise of Options granted under the Plan shall be
one million (1,000,000), subject to adjustments under the
provisions of Paragraph 7.  The shares of Common Stock to be
issued upon exercise of the Option may be authorized but unissued
shares or shares issued and reacquired by the Corporation.  In
the event any Option shall for any reason terminate or expire or
be surrendered without having been exercised in full, the shares
subject to such Option, but not purchased thereunder, shall again
be available for Options to be granted under the Plan.  

7.   CAPITAL ADJUSTMENTS AFFECTING STOCK:  In the event of a
capital adjustment resulting from a stock dividend, stock split,
reorganization, merger, consolidation, or a combination or
exchange of shares, the number of shares of stock subject to this
Plan and the number of shares under Option shall be adjusted
consistent with such capital adjustment.  The price of any share
under Option shall be adjusted so that there will be no change in
the aggregate purchase price payable under exercise of any such
Option.  The granting of an Option pursuant to this Plan shall
not affect in any way the right or power of the Corporation to
make adjustments, reorganizations, reclassifications, or changes
of its capital or business structure or to merge, consolidate,
dissolve, liquidate, or sell or transfer all or any part of its
business or assets.

8.   PARTICIPANTS:  Options may be granted only to Directors,
Officers or key employees of the Corporation and/or its
subsidiaries.  A participant may receive more than one grant;
provided, however, no Options may be granted to any person who,
at the time of the grant, owns more than ten percent (10%) of the
stock of the Corporation.  In determining the individuals to whom
Options may be granted, the Board shall take into account the
duties of the individuals, their present and potential
contribution to the success of the Corporation, the anticipated
number of years of effective service remaining and such other
factors as it deems relevant in connection with accomplishing the
purposes of the Plan.  Subject to the limitations set forth in
the Plan, Directors, Officers and key employees who have been
granted an Option under this Plan or other stock Option plans of
the Corporation may be granted an additional Option or Options
under this Plan if the Board or Committee shall so determine.

9.   OPTION AGREEMENT:   Each Option under this Plan shall be
evidenced by an Option Agreement which shall be signed by an
Officer for the Corporation and by the Optionee.  The Option
shall contain such provisions that may be approved by the Board
or Committee and shall be in accordance with the Plan but may
include additional provisions and restrictions and all Options do
not have to be the same, providing that the terms thereof are not
inconsistent with the Plan.

10.  OPTION PERIOD: Each Option granted hereunder must be granted
within ten years from the effective date of the Plan.  The period
for the exercise of each Option shall be determined by the Board,
but in no instance shall such period exceed ten years from the
date of grant of the Option.  No Option may be granted under the
Plan subsequent to April 17, 2006.

11.  OPTION PRICE:  The per share Option price of the stock
subject to each Option shall be determined by the Board or the
Committee on the date the Option is granted.  The purchase price
may be less than the fair market value of the Common Stock on the
date of granting.

12.  EXERCISE OF OPTIONS:

     (a)  An Option may be exercised at any time or from time to
time, as to any part or all the shares which shall be covered
thereby provided, however, Options shall not be exercisable prior
to the expiration of six (6) months following the date on which
the Option was granted and no Option can be exercised prior to
shareholder approval of the Plan.  If the Plan is not approved by
the shareholders, all Options granted under the Plan shall become
void and be unenforceable;

     (b) No shares shall be delivered pursuant to any exercise of
an Option until the requirements of such laws and regulations as
may be deemed by the Board of Directors or Committee to be
applicable to them are satisfied and until payment in full in
cash or for exchange in shares of the Corporation's Common Stock,
previously owned by the Optionee, at the Fair Market Value of
said stock on the date of exercise, or such other terms and
conditions as may be determined by the Board or Committee.  No
Optionee, or the legal representative, legatee, or distributee of
an Optionee, shall be deemed to be a holder of any shares subject
to any Option unless and until the certificate or certificates
for them have been issued.

13.  NON-TRANSFERABILITY OF OPTION:  No Option granted under the
Plan shall be transferable without the consent of the Board
(including pledges or hypothecations) by an Optionee other than
by Will or if said Optionee dies intestate, under the laws of
descent and distribution of the state of said Optionee's domicile
at the time of his death. During the lifetime of an Optionee, the
Option shall be exercised only by said Optionee.

14.  TERMINATION OF OPTIONS:   The right of every Optionee to
purchase shares under his or her Option shall be subject to the
provisions of this paragraph.

     (a)  In relation to Options with Officers or key employees:

          (i)  In the event of the termination of an Officer or
          employment with the Corporation of a key employee for       
          any reason, other than death, without the consent of
          the Board, all rights of the Optionee to purchase
          shares pursuant to his or her Option (including right
          to purchase shares which have accrued but which have 
          remained unexercised) shall expire three (3) months
          after the date on which the Optionee's affiliation or 
          employment with the Corporation is terminated.

          (ii)  In the event of the death of an Optionee who is a
          key employee, the unexpired portion of said Option
          shall be exercisable within a period of one (1) year
          from the date of said key employee's death only by the
          personal representative of the estate of the deceased,
          or such other person or persons to whom the legatee's
          rights under the Option shall pass by the Optionee's
          Will, or if he or she dies intestate, by the laws of
          descent and distribution of the state of said
          Optionee's domicile at the time of death, or by the
          transferee of any Option transferred with the consent
          of the Board (see Paragraph 13); and to the extent the
          Optionee was entitled to exercise Options at the time
          of death.

     (b)  In relation to Options with Directors:

          (i)  In the event an Optionee's, who is a Director, 
          tenure in office is terminated for "cause", as cause is
          defined by the Corporation's Certificate of Incorpora-
          tion, all such rights of the Optionee to purchase
          shares pursuant to his or her Option (including right
          to purchase shares which have accrued but which have
          remained unexercised) shall forthwith cease and
          terminate.

          (ii)  In the event of termination of a Director's
          tenure in office, other than for "cause", prior to full
          exercise of his or her Option under the Plan, the
          unexpired portion of said Option shall be exercisable
          within a period of one (1) year, or such longer period
          as the Board may determine, from the date of such
          Director's termination of tenure in office.

          (iii)  In the event of death of an Optionee, who is a
          Director, prior to the full exercise of his or her
          Option the unexpired portion of said Option shall be
          exercisable within a period of one (1) year from the
          date of said Director's death only by the personal
          representative of the estate of the deceased, or such
          other person or persons to whom the legatee's rights
          under the Option shall pass by the Optionee's Will, or
          if he or she dies intestate, by the laws of descent and
          distribution of the state of said Optionee's domicile
          at the time of death, or by the transferee of any
          Option transferred with the consent of the Board (see
          Paragraph 13); and to the extent the Optionee was
          entitled to exercise Options at the time of death.

15.   RIGHTS AS SHAREHOLDERS:  An Optionee or a transfer of an
Option shall have no right as a Shareholder with respect to any
shares subject to such offer prior to the purchase of such shares
by exercise of the Option as provided herein and the issuance and
deliverance of such shares.

16.  EMPLOYMENT:   The establishment of this Plan and the
granting of any Options thereunder shall not be construed as
conferring on any employee any right to continued employment, and
the employment of any Optionee may be terminated without regard
to the effect which such action might have upon him or her as an
Optionee.

17.  AMENDMENT OR TERMINATION:  Unless the Plan shall theretofore
have been terminated as hereinafter provided, it shall terminate
on, and no Option shall be granted thereunder after, April 17,
2006.  The Board may amend the Plan or make such modifications or
amendments thereto as it shall deem advisable, or in order to
conform to any changes in any law or regulation applicable
thereto, or terminate the Plan,  Provided, however, the Board may
not, without further approval by the shareholders of a majority
of the outstanding shares of the Corporation having general
voting power, (a) make any changes in the maximum number of
shares reserved for issuance on Options under the Plan, other
than changes as described in Paragraph 6 hereof; (b) change the
participants eligible to be granted Options; (c) revoke or alter
the terms of any Options previously granted, without the consent
of the Optionee; (d) extend the time within which Options may be
granted under the Plan; or (e) provide for the administration of
the Plan otherwise than by the Board or a Committee of the Board.

18.  GOVERNMENT REGULATIONS:  The Plan and the granting and
exercising of Options hereunder shall be subject to all
applicable Federal and State laws and all rules and regulations
issued thereunder, and the Board of Directors, in its discretion,
may, subject to the provisions of Paragraph 6 hereof, make such
changes in the Plan (except such changes which by law, or as
provided in Paragraph 17, must be approved by the shareholders)
as may be required to conform the Plan to such applicable laws,
rules and regulations.

19.  OTHER PROVISIONS:  Options granted pursuant to the Plan
shall be evidenced by agreements in such form as the Board shall
from time to time approve.









                              Exhibit (10k)

                           FACTORING AGREEMENT




Republic Factors Corp.
452 Fifth Avenue
New York, New York 10018

     Re: Unifi, Inc.

Ladies and Gentlemen:

         We hereby request that you act as our factor effective
as of the date of your acceptance hereof, upon the terms and
conditions set forth below.  All capitalized terms shall have the
meaning given such terms in Section 15 of this Agreement
("Definitions") unless defined elsewhere in this Agreement.

              1.  PURCHASE OF RECEIVABLES:

              A.   We agree that we will do certain of our
business through you as our factor and hereby assign and sell to
you as absolute owner all Receivables.  We represent and warrant
that each and every Receivable now or hereafter assigned to you
will be a bona fide and existing obligation of a customer of
ours, owned by and owing to us, arising out of the sale and
delivery of goods by us, free and clear of any and all
deductions, Disputes, liens, security interests and encumbrances.

              B.   You agree to and do hereby purchase without
recourse to us, except as set forth hereinafter, all Receivables
approved by you in accordance with Section l.E below.  You agree
to and do hereby assume the risk of non-payment on such
Receivables, if nonpayment is due solely to the financial
inability of our
 customer to make payment at the due date of the
Receivable, provided the customer has, at such due date, and
thereafter, received and finally accepted the merchandise giving
rise to such Receivables without any Dispute.

         C.   Receivables not approved by you in accordance with
Section l.E below also are assigned to and purchased by you, but
with full recourse to us in the event of non-payment thereof or
in the event of a Dispute.

         D.   In addition, we hereby sell, assign and transfer to
you all of our right, title and interest in and to the
merchandise, the sale of which resulted in creation of
Receivables, and in all such merchandise that may be returned by
customers and all causes of action and rights in connection
therewith, which we now have or may hereafter acquire, including
our rights of reclamation, replevin and stoppage in transit and
as an unpaid vendor of merchandise or services as a lienor.  We
hereby agree upon your instruction to promptly take any and all
action necessary for you to enforce your rights of reclamation,
replevin and stoppage in transit and in the event of our failure
to do so, you shall be authorized to exercise any such right in
our name or in any manner you deem appropriate.  Any merchandise
so recovered shall be treated as returned merchandise, and shall
be set aside, marked with your name and held for your account as
owner.  We shall notify you promptly of all such returned
merchandise.

         E.   No purchase of any Receivable by you shall be
deemed to be made pursuant to Section l. B. above unless the sale
of merchandise by us resulting in such Receivable shall have been
made with your prior written approval of the amount and terms of
such sale and the credit standing of our customer, and you shall
have the right to withdraw such approval at any time before
actual delivery of such merchandise.  Each credit approval shall
be automatically withdrawn in the event the terms of sale are
changed without your written approval or in the event the
shipment of goods or rendition of services shall not be made or
performed within thirty (30) days from the completion date
specified in the credit approval or within thirty (30) days from
the date of the credit approval, if no completion date is
specified.  When a credit approval specifies special terms and
conditions, the credit approval shall be deemed automatically
withdrawn when such special terms and conditions are not complied
with.  You shall not be liable in any manner or respect for
refusing to accept or approve any Receivable or the credit
standing of any customer of ours or for withdrawing any approval
as provided in this Section l.E.

         F.   Net Sales relating to each Receivable shall be
credited to our account net of any deductions as of the last day
of the month in which such Receivables are specifically assigned
and shall be available for payment on the Settlement Date of the
month in which such Receivables are specifically assigned and
such credit shall constitute payment in full of such receivable. 
At your election, you may deduct from Net Sales available for
payment on the Settlement Date or charge our account with your
factoring commission and interest, fees and charge backs as
provided in this Agreement.

         G.   On the face of all bills and invoices for all
Receivables assigned to and purchased by you hereunder shall be
placed the following legend: "This Receivable is assigned owned
by and payable only to: REPUBLIC FACTORS CORP. AT P.O. BOX 7777,
W8720, PHILADELPHIA, PA 19175-8720 OR DEPT. 49941, LOS ANGELES,
CA 90088, whichever is nearer.  Any objection to this invoice
must be reported to Republic Factors Corp. at 452 Fifth Avenue,
New York, N.Y. 10018-2706."

         2.   ADVANCES: You may, in your sole discretion, make
advances to us from time to time at our request.  In your sole
discretion you may hold a reserve against Receivables in such
amount as you determine to hold, and you may revise such reserve
from time to time.

         3.   SECURITY INTEREST: As security for any and all
Obligations, you shall be entitled to hold and we hereby grant to
you a continuing general lien upon, security interest in and to,
and right of set off on or against any or all of the following,
whether now or hereafter existing or acquired (collectively, the
"Collateral"): our reserves, all balances, sums and other
property at any time to our credit or in your possession or in
the possession of any of your Affiliates, together with all
merchandise the sale of which resulted in the creation of
Receivables and in all such merchandise that may be returned by
customers and Receivables, if and to the extent we are deemed to
have any rights therein, and all books and records relating to
any of the foregoing, including the cash and non-cash proceeds of
all of the foregoing.  We represent, warrant and covenant to you
that we now have, and shall at all times continue to have, good
and marketable title to all of the Collateral, free and clear of
any and all liens, security interests and encumbrances.  We shall
execute and deliver to you all financing statements and other
documents and instruments that you may request to perfect,
protect or establish your security interest hereunder.  We shall
reimburse you for, and you shall be entitled to charge our
account with, all reasonable costs and expenses incurred by you
in connection with the enforcement of this Agreement, or to
enforce any of the obligations, or in the prosecution or defense
of any action, between you or us, concerning any matter growing
out of or in any manner relating to this Agreement or other
Collateral or any obligation whatsoever including, without
limitation, all reasonable fees and expenses of your attorneys
(including in-house counsel), incurred in connection with the
foregoing, including, without limitation, those incurred in
connection with any state court insolvency case or proceeding or
federal bankruptcy case or proceeding, and all fees and costs in
connection with public record searches and filings,
investigation, accounting and periodic field examination fees and
expenses (whether from your own or outside investigators,
auditors or examiners) and all other costs and expenses with
respect thereto, whether or not a legal action is commenced by or
against us, and if such action is commenced, whether or not
judgment is obtained.  Recourse to security or any Collateral
shall not at any time be required and we shall at all times
remain liable for the repayment on demand to you of all loans and
advances to or for our account and of all other Obligations at
any time or from time to time owing to you or any of your
Affiliates.

         4.   DISBURSEMENT OF FUNDS: We may from time to time
give you oral, telephonic, telefax and/or written instructions to
disburse monies out of our factoring account.  Such disbursement
requests may be made by any of our officers, employees or agents
and you shall have no obligation to verify that any request is
authorized or proper.

         5.   INTEREST:

              A.  Interest charges to our account shall be at
one-half of one percent (1/2%) in excess of the Republic
Reference Rate, computed on the basis of a 360-day year for the
actual number of days in the interest period.  We recognize that
the actual yield to you under this Agreement may exceed the rate
of interest specified in this Section 5.A.  The interest rate in
effect during each calendar month shall be determined using the
Republic Reference Rate in effect on the last Business Day of the
preceding calendar month. 

              B.  Interest on all sums charged to us or to or for
our account or payable to us by you during any month shall be
calculated from the date any such charge was incurred up to and
including the Settlement Date of such month.  Interest on all
sums advanced to us or to or for our account shall be calculated
from the date of such advance up to and including the date on
which such advance is repaid.

              C.  You shall charge our account with interest at
the applicable rate determined in accordance with Section 5.A
above for chargebacks, and changes to the due date of any
Receivable.  Interest on chargebacks of full invoices shall be
calculated from the due date of the Receivable involved to the
Settlement Date of the month in which such chargeback was made. 
Interest on chargebacks relating to customer partial deductions
of invoices shall be calculated from the Deposit Date of the
remittance taking such deduction until the end of the month in
which such chargeback was made and from the end of such month
until the Settlement Date of such month.  Interest on changes to
the due dates of Receivables shall be calculated from the
original due date of such Receivable to the revised due date of
such Receivable.  Early payments made by our customers shall not
reduce the interest to be charged to our account. 

              D.  If for any reason there remains with you past
any Settlement Date any balance owing to us ("Matured Funds"),
you shall pay us interest on such Matured Funds from the day
after Settlement Date up to and including the date such funds are
remitted to us, at a rate per annum equal to 2% below the
Republic Reference Rate in effect during each day in which such
Matured Funds are retained by you.  The applicable Republic
Reference Rate to be determined in accordance with Section 5.A
above.  You reserve the right to remit such Matured Funds to us
at any time.

         6.   MONTHLY STATEMENTS: You will send us a monthly
statement of our account current after the end of each month. 
UNLESS YOU RECEIVE OUR WRITTEN EXCEPTIONS TO ANY ACCOUNT CURRENT
RENDERED BY YOU WITHIN SIXTY (60) DAYS AFTER SUCH ACCOUNT CURRENT
IS RENDERED, SUCH ACCOUNT CURRENT SHALL CONSTITUTE AN ACCOUNT
STATED AND BE DEEMED ACCEPTED BY US AND SHALL BE CONCLUSIVE AND
BINDING UPON US.

         7.   COMMISSIONS:
              A.  We agree to pay to you a factoring commission
equal to five tenths of a percent (.5%) of the gross face amount
of each Receivable, less, with respect to each Receivable,
applicable credits issued by us.  Your factoring commission as so
calculated shall be charged to our account effective as of the
fifteenth (15th) day of the month in which the Receivable was
assigned.

              B.  Commissions payable to you hereunder are based
upon our usual and regular terms which do not exceed sixty (60)
days.

              C.  We may from time to time request that you
credit approve sales made by us to Debtors-in-Possession
operating under Chapter 11 of the Bankruptcy Code ("DIP Sales"). 
We agree that any such credit approval by you of DIP Sales shall
be subject to a supplemental factoring commission to be agreed
upon by you and us in addition to the regular factoring
commission charged by you, as an additional condition to your
factoring of DIP Sales.

              D.  Each month you shall charge our account with
the amount of the factoring commission provided for herein.

         8.   ASSIGNMENT SCHEDULES, INVOICING AND CREDITS: We
will provide you with an assignment and schedule of Receivables
sold and assigned to you in form satisfactory to you.  All bills
or invoices shall be mailed by us to our customers at our sole
expense.  We will give you copies of all bills or invoices,
together with such proof of shipment or delivery as you may from
time to time require.  The issuance of or any billing by us of
such bills or invoices, shall constitute an assignment thereof to
you for the Receivables represented thereby, whether or not we
execute any other specific instrument of assignment. 
Notwithstanding the foregoing, you shall be deemed not to have
assumed the credit risk as provided in Section l.B above if we do
not supply you with a schedule and assignment of Receivables
within ten (10) days of the creation of the Receivables involved
and the risk of loss with respect to such Receivables shall be
deemed to have reverted to and been assumed by us without any act
upon your part to effect the same.  Credits may be claimed only
by the customer.  All credits for full invoice amounts shall be
assigned by us to you.

         9.   DISPUTES AND CHARGEBACKS: We hereby further warrant
to you that the customer in each instance has received and will
accept the merchandise sold and the bill or invoice therefor, and
will pay the same as and when due without any Dispute.  We will
notify you promptly of, and, at our own cost and expense,
including attorneys' fees and expenses, shall settle all Disputes
and will pay you promptly the amount of the Receivables affected
thereby.  Any Dispute not settled by us by the sixtieth (60th)
day next following the maturity of the bill or invoice affected
thereby may, if you so elect, be settled, compromised, adjusted
or litigated by you directly with the customer or other
complainant for our account and risk and upon such terms and
conditions as you in your sole discretion deem advisable.  In
addition to all other rights to which you are entitled hereunder,
whenever there is any Dispute, if any unapproved Receivable or
approved Receivable of a customer having other approved
Receivables then in Dispute is unpaid at its maturity, you may
charge the amount of the Receivable so affected or unpaid to us
at any time.  In addition, you shall also be entitled to charge
our account the amounts you receive in payment of any unapproved
Receivable and which thereafter you are required to turn over or
return to the customer or any legal representative thereof.  The
provisions of the foregoing sentence shall survive the
termination of this Agreement, and we hereby indemnify you and
hold you harmless from any loss or expense arising out of the
assertion of such a claim with respect to any such unapproved
Receivable, including attorneys' fees and expenses.  You may
charge back to our account any deduction taken by customer with
respect to a Receivable sixty days after receipt of payment with
respect to such Receivable.  In addition, as further
consideration for your entering into this Agreement, we waive any
right to any payments received by you from or on behalf of our
customers which neither you nor we can identify to any
Receivable.  Any chargeback of a Receivable shall not be deemed
nor shall it constitute a reassignment to us of the Receivable
affected thereby, and title thereto and to the merchandise
represented thereby shall remain in you until you are fully
reimbursed.  Regardless of the date or dates upon which you
charge back the amount of any Receivable with respect to which
there is any Dispute, or the amount owing from a customer which
has raised any Dispute, we agree that immediately upon the
occurrence of any such Dispute, any obligation you may otherwise
have had hereunder to bear the risk of loss with respect to such
Receivable shall cease and such obligation shall be deemed to
have reverted to, and to have been assumed by, us without any act
upon your part to effect the same.

              10.  REMITTANCES OF FUNDS: If any remittances are
made directly to us, we shall hold the same in trust for you as
your property and immediately deliver to you the identical
checks, monies or other forms of payment received, and you shall
have the right to endorse our name on any and all checks or other
forms of remittances received if such endorsement is necessary to
effect collection.

              11.  MAINTENANCE OF RECORDS:

                   A.  We agree that we will hold at our offices
and be fully responsible to you for any and all shipping receipts
evidencing delivery of goods or rendition of services regarding
Receivables factored by you.  Such shipping evidences held by us
shall be available for your inspection and for delivery to you at
your request at any time.

                   B.  We further agree to make our records,
files and books of account, including, but not limited to, any
and all bills, invoices, shipping or transport documents,
ledgers, journals, checkbooks, correspondence, memoranda,
microfilm, microfiche, computer programs and records, source
materials, tapes and discs (collectively "Documents"), available
to you on request and that you may visit our premises during
normal business hours to examine such Documents and to make
copies or extracts thereof and to conduct such examinations as
you deem necessary.

              12.  CERTAIN COSTS AND EXPENSES

                   A.  If you, in your sole discretion, agree to
at our request and on our behalf file a claim (a "DR Claim"),
with respect to a Receivable which is not at your credit risk or
forward such a DR Claim to a collection agency or attorney for
collection, you shall do so only if you and we have agreed as to
the terms regarding payment to you for such service or those of
any collection agency or attorney to whom you may forward the DR
Claim and reimbursement for expenses incurred in respect thereof
and you may then charge our account in an amount equal to such
agreed fees and expenses.

                   B.  We shall be entitled to receive at no cost
to us one (1) Client Detail Aged Trial Balance for each month.

                   C.  You may modify the charges set forth in
Sections 4, 7.B, 7.C and 12.A above, from time to time, on not
less than sixty (60) days prior written notice.

              13.  TAXES: Any state, city, local or federal sales
or excise taxes on sales of Receivables hereunder shall be timely
paid by us, but if you should make any payment of any thereof, we
will repay the same to you upon demand, and all such payments
shall constitute Obligations.

              14.  WARRANTIES AND AGREEMENTS:

                   A.  We hereby warrant our solvency (which
warranty shall be continuing throughout the term of this
Agreement) and hereby agree that we are not entitled to and shall
not pledge your credit for any purpose whatsoever.  We further
agree that we shall not encumber or grant a lien on or security
interest in Receivables or our other Collateral, other than to
you without your prior written consent.

         B.  We agree to furnish you with balance sheets,
statements of profit and loss, financial statements and such
other information regarding our business affairs and financial
condition as you may from time to time require, and in any event,
a statement of our financial position for each fiscal year
prepared and certified by our regularly engaged Certified Public
Accountant.  All such statements shall fairly present our
financial condition as of the dates, and the results of our
operations for the periods, for which the same are furnished.

         C.  This Agreement is the complete agreement between the
parties hereto as to the subject matter hereof, all prior
commitments, proposals, negotiations concerning the subject
matter hereof being merged herein.  This Agreement is entered
into for the benefit of said parties, their successors and
assigns, except that we shall not assign or hypothecate our
rights under this Agreement to any other person, firm,
corporation or entity without your prior written consent.  This
Agreement cannot be amended, changed, modified or terminated
orally.  We hereby consent to the assignment by you of this
Agreement and your rights hereunder, including the Collateral, to
any Affiliate or any other third-party.  No delay or failure on
your part in exercising any right, privilege or option hereunder
shall operate as a waiver of such or of any other right,
privilege or option, and no waiver whatever shall be valid unless
in writing signed by you and then only to the extent a waiver is
therein set forth.

         15.  DEFINITIONS: For purposes of this Agreement the
following terms shall have the respective meanings given to them
below:

         (a)  "Affiliates" shall mean any person, firm or
corporation directly or indirectly controlling, controlled by or
in common control with you and any corporation the stock of which
is owned or controlled directly or indirectly by, or is under
common control with, Republic New York Corporation.

         (b)  "Agreement" shall mean this Factoring Agreement, as
amended, modified or supplemented.

         (c)  "Average Weighted Due Date of Receivables" shall
mean with respect to Receivables assigned hereunder in any month,
the quotient obtained by dividing the Dollar Days for such month
by the Net Sales for such month, adjusted to the next calendar
day, if such calculated date results in fractional days.

         (d)  "Business Day" shall mean any week day on which
banking institutions in New York, New York are open for the
transaction of ordinary banking business.  If any payment or
credit by you to us under this Agreement is due on a day other
than a Business Day, then such payment or credit shall be made on
the next Business Day.

         (e)  "Deposit Date" shall mean with respect to a payment
on a Receivable from or on behalf of our customer made to the
banking institution receiving on your behalf such payment, the
date such banking institution notes on the item evidencing such
payment or otherwise on its records as the date it deems such
payment as having been received by it.

         (f)  "Dispute" shall mean any dispute, claim, offset,
defense, counterclaim or any other reason for nonpayment other
than a customer's financial inability to pay, whether bona fide
or not, and regardless of whether the same, in part or in whole,
relates to an unpaid Receivable or any other Receivable.

         (g)  "Dollar Days" shall mean with respect to
Receivables assigned hereunder in any month, the number of days
from the end of the month in which each invoice or credit is
assigned to its due date (based upon longest or shortest payment
terms as you may elect) multiplied by the dollar amount of each
such invoice or credit, net of discounts.

         (h)  "Net Sales" shall mean the gross face amount of
Receivables less discounts offered to, and any credits received
by or allowed to our customers.  In computing "Net Sales" you may
in your discretion treat (1) discounts offered to our customers
as having been taken by such customers on the largest discount
offered to them, and (2) all discounts used in such computation
also as being applicable to postage, freight, and incidental
charges.

         (i)  "Obligations" shall mean all loans, advances,
indebtedness, liabilities, debit balances, covenants and duties
and all other obligations of whatever kind or nature at any time
or from time to time owed by us to you or any of your Affiliates,
whether fixed or contingent, due or to become due, no matter how
or when arising and whether under this or any other Agreement or
otherwise and including all obligations for purchases made by us
from any other concern factored by you.

         (i)  "Receivables" (or "Receivable" in the singular)
shall mean and include all accounts, and all other obligations of
customers of ours arising out of the sale and delivery of goods
by us (whether now existing or hereafter created) which are
designated by us as being factored by you.

         (k)  "Republic Reference Rate" shall mean the lending
rate established by Republic National Bank of New York from time
to time at its principal domestic office as its reference lending
rate for domestic commercial loans.

         (1)  "Settlement Date" shall mean the Average Weighted
Due Date of all Receivables assigned during such month plus five
Business Days.

         16.  TERM AND EVENTS OF DEFAULT:

         A.  This Agreement shall continue in full force and
effect from the effective date hereof unless terminated by you or
unless we notify you of our desire to terminate this Agreement by
giving you at least thirty (30) days' prior written notice.  You
shall have the right to terminate this Agreement at any time upon
thirty (30) days' prior written notice.  Termination shall be
effective by the mailing by certified mail, return receipt
requested of a letter of notice addressed by either of us to the
other specifying the date of termination.  Notwithstanding the
foregoing, you may terminate this Agreement without notice upon
the occurrence of any Event of Default.  On termination for any
reason, all obligations shall, unless and to the extent that you
otherwise elect, become immediately due and payable without
notice or demand.  Any of the following events with respect to us
or any guarantor of any Obligations shall constitute an "Event of
Default" hereunder: default in the payment or performance of any
Obligation owing to you or any of your Affiliates when due,
including without limitation the failure to pay to you the amount
of any net debit balance in our account and any unpaid interest
thereon after demand therefor has been made; or we or any of them
commit any breach of or default in the performance of any other
covenant or agreement contained in this Agreement or in any other
instrument or agreement with or in favor of you or your
Affiliates; any representation or warranty made by us or any of
them in this Agreement or in any other instrument or agreement
with or in favor of you or your Affiliates shall prove to be
inaccurate or untrue; any partner (if we or any of them is a
partnership) shall die or otherwise withdraw from the
partnership; death (if we or any of them is a natural person) or
dissolution (if we or any of them is a corporation); we or any of
them shall commence any case, proceeding or other action under
any law relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered
with respect to us or any of them, or seeking to adjudicate us or
any of them a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to us or any of them or
any of their debts, or seeking appointment of a receiver,
trustee, custodian or other similar official for us or any of
them or for all or any substantial part of the assets of us or
any of them, or we or any of them shall make a general assignment
for the benefit of its creditors, or there shall be commenced
against us or any of them any case, proceeding or other action of
a nature referred to in this clause; there shall be commenced
against us or any of them any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of the
assets of us or any of them which results in the entry of an
order for any such relief, or we or any of them shall take any
action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in this clause;
we or any of them shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they
become due; entry of a judgment against us or any of them;
failure to pay or remit any tax when assessed or due; making a
bulk transfer or sending notice of intent to do so; granting any
security interest (other than to you) in the Collateral without
your prior written consent; suspension or liquidation of the
usual business of us or any of them; failing to furnish you with
any requested financial information or failing to permit
inspection of books or records by you or any of your agents,
attorneys or accountants; the occurrence of a default or event of
default under any guarantee or security agreement guaranteeing or
securing any obligations; we or any of them (if a corporation)
shall become a party to any merger or consolidation without your
prior written consent unless the surviving entity shall
specifically assume our obligations hereunder and have a net
worth upon the effectiveness of such merger or consolidation at
least equal to ours immediately prior thereto; or control of us
or any of them (if a corporation or partnership) shall change.

         B.   Notwithstanding any termination hereof, this
Agreement shall nevertheless continue in full force and effect as
to, and be binding upon us, after any termination, until we have
fully paid, performed and satisfied all of the Obligations, no
matter how or when arising and whether under this or any other
agreement.

         17.  REMEDIES: Upon the occurrence of any Event of
Default, you shall have all of the rights and remedies of a
secured party under the Uniform Commercial Code and other
applicable laws with respect to all Collateral, such rights and
remedies being in addition to all of your other rights and
remedies provided for herein or in any other agreement between
us, and further, you may, at any time or times, after the
occurrence of any such Event of Default, sell and deliver any and
all other Collateral held by you or for you at public or private
sale, in one or more sales or parcels, at such prices and upon
such terms as you may deem best, and for cash or on credit or for
future delivery, without your assumption of any credit risk, and
at public or private sales, as you may deem appropriate.  If
reasonable notice of the time and place of such sale is required
under applicable law, such requirement shall be met if any such
notice is mailed, postage prepaid, to our address shown on the
cover page hereof, or the last shown address in your records, at
least five (5) days before the time of the sale or disposition
thereof.  You may be the purchaser at any sale, if it is public,
free from any right of redemption, which, to the extent permitted
by law, we also hereby expressly waive.  The proceeds of sale
shall be applied first to all costs and expenses of sale,
including attorneys' fees and disbursements, and then to the
payment (in such order as you may elect) of all Obligations.  You
will return any excess to us and we shall remain liable to you
for any deficiency.  Your rights and remedies under this
Agreement will be cumulative and not exclusive of any other
rights or remedies which you may otherwise have.  The provisions
of this Section 17 shall survive any termination of this
Agreement.

              18.  APPLICABLE LAW, ARBITRATION, WAIVER OF JURY
TRIAL, JURISDICTION, STATUTE OF LIMITATIONS:

              A.  This Agreement is made in the State of New York
and shall be governed by and construed in accordance with the
laws of said State, without regard to conflict of laws
principles.

         B.  We agree that any Claim or cause of action by us
against you, or any of your directors, officers, employees,
agents, accountants or attorneys, based on, arising from or
relating in any way to this Agreement, or any supplement or
amendment hereto, or any other present or future agreement
between us, or any other transaction contemplated hereby or
thereby or relating hereto or thereto, or any other matter
whatsoever shall be barred unless asserted by us by the
commencement of an action or proceeding in a court of competent
jurisdiction by the filing of a complaint within three years
after the first act, occurrence or omission upon which such Claim
or cause of action, or any part thereof, is based, and the
service of a summons and complaint upon one of your officers,
within thirty (30) days thereafter.  We agree that said three
year period is a reasonable and sufficient time for us to
investigate and act upon such Claim or cause of action.  Said
three year period shall not be waived, tolled or extended except
by specific written consent by you.

         C.  In performing your obligations under this Agreement,
you shall be liable to us for only your negligence or willful
misconduct.  No person or entity shall be a third party
beneficiary of any of our rights or claims under this Agreement
and in particular, but not by way of limitation, you shall not be
liable to any third party or for any act or omission by you or
any third party including, without limitation, the inability or
failure of any third party to effect a transfer in accordance
with our instructions due to mechanical, computer or electrical
failures or for any other reason beyond your control.  You shall
have no obligation to pursue, or assist us in pursuing, any claim
we may have against any third party.  In no event, shall you be
liable for special, punitive, indirect or consequential damages,
nor shall any action or inaction on your part, constitute a
waiver by you of any cause of action or defense.

         D.  YOU AND WE EACH HEREBY WAIVE THE RIGHT TO TRIAL BY
JURY IN ANY ACTION BASED UPON, ARISING FROM, OR IN ANY WAY
RELATING TO: (I) THIS AGREEMENT, OR ANY SUPPLEMENT OR AMENDMENT
HERETO; OR (II) ANY OTHER PRESENT OR FUTURE INSTRUMENT OR
AGREEMENT BETWEEN YOU AND US; OR (III) ANY CONDUCT, ACTS OR
OMISSIONS BY YOU OR US OR ANY OF YOUR OR OUR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER
PERSONS AFFILIATED WITH YOU OR US; IN EACH OF THE FOREGOING
CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.  As a
material part of the consideration to you to enter into this
Agreement, we (1) agree that, at your option, all actions and
proceedings based upon, arising out of or relating in any way
directly or indirectly to this Agreement shall be litigated
exclusively in the Supreme Court of the State of New York, County
of New York, (2) consent to the jurisdiction of such court and
consent to the service of process in any such action or
proceeding by personal delivery, first-class mail, or any other
method permitted by law, and (3) waive any and all rights to
transfer or change the venue of any such action or proceeding to
any other court.

         E.  The headings of various Sections of this Agreement
are for convenience of reference only and shall not modify,
define, expand or limit any of the terms or provisions of this
Agreement.

         F.  This Agreement and the other written documents
previously or now executed in connection herewith are the entire
and only agreements between us with respect to the subject matter
hereof, and all oral representations, agreements and
undertakings, previously or contemporaneously made, which are not
set forth herein or therein, are superseded hereby and thereby. 
The provisions of this Section 18, shall survive any termination
of this Agreement.

                             Very truly yours,
ATTEST:

GEORGE ALFRED WEBSTER                  ROBERT A. WARD
_______________________________   ______________________________

[SEAL]                       By:  EXECUTIVE VICE PRESIDENT
                                  ______________________________
                                  Title:


                             ACCEPTED AT NEW YORK, NEW YORK


                             ON August 23, 1995


                             REPUBLIC FACTORS CORP.


                             By: LUANE HILLER
                                ______________________________
                                Title: Senior Vice President






                           LETTER AMENDMENT
                           ----------------

Republic Factors Corp.
227 West Trade Street, Suite 2050
Charlotte, NC  28202
Mailing Address: Post Office Box 221679
Charlotte, NC  28222-1679
Telephone 704 358 2000


                                         October 16, 1995

Unifi, Inc.
7201 West Friendly Avenue
PO Box 19109
Greensboro, N.C.  27419

Gentlemen:

     We refer to the factoring agreement entered into between us on August 18, 
1995 ("Agreement").

     For mutual convenience, in lieu of providing us with physical copies of all
invoices as required by the Agreement, we agree to accept a computer summary, 
in form satisfactory to us containing all of the pertinent information relating
to each invoice as we deem appropriate.

     Accordingly, pursuant to our mutual understanding, effective immediately,
the Agreement shall be, and hereby is, amended to provide that until we advise
you to the contary we will accept computer summaries in lieu of physical copies
of all such invoices as provided above.  You agree however to retain physical 
copies of all such invoices and upon our request to promptly provide us with 
copies thereof.  Your failure to provide such copies to us upon our request 
within a reasonable time shall entitle us to charge your account with the 
amount of the relevant invoice (whether said invoice was at our credit risk
or not).

    In addition, we shall not be responsible for any errors or omissions
contained in such computer summaries and you agree to indemnify and hold us
harmless from any claims, liability or expense (including reasonable attorneys
fees) incurred by us as a result of any such errors and omissions. 

     Except as herein provided, no other change in the terms of provisions of
the Agreement is intended or implied.

     Kindly acknowledge your agreement to the foregoing by signing and returning
the copy of this letter.

                                     Very truly yours,

                                     REPUBLIC FACTORS CORP.

                                     LARRY W. LANEY
                                     Larry W. Laney
                                     Senior Vice President


READ AND AGREED TO:

UNIFI, INC.


BY: ROBERT A. WARD
TITLE: EXECUTIVE VICE PRESIDENT



                          Exhibit (10n)

                     SEVERANCE COMPENSATION AGREEMENT

     THIS AGREEMENT ("Agreement") between UNIFI, INC., a New York
corporation (the "Company"), and WILLIAM T. KRETZER ("Executive")
effective the 20th day of July, 1996.

                                WITNESSETH:

     WHEREAS, WILLIAM T. KRETZER is presently the President and
Chief Executive Officer of the Company, to which he was elected
in 1985, and has been an Officer or Executive Officer since 1975;
and

     WHEREAS, the Company's Board of Directors considers the
establishment and maintenance of a sound and vital Management to
be essential in protecting and enhancing the best interests of
the Company and its Shareholders, recognizes that the possibility
of a change in control exists and that such possibility, and the
uncertainty and questions which it may raise among Management,
may result in the departure or distraction of Management
personnel to the detriment of the Company and its Shareholders;
and 

     WHEREAS, the Executive desires that in the event of any
change in control he will continue to have the responsibility and
status he has earned; and

     WHEREAS, the Company's Board of Directors has determined
that it is appropriate to reinforce and encourage the continued
attention and dedication of the Executive,
 as a member of the
Company's Management, to his assigned duties without distraction
in potentially disturbing circumstances arising from the
possibility of a change in control of the Company.

     NOW, THEREFORE, in order to induce the Executive to remain
in the employment of the Company and in consideration of the
Executive agreeing to remain in the employment of the Company,
subject to the terms and conditions set out below, the Company
agrees it will pay such amount, as provided in Section 4 of this
Agreement, to the Executive, if the Executive's employment with
the Company terminates under one of the circumstances described
herein following a change in control of the Company, as herein
defined.

     Section 1.  Term:  This Agreement shall terminate, except to
the extent that any obligation of the Company hereunder remains
unpaid as of such time, upon the earliest of (i) three years from
July 20, 1996 if a Change in Control of the Company has not
occurred within such three year period; (ii) the termination of
the Executive's employment with the Company based on Death,
Disability (as defined in Section 3(b), Retirement (as defined in
Section 3(c)), Cause (as defined in Section 3(d)) or by the
Executive other than for Good Reason (as defined in Section
3(e)); and (iii) two years from the date of a Change in Control
of the Company if the Executive has not voluntarily terminated
his employment for Good Reason as of such time.

     Section 2.  Change in Control:  No compensation shall be
payable under this Agreement unless and until (a) there shall
have been a Change in Control of the Company, while the Executive
is still an employee of the Company and (b) the Executive's
employment by the Company thereafter shall have been terminated
in accordance with Section 3.  For purposes of this Agreement, a
Change in Control of the Company shall be deemed to have occurred
if (i) there shall be consummated (x) any consolidation or merger
of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which shares of the
Company's Common Stock would be converted into cash, securities
or other property, other than a merger of the Company in which
the holders of the Company's Common Stock immediately prior to
the merger have the same proportionate ownership of common stock
of the surviving corporation immediately after the merger, or (y)
any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially
all, of the assets of the Company, or (ii) the Shareholders of
the Company approved any plan or proposal for the liquidation or
dissolution of the Company, or (iii) any person (as such term is
used in Sections 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), shall become the
beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of twenty percent (20%) or more of the Company's
outstanding Common Stock, or (iv) during any period of two
consecutive years, individuals who at the beginning of such
period constitute the entire Board of Directors shall cease for
any reason to constitute a majority thereof unless the election,
or the nomination for election by the Company's Shareholders, of
each new Director was approved by a vote of at least two-thirds
of the Directors then still in office who were Directors at the
beginning of the period.

     Section 3.  Termination Following Change in Control:  (a) If
a Change in Control of the Company shall have occurred while the
Executive is still an employee of the Company, the Executive
shall be entitled to the compensation provided in Section 4 upon
the subsequent termination of the Executive's employment with the
Company by the Executive voluntarily for Good Reason or by the
Company unless such termination by the Company is as a result of
(i) the Executive's Death, (ii) the Executive's Disability (as
defined in Section (3)(b) below); (iii) the Executive's
Retirement (as defined in Section 3(c) below); (iv) the
Executive's termination by the Company for Cause(as defined in
Section 3(d) below); or (v) the Executive's decision to terminate
employment other than for Good Reason (as defined in Section 3(e)
below).

     (b)  Disability:  If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall
have been absent from his duties with the Company on a full-time
basis for six months (including months before and after the
change of control) and within 30 days after written notice of
termination is thereafter given by the Company the Executive
shall not have returned to the full- time performance of the
Executive's duties, the Company may terminate this Agreement for
"Disability."

     (c)  Retirement:  The term "Retirement" as used in this
Agreement shall mean termination in accordance with the Company's
retirement policy or any arrangement established with the consent
of the Executive.

     (d)  Cause:  The Company may terminate the Executive's
employment for Cause.  For purposes of this Agreement only, the
Company shall have "Cause" to terminate the Executive's
employment hereunder only on the basis of fraud, misappropriation
or embezzlement on the part of the Executive or malfeasance or
misfeasance by said Executive in performing the duties of his
office, as determined by the Board of Directors.  Notwithstanding
the foregoing, the Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by
the affirmative vote of not less than three-quarters of the
entire membership of the Company's Board of Directors at a
meeting of the Board called and held for the purpose (after
reasonable notice to the Executive and an opportunity for the
Executive, together with the Executive's counsel, to be heard
before the Board), finding that in the good faith opinion of the
Board the Executive was guilty of conduct set forth in the second
sentence of this Section 3(d) and specifying the particulars
thereof in detail.

     (e)  Good Reason:  The Executive may terminate the
Executive's employment for Good Reason at any time during the
term of this Agreement.  For purposes of this Agreement "Good
Reason" shall mean any of the following (without the Executive's
express written consent):

        (i)  the assignment to the Executive by the 
   Company of duties inconsistent with the Executive's
   position, duties, responsibilities and status with
   the Company immediately prior to a Change in Control
   of the Company; or a change in the Executive's
   titles or offices as in effect immediately prior to
   a Change in Control of the Company; or any removal
   of the Executive from or any failure to reelect the
   Executive to any of the positions held prior to the
   change of control, except in connection with the
   termination of his employment for Disability,
   Retirement, or Cause, or as a result of the
   Executive's Death; or by the Executive other than
   for Good Reason;

        (ii)  a reduction by the Company in the
   Executive's base salary as in effect on the date
   hereof or as the same may be increased from time to
   time during the term of this Agreement or the
   Company's failure to increase (within 12 months of
   the Executive's last increase in base salary) the
   Executive's base salary after a Change in Control of
   the Company in an amount which at least equals, on a
   percentage basis, the average percentage increase in
   base salary for all executive officers of the
   Company effected in the preceding 12 months;

        (iii)  any failure by the Company to continue
   in effect any benefit plan or arrangement
   (including, without limitation, the Company's Profit
   Sharing Plan, group life insurance plan and medical,
   dental, accident and disability plans) in which the
   Executive is participating at the time of a Change
   in Control of the Company (or any other plans
   providing the Executive with substantially similar
   benefits) (hereinafter referred to as "Benefit
   Plans"), or the taking of any action by the Company
   which would adversely affect the Executive's
   participation in or materially reduce the
   Executive's benefits under any such Benefit Plan or
   deprive the Executive of any material fringe benefit
   enjoyed by the Executive at the time of a Change in
   Control of the Company;

        (iv)  any failure by the Company to continue in
   effect any plan or arrangement to receive securities
   of the Company (including, without limitation, Stock
   Option Plans or any other plan or arrangement to
   receive and exercise stock options, restricted stock
   or grants thereof) in which the Executive is
   participating at the time of a Change in Control of
   the Company (or plans or arrangements providing him
   with substantially similar benefits) (hereinafter
   referred to as "Securities Plans") and the taking of
   any action by the Company which would adversely
   affect the Executive's participation in or
   materially reduce the Executive's benefits under any
   such Securities Plan;

        (v)  any failure by the Company to continue in
   effect any bonus plan, automobile allowance plan, or
   other incentive payment plan in which the Executive
   is participating at the time of a Change in Control
   of the Company, or said Executive had participated
   in during the previous calendar year;

        (vi)  a relocation of the Company's principal
   executive offices to a location outside of North
   Carolina, or the Executive's relocation to any place
   other than the location at which the Executive
   performed the Executive's duties prior to a Change
   in Control of the Company, except for required
   travel by the Executive on the Company's business to
   an extent substantially consistent with the
   Executive's business travel obligations at the time
   of a Change in Control of the Company;

        (vii)  any failure by the Company to provide
   the Executive with the number of paid vacation days
   to which the Executive is entitled at the time of a
   Change in Control of the Company;

        (viii)  any breach by the Company of any
   provision of this Agreement;

        (ix)  any failure by the Company to obtain the
   assumption of this Agreement by any successor or
   assign of the Company; or

        (x)  any purported termination of the
   Executive's employment which is not made pursuant to
   a Notice of Termination satisfying the requirements
   of Section 3(f).

   (f)  Notice of Termination:  Any termination by the Company
pursuant to Section 3(b), 3(c) or 3(d) shall be communicated by a
Notice of Termination.  For purposes of this Agreement, a "Notice
of Termination" shall mean a written notice which shall indicate
those specific termination provisions in this Agreement relied
upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated.  For
purposes of this Agreement, no such purported termination by the
Company shall be effective without such Notice of Termination.

   (g)  Date of Termination:  "Date of Termination" shall mean
(a) if Executive's employment is terminated by the Company for
Disability, 30 days after Notice of Termination is given to the
Executive (provided that the Executive shall not have returned to
the performance of the Executive's duties on a full-time basis
during such 30 day period) or (b) if the Executive's employment
is terminated by the Company for any other reason, the date on
which a Notice of Termination is given; provided that if within
30 days after any Notice of Termination is given to the Executive
by the Company the Executive notifies the Company that a dispute
exists concerning the termination, the Date of Termination shall
be the date the dispute is finally determined, whether by mutual
agreement by the parties or upon final judgment, order or decree
of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected) or
(c) the date the Executive notifies the Company in writing that
he is terminating his employment and setting forth the Good
Reason (as defined in Section 3(e)).

   Section 4.  Severance Compensation upon Termination of
Employment.  If the Company shall terminate the Executive's
employment other than pursuant to Section 3(b), 3(c) or 3(d) or
if the Executive shall voluntarily terminate his employment for
Good Reason, then the Company shall pay to the Executive as
severance pay in a lump sum, in cash, on the fifth day following
the Date of Termination, an amount equal to 2.99 times the
annualized aggregate annual compensation paid to the Executive by
the Company or any of its subsidiaries during the five calendar
years preceding the Change in Control of the Company; provided,
however, that if the lump sum severance payment under this
Section 4, either alone or together with other payments which the
Executive has the right to receive from the Company, would
constitute a "parachute payment" (as defined in Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code")), such
lump sum severance payment shall be reduced to the largest amount
as will result in no portion of the lump sum severance payment
under this Section 4 being subject to the excise tax imposed by
Section 4999 of the Code.  The determination of any reduction in
the lump sum severance payment under this Section 4 pursuant to
the foregoing proviso shall be made by the Company's Independent
Certified Public Accountants, and their decision shall be
conclusive and binding on the Company and the Executive.

   Section 5.  No Obligation to Mitigate Damages; No Effect on
Other Contractual Rights:  (a) The Executive shall not be
required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the
Executive as the result of employment by another employer after
the Date of Termination, or otherwise.

   (b)  The provisions of this Agreement, and any payment
provided for hereunder, shall not reduce any amounts otherwise
payable, or in any way diminish the Executive's rights under any
employment agreement or other contract, plan or employment
arrangement with the Company.

   (c)  The Company shall, upon the termination of the
Executive's employment other than by Death, Disability (as
defined in Section 3(b)), Retirement (as defined in Section 3(c))
or Cause (as defined in Section 3(d)), or the termination of the
Executive's employment by the Executive without Good Reason,
maintain in full force and effect, for the Executive's continued
benefit until the earlier of (a) two years after the Date of
Termination or (b) Executive's commencement of full time
employment with a new employer, all life insurance, medical,
health and accident, and disability plans, programs or
arrangements in which he was entitled to participate immediately
prior to the Date of Termination, provided that his continued
participation is possible under the general terms and provisions
of such plans and programs.  In the event the Executive is
ineligible under the terms of such plans or programs to continue
to be so covered, the Company shall provide substantially
equivalent coverage through other sources.

   (d)  The Executive's account and rights in and under Unifi,
Inc.'s Profit Sharing Plan and Trust, Unifi, Inc.'s Retirement
Savings Plan and any other retirement benefit or incentive plans,
shall remain subject to the terms and conditions of the
respective plans as they existed at the time of the termination
of the Executive's employment.


   Section 6.  Successor to the Company:  (a) The Company will
require any successor or assign (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company,
by agreement expressly, absolutely and unconditionally to assume
and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if
no such succession or assignment had taken place.  Any failure of
the Company to obtain such agreement prior to the effectiveness
of any such succession or assignment shall be a material breach
of this Agreement and shall entitle the Executive to terminate
the Executive's employment for Good Reason.  As used in this
Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor or assign to its business and/or assets
as aforesaid which executes and delivers the agreement provided
for in this Section 6 or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law.  If
at any time during the term of this Agreement the Executive is
employed by any corporation a majority of the voting securities
of which is then owned by the Company, "Company" as used in
Sections 3, 4 and 11 hereof shall in addition include such
employer.  In such event, the Company agrees that it shall pay or
shall cause such employer to pay any amounts owed to the
Executive pursuant to Section 4 hereof.

   (b)  If the Executive should die while any amounts are still
payable to him hereunder, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive's legatee, or other designee or,
if there be no such designee, to the Executive's estate.  This
Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives or attorney-in-fact, executors
or administrators, heirs, distributees and legatees.

   Section 7.  Notice:  For purposes of this Agreement, notices
and all other communications provided for in the Agreement shall
be in writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return
receipt requested, postage prepaid, as follows:

   If to the Company:

   Unifi, Inc.
   P. O. Box 19109
   Greensboro, NC 27419-9109

   ATTENTION:  Mr. William T. Kretzer
               President and Chief Executive Officer


   If to the Executive:

   Mr. William T. Kretzer
   3039 Lake Forest Drive
   Greensboro, NC 27408

or such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.

   Section 8.  Miscellaneous:  (a) The invalidity or
unenforceability of any provisions of this Agreement shall not
affect the validity or enforceability of any other provision of 
this Agreement, which shall remain in full force and effect.

   (b)  Any payment or delivery required under this Agreement
shall be subject to all requirements of the law with regard to
withholding (including FICA tax), filing, making of reports and
the like, and Company shall use its best efforts to satisfy
promptly all such requirements.

   (c)  Prior to the Change in Control of the Company, as herein
defined, this Agreement shall terminate if Executive shall
resign, retire, become permanently and totally disabled, or die. 
This Agreement shall also terminate if Executive's employment as
an executive officer of the Company shall have been terminated
for any reason by the Board of Directors of the Company as
constituted more than three (3) months prior to any Change in
Control of the Company, as defined in Section 2 of this
Agreement.

   Section 9.  Legal Fees and Expenses:  The Company shall pay
all legal fees and expenses which the Executive may incur as a
result of the Company's contesting the validity, enforceability
or the executive's interpretation of, or determinations under,
this Agreement.

   Section 10.  Confidentiality:  The Executive shall retain in
confidence any and all confidential information known to the
Executive concerning the Company and its business so long as such
information is not otherwise publicly disclosed.

   IN WITNESS WHEREOF, Unifi, Inc. has caused this Agreement to
be signed by a member of the Company's Compensation Committee who
is an outside director pursuant to resolutions duly adopted by
the Board of Directors and its seal affixed hereto and the
Executive has hereunto affixed his hand and seal effective as of
the date first above written.

                              UNIFI, INC. 


                              BY: DONALD F. ORR           (SEAL)
                              Compensation Committee



                              WILLIAM T. KRETZER          (SEAL)
                              WILLIAM T. KRETZER
                              President and 
                              Chief Executive Officer



                                Exhibit (10o)

                              CREDIT AGREEMENT


                           Dated as of April 15, 1996


                                     among


                                  UNIFI, INC.
                                  as Borrower,


                              THE SEVERAL LENDERS
                         FROM TIME TO TIME PARTY HERETO


                                      AND


                               NATIONSBANK, N.A.
                                    as Agent


<PAGE>
                               TABLE OF CONTENTS


                                                                  
                                                       Page No.

SECTION 1
     DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . .  1 
     1.1  Definitions. . . . . . . . . . . . . . . . . . . . .  1 
     1.2  Computation of Time Periods. . . . . . . . . . . . . 16 
     1.3  Accounting Terms . . . . . . . . . . . . . . . . . . 16 

SECTION 2
     THE CREDIT FACILITIES . . . . . . . . . . . . . . . . . . 17 
     2.1  Revolving Loans. . . . . . . . . . . . . . . . . . . 17 
     2.2  Competitive Bid Loan Subfacility . . . . . . . . . . 18 
     2.3  Default Rate . . . . . . . . . . . . . . . . . . . . 21 
     2.4  Extension and Conversion . . . . . . . . . . . . . . 22 
     2.5  Reductions in Commitments and Prepayments. . . . . . 22 
     2.6  Facility Fee . . . . . . . . . . . . . . . . . . . . 23 
     2.7  Capital Adequacy . . . . . . . . . . . . . . . . . . 24 
     2.8  Inability To Determine Interest Rate . . . . . . . . 24 
     2.9  Illegality . . . . . . . . . . . . . . . . . . . . . 24 
     2.10 Requirements of Law. . . . . . . . . . . . . . . . . 25 
     2.11 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 26 
     2.12 Indemnity. . . . . . . . . . . . . . . . . . . . . . 29 
     2.13 Pro Rata Treatment . . . . . . . . . . . . . . . . . 29 
     2.14 Sharing of Payments. . . . . . . . . . . . . . . . . 30 
     2.15 Place and Manner of Payments . . . . . . . . . . . . 31 
     2.16 Replacement of Lenders . . . . . . . . . . . . . . . 32 

SECTION 3
     CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . 32 
     3.1  Closing Conditions . . . . . . . . . . . . . . . . . 32 
     3.2  Each Loan Advance. . . . . . . . . . . . . . . .   . 33 

SECTION 4
     REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 34 
     4.1  Financial Statements . . . . . . . . . . . . . . . . 34 
     4.2  Corporate Status . . . . . . . . . . . . . . . . . . 35 
     4.3  Corporate Authorization. . . . . . . . . . . . . . . 35 
     4.4  No Conflicts . . . . . . . . . . . . . . . . . . . . 35 
     4.5  Liens. . . . . . . . . . . . . . . . . . . . . . . . 35 
     4.6  Litigation . . . . . . . . . . . . . . . . . . . . . 35 
     4.7  Governmental and Other Approvals . . . . . . . . . . 35 
     4.8  Use of Loans . . . . . . . . . . . . . . . . . . . . 36 
     4.9  Taxes. . . . . . . . . . . . . . . . . . . . . . . . 36 
     4.10 Compliance with Law. . . . . . . . . . . . . . . . . 36 
     4.11 ERISA. . . . . . . . . . . . . . . . . . . . . . . . 36 
     4.12 Hazardous Substances . . . . . . . . . . . . . . . . 37 






SECTION 5
     COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 38 
     5.1  Financial Statements . . . . . . . . . . . . . . . . 38 
     5.2  Certificates;
 Other Information. . . . . . . . . . . 39 
     5.3  Payment of Obligations . . . . . . . . . . . . . . . 39 
     5.4  Conduct of Business and Maintenance of Existence . . 39 
     5.5  Insurance. . . . . . . . . . . . . . . . . . . . . . 40 
     5.6  Inspection of Property; Books and Records; 
            Discussions . . . . . . . . . . . . . . . . . . .  40 
     5.7  Notices. . . . . . . . . . . . . . . . . . . . . . . 40 
     5.8  Environmental Laws . . . . . . . . . . . . . . . . . 40 
     5.9  Financial Covenants. . . . . . . . . . . . . . . . . 41 
     5.10 Funded Debt. . . . . . . . . . . . . . . . . . . . . 41 
     5.11 Liens. . . . . . . . . . . . . . . . . . . . . . . . 42 
     5.12 Mergers and Consolidations . . . . . . . . . . . . . 42 

SECTION 6
     EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . 43 
      6.1.       Events of Default . . . . . . . . . . . . . . 43 
      6.2.       Rights and Remedies . . . . . . . . . . . . . 45 

SECTION 7
     AGENCY PROVISIONS . . . . . . . . . . . . . . . . . . . . 46 
     7.1  Appointment. . . . . . . . . . . . . . . . . . . . . 46 
     7.2  Delegation of Duties . . . . . . . . . . . . . . . . 46 
     7.3  Exculpatory Provisions . . . . . . . . . . . . . . . 47 
     7.4  Reliance on Communications . . . . . . . . . . . . . 47 
     7.5  Notice of Default. . . . . . . . . . . . . . . . . . 48 
     7.6  Non-Reliance on Agent and Other Lenders. . . . . . . 48 
     7.7  Indemnification. . . . . . . . . . . . . . . . . . . 48 
     7.8  Agent in its Individual Capacity . . . . . . . . . . 49 
     7.9  Successor Agent. . . . . . . . . . . . . . . . . . . 49 

SECTION 8
     MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 50 
     8.1  Notices. . . . . . . . . . . . . . . . . . . . . . . 50 
     8.2  Benefit of Agreement . . . . . . . . . . . . . . . . 51 
     8.3  No Waiver; Remedies Cumulative . . . . . . . . . . . 52 
     8.4  Payment of Expenses, etc . . . . . . . . . . . . . . 53 
     8.5  Amendments, Waivers and Consents . . . . . . . . . . 54 
     8.6  Counterparts . . . . . . . . . . . . . . . . . . . . 54 
     8.7  Headings . . . . . . . . . . . . . . . . . . . . . . 54 
     8.8  Survival . . . . . . . . . . . . . . . . . . . . . . 54 
     8.9  Governing Law; Submission to Jurisdiction; Venue . . 54 
     8.10 Severability . . . . . . . . . . . . . . . . . . . . 55 
     8.11 Entirety . . . . . . . . . . . . . . . . . . . . . . 55 
     8.12 Survival . . . . . . . . . . . . . . . . . . . . . . 55 

<PAGE>
                                   CREDIT AGREEMENT



          THIS CREDIT AGREEMENT dated as of April 15, 1996 (the
"Credit Agreement"), is by and among UNIFI, INC., a New York
corporation (the "Borrower"), the several lenders identified on
the signature pages hereto and such other lenders as may from
time to time become a party hereto (the "Lenders") and
NATIONSBANK, N.A., as agent for the Lenders (in such capacity,
the "Agent").

                              W I T N E S S E T H

          WHEREAS, the Borrower has requested that the Lenders
provide a $400,000,000 5-year revolving credit facility under
this Credit Agreement for the purpose of financing the redemption
of certain convertible subordinated notes of the Borrower and for
other general corporate purposes; and

          WHEREAS, the Lenders have agreed to make the requested
credit facility available to the Borrower on the terms and
conditions hereinafter set forth;

          NOW, THEREFORE, IN CONSIDERATION of the premises and
other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:


                                   SECTION 1

                                  DEFINITIONS

          1.1  Definitions.  As used in this Credit Agreement,
the following terms shall have the meanings specified below
unless the context otherwise requires:

               "Agent" means NationsBank, N.A. and any successors
and assigns in such capacity.

               "Applicable Percentage" means, for any day, the
rate per annum set forth below opposite the applicable pricing
level then in effect as shown below, it being understood that the
Applicable Percentage for (i) Base Rate Loans shall be the
percentage set forth under the column "Base Rate Loans", (ii)
Eurodollar Loans shall be the percentage set forth under the
column "Eurodollar Loans", and (iii) the Facility Fee shall be
the percentage set forth under the column "Facility Fee":

<PAGE>


 Pricing       Leverage      Base Rate       Eurodollar        Facility
  Level         Ratio          Loans           Loans              Fee
   
   I         <1.0 to 1.0       0.00%           0.185%            0.090%

  II        Less than or =
             1.0 to 1.0
            but <1.5:1.0       0.00%           0.225%            0.100%

 III         Less than or = 
             1.5:1.0 but
              <2.5:1.0         0.00%           0.265%            0.110%

 IV           Less than or =
               2.5:1.0 but
               <3.0:1.0        0.00%           0.300%            0.125%

 V            Less than or =   
                3.0:1.0         0.00%           0.350%            0.150%


          The Applicable Percentage shall, in each case, be
determined and adjusted quarterly by the Agent as soon as
practicable (but in any event within 5 days) after delivery of
the annual financial information required by Section 5.1(a) or
the quarterly financial information required by Section 5.1(b),
provided that the date of determination and adjustment shall not
be later than the date 5 days after the date by which the
Borrower is required to provide such quarterly financial
information in accordance with Section 5.1(b) (each an "Interest
Determination Date") based on the information contained in such
quarterly financial information.  Such Applicable Percentage
shall be effective from such Interest Determination Date until
the next such Interest Determination Date.  The Agent shall
determine the appropriate Pricing Level promptly upon its receipt
of the quarterly financial information and promptly notify the
Borrower and the Lenders of any change thereof.  Such
determinations by the Agent shall be conclusive absent manifest
error.  The initial Applicable Percentages shall be based on
Pricing Level I until the first Interest Determination Date
occurring after the Closing Date.

               "Bankruptcy Code" means the Bankruptcy Code in
Title 11 of the United States Code, as amended, modified,
succeeded or replaced from time to time.

               "Base CD Rate" means a per annum interest rate
(rounded upwards, if necessary, to the next 1/16 of 1%)
determined pursuant to the following formula:

                                                     CD
Base CD Rate =    Three Month Secondary CD Rate    + Assessment
                  -----------------------------       Rate
                   1 - CD Reserve Percentage          

               "Base Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest whole multiple of
1/100 of 1%) equal to the greater of (a) the Federal Funds Rate
in effect on such day plus 1/2 of 1%, (b) the Base CD Rate in
effect on such day plus 1/2 of 1%, or (c) the Prime Rate in
effect on such day.  If for any reason the Agent shall have
determined (which determination shall be conclusive absent
manifest error) that it is unable after due inquiry to ascertain
the Federal Funds Rate or the Base CD Rate for any reason,
including the inability or failure of the Agent to obtain
sufficient quotations in accordance with the terms hereof, the
Base Rate shall be determined without regard to clause (a) or
(b), as applicable, of the first sentence of this definition
until the circumstances giving rise to such inability no longer
exist.  Any change in the Base Rate due to a change in the Prime
Rate, the Base CD Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate,
the Base CD Rate or the Federal Funds Rate, respectively.

               "Base Rate Loan" means any Loan bearing interest
at a rate determined by reference to the Base Rate.

               "Borrower" means Unifi, Inc., a New York
corporation, as identified as such in the heading hereof,
together with any successors and permitted assigns.

               "Business Day" means a day other than a Saturday,
Sunday or other day on which commercial banks in Charlotte, North
Carolina and New York, New York are authorized or required by law
to close, except that, when used in connection with a Eurodollar
Loan, such day shall also be a day on which dealings between
banks are carried on in U.S. dollar deposits in London, England,
Charlotte, North Carolina and New York, New York.

               "Capital Expenditures" means all expenditures
which in accordance with GAAP would be classified as capital
expenditures, including Capital Lease Obligations.

               "Capital Lease" means any lease of property, real
or personal, the obligations with respect to which are required
to be capitalized on a balance sheet of the lessee in accordance
with GAAP.

               "Capital Lease Obligations" means the capital
lease obligations relating to a Capital Lease determined in
accordance with GAAP.

               "CD Assessment Rate" means, for any day, the net
annual assessment rate (rounded upward to the nearest 1/100th of
1%) determined by NationsBank to be payable on such day to the
Federal Deposit Insurance Corporation or any successor ("FDIC")
for FDIC's insuring time deposits made in Dollars at the offices
of NationsBank in the United States.

               "CD Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor), for determining the maximum
reserve requirement for a member bank of the Federal Reserve
System in Charlotte, North Carolina with deposits exceeding one
billion Dollars in respect of non-personal time deposits in
Dollars in Charlotte, North Carolina having a maturity of three
months in an amount of $100,000 or more.

               "Closing Date" means the date hereof.

               "Code" means the Internal Revenue Code of 1986, as
amended, and any successor thereto, as interpreted by the rules
and regulations issued thereunder, in each case as in effect from
time to time.  References to sections of the Code shall be
construed also to refer to any successor sections.

               "Commitment" means, as to each Lender, the
commitment of such Lender to make its Commitment Percentage of
Committed Loans up to its Committed Amount.

               "Commitment Percentage" means, for each Lender, a
fraction (expressed as a percentage) the numerator of which is
the Committed Amount of such Lender at such time and the
denominator of which is the Total Committed Amount, provided that
if the Commitment Percentage of any Lender is to be determined
after the Commitments have been terminated, then the Commitment
Percentage of such Lender shall be determined immediately prior
(and without giving effect) to such termination.

               "Committed Amount" means, as to each Lender, the
maximum amount of such Lender's Commitment as identified on
Schedule 2.1(a).

               "Committed Loans" means such term as defined in
Section 2.1.

               "Committed Note" or "Committed Notes" means the
promissory notes of the Borrower in favor of each of the Lenders
evidencing the Committed Loans provided pursuant to Section
2.1(e), individually or collectively, as appropriate, as such
promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.

               "Competitive Bid" means an offer by a Lender to
make a Competitive Bid Loan pursuant to the terms of Section 2.2.

               "Competitive Bid Lenders" means, at any time,
those Lenders which have Competitive Bid Loans outstanding.

               "Competitive Bid Loan" means a loan made by a
Lender in its discretion pursuant to the provisions of Section
2.2.

               "Competitive Bid Note" or "Competitive Bid Notes"
means the promissory notes of the Borrower in favor of each of
the Lenders evidencing the Competitive Bid Loans, if any,
provided pursuant to Section 2.2(i), individually or
collectively, as appropriate, as such promissory notes may be
amended, modified, supplemented, extended, renewed or replaced
from time to time.

               "Competitive Bid Rate" means, as to any
Competitive Bid made by a Lender in accordance with the
provisions of Section 2.2, the fixed rate of interest offered by
the Lender making the Competitive Bid.

               "Competitive Bid Request" means a request by the
Borrower for Competitive Bids in accordance with the provisions
of Section 2.2.

               "Consolidated Capital Expenditures" means Capital
Expenditures for the Borrower and its Subsidiaries on a
consolidated basis.

               "Consolidated EBITDA" means, for any period, the
sum of Consolidated Net Income plus Consolidated Interest Expense
plus all provisions for any Federal, state or other income taxes
plus depreciation, amortization and other non-cash charges, for
the Borrower and its Subsidiaries on a consolidated basis as
determined in accordance with GAAP applied on a consistent basis. 
Except as otherwise specified, the applicable period shall be for
the four consecutive quarters ending as of the date of
determination.

               "Consolidated Funded Debt" means Funded Debt of
the Borrower and its Subsidiaries on a consolidated basis
determined in accordance with GAAP applied on a consistent basis.

               "Consolidated Interest Expense" means, for any
period, all interest expense, including the amortization of debt
discount and premium and the interest component under Capital
Leases for the Borrower and its Subsidiaries on a consolidated
basis determined in accordance with GAAP applied on a consistent
basis.  Except as otherwise specified, the applicable period
shall be for the four consecutive quarters ending as of the date
of computation.

               "Consolidated Net Income" means, for any period,
the net income of the Borrower and its Subsidiaries on a
consolidated basis determined in accordance with GAAP applied on
a consistent basis.  Except as otherwise specified, the
applicable period shall be for the four consecutive quarters
ending as of the date of computation.

               "Consolidated Net Worth" means total stockholders'
equity for the Borrower and its Subsidiaries on a consolidated
basis as determined at a particular date in accordance with GAAP
applied on a consistent basis.

               "Contractual Obligation" means, as to any Person,
any provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.

               "Credit Agreement" means this Credit Agreement.

               "Credit Documents" means this Credit Agreement and
the Notes.

               "Default" means any event, act or condition which
with notice or lapse of time, or both, would constitute an Event
of Default.

               "Defaulting Lender" means, at any time, any Lender
that, at such time (a) has failed to make a Loan required
pursuant to the term of this Credit Agreement (b) has failed to
pay to the Agent or any Lender an amount owed by such Lender
pursuant to the terms of this Credit Agreement or (c) has been
deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or to a receiver, trustee or similar
official.

               "Dollars" and "$" means dollars in lawful currency
of the United States of America.

               "Environmental Laws" means any and all lawful and
applicable Federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to
emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes into the environment including,
without limitation, ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.

               "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, and any successor statute
thereto, as interpreted by the rules and regulations thereunder,
all as the same may be in effect from time to time.  References
to sections of ERISA shall be construed also to refer to any
successor sections.

               "ERISA Affiliate" means an entity, whether or not
incorporated, which is under common control with the Borrower or
any of its Subsidiaries within the meaning of Section 4001(a)(14)
of ERISA, or is a member of a group which includes the Borrower
and which is treated as a single employer under Sections 414(b),
(c), (m), or (o) of the Code.

               "Eurodollar Loan" means any Loan bearing interest
at a rate determined by reference to the Eurodollar Rate.

               "Eurodollar Rate" means, for the Interest Period
for each Eurodollar Loan comprising part of the same borrowing
(including conversions, extensions and renewals), a per annum
interest rate determined pursuant to the following formula:

          Eurodollar Rate =             LIBOR Rate           
                              ---------------------------------
                              1 - Eurodollar Reserve Percentage

               "Eurodollar Reserve Percentage" means for any day,
that percentage (expressed as a decimal) which is in effect from
time to time under Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as such regulation may
be amended from time to time or any successor regulation, as the
maximum reserve requirement for the Agent (including, without
limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurocurrency
liabilities as that term is defined in Regulation D (or against
any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is
determined).   The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in
the Eurodollar Reserve Percentage.  The Agent will promptly
notify the Borrower of any change in the Eurodollar Reserve
Percentage of which it becomes aware.

               "Event of Default" means such term as defined in
Section 6.1.

               "Facility Fee" means such term as defined in
Section 2.6.

               "Federal Funds Rate" means, for any day, the rate
of interest per annum (rounded upwards, if necessary, to the
nearest whole multiple of 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day, provided
that (A) if such day is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the
next preceding Business Day and (B) if no such rate is so
published on such next succeeding Business Day, the Federal Funds
Rate for such day shall be the average rate quoted to the Agent
on such day on such transactions as determined by the Agent.

               "Funded Debt" means, for any Person, (i)  all
Indebtedness of such Person for borrowed money (including without
limitation, indebtedness evidenced by promissory notes, bonds,
debentures and similar instruments and further any portion of the
purchase price for assets or acquisitions permitted hereunder
which may be financed by the seller and Guaranty Obligations by
such Person of Funded Debt of other Persons), (ii) all purchase
money Indebtedness of such Person, (iii) the principal portion of
Capital Lease Obligations, (iv) the maximum amount available to
be drawn under standby letters of credit and bankers' acceptances
issued or created for the account of such Person, (v) all
preferred stock issued by such Person and required by the terms
thereto to be redeemed, or for which mandatory sinking fund
payments are due, by a fixed date, (vi) the aggregate amount of
Indebtedness and other obligations owing on or in respect of
uncollected accounts receivable of such Person subject at such
time to a sale of receivables (or other similar transaction but
excluding factoring arrangements of the type engaged in by the
Borrower as of the Closing Date) regardless of whether such
transaction is effected without recourse to such Person or in a
manner which would not be reflected on the balance sheet of such
Person in accordance with GAAP (including Permitted Receivables
Financings) and (vii) all obligations of such Person under
synthetic leases or other off-balance sheet financing
arrangements.  Funded Debt shall include payments in respect of
Funded Debt which constitute current liabilities of the obligor
under GAAP.

               "GAAP" means generally accepted accounting
principles in the United States applied on a consistent basis and
subject to Section 1.3 hereof.

               "Governmental Authority" means any Federal, state,
local or foreign court or governmental agency, authority,
instrumentality or regulatory body.

               "Guaranty Obligations" means, with respect to any
Person, without duplication, any obligations of such Person
(other than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) guaranteeing or
intended to guarantee any Indebtedness of any other Person in any
manner, whether direct or indirect, and including without
limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any property constituting
security therefor, (ii) to advance or provide funds or other
support for the payment or purchase of any such Indebtedness or
to maintain working capital, solvency or other balance sheet
condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or
similar agreements or arrangements) for the benefit of any holder
of Indebtedness of such other Person, (iii) to lease or purchase
property, securities or services primarily for the purpose of
assuring the holder of such Indebtedness, or (iv) to otherwise
assure or hold harmless the holder of such Indebtedness against
loss in respect thereof.  The amount of any Guaranty Obligation
hereunder shall (subject to any limitations set forth therein) be
deemed to be an amount equal to the outstanding principal amount
(or maximum principal amount, if larger) of the Indebtedness in
respect of which such Guaranty Obligation is made.

               "Indebtedness" means, of any Person at any date,
(a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices), 
(b) any other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument, (c) all obligations
of such Person under Capital Leases, (d) all obligations of such
Person in respect of acceptances issued or created for the
account of such Person, (e) all liabilities secured by any Lien
on any property owned by such Person even though such Person has
not assumed or otherwise become liable for the payment thereof,
(f) all obligations of such Person under conditional sale or
other title retention agreements relating to property purchased
by such Person (other than customary reservations or retentions
of title under agreements with suppliers entered into in the
ordinary course of business), (g) all obligations of such Person
under take-or-pay or similar arrangements or under commodities
agreements, (h) all Guaranty Obligations of such Person, (i) all
obligations of such Person in respect of interest rate protection
agreements, foreign currency exchange agreements, commodity
purchase or option agreements or other interest or exchange rate
or commodity price hedging agreements, (j) the maximum amount of
all letters of credit issued or bankers' acceptances created for
the account of such Person and, without duplication, all drafts
drawn thereunder (to the extent not theretofore reimbursed), (k)
all preferred stock issued by such Person and required by the
terms thereto to be redeemed, or for which mandatory sinking fund
payments are due, by a fixed date, (l) all other obligations
which would be shown as a liability on the balance sheet of such
Person (m) the aggregate amount of indebtedness or obligations
owing on or in respect of uncollected accounts receivable of such
Person subject at such time to a sale of receivables (or other
similar transaction but excluding factoring arrangements of the
type engaged in by the Borrower as of the Closing Date)
regardless of whether such transaction is effected without
recourse to such Person or in a manner which would not be
reflected on the balance sheet of such Person in accordance with
GAAP and (n) all obligations of such Person under synthetic
leases or other off-balance sheet financing arrangements; but
specifically excluding from the foregoing trade payables and
other expenses and reserves (whether classified as long term or
short term) arising or incurred in the ordinary course of
business.  For purposes hereof, Indebtedness shall include
Indebtedness of any partnership in which such Person is a general
partner (except for any such Indebtedness with respect to which
the holder is limited to the assets of such partnership or joint
venture).

               "Interest Coverage Ratio" means the ratio of (i)
Consolidated EBITDA minus Consolidated Capital Expenditures for
the applicable period, to (ii) Consolidated Interest Expense. 
Except as otherwise specified, the applicable period shall be for
the four consecutive quarters ending as of the date of
computation.

               "Interest Payment Date" means (i) as to any Base
Rate Loan, the last day of each March, June, September and
December and the Termination Date, (ii) as to any Eurodollar Loan
or any Competitive Bid Loan, the last day of each Interest Period
for such Loan and on the Termination Date, and in addition where
the applicable Interest Period is more than 3 months, then also
on the date 3 months from the beginning of the Interest Period,
and each 3 months thereafter.  If an Interest Payment Date falls
on a date which is not a Business Day, such Interest Payment Date
shall be deemed to be the next succeeding Business Day, except
that in the case of Eurodollar Loans where the next succeeding
Business Day falls in the next succeeding calendar month, then on
the next preceding Business Day.

               "Interest Period" means (i) with respect to any
Eurodollar Loan, a period of one, two, three or six months 
duration, as the Borrower may elect, commencing in each case on
the date of the borrowing (including extensions and conversions)
and (ii) with respect to any Competitive Bid Loan, a period
beginning on the date of borrowing and ending on the date
specified in the respective Competitive Bid whereby the offer to
make such Competitive Bid Loan was extended, which, except with
regards to any Accommodating Competitive Bid Loan, shall be not
less than 7 days nor more than 180 days' duration; provided,
however, (A) if any Interest Period would end on a day which is
not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day (except that in the case of
Eurodollar Loans where the next succeeding Business Day falls in
the next succeeding calendar month, then on the next preceding
Business Day), (B) no Interest Period shall extend beyond the
Termination Date, and (C) in the case of Eurodollar Loans, where
an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall, subject to
clause (A) above, end on the last Business Day of such calendar
month.

               "Lenders" means each of the Persons identified as
a "Lender" on the signature pages hereto, and each Person which
may become a Lender by way of assignment in accordance with the
terms hereof, together with their successors and permitted
assigns.

               "Leverage Ratio" means the ratio of Consolidated
Funded Debt to Consolidated EBITDA.

               "LIBOR Rate" means, for any Interest Period, the
interest rate per annum equal to the offered rate for deposits in
United States dollars (rounded to four decimal places) in amounts
comparable to the principal amount of, and for a length of time
comparable to the Interest Period for, the Eurodollar Loan to be
made by the Lenders, which interest rate appears on the Telerate
Page 3750 as of 11:00 a.m. (London time) two (2) Business Days
prior to the first day of such Interest Period; provided,
however, that (i) if more than one such offered rate appears on
Telerate Page 3750, the LIBOR Rate shall be the arithmetic
average (rounded to four decimal places) of such offered rates,
or (ii) if no such offered rate appears on such page, the LIBOR
Rate shall be the interest rate per annum (rounded to four
decimal places) at which United States dollar deposits are
offered to NationsBank in the London interbank borrowing market
at approximately 11:00 a.m. (Charlotte, North Carolina time) on
the date two (2) Business Days prior to the first day of such
Interest Period in an amount comparable to the principal amount
of, and for a length of time comparable to the Interest Period
for, the Eurodollar Loan to be made by the Lenders.

               "Lien" means any mortgage, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance,
lien (statutory or otherwise), preference, priority or charge of
any kind (including any agreement to give any of the foregoing,
any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the Uniform
Commercial Code as adopted and in effect in the relevant
jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).

               "Loan" or "Loans" means a Committed Loan and/or a
Competitive Bid Loan, as appropriate.

               "Material Adverse Effect" means a material adverse
effect on (i) the condition (financial or otherwise), operations,
business, assets, liabilities or prospects of the Borrower and
its Subsidiaries taken as a whole, (ii) the ability of the
Borrower to perform any material obligation under the Credit
Documents or (iii) the material rights and remedies of the
Lenders under the Credit Documents.

               "Multiemployer Plan" means a Plan which is a
multiemployer plan as defined in Sections 3(37) or 4001(a)(3) of
ERISA.

               "Multiple Employer Plan" means a Plan which the
Borrower, any of its Subsidiaries or any ERISA Affiliate and at
least one employer other than the Borrower, its Subsidiaries or
any ERISA Affiliate are contributing sponsors.

               "NationsBank" means NationsBank, N.A. and its
successors.

               "Non-Excluded Taxes" means such term as defined in
Section 2.11(a).

               "Note" or "Notes" means the Committed Notes and/or
the Competitive Bid Notes, collectively, separately or
individually, as appropriate.

               "Notice of Borrowing" means the written notice of
borrowing as referenced and defined in Section 2.1(b)(i).

               "Notice of Extension/Conversion" means the written
notice of extension or conversion of a Loan in accordance with
Section 2.4, a form of which is attached as Schedule 2.4.

               "Obligations" means, with respect to any or all of
the Lenders, the unpaid principal of, and the accrued and unpaid
interest on, the Loans, all accrued and unpaid Commitment Fees
and all other unsatisfied obligations of the Borrower arising
under any of the Credit Documents, including without limitation
under Sections 2.10, 2.11 and 2.12.

               "Participation Interest" means the purchase by a
Lender of a participation in Committed Loans as provided in
Section 2.14.

               "PBGC" means the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of
ERISA and any successor thereof.

               "Permitted Liens" means

               (a)   Liens created by or otherwise existing,
under or in connection with this Credit Agreement or the other
Credit Documents in favor of the Lenders;

               (b)  Liens in favor of a Lender hereunder as the
provider of interest rate protection relating to the Loans
hereunder, but only (i) to the extent such Liens secure
obligations under such interest rate protection agreements
permitted under Section 5.10, (ii) to the extent such Liens are
on the same collateral as to which the Lenders also have a Lien
and (iii) if such provider and the Lenders shall share pari passu
in the collateral subject to such Liens;

               (c)  Liens securing Indebtedness (and refinancings
thereof) to the extent permitted under Section 5.10(c);

               (d)  Liens securing Permitted Receivables
Financings to the extent permitted under Section 5.10;

               (e)   Liens for taxes, assessments, charges or
other governmental levies not yet due or as to which the period
of grace (not to exceed 60 days), if any, related thereto has not
expired or which are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Borrower or its Subsidiaries,
as the case may be, in conformity with GAAP;

               (f)  carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the
ordinary course of business which are not overdue for a period of
more than 60 days or which are being contested in good faith by
appropriate proceedings;

               (g)  pledges or deposits in connection with
workers' compensation, unemployment insurance and other social
security legislation and deposits securing liability to insurance
carriers under insurance or self-insurance arrangements;

               (h)  deposits to secure the performance of bids,
trade contracts, (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary
course of business; 

               (i)  any extension, renewal or replacement (or
successive extensions, renewals or replacements) , in whole or in
part, of any Lien referred to in the foregoing clauses; provided
that such extension, renewal or replacement Lien shall be limited
to all or a part of the property which secured the Lien so
extended, renewed or replaced (plus improvements on such
property);

               (j)  easements, rights of way, restrictions and
other similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not material in amount and
which do not in any case materially detract from the value of the
property subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower or any
Subsidiary;

               (k) leases and subleases otherwise permitted
hereunder granted to others not interfering in any material
respect in the business of the Borrower or any Subsidiary; and

               (l) attachment or judgment Liens, where the
attachment or judgment which gave rise to such Liens does not
constitute an Event of Default hereunder.

               "Permitted Receivables Financing" means any one or
more receivables financings (including factoring arrangements,
securitizations and similar structured finance transactions)
involving the sale by the Borrower or any of its Subsidiaries of
accounts or other receivables, whether or not pursuant to true
sales transactions (as determined in accordance with GAAP).

               "Person" means any individual, partnership, joint
venture, firm, corporation, limited liability company,
association, trust or other enterprise (whether or not
incorporated) or any Governmental Authority.

               "Plan" means any employee benefit plan (as defined
in Section 3(3) of ERISA) which is covered by ERISA and with
respect to which the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an
"employer" within the meaning of Section 3(5) of ERISA.

               "Prime Rate" means the per annum rate of interest
established from time to time by the Agent at its principal
office in Charlotte, North Carolina as its Prime Rate.  Any
change in the interest rate resulting from a change in the Prime
Rate shall become effective as of 12:01 a.m. of the Business Day
on which each change in the Prime Rate is announced by the Agent. 
The Prime Rate is a reference rate used by the Agent in
determining interest rates on certain loans and is not intended
to be the lowest rate of interest charged on any extension of
credit to any debtor.

               "Replaced Lender" means such term as defined in
Section 2.16. "Replacement Lender" means such term as defined in
Section 2.16.

               "Reportable Event" means any of the events set
forth in Section 4043(b) of ERISA, other than those events as to
which the post-event notice requirement is waived under
subsections .13, .14, .18, .19, or .20 of PBGC Reg. Section 2615.

               "Required Lenders" means, at any time, two or more
Lenders having collectively at least fifty-one percent (51%) of
the Commitments or, if the Commitments have been terminated, two
or more Lenders holding collectively at least fifty-one percent
(51%) of the aggregate unpaid principal amount of the Notes;
provided that the Commitments of, or unpaid principal amount of
Notes owing to, a Defaulting Lender shall be excluded for
purposes hereof in making a determination of Required Lenders.

               "Requirement of Law" means, as to any Person, the
certificate of incorporation and by-laws or other organizational
or governing documents of such Person, and any law, treaty, rule
or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or
binding upon such Person or any of its material property.

               "Responsible Officer" means the President,
Executive Vice President, Chief Financial Officer, Treasurer or
Assistant Treasurer of the Borrower.

               "Single Employer Plan" means any Plan which is
covered by Title IV of ERISA, but which is not a Multiemployer
Plan.

               "Subject Property" means such term as defined in
Section 4.12. 

               "Subsidiary" means, as to any Person, (a) any
corporation more than 50% of whose stock of any class or classes
having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of
whether or not at the time, any class or classes of such
corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such
Person directly or indirectly through Subsidiaries, and (b) any
partnership, limited liability company, association, joint
venture or other entity in which such person directly or
indirectly through Subsidiaries has more than 50% equity interest
at any time.  Unless otherwise specified, any reference to a
Subsidiary is intended as a reference to a Subsidiary of the
Borrower.

               "Termination Date" means, with respect to any
Lender at any time, the earlier of (i) the day five (5) years
after the date of this Credit Agreement and (ii) the day on which
the Commitments shall have been reduced to zero and terminated in
whole pursuant to the terms hereof. 

               "Termination Event" means (i) with respect to any
Plan, the occurrence of a Reportable Event or the substantial
cessation of operations (within the meaning of Section 4062(e) of
ERISA); (ii) the withdrawal of the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a substantial employer (as
such term is defined in Section 4001(a)(2) of ERISA), or the
termination of a Multiple Employer Plan; (iii) the distribution
of a notice of intent to terminate or the actual termination of a
Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the
institution of proceedings to terminate or the actual termination
of a Plan by the PBGC under Section 4042 of ERISA; (v) any event
or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; or (vi) the complete or partial withdrawal
of the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate from a Multiemployer Plan.

               "Three-Month Secondary CD Rate" means, for any
day, the secondary market rate for three-month certificates of
deposit reported as being in effect for such day (or, if such day
shall not be a Business Day, the immediately preceding Business
Day) by the Board of Governors of the Federal Reserve System (the
"Board") through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the
current practices of the Board of Governors of the Federal
Reserve System, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or, if
such rate shall not be so reported on such day or such
immediately preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of
major money center banks received at approximately 10:00 A.M.,
Charlotte North Carolina time, on such day, (or, if such day
shall not be a Business Day, on the immediately preceding
Business Day) by the Agent from three negotiable certificate of
deposit dealers of recognized standing selected by it.

               "Total Committed Amount" means the aggregate
Committed Amounts of all the Lenders, being initially
$400,000,000.

               "U.S. Tax Compliance Certificate" means such term
as defined in Section 2.11(b)(Y).

          1.2  Computation of Time Periods.  For purposes of
computation of of time hereunder, the word "from" means "from and
including" and the "to" and "until" each mean "to but excluding."

          1.3  Accounting Terms.  Except as otherwise expressly
provided herein, accounting terms used herein shall be
interpreted, and all financial and certificates and reports as to
financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a
consistent basis.  All calculations made for the purposes of
determining compliance with this Credit Agreement shall (except
as otherwise expressly provided herein) be made by application of
GAAP applied on a basis consistent with the most recent annual or
quarterly financial statements delivered pursuant to Section 5.1
hereof (or, prior to the delivery of the first financial
statements pursuant to Section 5.1 hereof, consistent with the
financial statements as at December 24, 1995 referenced in
Section 4.1); provided, however, if (a) the Borrower shall object
to determining such compliance on such basis at the time of
delivery of such financial statements due to any change in GAAP
or the rules promulgated with respect thereto or (b) the Agent or
the Required Lenders shall so object in writing within 30 days
after delivery of such financial statements, then such
calculations shall be made on a basis consistent with the most
recent financial statements delivered by the Borrower to the
Lenders as to which no such objection shall have been made. 

                                   SECTION 2

                             THE CREDIT FACILITIES

          2.1  Revolving Loans.

               (a)    Commitment.  Subject to the terms and
conditions of this Credit Agreement, each Lender severally agrees
to make revolving loans ("Committed Loans") to the Borrower from
time to time during the period from the date hereof to the
Termination Date in an aggregate principal amount not to exceed
such Lender's Commitment at any time in effect; provided,
however, that (A) with regard to each Lender individually, such
Lender's Committed Loans shall not exceed its Committed Amount
and (B) with regard to the Lenders collectively, the aggregate
amount of Committed Loans plus the aggregate amount of
Competitive Bid Loans shall not exceed the Total Committed
Amount.  Committed Loans may consist of Base Rate Loans or
Eurodollar Loans, or a combination thereof, as the Borrower may
request, and may be repaid and reborrowed in accordance with the
provisions hereof; provided, however that no more than six (6)
Eurodollar Loans shall be outstanding hereunder at any time.

               (b)  Committed Loan Borrowings.

                    (i)  Notice of Borrowing.  The Borrower shall
request a Committed Loan borrowing by written notice (or
telephone notice promptly confirmed in writing) to the Agent not
later than 11:00 A.M. (Charlotte, North Carolina time) on the
Business Day of the requested borrowing in the case of Base Rate
Loans, and on the second Business Day prior to the date of the
requested borrowing in the case of Eurodollar Loans.  Each such
request for borrowing shall be irrevocable and shall specify (A)
that a Committed Loan is requested, (B) the date of the requested
borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed, and (D) whether the borrowing
shall be comprised of Base Rate Loans, Eurodollar Loans or a
combination thereof, and if Eurodollar Loans are requested, the
Interest Period(s) therefor.  A form of Notice of Borrowing (a
"Notice of Borrowing") is attached as Schedule 2.1(b)(i).  If the
Borrower shall fail to specify in any such Notice of Borrowing
(I) an applicable Interest Period in the case of a Eurodollar
Loan, then such notice shall be deemed to be a request for an
Interest Period of one month, or (II) the type of Committed Loan
requested, then such notice shall be deemed to be a request for a
Base Rate Loan hereunder.  The Agent shall give notice to each
Lender promptly upon receipt of each Notice of Borrowing, the
contents thereof and each such Lender's share thereof.

                    (ii)  Minimum Amounts.  Each Committed Loan
borrowing shall be in a minimum aggregate amount of $2,500,000
and integral multiples of $1,000,000, in the case of Eurodollar
Loans and $500,000 in the case of Base Rate Loans, in excess
thereof (or the remaining amount of the Total Committed Amount,
if less).

                    (iii)  Advances.  Each Lender will make its
Commitment Percentage of each Committed Loan borrowing available
to the Agent for the account of the Borrower at the office of the
Agent specified in Schedule 2.1(a), or at such other office as
the Agent may designate in writing, by 1:00 P.M. (Charlotte,
North Carolina time) on the date specified in the applicable
Notice of Borrowing in Dollars and in funds immediately available
to the Agent.  Such borrowing will then be made available to the
Borrower by the Agent by crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made
available to the Agent by the Lenders and in like funds as
received by the Agent.

               (c)  Repayment.  The principal amount of all
Committed Loans shall be due and payable in full on the
Termination Date.

               (d)  Interest.  Subject to the provisions of
Section 2.3, Committed Loans shall bear interest at a per annum
rate equal to:

                    (i)  Base Rate Loans.  During such periods as
Committed Loans shall be comprised of Base Rate Loans, the sum of
the Base Rate plus the Applicable Percentage; and

                    (ii)  Eurodollar Loans.  During such periods
as Committed Loans shall be comprised of Eurodollar Loans, the
sum of the Eurodollar Rate plus the Applicable Percentage.

          Interest on Committed Loans shall be payable in arrears
on each Interest Payment Date.

               (e)  Committed Notes.  The Committed Loans made by
each Lender shall be evidenced by a duly executed promissory note
of the Borrower to each Lender substantially in the form of
Schedule 2.1(e).

          2.2  Competitive Bid Loan Subfacility.

               (a)  Competitive Bid Loans.  Subject to the terms
and conditions of this Credit Agreement, the Borrower may, from
time to time during the period from the date hereof to the
Termination Date, request and each Lender may, in its sole
discretion, agree to make, Competitive Bid Loans to the Borrower;
provided that the sum of the aggregate amount of Competitive Bid
Loans plus the aggregate amount of Committed Loans shall not
exceed the Total Committed Amount.  Each Competitive Bid Loan
shall be in a minimum aggregate principal amount of $2,500,000
and multiples of $1,000,000 in excess thereof.

               (b)  Competitive Bid Requests.  The Borrower may
solicit Competitive Bids by delivery of a Competitive Bid Request
substantially in the form of Schedule 2.2(b)-1 to the Agent by
12:00 Noon (Charlotte, North Carolina time) on the second
Business Day prior to the date of the requested Competitive Bid
Loan borrowing in the case of all other Competitive Bid Requests;
provided however that in no event may a Competitive Bid Request
be submitted more than four (4) Business Days prior to the date
of a requested Competitive Bid Loan borrowing.  A Competitive Bid
Request shall specify (i) the date of the requested Competitive
Bid Loan borrowing (which shall be a Business Day), (ii) the
amount of the requested Competitive Bid Loan borrowing and (iii)
the applicable Interest Periods requested.  The Agent shall,
promptly following its receipt of a Competitive Bid Request
notify the Lenders of its receipt and the contents thereof.  A
form of such notice is provided in Schedule 2.2(b)-2.  No more
than three (3) Competitive Bid Requests shall be submitted at any
one time (e.g., the Borrower may request Competitive Bids for no
more than three (3) different Interest Periods at a time) and
Competitive Bid Requests may be made no more frequently than once
every five (5) Business Days.  The Borrower shall make payment to
the Agent of a fee in the amount of $3,500 concurrently with
delivery of any Competitive Bid Request (whether or not any
Competitive Bid is offered by a Lender, accepted by the Borrower
or extended by the offering Lender pursuant thereto).

               (c)  Competitive Bid Procedure.  Each Lender may,
in its sole discretion, make one or more Competitive Bids to the
Borrower in response to a Competitive Bid Request.  Each
Competitive Bid must be received by the Agent not later than
10:00 A.M. (Charlotte, North Carolina time) on the Business Day
next succeeding the date of receipt by such Lender of the related
Competitive Bid Request.  A Lender may offer to make all or part
of the requested Competitive Bid Loan borrowing and may submit
multiple Competitive Bids in response to a Competitive Bid
Request.  The Competitive Bid shall specify (i) the particular
Competitive Bid Request as to which the Competitive Bid is
submitted, (ii) the minimum (which shall be not less than
$1,000,000 and integral multiples thereof) and maximum principal
amounts of the requested Competitive Bid Loan or Loans as to
which the Lender is willing to make, and (iii) the applicable
interest rate or rates and Interest Period or Periods therefor. 
A form of such Competitive Bid is provided in Schedule 2.2(c).  A
Competitive Bid submitted by a Lender in accordance with the
provisions hereof shall be irrevocable.  The Agent shall promptly
notify the Borrower of all Competitive Bids made and the terms
thereof and shall send a copy of each of the Competitive Bids to
the Borrower for its records as soon as practicable.

               (d)  Submission of Competitive Bids by Agent.  If
the Agent, in its capacity as a Lender, elects to submit a
Competitive Bid in response to the related Competitive Bid
Request, it shall submit such Competitive Bid directly to the
Borrower one-half of an hour earlier than the latest time at
which the other Lenders are required to submit their Competitive
Bids to the Agent in response to such Competitive Bid Request
pursuant to the terms of subsection (c) above.

               (e)  Acceptance of Competitive Bids.  The Borrower
may, in its sole and absolute discretion, subject only to the
provisions of this subsection (e), accept or reject any
Competitive Bid offered to it.  To accept a Competitive Bid, the
Borrower shall give written notification (or telephone notice
promptly confirmed in writing) substantially in the form of
Schedule 2.2(e) of its acceptance of any or all such Competitive
Bids.  Such notification must be received by the Agent not later
than 11:00 A.M. (Charlotte, North Carolina time) on the date on
which notice of election to make a Competitive Bid is to be given
by the Lenders pursuant to the terms of subsection (c) above;
provided, however, (i) the failure by the Borrower to give timely
notice of its acceptance of a Competitive Bid shall be deemed to
be a rejection thereof, (ii) the Borrower may accept Competitive
Bids only in ascending order of rates, (iii) the aggregate amount
of Competitive Bids accepted by the Borrower shall not exceed the
principal amount specified in the Competitive Bid Request, (iv)
the Borrower may accept a portion of a Competitive Bid in the
event, and to the extent, acceptance of the entire amount thereof
would cause the Borrower to exceed the principal amount specified
in the related Competitive Bid Request, subject however to the
minimum amounts provided herein (and provided that where two or
more Lenders submit a Competitive Bid at the same Competitive Bid
Rate, then the Borrower shall accept portions of the Competitive
Bids of such Lenders on a pro rata basis based upon the amount of
the Competitive Bids of such Lenders) and (v) no bid shall be
accepted for a Competitive Bid Loan unless such Competitive Bid
Loan is in a minimum principal amount of $1,000,000 and integral
multiples thereof, except that where a portion of a Competitive
Bid is accepted in accordance with the provisions of subsection
(iv) hereof, then in a minimum principal amount of $100,000 and
integral multiples thereof (but not in any event less than the
minimum amount specified in the Competitive Bid), and in
calculating the pro rata allocation of acceptances of portions of
multiple bids at a particular Competitive Bid Rate pursuant to
subsection (iv) hereof, the amounts shall be rounded to integral
multiples of $100,000 in a manner which shall be in the
discretion of the Borrower.  A notice of acceptance of a
Competitive Bid given by the Borrower in accordance with the
provisions hereof shall be irrevocable.  The Agent shall, not
later than 12:00 Noon (Charlotte, North Carolina time) on the
date of receipt by the Agent of a notification from the Borrower
of its acceptance and/or rejection of Competitive Bids, notify
each Lender of its receipt and the contents thereof.  Upon its
receipt from the Agent of notification of the Borrower's
acceptance of its Competitive Bid(s) in accordance with the terms
of this subsection (e), each successful bidding Lender will
thereupon become bound, subject to the other applicable
conditions hereof, to make the Competitive Bid Loan in respect of
which its bid has been accepted.

               (f)  Funding of Competitive Bid Loans.  Each of
which is to make a Competitive Bid Loan shall make its
Competitive Bid Loan borrowing available to the Agent for the
account of the Borrower (in Dollars and in funds immediately
available to the Agent) at the office of the Agent specified in
Schedule 2.1(a), or at such other office as the Agent may
designate in writing, by 1:30 P.M. (Charlotte, North Carolina
time) on the date specified in the Competitive Bid Request.  Such
borrowing will then be made available to the Borrower by
crediting the account of the Borrower on the books of such office
with the aggregate of the amount made available to the Agent by
the applicable Competitive Bid Lenders and in like funds as
received by the Agent.

               (g)  Maturity of Competitive Bid Loans.  Each
Competitive Bid Loan shall mature and be due and payable in full
on the last day of the Interest Period applicable thereto. 
Unless the Borrower shall give notice to the Agent otherwise, the
Borrower shall be deemed to have requested a Committed Revolving
Loan borrowing in the amount of the maturing Competitive Bid
Loan, the proceeds of which will be used to repay such
Competitive Bid Loan.

               (h)  Interest on Competitive Bid Loans.  Subject
to the provisions of Section 2.3, Competitive Bid Loans shall
bear interest for the benefit of the applicable Competitive Bid
Lender in each case at the Competitive Bid Rate applicable
thereto.  Interest on Competitive Bid Loans shall be payable in
arrears on each Interest Payment Date.

               (i)  Competitive Bid Loan Notes.  The Competitive
Bid Loans shall be evidenced by a duly executed promissory note
of the Borrower to each Lender in an original principal amount
equal to the Total Committed Amount and substantially in the form
of Schedule 2.2(i).

          2.3  Default Rate.  Overdue principal and, to the
extent permitted by law overdue interest in respect of each Loan
and any other overdue amount payable hereunder or under the other
Credit Documents hereunder or under the other Credit Documents
shall bear interest, payable on demand, at a per annum rate 2%
greater than the rate which would otherwise be applicable (or if
no rate is applicable, whether in respect of interest, fees or
other amounts, then 2% greater than the Base Rate).

          2.4  Extension and Conversion.  The Borrower shall have
the option, on any Business Day prior to the Termination Date, to
extend existing Loans into a subsequent permissible Interest
Period or to convert Loans into Loans of another type; provided,
however, that (i) except as provided in Section 2.9, Eurodollar
Loans may be converted into Base Rate Loans only on the last day
of the Interest Period applicable thereto, (ii) Eurodollar Loans
may be extended, and Base Rate Loans may be converted into
Eurodollar Loans, only if no Default or Event of Default is in
existence on the date of extension or conversion, (iii) Loans
extended as, or converted into, Eurodollar Loans shall be subject
to the terms of the definition of "Interest Period" set forth in
Section 1.1 and shall be in such minimum amounts as provided in
Section 2.1(b)(ii), and (iv) any request for extension or
conversion of a Eurodollar Loan which shall fail to specify an
Interest Period shall be deemed to be a request for an Interest
Period of one month.  Each such extension or conversion shall be
effected by the Borrower by giving a Notice of
Extension/Conversion (or telephone notice promptly confirmed in
writing) to the Agent prior to 11:00 A.M. (Charlotte, North
Carolina time) on the Business Day of, in the case of the
conversion of a Eurodollar Loan into a Base Rate Loan, and on the
second Business Day prior to, in the case of the extension of a
Eurodollar Loan as, or conversion of a Base Rate Loan into, a
Eurodollar Loan, the date of the proposed extension or
conversion, specifying the date of the proposed extension or
conversion, the Loans to be so extended or converted, the types
of Loans into which such Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect
thereto.  Each request for extension or conversion shall
constitute a representation and warranty by the Borrower of the
matters specified in subsections (b), (c) and (d) of Section 3.2. 
In the event the Borrower fails to request extension of or
conversion into any Eurodollar Loan in accordance with this
Section, or any such conversion or extension is not permitted or
required by this Section, then such Loans shall be automatically
converted into Base Rate Loans at the end of their Interest
Period.  The Agent shall give each Lender notice as promptly as
practicable of any such proposed extension or conversion
affecting any Loan.

          2.5  Reductions in Commitments and Prepayments.

               (a)  Termination of Commitments Generally.  The
Borrower may at any time, upon not less than five (5) Business
Days' written notice to the Agent, terminate the Commitments, in
whole or in part; provided that (i) the Commitments shall not be
terminated to an amount less than the sum of the aggregate amount
of Competitive Bid Loans plus the aggregate amount of Committed
Loans and (ii) partial terminations shall be in a minimum
principal amount of $10,000,000 and multiples of $1,000,000 in
excess thereof.  Partial terminations in the Commitments will
serve to reduce each of the Lenders' respective Committed Amount
ratably in accordance with the provisions of Section 2.13(a). 
Terminations of the Commitments, in whole or in part, pursuant to
this subsection (a) are permanent and may not be reinstated.

               (b)  Voluntary Prepayments.  The Borrower may
prepay the Loans, in whole or in part; provided that (i)
Committed Loans which are Eurodollar Loans and Competitive Bid
Loans may be prepaid only with three (3) Business Days' prior
written notice (or telephone notice promptly confirmed in
writing) to the Agent and any such prepayment of Committed Loans
which are Eurodollar Loans and Competitive Bid Loans shall be
accompanied by any amounts owing under Section 2.12 on account
thereof, and (ii) partial prepayments shall be in a minimum
principal amount of $2,500,000 and multiples of $1,000,000 in
excess thereof.  Amounts paid under this subsection (b) shall be
applied as the Borrower may direct, or if the Borrower shall fail
to make any such direction, first to Committed Loans which are
Base Rate Loans, second to Committed Loans which are Eurodollar
Loans in direct order of Interest Period maturities and third to
Competitive Bid Loans in direct order of Interest Period
maturities.  Amounts paid under this subsection (b) may be
reborrowed in accordance with the provisions of this Credit
Agreement.  A form of Notice of Voluntary Prepayment is provided
as Schedule 2.5(b).

               (c) Mandatory Prepayments.  If at any time the sum
of the aggregate amount of Competitive Bid Loans plus the
aggregate amount of Committed Loans shall exceed the Total
Committed Amount, the Borrower shall immediately make payment on
the Loans in an amount sufficient to eliminate the deficiency. 
Amounts paid under this subsection (c) shall be applied as the
Borrower may direct, or if the Borrower shall fail to make any
such direction, first to Committed Loans which are Base Rate
Loans, second to Committed Loans which are Eurodollar Loans in
direct order of Interest Period maturities and third to
Competitive Bid Loans in direct order of Interest Period
maturities.

               (d)  Notice.  In the case of voluntary prepayments
under subsection (b) hereof, the Borrower will give notice to the
Agent of its intent to make such a prepayment by 11:00 A.M.
(Charlotte, North Carolina time) three (3) Business Days', in the
case of Committed Loans which are Eurodollar Loans and
Competitive Bid Loans, and one (1) Business Day prior, in all
other cases, prior to the date of prepayment.

          2.6  Facility Fee.  In consideration of the Commitments
by the Lenders hereunder, the Borrower agrees to pay to the Agent
for the ratable benefit of the Lenders a facility fee (the
"Facility Fee") equal to the Applicable Percentage per annum on
the Total Committed Amount in effect from time to time for the
applicable period.  The Facility Fee shall accrue from the date
hereof and shall be payable quarterly in arrears on the last day
of each calendar quarter.

          2.7  Capital Adequacy.  If, after the date hereof, any
Lender has determined that the adoption or effectiveness of any
applicable law, rule or regulation regarding capital adequacy, or
any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Lender with any
request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the
rate of return on such Lender's capital or assets as a
consequence of its commitments or obligations hereunder (after
taking into account any resulting increase in the Eurodollar Rate
due to any increase in the Eurodollar Reserve Percentage) to a
level below that which such Lender could have achieved but for
such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital
adequacy), then, upon notice from such Lender, the Borrower shall
pay to such Lender, without duplication, such additional amount
or amounts as will compensate such Lender for such reduction. 
Each determination by any such Lender of amounts owing under this
Section shall, absent manifest error, be conclusive and binding
on the parties hereto.

          2.8  Inability To Determine Interest Rate.  If prior to
the first day of any Interest Period, the Agent shall have
determined (which determination shall be conclusive and binding
upon the Borrower) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, the
Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter.  If
such notice is given (i) any Eurodollar Loans requested to be
made on the first day of such Interest Period shall be made as
Base Rate Loans, (ii) any Loans that were to have been converted
on the first day of such Interest Period to or continued as
Eurodollar Loans shall be converted to or continued as Base Rate
Loans and (iii) any outstanding Eurodollar Loans shall be
converted, on the first day of such Interest Period, to Base Rate
Loans.  Until such notice has been withdrawn by the Agent, no
further Eurodollar Loans shall be made or continued as such, nor
shall the Borrower have the right to convert Base Rate Loans to
Eurodollar Loans.

          2.9  Illegality.  Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of
Law or in the interpretation or application thereof occurring
after the Closing Date shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Credit
Agreement, (a) such Lender shall promptly give written notice of
such circumstances to the Borrower and the Agent (which notice
shall be withdrawn whenever such circumstances no longer exist),
(b) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert a Base Rate
Loan to Eurodollar Loans shall forthwith be canceled and, until
such time as it shall no longer be unlawful for such Lender to
make or maintain Eurodollar Loans, such Lender shall then have a
commitment only to make a Base Rate Loan when a Eurodollar Loan
is requested and (c) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to
Base Rate Loans on the respective last days or the then current
Interest Periods with respect to such Loans or within such
earlier period as required by law.  If any such conversion of a
Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower
shall pay to such Lender such amounts, if any, as may be required
pursuant to subsection 2.12.

          2.10  Requirements of Law.  If the adoption of or any
change in any Requirement of Law or in the interpretation or
application thereof applicable to any Lender, or compliance by
any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental
Authority, in each case made subsequent to the Closing Date (or,
if later, the date on which such Lender becomes a Lender): (i)
shall subject such Lender to any tax of any kind whatsoever with
respect to or any Eurodollar Loans made by it or its obligation
to make Eurodollar Loans, or change the basis of taxation of
payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by subsection 2.11 (including
Non-Excluded Taxes imposed solely by reason of any failure of
such Lender to comply with its obligations under subsection
2.11(b)) and changes in taxes measured by or imposed upon the
overall net income, or franchise tax (imposed in lieu of such net
income tax), of such Lender or its applicable lending office,
branch, or any affiliate thereof); (ii)  shall impose, modify or
hold applicable any reserve, special deposit, compulsory loan or
similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by,
any office of such Lender which is not otherwise included in the
determination of the Eurodollar Rate hereunder; or (iii)  shall
impose on such Lender any other condition (excluding any tax of
any kind whatsoever); and the result of any of the foregoing is
to increase the cost to such Lender, by an amount which such
Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any
amount receivable hereunder in respect thereof, then, in any such
case, upon notice to the Borrower from such Lender, through the
Agent, in accordance herewith, the Borrower shall promptly pay
such Lender, upon its demand and without duplication, any
additional amounts necessary to compensate such Lender for such
increased cost or reduced amount receivable, provided that (i) in
any such case, the Borrower may elect to convert the Eurodollar
Loans made by such Lender hereunder to Base Rate Loans by giving
the Agent at least one Business Day's notice of such election, in
which case the Borrower shall promptly pay to such Lender, upon
demand, without duplication, such amounts, if any, as may be
required pursuant to Section 2.12 and (ii) no such amounts shall
be payable in excess of the amounts that such Lender could have
realized had all outstanding Loans been funded at the Prime Rate. 
If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall provide prompt notice
thereof to the Borrower, through the Agent, certifying (x) that
one of the events described in this paragraph (a) has occurred
and describing in reasonable detail the nature of such event, (y)
as to the increased cost or reduced amount resulting from such
event and (z) as to the additional amount demanded by such Lender
and a reasonably detailed explanation of the calculation thereof. 
Such a certificate as to any additional amounts payable pursuant
to this subsection submitted by such Lender, through the Agent,
to the Borrower shall be conclusive in the absence of manifest
error.  This covenant shall survive the termination of this
Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.

          2.11  Taxes.

               (a)  Except as provided below in this subsection,
all payments made by the Borrower under this Credit Agreement and
the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges,
fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by Governmental
Authority, excluding (i) taxes measured by or imposed upon the
overall net income of any Lender or its applicable lending
office, or any branch or affiliate thereof, and all franchise
taxes, branch taxes, taxes on doing business or taxes on the
overall capital or net worth of any Lender or its applicable
lending office, or any branch or affiliate thereof, in each case
imposed in lieu of net income taxes, or (ii) any taxes arising
after the Closing Date solely as a result of or attributable to a
Lender changing any applicable lending office after the date that
such Lender becomes a party hereto, imposed: (i) by the
jurisdiction under the laws of which such Lender, applicable
lending office, branch or affiliate is organized or is located,
or in which its principal executive office is located, or any
nation within which such jurisdiction is located or any political
subdivision thereof; or (ii) by reason of any connection between
the jurisdiction imposing such tax and such Lender, applicable
lending office, branch or affiliate other than a connection
arising solely from such Lender having executed, delivered or
performed its obligations, or received payment under or enforced,
this Credit Agreement or the Notes.  If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld
from any amounts payable to the Agent or any Lender hereunder,
(A) the amounts so payable to the Agent or such Lender shall be
increased to the extent necessary to yield to the Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any
such other amounts payable hereunder at the rates or in the
amounts specified in this Credit Agreement, provided, however,
that a Borrower shall be entitled to deduct and withhold any
Excluded Taxes and shall not be required to increase any such
amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such
Lender fails to comply with the requirements of paragraph (b) of
this subsection whenever any Non-Excluded Taxes are payable by
such Borrower, and (B) as promptly as possible thereafter such
Borrower shall send to the Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of
an original official receipt received by such Borrower showing
payment thereof.  If a Borrower fails to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fails to
remit to the Agent the required receipts or other required
documentary evidence, such Borrower shall indemnify the Agent and
the Lenders for any incremental taxes, interest or penalties that
may become payable by the Agent or any Lender as a result of any
such failure.  The agreements in this subsection shall survive
the termination of this Credit Agreement and the payment of the
Loans and all other amounts payable hereunder.

               (b)  Each Lender that is not incorporated under
the laws of the United States of America or a state thereof
shall:

                    (X)(i)  on or before the date of any payment
                    by the Borrower under this Credit Agreement 
                    or Notes to such Lender, deliver to the
                    Borrower and the Agent (A) two duly completed
                    copies of United States Internal Revenue 
                    Service Form 1001 or 4224, or successor
                    applicable form, as the case may be, 
                    certifying that it is entitled to receive 
                    payments under this Credit Agreement and any 
                    Notes without deduction or withholding of any 
                    United States federal income taxes and (B) an 
                    Internal Revenue Service Form W-8 or W-9,
                    or successor applicable form, as the case may
                    be, certifying that it is entitled to an 
                    exemption from United States backup           
                    withholding tax;

                    (ii)  deliver to the Borrower and the Agent
                    two further copies of any such form or 
                    certification on or before the date that any
                    such form or certification expires or becomes
                    obsolete and after the occurrence of any 
                    event requiring a change in the most recent
                    form previously delivered by it to the 
                    Borrower; and

                    (iii)  obtain such extensions of time for 
                    filing and complete such forms or 
                    certifications as may reasonably be requested
                    by the Borrower or the Agent; or

               (Y)  in the case of any such Lender that is not a
               "bank" within the meaning of Section 881(c)(3)(A)
               of the Code, (i) represent to the Borrower (for 
               the benefit of the Borrower and the Agent) that it
               is not a bank within the meaning of Section 
               881(c)(3)(A) of the Code, (ii) agree to furnish to
               the Borrower on or before the date of any payment
               by the Borrower, with a copy to the Agent (A) a
               certificate substantially in the form of Schedule
               2.11 hereto (any such certificate a "U.S. Tax
               Compliance Certificate") and (B) two accurate and
               complete original signed copies of Internal                  
               Revenue Service Form W-8, or successor applicable               
               form certifying to such Lender's legal entitlement
               at the date of such certificate to an exemption 
               from U.S. withholding tax under the provisions of
               Section 881(c) of the Code with respect to 
               payments to be made under this Credit Agreement 
               and any Notes (and to deliver to the Borrower and
               the Agent two further copies of such form on or 
               before the date it expires or becomes obsolete and
               after the occurrence of any event requiring a 
               change in the most recently provided form and, if
               necessary, obtain any extensions of time 
               reasonably requested by the Borrower or the Agent
               for filing and completing such forms), and (iii)
               agree, to the extent legally entitled to do so, 
               upon reasonable request by the Borrower, to 
               provide to the Borrower (for the benefit of the
               Borrower and the Agent) such other forms as may be
               reasonably required in order to establish the 
               legal entitlement of such Lender to an exemption 
               from withholding with respect to payments under 
               this Credit Agreement and any Notes; unless in any
               such case any change in treaty, law or regulation
               has occurred after the date such Person becomes a
               Lender hereunder which renders all such forms 
               inapplicable or which would prevent such Lender
               from duly completing and delivering any such form
               with respect to it and such Lender so advises the
               Borrower and the Agent.  Each Person that shall 
               become a Lender or a Participant pursuant to
               subsection 8.2 shall, upon the effectiveness of 
               the related transfer, be required to provide all 
               of the forms, certifications and statements 
               required pursuant to this subsection, provided 
               that in the case of a Participant the obligations
               of such Participant pursuant to this subsection 
               (b) shall be determined as if the Participant were
               a Lender except that such Participant shall 
               furnish all such required forms, certifications 
               and statements to the Lender from which the 
               related participation shall have been purchased.

          2.12  Indemnity.  The Borrower agrees to indemnify each
Lender and to hold each Lender harmless from any loss or expense
which such Lender may sustain or incur (other than through such
Lender's gross negligence or willful misconduct) as a consequence
of (a) default by the Borrower in making a borrowing of a
Eurodollar Loan or a Competitive Bid Loan, conversion into a
Eurodollar Loan or a Competitive Bid Loan, or continuation of
Eurodollar Loans after the Borrower has given a notice requesting
the same in accordance with the provisions of this Credit
Agreement, (b) default by the Borrower in making any prepayment
of a Eurodollar Loan or a Competitive Bid Loan after the Borrower
has given a notice thereof in accordance with the provisions of
this Credit Agreement or (c) the making of a prepayment of a
Eurodollar Loan or a Competitive Bid Loan on a day which is not
the last day of an Interest Period with respect thereto.  Such
indemnification may include an amount equal to the excess, if
any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of
such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to
borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the
applicable rate of interest for such Eurodollar Loans or
Competitive Bid Loans, as appropriate (excluding in the case of
Eurodollar Loans, however, the margin in excess of the Eurodollar
Rate included therein, if any) over (ii) the amount of interest
(as reasonably determined by such Lender) which would have
accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the
interbank Eurodollar market.  This covenant shall survive the
termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.

          2.13  Pro Rata Treatment.  Except to the extent
otherwise provided herein:

               (a)  Committed Loans.  Each Committed Loan
borrowing, each payment or prepayment of principal of any
Committed Loan and each payment of interest on the Committed
Loans, each reduction of the Committed Amount, and each
conversion or continuation of any Loan, shall be allocated among
the relevant Lenders in accordance with the respective applicable
Commitment Percentages (or, if the Commitments of such Lenders
have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Committed Loans
of such Lenders); and

               (b)  Advances.  Unless the Agent shall have been
notified in writing by any Lender prior to a Committed Loan
borrowing that such Lender will not make the amount that would
constitute its Commitment Percentage of such borrowing available
to the Agent, the Agent may assume that such Lender is making
such amount available to the Agent, and the Agent may, in
reliance upon such assumption, make available to the Borrower a
corresponding amount.  If such amount is not made available to
the Agent by the required time on the Borrowing Date therefor,
such Lender shall pay to the Agent, on demand, such amount with
interest thereon at a rate equal to the Base Rate for the period
until such Lender makes such amount immediately available to the
Agent.  A certificate of the Agent submitted to any Lender with
respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.  If such Lender's
Commitment Percentage of such Committed Loan borrowing is not
made available to the Agent by such Lender within two Business
Days of such Borrowing Date, the Agent shall notify the Borrower
of the failure of such Lender to make such amount available to
the Agent and the Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to
Base Rate Loans hereunder, on demand, from the Borrower.

          2.14  Sharing of Payments.  The Lenders agree among
themselves that, in the event that any Lender shall obtain
payment in respect of any Loan or any other obligation owing to
such Lender under this Credit Agreement through the exercise of a
right of setoff, banker's lien or counterclaim, or pursuant to a
secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of,
such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment
as provided for in this Credit Agreement, such Lender shall
promptly purchase from the other Lenders a participation in such
Loans and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end
that all Lenders share such payment in accordance with their
respective ratable shares as provided for in this Credit
Agreement.  The Lenders further agree among themselves that if
payment to a Lender obtained by such Lender through the exercise
of a right of setoff, banker's lien, counterclaim or other event
as aforesaid shall be rescinded or must otherwise be restored,
each Lender which shall have shared the benefit of such payment
shall, by repurchase of a participation theretofore sold, return
its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose
payment shall have been rescinded or otherwise restored.  The
Borrower agrees that any Lender so purchasing such a
participation may, to the fullest extent permitted by law,
exercise all rights of payment, including setoff, banker's lien
or counterclaim, with respect to such participation as fully as
if such Lender were a holder of such Loan or other obligation in
the amount of such participation.  Except as otherwise expressly
provided in this Credit Agreement, if any Lender or the Agent
shall fail to remit to the Agent or any other Lender an amount
payable by such Lender or the Agent to the Agent or such other
Lender pursuant to this Credit Agreement on the date when such
amount is due, such payments shall be made together with interest
thereon for each date from the date such amount is due until the
date such amount is paid to the Agent or such other Lender at a
rate per annum equal to the Base Rate.  If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives
a secured claim in lieu of a setoff to which this Section 2.14
applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders under this Section 2.14
to share in the benefits of any recovery on such secured claim.

          2.15  Place and Manner of Payments.  Except as
otherwise specifically provided herein, all payments hereunder
shall be made to the Agent in dollars in immediately available
funds, without offset, deduction, counterclaim or withholding of
any kind, at its offices specified in Schedule 2.1(a) not later
than 2:00 P.M. (Charlotte, North Carolina time) on the date when
due.  Payments received after such time shall be deemed to have
been received on the next succeeding Business Day.  The Agent may
(but shall not be obligated to) debit the amount of any such
payment which is not made by such time to any ordinary deposit
account of the Borrower maintained with the Agent (with notice to
the Borrower).  The Borrower shall, at the time it makes any
payment under this Credit Agreement, specify to the Agent the
Loans, fees or other amounts payable by the Borrower hereunder to
which such payment is to be applied (and in the event that it
fails so to specify, or if such application would be inconsistent
with the terms hereof, the Agent shall distribute such payment to
the Lenders in such manner as the Agent may determine to be
appropriate in respect of obligations owing by the Borrower
hereunder, subject to the terms of Section 2.5(c)).  The Agent
will distribute such payments to such Lenders, if any such
payment is received prior to 12:00 Noon (Charlotte, North
Carolina time) on a Business Day in like funds as received prior
to the end of such Business Day and otherwise the Agent will
distribute such payment to such Lenders on the next succeeding
Business Day.  Whenever any payment hereunder shall be stated to
be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day (subject to
accrual of interest and fees for the period of such extension),
except that in the case of Eurodollar Loans, if the extension
would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next
preceding Business Day.  Except as expressly provided otherwise
herein, all computations of interest and fees shall be made on
the basis of actual number of days elapsed over a year of 360
days, except with respect to computation of interest on Base Rate
Loans which shall be calculated based on a year of 365 or 366
days, as appropriate.  Interest shall accrue from and include the
date of borrowing, but exclude the date of payment. 

          2.16  Replacement of Lenders.  If any Lender delivers a
notice to the Borrower pursuant to Sections 2.7, 2.9, 2.10 or
2.11, then the Borrower shall have the right, if no Default or
Event of Default then exists, to replace such Lender (the
"Replaced Lender") with one or more additional banks or financial
institutions (collectively, the "Replacement Lender"), provided
that (A) at the time of any replacement pursuant to this Section
2.16, the Replacement Lender shall enter into one or more
assignment agreements substantially in the form of Schedule
8.2(b) pursuant to, and in accordance with the terms of, Section
8.2(b) (and with all fees payable pursuant to said Section 8.2(b)
to be paid by the Replacement Lender) pursuant to which the
Replacement Lender shall acquire all of the rights and
obligations of the Replaced Lender hereunder and, in connection
therewith, shall pay to the Replaced Lender in respect thereof an
amount equal to the sum of (a) the principal of, and all accrued
interest on, all outstanding Loans of the Replaced Lender, and
(b) all accrued, but theretofore unpaid, fees owing to the
Replaced Lender pursuant to Section 2.6, and (B) all obligations
of the Borrower owing to the Replaced Lender (including all
obligations, if any, owing pursuant to Section 2.7, 2.10 or 2.11,
but excluding those obligations specifically described in clause
(A) above in respect of which the assignment purchase price has
been, or is concurrently being paid) shall be paid in full to
such Replaced Lender concurrently with such replacement.


                                   SECTION 3

                                   CONDITIONS

          3.1  Closing Conditions.  The obligation of the Lenders
to enter into this Credit Agreement and make the initial Loans is
subject to satisfaction of the following conditions (in form and
substance acceptable to the Lenders):

               (a)  Executed Credit Documents.  Receipt by the
Agent of duly executed copies of this Credit Agreement and the
Notes.

               (b)  No Default; Representations and Warranties. 
As of the Closing Date (i) there shall exist no Default or Event
of Default and (ii) all representations and warranties contained
herein and in the other Credit Documents shall be true and
correct in all material respects.

               (c)  Opinion of Counsel.  Receipt by the Agent of
an opinion, or opinions, satisfactory to the Agent, addressed to
the Agent and the Lenders and dated as of the Closing Date, from
legal counsel to the Borrower.

               (d)  Corporate Documents.  Receipt by the Agent of
the following:

                      (i)     Charter Documents.  Copies of the
articles or certificates of incorporation or other charter
documents of the Borrower certified to be true and complete as of
a recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation and certified by
a secretary or assistant secretary of the Borrower to be true and
correct as of the Closing Date.

                     (ii)     Bylaws.  A copy of the bylaws of
the Borrower certified by a secretary or assistant secretary of
the Borrower to be true and correct as of the Closing Date.

                    (iii)     Resolutions.  Copies of resolutions
of the Board of Directors of the Borrower approving and adopting
the Credit Documents, the transactions contemplated therein
and authorizing execution and delivery thereof, certified by a
secretary or assistant secretary of the Borrower to be true and
correct and in force and effect as of the Closing Date.

                     (iv)     Good Standing.  Copies of (a)
certificates of good standing, existence or its equivalent with
respect to the Borrower certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing would
have a Material Adverse Effect on the business or operations of
the Borrower in such jurisdiction and (b) to the extent
available, a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the appropriate
governmental taxing authorities.

               (e)  Material Adverse Change.  Since December 24,
1995, there shall not have occurred, nor otherwise exist, an
event or condition which has a Material Adverse Effect on the
Borrower. 

               (f)  Other.  Receipt by the Agent of such other
documents, agreements or information which may be reasonably
requested by the Lenders.

          3.2  Each Loan Advance.  The obligation of each Lender
to make any Loan advance, including the conversion to or
extension of any Eurodollar Loan, is subject to satisfaction of
the following conditions:

              (a)  (i) In the case of any Committed Loan, the
Agent shall have received an appropriate Notice of Borrowing or
Notice of Extension/Conversion; and (ii) in the case of any
Competitive Bid Loan, the applicable Competitive Bid Lender shall
have received an appropriate notice of acceptance of its related
Competitive Bid;


              (b)  The representations and warranties set forth
in Section 4 shall be true and correct on and as of the date of
the making of such Loan with the same force and effect as if made
on and as of such date (or, if any such representation or
warranty is expressly stated to have been made as of a specific
date, as of such specific date);

              (c)  There shall not have been commenced against
the Borrower an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or
any case, proceeding or other action for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of the Borrower or for any substantial part
of its Property or for the winding up or liquidation of its
affairs, and such involuntary case or other case, proceeding or
other action shall remain undismissed, undischarged or unbonded;
and

              (d)  No Default or Event of Default shall exist and
be continuing either prior to or after giving effect thereto.

The delivery of each Notice of Borrowing and each Notice of
Extension/Conversion relating to an extension of or conversion
into Eurodollar Loans and each request for a Competitive Bid
pursuant to a Competitive Bid Request shall constitute a
representation and warranty by the Borrower of the correctness of
the matters specified in subsections (b), (c) and (d) above.


                                   SECTION 4

                         REPRESENTATIONS AND WARRANTIES

          The Borrower represents and warrants to the Agent and
the Lenders as follows:

          4.1  Financial Statements.  The Borrower has furnished
to the Lenders copies of (i) the consolidated balance sheet of
the Borrower and its Subsidiaries as at June 25, 1995 and the
related consolidated statements of income, cash flows and
shareholders' equity for the fiscal year then ended and (ii) the
consolidated balance sheet of the Borrower and its Subsidiaries
as at December 24, 1995 and the related consolidated statements
of income, cash flows and shareholders equity for the period then
ended.  Such financial statements, including the related
schedules and notes, are complete and correct in all material
respects and fairly present the consolidated financial condition
of the Borrower and its Subsidiaries at such dates and the
results of their operations for such periods, all in accordance
with GAAP applied on a consistent basis (except as otherwise
stated therein or in the notes thereto throughout the periods
involved).

          4.2  Corporate Status.  The Borrower is a corporation
duly incorporated and organized and validly existing in good
standing in its jurisdiction of incorporation, is duly qualified
and in good standing as a foreign corporation and authorized to
do business in all other jurisdictions wherein the nature of its
business or property makes such qualification necessary, except
where its failure so to qualify would not have a Material Adverse
Effect, and has full power to own its real properties and its
personal properties and to carry on its business as now
conducted.

          4.3  Corporate Authorization.  The execution, delivery
and performance of this Credit Agreement and of the Notes are
within the powers and authority of the Borrower and have been
duly authorized by proper corporate proceedings.  This Credit
Agreement and Notes have been duly executed and delivered by the
Borrower and constitute the legal, valid and binding obligations
of the Borrower enforceable against the Borrower in accordance
with their respective terms.

          4.4  No Conflicts.  Neither the execution and delivery
of the Credit Agreement and Notes, nor the consummation of the
transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by the Borrower
will (a) violate or conflict with any provision of its articles
of incorporation or bylaws, (b) violate, contravene or conflict
with any law, regulation (including, without limitation,
Regulation U or Regulation X), order, writ, judgment, injunction,
decree or permit applicable to it, (c) violate, contravene or
conflict with contractual provisions of, or cause an event of
default under, any indenture, loan agreement, mortgage, deed of
trust, contract or other agreement or instrument to which it is a
party or by which it may be bound, the violation of which could
have or might be reasonably expected to have a Material Adverse
Effect, or (d) result in or require the creation of any Lien upon
or with respect to its properties.

          4.5  Liens.  The Borrower has no outstanding Liens
other than Permitted Liens.

          4.6  Litigation.  There are no actions, suits or
proceedings pending or, to the best knowledge of the Borrower,
threatened against or affecting the Borrower or any Subsidiary in
any court or arbitration or before or by any governmental
department, agency or instrumentality, domestic or foreign, which
reasonably would be expected to have a Material Adverse Effect;
and neither the Borrower nor any Subsidiary is in violation of
any judgment, order, writ, injunction, decree or award or in
violation of any rule or regulation of any court or binding
arbitration or governmental department, agency or
instrumentality, domestic or foreign, the violation of which
would have a Material Adverse Effect.

          4.7  Governmental and Other Approvals.  No approval,
consent or authorization of, or any other action by, or filing or
registration with, any governmental department, agency or
instrumentality, domestic or foreign, is necessary for the
execution or delivery by the Borrower of this Credit Agreement,
the Notes or for the performance by the Borrower of any of the
terms or conditions hereof or thereof.

          4.8  Use of Loans.  The proceeds of the Loans will be
used for (i) financing redemption of $230,000,000 6% Convertible
Subordinated Notes due March 25, 2002 and the call premium
thereon and (ii) general corporate purposes; provided that no
part of the proceeds of any Loan hereunder will be used for the
purpose of purchasing or carrying Margin Stock or to extend
credit to others for such purpose, in violation of Regulation U
or Regulation X issued by the Board of Governors of the Federal
Reserve System or Section 7 of the Securities Exchange Act of
1934, as amended.

          4.9  Taxes.  The Borrower has filed, or caused to be
filed, all tax returns (federal, state, local and foreign)
required to be filed and paid all amounts of taxes shown thereon
to be due (including interest and penalties) and has paid all
other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (a) which
are not yet delinquent, (b) that are being contested in good
faith and by proper proceedings, and against which adequate
reserves are being maintained in accordance with GAAP or (c)
which are promptly filed or paid upon notice to the Borrower of
the existence thereof.

          4.10  Compliance with Law. Each of the Borrower and its
Subsidiaries is in compliance with all laws, rules, regulations,
orders and decrees (including without limitation Environmental
Laws) applicable to it, or to its properties, unless such failure
to comply would not have or be reasonably expected to have a
Material Adverse Effect.

          4.11  ERISA.  Except as would not result in a Material
Adverse Effect: 

          (a)  During the five-year period prior to the date on
which this representation is made or deemed made: (i) no
Termination Event has occurred, and, to the best of the
Borrower's or any ERISA Affiliate's knowledge, no event or
condition has occurred or exists as a result of which any
Termination Event could reasonably be expected to occur, with
respect to any Plan; (ii) no "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of
the Code, whether or not waived, has occurred with respect to any
Plan; (iii) each Single Employer Plan and, to the best of the
Borrower's or any ERISA Affiliate's knowledge, each Multiemployer
Plan has been maintained, operated, and funded in compliance with
its own terms and in material compliance with the provisions of
ERISA, the Code, and any other applicable federal or state laws;
and (iv) no lien in favor or the PBGC or a Plan has arisen or is
reasonably likely to arise on account of any Plan.

          (b)  The actuarial present value of all "benefit
liabilities" under each Single Employer Plan (determined within
the meaning of Section 401(a)(2) of the Code, utilizing the
actuarial assumptions used to fund such Plans), whether or not
vested, did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made,
exceed the current value of the assets of such Plan allocable to
such accrued liabilities.

          (c)  None of the Borrower, its Subsidiaries or any
ERISA Affiliate has incurred, or, to the best of the Borrower's
knowledge, are reasonably expected to incur, any withdrawal
liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan.  None of the Borrower, its Subsidiaries or any
ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of
Section 4241 of ERISA), is insolvent (within the meaning of
Section 4245 of ERISA), or has been terminated (within the
meaning of Title IV of ERISA), and no Multiemployer Plan is, to
the best of the Borrower's knowledge, reasonably expected to be
in reorganization, insolvent, or terminated.

          (d)  No prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility has occurred with respect to a Plan
which has subjected or may subject the Borrower, any of its
Subsidiaries or any ERISA Affiliate to any liability under
Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Code, or under any agreement or other instrument pursuant to
which the Borrower, any of its Subsidiaries or any ERISA
Affiliate has agreed or is required to indemnify any person
against any such liability.

          4.12  Hazardous Substances.  Except as would not
reasonably be expected to have a Material Adverse Effect, (i) the
real property owned or leased by the Borrower and its
Subsidiaries or on which the Borrower or any of its Subsidiaries
operates (the "Subject Property") is free from "hazardous
substances" as defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C.
[Subsection:4,6] 9601 et seq., as amended, and the regulations
promulgated thereunder, (ii) no portion of the Subject Property
is subject to federal, state or local regulation or liability
because of the presence of stored, leaked or spilled petroleum
products, hazardous wastes, "PCB's" or PCB items (as defined in
40 C.F.R. Subsection 763.3), underground storage tanks,
"asbestos" (as defined in 40 C.F.R. Subsection 763.63) or the
past or present accumulation, spillage or leakage of any such
substance, (iii) the Borrower and each of its Subsidiaries is in
compliance in all material respects with all federal, state and
local requirements relating to protection of health or the
environment in connection with the operation of their businesses,
and (iv) the Borrower does not know of any complaint or
investigation regarding real property which it or any of its
Subsidiaries owns or leases or on which it or any of its
Subsidiaries operates.


                                   SECTION 5

                                   COVENANTS

          So long as any of the Commitments are in effect and, in
any event, until payment in full and discharge of all Obligations
to the Agent and the Lenders, including payment of all principal
and interest on the Loans, the Borrower shall comply, and shall
cause each Subsidiary, to the extent applicable, to comply, with
the following covenants: 

          5.1  Financial Statements.  Furnish to the Agent (with
sufficient copies for each of the Lenders):

               (a)  Annual Financial Statements.  As soon as
available,  but in any event within 90 days after the end of each
fiscal year of the Borrower, a copy of the consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the
end of such fiscal year and the related consolidated statements
of earnings and of cash flows of the Borrower and its
consolidated Subsidiaries for such year, setting forth in each
case in comparative form the figures for the previous year,
reported on without a "going concern" or like qualification or
exception, or qualification indicating that the scope of the
audit was inadequate to permit such independent certified public
accountants to certify such financial statements without such
qualification, by Ernst & Young, LLP or other firm of independent
certified public accountants of nationally recognized standing;
and 

               (b)  Quarterly Financial Statements.  As soon as
available and in any event within 45 days after the end of each
of the first three fiscal quarters of the Borrower, a
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such period and related statements
of earnings and of cash flows for the Borrower and its
consolidated Subsidiaries for such quarterly period and for the
portion of the fiscal year ending with such period, in each case
setting forth in comparative form consolidated figures for the
corresponding period or periods of the preceding fiscal year
(subject to normal recurring year-end audit adjustments), all in
reasonable form and detail acceptable to the Agent and the
Required Lenders; all such financial statements to be prepared in
reasonable detail in accordance with GAAP applied consistently
throughout the periods reflected therein.

          5.2  Certificates; Other Information.  Furnish to the
Agent (with sufficient copies for each of the Lenders):

               (a)  concurrently with the delivery of the
financial statements referred to in Sections 5.1(a) and 5.1(b)
above, a certificate of a Responsible Officer stating that, to
the best of such Responsible Officer's knowledge, the Borrower
during such period observed or performed in all material respects
all of its covenants and other agreements, and satisfied in all
material respects every material condition, contained in this
Credit Agreement to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of
any Default or Event of Default except as specified in such
certificate and such certificate shall include the calculations
required to indicate compliance with Section 5.9;

               (b)  within thirty days after the same are sent,
copies of all reports (other than those otherwise provided
pursuant to subsection 5.1 and those which are of a promotional
nature) and other financial information which the Borrower sends
to its stockholders, and within thirty days after the same are
filed, copies of all financial statements and non-confidential
reports which the Borrower may make to, or file with, the
Securities and Exchange Commission or any successor or analogous
Governmental Authority;

               (c)  promptly, such additional financial and other
information as the Agent, on behalf of any Lender, may from time
to time reasonably request.

          5.3  Payment of Obligations.  Pay, discharge or
otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, in accordance with industry
practice (subject, where applicable, to specified grace periods)
all its material obligations of whatever nature and any
additional costs that are imposed as a result of any failure to
so pay, discharge or otherwise satisfy such obligations, except
when the amount or validity of such obligations and costs is
currently being contested in good faith by appropriate
proceedings and reserves, if applicable, in conformity with GAAP
with respect thereto have been provided on the books of the
Borrower or its Subsidiaries, as the case may be.

          5.4  Conduct of Business and Maintenance of Existence. 
Continue to engage in business of the same general type as now
conducted by it on the date hereof and preserve, renew and keep
in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its
business; comply with all Contractual Obligations and
Requirements of Law applicable to it except to the extent that
failure to comply therewith would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.

          5.5  Insurance.  The Borrower shall maintain insurance
in such amounts and covering such risks as is consistent with
sound business practice.

          5.6  Inspection of Property; Books and Records;
Discussions. Keep proper books of records and account in which
full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and
transactions in relation to its businesses and activities; and
permit, during regular business hours and upon reasonable notice,
the Agent to visit and inspect any of its properties and examine
and make abstracts from any of its books and records (other than
materials protected by the attorney-client privilege and
materials which the Borrower may not disclose without violation
of a confidentiality obligation binding upon it) at any
reasonable time and as often as may reasonably be desired, and to
discuss the business, operations, properties and financial and
other condition of the Borrower and its Subsidiaries with
officers and employees of the Borrower and its Subsidiaries and
with its independent certified public accountants.

          5.7  Notices.  Give notice to the Agent (which shall
promptly transmit such notice to each Lender) of:

               (a)  within five Business Days after the Borrower
knows thereof, the occurrence of any Default or Event of Default;

               (b)  promptly, any default or event of default
under any Contractual Obligation of the Borrower or any of its
Subsidiaries or the Borrower which would reasonably be expected
to have a Material Adverse Effect;

               (c)  promptly, any litigation, or any
investigation or proceeding known to the Borrower, affecting the
Borrower or any of its Subsidiaries or the Borrower which, if
adversely determined, would reasonably be expected to have a
Material Adverse Effect; and

               (d)  promptly, any other development or event
which would reasonably be expected to have a Material Adverse
Effect.

Each notice pursuant to this subsection shall be accompanied by a
statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the
Borrower proposes to take with respect thereto.

          5.8  Environmental Laws.

               (a)  Except to the extent that failure to do so
would not reasonably be expected to have a Material Adverse
Effect, comply in all material respects with, and ensure
compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws and
obtain and comply in all material respects with and maintain, and
ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by
applicable Environmental Laws;

               (b)  Conduct and complete all investigations,
studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws and promptly
comply in all material respects with all lawful orders and
directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being
contested in good faith by appropriate proceedings or the
pendency of such proceedings would not reasonably be expected to
have a Material Adverse Effect; and

               (c)  Defend, indemnify and hold harmless the
Agent, and the Lenders, and their respective employees, agents,
officers and directors, from and against any and all claims,
demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way resulting
from the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower,
any of its Subsidiaries or the properties, or any orders,
requirements or demands of Governmental Authorities related
thereto, including, without limitation, reasonable attorney's
and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to
the extent that any of the foregoing arise out of the negligence
or willful misconduct of the party seeking indemnification
therefor.  The agreements in this paragraph shall survive
repayment of the Notes and all other amounts payable hereunder.

          5.9  Financial Covenants.

               (a)  Consolidated Net Worth.  There shall be
maintained at all times a Consolidated Net Worth of at least
$400,000,000; provided that the minimum Consolidated Net Worth
required hereunder shall be increased (but not decreased) on the
last day of each fiscal quarter by an amount equal to 33% of
Consolidated Net Income for the fiscal quarter then ended.

               (b)  Interest Coverage Ratio.  There shall be
maintained as of the end of each fiscal quarter an Interest
Coverage Ratio of at least 2.5:1.0.

               (c)  Leverage Ratio.  There shall be maintained as
of the end of each fiscal quarter a Leverage Ratio of not greater
than 3.25:1.0.

          5.10  Funded Debt.  The Borrower will not, nor will it
permit any Subsidiary to, create, incur, assume or permit to
exist any Funded Debt, except for:

               (a)  Funded Debt arising or existing under this
Credit Agreement and evidenced by the Notes hereunder;

               (b)  Funded Debt existing as of the Closing Date
and disclosed in the financial statements referenced in Section
4.1 and in addition as set forth in Schedule 5.10;

               (c)  Funded Debt consisting of Capital Lease
Obligations or Indebtedness incurred or assumed to provide all or
a portion of the purchase price or cost of construction of an
asset provided that (i) such Indebtedness when incurred shall not
exceed the purchase or cost of construction of such asset; (ii)
no such Indebtedness shall be refinanced for a principal amount
in excess of the principal balance outstanding thereon at the
time of such refinancing; and (iii) the total aggregate amount of
all such Indebtedness shall not exceed $50,000,000 at any time
outstanding;

               (d)  Funded Debt arising or existing in connection
with a Permitted Receivables Financing;

               (e)  other Funded Debt of the Borrower, provided
that after giving effect thereto and to the application of
proceeds therefrom, the Leverage Ratio will not be excess of the
level permitted by Section 5.9(c) hereof; and

               (f)  renewals, extensions and refundings of Funded
Debt permitted by this Section 5.10, provided that after giving
effect thereto and to the application of proceeds therefrom, the
Leverage Ratio will not be in excess of the level permitted by
Section 5.9(c) hereof.

          5.11  Liens.  The Borrower will not, nor will it permit
any Subsidiary to, create, incur, assume or permit to exist any
Lien with respect to any of its property or assets of any kind
(whether real or personal, tangible or intangible), whether now
owned or hereafter acquired, except for Permitted Liens.

          5.12  Mergers and Consolidations.  The Borrower shall
(i) not sell, lease or otherwise transfer all or substantially
all of its property, assets and business to any other entity, and
(ii) not merge or consolidate with or into, or acquire all or
substantially all of the assets of, any other entity without the
prior written consent of the Required Lenders unless (A) the cash
consideration paid or payable by the Borrower and/or its
Subsidiaries in connection therewith in a transaction or series
or related transactions is less than an amount equal to 20% of
the Borrower's Consolidated Net Worth, and (B) no Default or
Event of Default shall exist prior to or after giving effect
thereto.


                                   SECTION 6

                               EVENTS OF DEFAULT

           6.1.  Events of Default.  Each of the following
occurrences shall constitute an "Event of Default" under this
Agreement:

               (A)  any representation or warranty made by the
Borrower to the Lenders in or in connection with this Credit
Agreement or any of the other Credit Documents shall prove to
have been false or misleading in any material respect when made
or furnished;

               (B)  the Borrower shall fail to pay

                    (i)  any principal of any Note as and when 
                    the same shall become due and payable, or

                    (ii) any interest on any Note, any Commitment
                    Fee or any other Obligation as and when the 
                    same shall become due and payable, and such 
                    failure shall continue unremedied for more 
                    than five days;

               (C)  the Borrower shall fail to pay when due,
whether by acceleration or otherwise, one or more evidences of
Indebtedness (other than the Notes hereunder) having an aggregate
unpaid balance of more than $10,000,000, and such failure shall
continue for more than the period of grace, if any, applicable
thereto and shall not have been waived;

               (D)  the Borrower shall fail to perform or observe
any other term, covenant or agreement contained in this Credit
Agreement or any other Credit Document on its part to be
performed or observed, and such failure shall continue unremedied
for a period of 30 days;

               (E)  the Borrower or any Subsidiary shall (i)
apply for or consent to the appointment of a receiver, custodian,
trustee or liquidator of the Borrower or such Subsidiary or any
of their respective properties or assets, (ii) generally fail or
admit in writing its inability to pay its debts as they become
due, (iii) make a general assignment for the benefit of
creditors, (iv) commence a voluntary case under the Bankruptcy
Code (as now or hereafter in effect), (v) file a petition seeking
to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or
readjustment of debts, (vi) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition
filed against the Borrower or such Subsidiary in an involuntary
case under the Bankruptcy Code or (vii) take any corporate action
for the purpose of effecting any of the foregoing;

               (F)  a proceeding or case shall be commenced,
without the application or consent of the Borrower or any in any
court of competent jurisdiction seeking (i) its liquidation,
reorganization, dissolution or winding-up or the composition or
readjustment of its debts, (ii) the appointment of a trustee,
receiver, custodian or liquidator of the Borrower or such
Subsidiary or of all or any substantial part of its assets or
(iii) similar relief in respect of the Borrower or such
Subsidiary under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts,
and such proceeding or case shall continue undismissed, or an
order, judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect,
for a period of 60 days; or an order for relief against the
Borrower or such Subsidiary shall be entered in an involuntary
case under the Bankruptcy Code;

               (G)  any of the following events or conditions,
which in the aggregate, reasonably could be expected to involve
possible taxes, penalties, and other liabilities in an aggregate
amount in excess of $10,000,000:  (1) any "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and
Section 412 of the Code, whether or not waived, shall exist with
respect to any Plan, or any lien shall arise on the assets of the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
in favor of the PBGC or a Plan; (2) a Termination Event shall
occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in the
termination of such Plan for purposes of Title IV of ERISA; (3) a
Termination Event shall occur with respect to a Multiemployer
Plan or Multiple Employer Plan, which is, in the reasonable
opinion of the Agent, likely to result in (i) the termination of
such Plan for purposes of Title IV of ERISA, or (ii) the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA),
or insolvency or (within the meaning of Section 4245 of ERISA)
such Plan; or (4) any prohibited transaction (within the meaning
of Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility shall occur which may subject the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
to any liability under Sections 406, 409, 502(i), or 502(l) of
ERISA or Section 4975 of the Code, or under any agreement or
other instrument pursuant to which the Borrower, any Subsidiary
of the Borrower or any ERISA Affiliate has agreed or is required
to indemnify any person against any such liability;

               (H)  any final judgment, final consent decree or
final order for the payment of money (or for the performance of
any remedial action or other services that would result in the
expenditure of funds by the Borrower or any of its Subsidiaries)
shall be rendered against the Borrower or any of its Subsidiaries
by any federal, state or local court or administrative agency and
the same shall fail to be discharged, stayed or bonded for a
period of 60 days after such final judgment, final consent decree
or final order for the payment of money (or, in the case of
performance obligations, shall fail to be performed in the manner
and at the times required in such final judgment, final consent
decree or final order or shall fail to otherwise be discharged,
stayed or bonded, in any such case, for a period of 60 days after
the performance of such obligations is required) provided that no
occurrence described in this subsection (H) shall constitute an
Event of Default unless the aggregate outstanding liability of
the Borrower and its Subsidiaries which has resulted from all
such occurrences shall exceed $10,000,000 (or its equivalent in
any other currency); or

               (I)  either (i) a "person" or a "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934) becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934) of more
than 50% of the then outstanding voting stock of the Borrower or
(ii) a majority of the Board of Directors of the Borrower shall
consist of individuals who are not Continuing Directors;
"Continuing Director" means, as of any date of determination, (i)
an individual who on the date two years prior to such
determination date was a member of the Borrower's Board of
Directors and

               (ii) any new Director whose nomination for
election by the Borrower's shareholders was approved by a vote of
at least 75% of the Directors then still in office who either
were Directors on the date two years prior to such determination
date or whose nomination for election was previously so approved.

           6.2.  Rights and Remedies.  Upon the occurrence of an
Event of Default, and at any time thereafter unless and until
such Event of Default has been waived by the Required Lenders or
cured to the satisfaction of the Required Lenders (pursuant to
the voting procedures in Section 8.5), the Agent shall, upon the
request and direction of the Required Lenders, by written notice
to the Borrower take any of the following actions without
prejudice to the rights of the Agent or any Lender to enforce its
claims against the Borrower, except as otherwise specifically
provided for herein:

             (i)  Termination of Commitments.  Declare the
Commitments terminated whereupon the Commitments shall be
immediately terminated.

            (ii)  Acceleration.  Declare the unpaid principal of
and any accrued interest in respect of all Loans and any and all
other amounts owing hereunder to any of the Lenders to be due
whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower.

           (iii)  Enforcement of Rights.  Enforce any and all
rights and interests created and existing under this Credit
Agreement and the Notes and all rights of set-off.

          Notwithstanding the foregoing, in the case of an Event
of Default specified in subsection (E) or (F) relating to a
Borrower or a Subsidiary, the respective Commitment of each
Lender shall be immediately terminated and the Notes, including
all interest thereon, and all other Obligations shall be
immediately due and payable, without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived
by the Borrower.


                                   SECTION 7

                               AGENCY PROVISIONS

          7.1  Appointment.  Each Lender hereby designates and
appoints NationsBank, N.A. as administrative agent (in such
capacity as Agent hereunder, the "Agent") of such Lender to act
as specified herein and the other Credit Documents, and each such
Lender hereby authorizes the Agent, as the agent for such Lender,
to take such action on its behalf under the provisions of this
Credit Agreement and the other Credit Documents and to exercise
such powers and perform such duties as are expressly delegated by
the terms hereof and of the other Credit Documents, together with
such other powers as are reasonably incidental thereto. 
Notwithstanding any provision to the contrary elsewhere herein
and in the other Credit Documents, the Agent shall not have any
duties or responsibilities, except those expressly set forth
herein and therein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Credit
Agreement or any of the other Credit Documents, or shall
otherwise exist against the Agent.  The provisions of this
Section are solely for the benefit of the Agent and the Lenders
and the Borrower shall not have any rights as a third party
beneficiary of the provisions hereof.  In performing its
functions and duties under this Credit Agreement and the other
Credit Documents, the Agent shall not act solely as agent of the
Lenders and does not assume and shall not be deemed to have
assumed any obligation or relationship of agency or trust with or
for the Borrower.

          7.2  Delegation of Duties.  The Agent may execute any
of its duties hereunder or under the other Credit Documents by or
through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such
duties.  The Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.

          7.3  Exculpatory Provisions.  Neither the Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact
or affiliates shall be (i) liable for any action lawfully taken
or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit
Documents (except for its or such Person's own gross negligence
or willful misconduct), or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or
warranties made by the Borrower contained herein or in any of the
other Credit Documents or in any certificate, report, statement
or other document referred to or provided for in, or received by
the Agent under or in connection herewith or in connection with
the other Credit Documents, or enforceability or sufficiency
herefor of any of the other Credit Documents, or for any failure
of the Borrower to perform its obligations hereunder or
thereunder.  The Agent shall not be responsible to any Lender for
the effectiveness, genuineness, validity, enforceability,
collectability or sufficiency of this Credit Agreement, or any of
the other Credit Documents or for any representations,
warranties, recitals or statements made herein or therein or made
by the Borrower in any written or oral statement or in any
financial or other statements, instruments, reports, certificates
or any other documents in connection herewith or therewith
furnished or made by the Agent to the Lenders or by or on behalf
of the Borrower to the Agent or any Lender or be required to
ascertain or inquire as to the performance or observance of any
of the terms, conditions, provisions, covenants or agreements
contained herein or therein or as to the use of the proceeds of
the Loans or of the existence or possible existence of any
Default or Event of Default or to inspect the properties, books
or records of the Borrower.

          7.4  Reliance on Communications.  The Agent shall be
entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and
upon advice and statements of legal counsel (including, without 
limitation, counsel to the Borrower, independent accountants and
other experts selected by the Agent with reasonable care).  The
Agent may deem and treat the Lenders as the owner of their
respective interests hereunder for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have
been filed with the Agent in accordance with Section 8.2(b)
hereof.  The Agent shall be fully justified in failing or
refusing to take any action under this Credit Agreement or under
any of the other Credit Documents unless it shall first receive
such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction
by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take
any such action.  The Agent shall in all cases be fully protected
in acting, or in refraining from acting, hereunder or under any
of the other Credit Documents in accordance with a request of the
Required Lenders (or to the extent specifically provided in
Section 8.5, all the Lenders) and such request and any action
taken or failure to act pursuant thereto shall be binding upon
all the Lenders (including their successors and assigns).

          7.5  Notice of Default.  The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Agent has received notice
from a Lender or the Borrower referring to the Credit Document,
describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent
receives such a notice, the Agent shall give prompt notice
thereof to the Lenders.  The Agent shall take such action with
respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders.

          7.6  Non-Reliance on Agent and Other Lenders.  Each
Lender expressly acknowledges that neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and
that no act by the Agent or any affiliate thereof hereinafter
taken, including any review of the affairs of the Borrower, shall
be deemed to constitute any representation or warranty by the
Agent to any Lender.  Each Lender represents to the Agent that it
has, independently and without reliance upon the Agent or any
other Lender, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of
the Borrower and made its own decision to make its Loans
hereunder and enter into this Credit Agreement.  Each Lender also
represents that it will, independently and without reliance upon
the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking
or not taking action under this Credit Agreement, and to make
such investigation as it deems necessary to inform itself as to
the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Borrower. 
Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Agent hereunder,
the Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the
business, operations, assets, property, financial or other
conditions, prospects or creditworthiness of the Borrower which
may come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.

          7.7  Indemnification.  The Lenders agree to indemnify
the Agent in its capacity as such (to the extent not reimbursed
by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their respective
Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including without limitation at any time
following the payment of the Obligations) be imposed on, incurred
by or asserted against the Agent in its capacity as such in any
way relating to or arising out of this Credit Agreement or the
other Credit Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated
hereby or thereby or any action taken or omitted by the Agent
under or in connection with any of the foregoing; provided that
no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from
the gross negligence or willful misconduct of the Agent.  If any
indemnity furnished to the Agent for any purpose shall, in the
opinion of the Agent, be insufficient or become impaired, the
Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such
additional indemnity is furnished.  The agreements in this
Section shall survive the payment of the Obligations and all
other amounts payable hereunder and under the other Credit
Documents.

          7.8  Agent in its Individual Capacity.  The Agent and
its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as
though the Agent were not Agent hereunder.  With respect to the
Loans made and all Obligations owing to it, the Agent shall have
the same rights and powers under this Credit Agreement as any
Lender and may exercise the same as though they were not Agent,
and the terms "Lender" and "Lenders" shall include the Agent in
its individual capacity.

          7.9  Successor Agent.  The Agent may, at any time,
resign upon 20 days' written notice to the Lenders.  Upon any
such resignation, the Required Lenders shall have the right to
appoint a successor Agent.  If no successor Agent shall have been
so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the notice of resignation,
as appropriate, then the retiring Agent shall select a successor
Agent provided such successor is a Lender hereunder or a
commercial bank organized under the laws of the United States of
America or of any State thereof and has a combined capital and
surplus of at least $400,000,000.  Upon the acceptance of any
appointment as Agent hereunder by a successor, such successor
Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and
obligations as Agent, as appropriate, under this Credit Agreement
and the other Credit Documents and the provisions of this Section
7.9 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Credit Agreement.

                                   SECTION 8

                                 MISCELLANEOUS

          8.1  Notices.  Except as otherwise expressly provided
herein, all notices and other communications shall have been duly
given and shall be effective (i) when delivered, (ii) when
transmitted via telecopy (or other facsimile device) to the
number set out below, (iii) the day following the day on which
the same has been delivered prepaid to a reputable national
overnight air courier service, or (iv) the third Business Day
following the day on which the same is sent by certified or
registered mail, postage prepaid, in each case to the respective
parties at the address, in the case of the Borrower and the
Agent, set forth below, and in the case of the Lenders, set forth
on Schedule 2.1(a), or at such other address as such party may
specify by written notice to the other parties hereto:

               if to the Borrower:

                    Unifi, Inc.
                    P.O. Box 19109
                    7201 W. Friendly Avenue
                    Greensboro, North Carolina  27410
                    Attn:  Robert A. Ward
                    Telephone: (910) 316-5461
                    Telecopy: (910) 294-4751

               with a copy to:

                    Frazier, Frazier & Mahler
                    Suite 206, Southeastern Building
                    102 N. Elm Street
                    P.O. Drawer  1559
                    Greensboro, North Carolina  27402
                    Attn:  C. Clifford Frazier
                    Telephone: (910) 378-7781
                    Telecopy: (910) 274-7358

               if to the Agent:

                    NationsBank, N.A.
                    101 N. Tryon Street
                    Independence Center, 15th Floor
                    NC1-001-15-04
                    Charlotte, North Carolina  28255
                    Attn:  Linda Ballard
                    Telephone: (704) 386-9368
                    Telecopy: (704) 386-9923

               with a copy to:

                    NationsBank, N.A.
                    NationsBank Corporate Center
                    100 N. Tryon Street, 8th Floor
                    NC1-007-08-01
                    Charlotte, North Carolina  28255
                    Attn:  Richard G. Parkhurst, Jr.
                    Telephone: (704) 386-1828
                    Telecopy: (704) 386-1270


          8.2  Benefit of Agreement.

               (a)  Generally.  This Credit Agreement shall be
binding upon and inure to the benefit of and be enforceable by
the respective successors and assigns of the parties hereto;
provided that the Borrower may not assign and transfer any of its
interests without prior written consent of the Lenders; provided
further that the rights of each Lender to transfer, assign or
grant participations in its rights and/or obligations hereunder
shall be limited as set forth in this Section 8.2, provided
however that nothing herein shall prevent or prohibit any Lender
from (i) pledging its Loans hereunder to a Federal Reserve Bank
in support of borrowings made by such Lender from such Federal
Reserve Bank, or (ii) granting assignments or participation in
such Lender's Loans and/or Commitments hereunder to its parent
company and/or to any affiliate of such Lender.

               (b)  Assignments.  Each Lender may, upon obtaining
the consent of the Borrower and the Agent (which consent shall
not be unreasonably withheld), assign all or a portion of its
rights and obligations hereunder pursuant to an assignment
agreement substantially in the form of Schedule 8.2(b) to one or
more additional banks or financial institutions, provided that
(i) no such consent shall be required with respect to any
assignment by a Lender to an affiliate of such Lender and no such
consent shall be required from the Borrower after the occurrence
and during the continuation of any Event of Default, and (ii) any
such assignment shall be in a minimum aggregate amount of
$25,000,000 of the Commitments and that each such assignment
shall be of a constant, not varying, percentage of all of the
assigning Lender's rights and obligations under this Credit
Agreement.  Any assignment hereunder shall be effective upon
execution by all necessary parties of the applicable assignment
agreement, together with the payment of a transfer fee of $3,500
to the Agent for the account of the Agent. The assigning Lender
will give prompt notice to the Agent and the Borrower of any such
assignment.  Upon the effectiveness of any such assignment (and
after notice to the Borrower as provided herein), the assignee
shall become a "Lender" for all purposes of this Credit Agreement
and the other Credit Documents and, to the extent of such
assignment, the assigning Lender shall be relieved of its
obligations hereunder to the extent of the Loans and Commitment
components being assigned.  Along such lines the Borrower agrees
that upon notice of any such assignment and surrender of the
appropriate Note or Notes, it will promptly provide to the
assigning Lender and to the assignee separate promissory notes in
the amount of their respective interests substantially in the
form of the original Note (but with notation thereon that it is
given in substitution for and replacement of the original Note or
any replacement notes thereof).

               (c)  Participations.  Each Lender may sell,
transfer, grant or assign participations in all or any part of
such Lender's interests and obligations hereunder; provided that
(i) such selling Lender shall remain a "Lender" for all purposes
under this Credit Agreement (such selling Lender's obligations
under the Credit Documents remaining unchanged) and the
participant shall not constitute a Lender hereunder, (ii) no such
participant shall have, or be granted, rights to approve any
amendment or waiver relating to this Credit Agreement or the
other Credit Documents except to the extent any such amendment or
waiver would (A) reduce the principal of or rate of interest on
or fees in respect of any Loans in which the participant is
participating, or (B) postpone the date fixed for any payment of
principal (including the date of any mandatory prepayment),
interest or fees in which the participant is participating, (iii)
sub-participations by the participant (except to an affiliate,
parent company or affiliate of a parent company of the
participant) shall be prohibited and (iv) any such participations
shall be in a minimum aggregate amount of $5,000,000 of the
Commitments and in integral multiples of $1,000,000 in excess
thereof.  In the case of any such participation, the participant
shall not have any rights under this Credit Agreement or the
other Credit Documents (the participant's rights against the
selling Lender in respect of such participation to be those set
forth in the participation agreement with such Lender creating
such participation) and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not sold such
participation.

          8.3  No Waiver; Remedies Cumulative.  No failure or
delay on the part of the Borrower, the Agent or any Lender in
exercising any right, power or privilege hereunder or under any
other Credit Document and no course of dealing between the
Borrower and the Agent or any Lender shall operate as a waiver
thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege hereunder or thereunder.  The
rights and remedies provided herein are cumulative and not
exclusive of any rights or remedies which the Agent or any Lender
would otherwise have.  No notice to or demand on the Borrower in
any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances or constitute
a waiver of the rights of the Agent or the Lenders to any other
or further action in any circumstances without notice or demand.

          8.4  Payment of Expenses, etc.  The Borrower agrees to:
(i) pay all reasonable out-of-pocket costs and expenses of the
Agent in connection with the negotiation, preparation, execution
and delivery and administration of the Credit Agreement and the
other Credit Documents and the documents and instruments referred
to therein (including, without limitation, the reasonable fees
and expenses of Moore & Van Allen, PLLC, special counsel to the
Agent) and any amendment, waiver or consent relating to this
Credit Agreement and the other Credit Documents to which it shall
consent, including, but not limited to, any such amendments,
waivers or consents resulting from or related to any work-out,
renegotiation or restructure relating to the performance by the
Borrower under this Credit Agreement and of the Agent and the
Lenders in connection with enforcement of the Credit Documents
and the documents and instruments referred to therein (including,
without limitation, in connection with any such enforcement, the
reasonable fees and disbursements of counsel for the Agent and
each of the Lenders); (ii) pay and hold each of the Lenders
harmless from and against any and all present and future stamp
and other similar taxes with respect to the foregoing matters and
save each of the Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay or
omission (other than to the extent attributable to such Lender)
to pay such taxes; and (iii) indemnify the Agent and each Lender,
their respective officers, directors, employees, representatives
and agents from and hold each of them harmless against any and
all losses, liabilities, claims, damages or expenses incurred by
any of them as a result of, or arising out of, or in any way
related to, or by reason of, any investigation, litigation or
other proceeding (whether or not the Agent or any Lender is a
party thereto) related to the entering into and/or performance of
any Credit Document or the use of proceeds of any Loans
(including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Credit
Document, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such
investigation, litigation or other proceeding (but excluding any
such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of gross negligence or willful
misconduct on the part of the Person to be indemnified).  All
legal fees to be paid in accordance with this Section 8.4 shall
be based on the actual amount of time expended in connection with
such matters at the usual hourly rates of such attorneys,
notwithstanding the provisions of N.C. Gen. Stat. Subsection 
6-21.2.

          8.5  Amendments, Waivers and Consents.  Neither this
Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived,
discharged or terminated unless such amendment, change, waiver,
discharge or termination is in writing signed by the Required
Lenders, provided that no such amendment, change, waiver,
discharge or termination shall, without the consent of each
Lender affected thereby, (i) extend the scheduled maturities
(including the final maturity and any mandatory prepayments) of
any Loan, or any portion thereof, or reduce the rate or extend
the time of payment of interest (other than as a result of
waiving the applicability of any post-default increase in
interest rates) thereon or fees hereunder or reduce the principal
amount thereof, or increase the Commitments of the Lenders over
the amount thereof in effect (it being understood and agreed that
a waiver of any Default or Event of Default or of a mandatory
reduction in the Commitments shall not constitute a change in the
terms of any Commitment of any Lender), (ii) amend, modify or
waive any provision of this Section or Section 2.9, 2.10, 2.11,
2.12, 2.14, 7.7, and 8.4, (iii) reduce any percentage specified
in, or otherwise modify, the definition of Required Lenders or
(iv) consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Credit Agreement.  No
provision of Section 7 may be amended without the consent of the
Agent.

          8.6  Counterparts.  This Credit Agreement may be
executed in any number of counterparts, each of which where so
executed and delivered shall be an original, but all of which
shall constitute one and the same instrument.  It shall not be
necessary in making proof of this Credit Agreement to produce or
account for more than one such counterpart. 
 
          8.7  Headings.  The headings of the sections and
subsections hereof are provided for convenience only and shall
not in any way affect the meaning or construction of any
provision of this Credit Agreement.

          8.8  Survival of Indemnification.  All indemnities set
forth herein, including, without limitation, in Sections 2.10,
2.11 or 2.12 or 8.4 shall survive the execution and delivery of
this Credit Agreement, and the making of the Loans, the repayment
of the Loans and other obligations and the termination of the
Commitment hereunder.

          8.9  Governing Law; Submission to Jurisdiction; Venue. 

               (a)  THIS CREDIT AGREEMENT AND THE OTHER CREDIT
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.  Any
legal action or proceeding with respect to this Credit Agreement
or any other Credit Document may be brought in the courts of the
State of North Carolina in Mecklenburg County, or of the United
States for the Western District of North Carolina, and, by
execution and delivery of this Credit Agreement, each party
hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of such
courts.

               (b)  Each party hereby irrevocably waives any
objection which it may now or hereafter have to the laying of
venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Credit Agreement or any other
Credit Document brought in courts referred to in subsection (a)
hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an
inconvenient forum. 

               (c)  EACH OF THE AGENTS, EACH OF THE LENDERS AND
THE BORROWER HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

          8.10  Severability.  If any provision of any of the
Credit Documents is determined to be illegal, invalid or
unenforceable, such provision shall be fully severable and the
remaining provisions shall remain in full force and effect and
shall be construed without giving effect  to the illegal, invalid
or unenforceable provisions.

          8.11  Entirety.  This Credit Agreement together with
the other Credit Documents represent the entire agreement of the
parties hereto and thereto, and supersede all prior agreements
and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.

          8.12  Survival of Representations and Warranties.  All
representations and warranties made by the Borrower herein shall
survive delivery of the Notes and the making of the Loans
hereunder.


                  [Remainder of Page Intentionally Left Blank]
<PAGE>

     IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Credit Agreement to be duly executed and
delivered as of the date first above written.

BORROWER:                UNIFI, INC.,
                         a New York corporation


                         By ROBERT A. WARD
                            ____________________________
                         Title  EXECUTIVE VICE PRESIDENT
                               _________________________



LENDERS:                 NATIONSBANK, N.A.,
                         individually in its capacity as a
                         Lender and in its capacity as Agent


                         By RICHARD G. PARKHURST 
                            _____________________________
                         Title VICE PRESIDENT
                               __________________________


                         WACHOVIA BANK OF NORTH CAROLINA, N.A.


                         By CHARLENE JOHNSON
                            _____________________________
                         Title VICE PRESIDENT
                               __________________________


                         CREDIT SUISSE


                         By GEOFFREY M. CRAIG
                            _____________________________
                         Title MEMBER OF MANAGEMENT
                              __________________________


                         By KRISTINN R. KRISTINSSON 
                            _____________________________
                         Title  ASSOCIATE 
                              __________________________



<PAGE>
                              Schedule 2.1(a)
                         Schedule of Lenders and
                              Commitments



          Address for    Address for         Committed Committed 
Lender    Notices        Funding and           Amount  Percentage
                         Payments
- ------    -----------    ------------        --------  ----------

NationsBank, N.A.
     NationsBank, N.A.   NationsBank, NA
     101 N. Tryon Street 101 N. Tryon St.
     Independence Center, Independence Ctr.
     15th Floor          15th Floor
     NC1-001-15-04       NC-001-15-04
     Charlotte, NC 28255 Charlotte, NC 28255
     Attn:  Linda Ballard Attn:  Linda Ballard
     Ph: 704/386-9368    Ph:  704/386-9368
     Fx: 704/386-9923    Fx:  704/386-9923   $200,000,000   50%

with a copy to:

NationsBank, N.A.        
     NationsBank Corporate    NationsBank Corporate
     Center                   Center
     100 N. Tryon Street,     100 N. Tryon Street,
     8th Floor                8th Floor
     Charlotte, NC 28255      Charlotte, NC  28255
     Attn:  R.G. Parkhurst, Jr.Attn:  RG Parkhurst, Jr.
     Ph: 704/386-1828         Ph:  704/386-1828
     Fx: 704/386-1270         Fx:704/386-1270     

Wachovia Bank of North   
Carolina, N.A.           
     Wachovia Bank of North   Wachovia Bank of North
     Carolina, N.A.           Carolina, N.A.
     100 N. Main Street       100 N. Main Street
     Mail Code 37207          Mail Code 37207
     Winston-Salem, North     Winston-Salem, NC
     Carolina  27150-3099     27150-3099
     Attn:  Charlene Johnson  Attn:  Charlene Johnson
     Ph: 910/732-5472         Ph:  910/732-5472
     Fx: 910/732-6935         Fx:  910/732-6935
                                             $100,000,000   25%

Credit Suisse
     Credit Suisse            Credit Suisse
     12 East 49th Street      191 Peachtree St.
     New York, NY  10017      Suite 3500
     Attn:  Hazel Leslie      Atlanta, GA  30303
     Ph: 212/238-5218         Attn:  Chris Boren
     Fx: 212/238-5246         Ph:  404/577/6100
                              Fx:  404/577-9029
                                             $100,000,000   25%
PAGE

<PAGE>
                               Schedule 2.1(b)(i)

                     FORM OF NOTICE OF COMMITTED BORROWING


NationsBank, N.A.,
  as Agent for the Lenders
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina  28255
Attn:  Agency Services


Ladies and Gentlemen:

     The undersigned, UNIFI, INC. (the "Borrower"), refers to the
Credit Agreement dated as of April __, 1996 (as amended and
modified, from time to time, the "Credit Agreement"), among the
Borrower, the Lenders and NationsBank, N.A., as Agent. 
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit
Agreement.  The Borrower hereby gives notice that it requests a
Committed Loan borrowing pursuant to the provisions of Section
2.1(b) of the Credit Agreement and in connection herewith sets
forth below the terms on which such borrowing is requested to be
made:
     
     (A)  Date of Borrowing
          (which is a Business Day)     _______________________
     
     (B)  Principal Amount of
          Borrowing                     _______________________
     
     (C)  Interest rate basis           _______________________
     
     (D)  Interest Period and the
          last day thereof              _______________________
     
     In accordance with the requirements of Section 3.2, the
Borrower hereby reaffirms the representations and warranties set
forth in the Credit Agreement as provided in subsection (b) of
such Section, and confirms that the matters referenced in
subsections (c) and (d) of such Section, are true and correct.
     
                         Very truly yours,
     
                         UNIFI, INC.
     
                                  
                         By:__________________________________
                                  
                         Name:________________________________
                         Title:_______________________________
<PAGE>

                              Schedule 2.1(e)
     
                          FORM OF COMMITTED NOTE
     
$_________________                                April __, 1996
     
     
          FOR VALUE RECEIVED, UNIFI, INC., a New York corporation
(the "Borrower"), hereby promises to pay to the order of
______________________, its successors and assigns (the
"Lender"), at the office of NationsBank, N.A., as Agent (the
"Agent"), at 101 N.Tryon Street, Independence Center, 15th Floor,
NC1-001-15-04, Charlotte, North Carolina  28255 (or at such other
place or places as the holder hereof may designate), at the times
set forth in the Credit Agreement dated as of the date hereof
among the Borrower, the Lenders and the Agent (as it may be
amended and modified from time to time, the "Credit Agreement";
all capitalized terms not otherwise defined herein shall have the
meanings set forth in the Credit Agreement), but in no event
later than the Termination Date, in Dollars and in immediately
available funds, the principal amount of
________________________DOLLARS ($____________) or, if less than
such principal amount, the aggregate unpaid principal amount of
all Committed Loans made by the Lender to the Borrower pursuant
to the Credit Agreement, and to pay interest from the date hereof
on the unpaid principal amount hereof, in like money, at said
office, on the dates and at the rates selected in accordance with
Section 2.1(d) of the Credit Agreement.
     
     Upon the occurrence and during the continuance of an Event
of Default the balance outstanding hereunder shall bear interest
as provided in Section 2.3 of the Credit Agreement. 

     Further, in the event the payment of all sums due hereunder
is accelerated under the terms of the Credit Agreement, this Note
and all other indebtedness owing to the Lender under the Credit
Documents shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which
are hereby waived by the Borrower.
     
     In the event this Note is not paid when due at any stated or
accelerated  maturity, the Borrower agrees to pay, in addition to
the principal and interest, all costs of collection, including
reasonable attorneys' fees.
     
     All borrowings evidenced by this Note and all payments and
prepayments of the principal hereof and interest hereon and the
respective dates thereof shall be endorsed by the holder hereof
on Schedule A attached hereto and incorporated herein by
reference, or on a continuation thereof which shall be attached
hereto and made a part hereof; provided, however, that any
failure to endorse such information on such schedule or
continuation thereof shall not in any manner affect the
obligation of the Borrower to make payments of principal and
interest in accordance with the terms of this Note.
     
     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NORTH CAROLINA.
     
     IN WITNESS WHEREOF, the Borrower has caused this Note to be
duly executed by its duly authorized officer as of the day and
year first above written.
     
                         UNIFI, INC.
     
                                       
                         By:____________________________
                         Name:
                         Title:
     
          
<PAGE>
                            SCHEDULE A TO THE 
                              COMMITTED NOTE
                              OF UNIFI, INC.
                           DATED APRIL __, 1996
     
                                        Unpaid         Name of
     Type                               Principal      Person
      of  Interest       Payments       Balance        Making
Date Loan  Period   Principal Interest  of Note        Notation
- ---- ---- --------  --------- --------  ----------     ---------
     
     
          
<PAGE>
                             Schedule 2.2(b)-1

                      FORM OF COMPETITIVE BID REQUEST


NationsBank, N.A.,
  as Agent for the Lenders
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina  28255
Attn:  Agency Services

Ladies and Gentlemen:

     The undersigned, UNIFI, INC. (the "Borrower"), refers to the
Credit Agreement dated as of April __, 1996 (as amended and
modified from time to time, the "Credit Agreement"), among the
Borrower, the Lenders and NationsBank, N.A., as Agent. 
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit
Agreement.  The Borrower hereby gives you notice pursuant to
Section 2.2(b) of the Credit Agreement it requests solicitation
of Competitive Bids under the Credit Agreement, and in connection
herewith sets forth below the terms on which such Competitive Bid
Loan borrowing is requested to be made:
     
     (A)  Competitive Bid Request is/is not
          an Accommodating Competitive Bid
          Request
     
     (B)  Date of Competitive Bid Loan Borrowing
          (which is a Business Day)          __________________
     
     (C)  Principal Amount of
          Competitive Bid Loan Borrowing     __________________
     
     (D)  Interest Period and the last
          day thereof                        __________________
          
<PAGE>
     In accordance with the requirements of Section 3.2, the
Borrower hereby reaffirms the representations and warranties set
forth in the Credit Agreement as provided in subsection (b) of
such Section, and confirms that the matters referenced in
subsections (c) and (d) of such Section, are true and correct.
     
     
                         Very truly yours,
     
                         UNIFI, INC.
     
     
                                  
                         By:____________________________
                         Name:
                         Title:
          
<PAGE>
                             Schedule 2.2(b)-2
     
                 FORM OF NOTICE OF COMPETITIVE BID REQUEST
     
     
[Name of Lender]
[Address]
     
Attention:
     
Dear Sirs:

     Reference is made to the Credit Agreement dated as of April
__, 1996 (as amended and modified from time to time, the "Credit
Agreement"), among UNIFI, INC. (the "Borrower"), the Lenders and
NationsBank, N.A., as Agent.  Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreement.  The Borrower made a
Competitive Bid Request on _____________, 19__, pursuant to
Section 2.2(b) of the Credit Agreement, and in that connection
you are invited to submit a Competitive Bid by 10:00 A.M.
(Charlotte, North Carolina time) ______________, 19__ [Date of
Proposed Competitive Bid Loan Borrowing]  Your Competitive Bid
must comply with Section 2.2(c) of the Credit Agreement and the
terms set forth below on which the Competitive Bid Request was
made:
     
(A)  Date of Competitive Bid Borrowing       __________________
     
(B)  Principal amount of
     Competitive Bid Borrowing               __________________
     
(C)  Interest Period and the last
     day thereof                             __________________
     
     
                         Very truly yours,
     
                         NATIONSBANK, N.A., as Agent
     
     
                                 
                         By:_______________________________
                         Name:
                         Title:
          
<PAGE>
                              Schedule 2.2(c)
     
                          FORM OF COMPETITIVE BID
     
     
NationsBank, N.A.,
 as Agent for the Lenders
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina  28255
Attn:  Agency Services
     
Ladies and Gentlemen:
     
     The undersigned, [Name of Lender], refers to the Credit
Agreement dated as of April __, 1996 (as amended and modified
from time to time, the "Credit Agreement"), among UNIFI, INC.
(the "Borrower"), the Lenders and NationsBank, N.A., as Agent. 
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit
Agreement.  The undersigned hereby makes a Competitive Bid
pursuant to Section 2.2(c) of the Credit Agreement, in response
to the Competitive Bid Request made by the Borrower on
________________, 19__, and in that connection sets forth below
the terms on which such Competitive Bid is made:
     
(A)  Principal Amount                   ____________________
     
(B)  Competitive Bid Rate               ____________________
     
(C)  Interest Period and last
     day thereof                        ____________________
     
     The undersigned hereby confirms that it is prepared, subject
to the conditions set forth in the Credit Agreement, to extend
credit to the Borrower upon acceptance by the Borrower of this
bid in accordance with Section 2.2(e) of the Credit Agreement.
     
                         Very truly yours,
     
                         [NAME OF LENDER]
     
                                  
                         By:______________________________
                         Name:
                         Title:
          
<PAGE>
                              Schedule 2.2(e)
     
               FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
     
     
NationsBank, N.A.,
as Agent for the Lenders
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina  28255
Attn:  Agency Services

Ladies and Gentlemen:
     
     The undersigned, UNIFI, INC. (the "Borrower"), refers to the
Credit Agreement dated as of April __, 1996 (as amended and
modified from time to time, the "Credit Agreement"), among the
Borrower, the Lenders and NationsBank, N.A., as Agent.
     
     In accordance with Section 2.2(d) of the Credit Agreement,
we have received a summary of bids in connection with our
Competitive Bid Request dated ______________ and in accordance
with Section 2.2(d) of the Credit Agreement, we hereby accept the
following bids for maturity on [date]:
     
                                             Interest
Principal Amount    Competitive Bid Rate       Paid    Lender
- ----------------    ---------------------    --------  ------    
     
$                                  [%]
$                                  [%]
     
     We hereby reject the following bids:
     
                                            Interest
Principal Amount    Competitive Bid Rate     Paid      Lender
- ----------------    --------------------    --------   ------
     
$                                  [%]
$                                  [%]
     
     
     The Competitive Bid Loans accepted as provided above should
be deposited in the general deposit account maintained by the
Borrower with NationsBank, N.A. on [date].
     
                         Very truly yours,
     
                         UNIFI, INC.
     
     
                                  
                         By:_____________________________
                         Name:
                         Title: 
                         Schedule 2.2(i)
     
                   FORM OF COMPETITIVE BID NOTE
     
$400,000,000                                  April __, 1996
     
     
     FOR VALUE RECEIVED, UNIFI, INC., a New York corporation (the
"Borrower"), hereby promises to pay to the order of
_______________________________ its successors and permitted
assigns (the "Lender"), at the office of NationsBank, N.A., as
Agent (the "Agent"), at 101 N. Tryon Street, Independence Center,
15th Floor, NC1-001-15-04, Charlotte, North Carolina  28255 (or
at such other place or places as the holder hereof may
designate), at the times set forth in the Credit Agreement dated
as of the date hereof among the Borrower, the Lenders and the
Agent (as it may be amended and modified from time to time, the
"Credit Agreement"; all capitalized terms not otherwise defined
herein shall have the meanings set forth in the Credit
Agreement), but in no event later than the Termination Date, in
Dollars and in immediately available funds, the principal amount
of FOUR HUNDRED MILLION DOLLARS ($400,000,000) or, if less than
such principal amount, the aggregate unpaid principal amount of
all Competitive Bid Loans made by the Lender to the Borrower
pursuant to the Credit Agreement, and to pay interest from the
date hereof on the unpaid principal amount hereof, in like money,
at said office, on the dates and at the rates selected in
accordance with Section 2.2(g) of the Credit Agreement and in the
respective Competitive Bid applicable to each Competitive Bid
Loan borrowing evidenced hereby.
     
     Upon the occurrence and during the continuance of an Event
of Default the balance outstanding hereunder shall bear interest
as provided in Section 2.3 of the Credit Agreement.  Further, in
the event the payment of all sums due hereunder is accelerated
under the terms of the Credit Agreement, this Note and all other
indebtedness owing to the Lender under the Credit Documents shall
become immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by
the Borrower.
     
     In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to
the principal and interest, all costs of collection, including
reasonable attorneys' fees.
     
     All borrowings evidenced by this Note and all payments and
prepayments of the principal hereof and interest hereon and the
respective dates thereof shall be endorsed by the holder hereof
on Schedule A attached hereto and incorporated herein by
reference, or on a continuation thereof which shall be attached
hereto and made a part hereof; provided, however, that any
failure to endorse such information on such schedule or
continuation thereof shall not in any manner affect the
obligation of the Borrower to make payments of principal and
interest in accordance with the terms of this Note.
     
     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NORTH CAROLINA.
     
     IN WITNESS WHEREOF, the Borrower has caused this Note to be
duly executed by its duly authorized officer as of the day and
year first above written.
     
                         UNIFI, INC.
     
                                       
                         By:___________________________
                         Name:
                         Title:
     
          
<PAGE>
                               SCHEDULE A TO THE
                              COMPETITIVE BID NOTE
                                 OF UNIFI, INC.
                              DATED APRIL __, 1996

                                             Unpaid    Name of
          Type                               Principal Person    
           of  Interest       Payments       Balance   Making
Date      Loan  Period   Principal Interest   of Note  Notation
- ----      ---- --------  --------- --------  --------  ---------



<PAGE>
                               Schedule 2.4

                 FORM OF NOTICE OF CONVERSION OR EXTENSION


NationsBank, N.A.,
  as Agent for the Lenders
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina  28255
Attention:  Agency Services


Ladies and Gentlemen:

   The undersigned, UNIFI, INC. (the "Borrower"), refers to the
Credit Agreement dated as of April __, 1996 (as amended and
modified from time to time, the "Credit Agreement"), among the
Borrower, the Lenders and NationsBank, N.A., as Agent. 
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit
Agreement.  The Borrower hereby gives notice pursuant to Section
2.4 of the Credit Agreement that it requests an extension or
conversion of a Committed Loan outstanding under the Credit
Agreement, and in connection herewith sets forth below the terms
on which such extension or conversion is requested to be made:
     
(A)  Date of Extension or Conversion
     (which, with regard to Eurodollar
     Loans, is the last day of the
     the applicable Interest)           _______________________
     
(B)  Principal Amount of
     Extension or Conversion            _______________________
     
(C)  Interest rate basis                _______________________
     
(D)  Interest Period and the
     last day thereof                   _______________________
          
<PAGE>
     In accordance with the requirements of Section 3.2, the
Borrower hereby reaffirms the representations and warranties set
forth in the Credit Agreement as provided in subsection (b) of
such Section, and confirms that the matters referenced in
subsections (c) and (d) of such Section, are true and correct.
     
                         Very truly yours,
     
                         UNIFI, INC.
     
                         By:__________________________________
                         Name:
                         Title:
<PAGE>

                               Schedule 2.11
     
                  FORM OF U.S. TAX COMPLIANCE CERTIFICATE
     
     Reference is hereby made to the Credit Agreement, dated as
of April __, 1996, as amended and modified from time to time
thereafter, among Unifi, Inc., the Lenders party thereto and
NationsBank, N.A., as Agent (the "Credit Agreement"). Pursuant to
Section 2.11 of the Credit Agreement, the undersigned hereby
certifies that it is not a "bank" as such term is used in Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended.
     
     
                                    [NAME OF LENDER]
     
     
                                By:___________________________
                                Name:
                                Title:
     
          
<PAGE>
                              Schedule 5.1(c)
     
                 Form of Officer's Compliance Certificate
     
       For the fiscal quarter ended _________________, 19___.
     
     I, ______________________, [Title] of UNIFI, INC. (the
"Borrower") hereby certify that, to the best of my knowledge and
belief, with respect to that certain Credit Agreement dated as of
April __, 1996 (as amended and modified from time to time, the
"Credit Facility"; all of the defined terms in the Credit
Agreement are incorporated herein by reference) among the
Borrower, the Lenders party thereto and NationsBank, N.A., as
Agent:
     
     a.   The company-prepared financial statements which
          accompany this certificate are true and correct in all
          material respects and have been prepared in accordance
          with generally accepted accounting principles applied 
          on a consistent basis, subject to changes resulting 
          from audit and normal year-end audit adjustments; and
     
     b.   Since ___________ (the date of the last similar 
          certification, or, if none, the Closing Date) no 
          Default or Event of Default has occurred under the 
          Credit Agreement.
     
     c.   Attached are computations demonstrating compliance with
          the financial covenants set out in Section 5.9 of the 
          Credit Agreement.
     
     This ______ day of ___________, 19__.
     
     
                        UNIFI, INC.
     
                        By:________________________________
                        Name:
                        Title:
     
          
<PAGE>
                               Schedule 5.10
     
                           Existing Funded Debt
     
     
     
     
     
     
TYPE OF FUNDED DEBT                                       AMOUNT
    
- -----------------------------------------------------------------
     
     
     
Unifi, Inc. 6% Convertible
Subordinated Note Due 2002                        $230,000,000.00
issuable only in registered
form without coupons and
only in denominations of
$1,000.00 and any integral
multiple thereof.
<PAGE>
                              Schedule 8.2(b)
     
                     Form of Assignment and Acceptance
     
     
     THIS ASSIGNMENT AND ACCEPTANCE dated as of ________, 199_ is
entered into between ________________ ("Assignor") and
____________________ ("Assignee").
     
     Reference is made to the Credit Agreement dated as of April
__, 1996, as amended and modified from time to time thereafter
(the "Credit Agreement") among UNIFI, the Lenders party thereto
and NationsBank, N.A., as Agent.  Terms defined in the Credit
Agreement are used herein with the same meanings.
     
1.   The Assignor hereby sells and assigns, without recourse, to
     the Assignee, and the Assignee hereby purchases and assumes,
     without recourse, from the Assignor, effective as of the 
     Effective Date set forth below, the interests set forth 
     below (the "Assigned Interest") in the Assignor's rights and
     obligations under the Credit Agreement, including, without  
     limitation, the interests set forth below in the Commitments
     of the Assignor on the effective date of the assignment
     designated below (the "Effective Date") and the Committed
     Loans owing to the Assignor which are outstanding on the
     Effective Date, together with unpaid interest accrued on the
     assigned Loans to the Effective Date and the amount, if any,
     set forth below of the Fees accrued to the Effective Date
     for the account of the Assignor.  Each of the Assignor and
     the Assignee hereby makes and agrees to be bound by all the
     representations, warranties and agreements set forth in
     Section 8.2(b) of the Credit Agreement, a copy of which has
     been received by each such party.  From and after the
     Effective Date (i) the Assignee, if it is not already a
     Lender under the Credit Agreement, shall be a party to and
     be bound by the provisions of the Credit Agreement and, to
     the extent of the interests assigned by this Assignment and
     Acceptance, have the rights and obligations of a Lender 
     thereunder and (ii) the Assignor shall, to the extent of
     the interests assigned by this Assignment and Acceptance,
     relinquish its rights and be released from its obligations 
     under the Credit Agreement.
     
2.   This Assignment and Acceptance shall be governed by and 
     construed in accordance with the laws of the State of North
     Carolina.
     
3.   Terms of Assignment
     
     (a)  Date of Assignment:  
     
     (b)  Legal Name of Assignor:  
     
     (c)  Legal Name of Assignee:  
     
     (d)  Effective Date of Assignment:  
            
     (e)  Commitment Percentage Assigned:
          (expressed as a percentage of
          the Total Committed Amount and
          set forth to at least 8 decimals)                 %
     
     (f)  Commitment Percentage of
          Assignor after Assignment
          (set forth to at least 8 decimals)                %
     
     (g)  Total Committed Loans outstanding
          as of Effective Date                     $_____________
          

     (h)  Principal Amount of Committed
          Loans assigned on Effective
          Date (the amount set forth
          in (g) multiplied by the 
          percentage set forth in (e))            $_____________
     

<PAGE>
The terms set forth above are hereby agreed to:
     
____________________, as Assignor
     
     
     
By:_____________________________________
Name:
Title:
     
     
_____________________, as Assignee
     
     
By:_____________________________________
Name:
Title:
     
     
CONSENTED TO:
     
NATIONSBANK, N.A., as Agent
     
By:____________________________________
Name:
Title:
     
     
UNIFI, INC.
     
By:__________________________________
Name:
Title     



<TABLE>
                                                            EXHIBIT (11)
                                            COMPUTATION OF EARNINGS PER SHARE
                                                UNIFI, INC. AND SUBSIDIARIES
                                   (Amounts in thousands, except per share data)
<CAPTION>                                                   
                                                               Years Ended        
                                        -----------------------------------------------------                             
                                        June 30, 1996       June 25, 1995       June 26, 1994
                                        -------------       --------------      -------------     
<C>                                          <S>                  <S>                <S>   
Primary
  Weighted average number of 
   shares outstanding                        65,726               69,005             70,415
  Net effect of dilutive stock options-
   based on the treasury stock method 
   using average market price                   485                  537                605
                                             --------             --------           -------  
                 Total                       66,211               69,542             71,020
                                        ===========         ============        ===========  
     Net Income                         $    72,479         $    116,171        $    76,492
                                        ------------        ------------        -----------  
     Per Share Amount                   $       1.09        $      1.67         $      1.08
                                        ============        ============        ===========
Fully Diluted
  Weighted average number of 
   shares outstanding                        65,726               69,005             70,415
  Assumed Conversion of 6% convertible
   subordinated notes                             *                7,753                  *
  Net effect of dilutive stock options-
   based on the treasury stock method 
   using the year-end market price, if
   higher than average market price             525                  544                612
                                       -------------        ------------        -----------
  Total                                      66,251               77,302             71,027
                                       ============         ============        ===========

  Net Income                            $    72,479         $    116,171        $    76,492
  Add 6% convertible subordinated notes
   interest, net of tax                           *                8,703                  *
                                      -------------         ------------        ------------  
  Total                                 $    72,479         $    124,874        $    76,492
                                      =============         ============        ===========   
 
  Per Share Amount                      $      1.09          $      1.62         $     1.08
                                      =============          ============        ==========  
<FN>
*    Conversion of the 6% convertible subordinated notes was not considered for this computation    
     because its effect is antidilutive.  Accordingly, fully diluted earning per share for these    
     periods has been reported consistent with the primary earnings per share results.
</FN>
</TABLE>

  




                                        EXHIBIT (13a)


CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)                       June 30, 1996      June 25, 1995

ASSETS:

Current assets:
   Cash and cash equivalents                    $    24,473       $     60,350
   Short-term investments                            ---                85,844
   Receivables                                      199,361            209,432
   Inventories                                      132,946            139,378
   Other current assets                               5,095              8,017
                                                ___________       ____________
   Total current assets                             361,875            503,021

Property, plant and equipment:
   Land                                               6,249              5,865
   Buildings & air conditioning                     212,581            203,114
   Machinery and equipment                          659,678            631,470
   Other                                            148,620             69,934
                                                ___________       ____________
                                                  1,027,128            910,383
Less:accumulated depreciation                       477,752            394,168
                                                ___________       ____________ 
                                                    549,376            516,215
Other noncurrent assets                              39,833             21,666
                                                ___________       ____________
                                                $   951,084       $  1,040,902
LIABILITIES AND SHAREHOLDERS' EQUITY:

Current liabilities:
   Accounts payable                             $   110,107       $    100,165
   Accrued expenses                                  39,895             54,338
   Income taxes                                      15,651             15,161
                                                ___________       ____________
   Total current liabilities                        165,653            169,664
                                                ___________       ____________
Long-term debt                                      170,000            230,000
                                                ___________       ____________
Deferred income taxes                                32,225             37,736
                                                ___________       ____________
Shareholders' equity:
   Common stock                                       6,483              6,714
   Capital in excess of par val.                     62,255            117,277
   Retained earnings                                512,253            473,962
   Cumulative translation adj.                        2,215              4,415
   Unrealized gains (losses)
     on certain investments                         ---                  1,134
                                                ___________       ____________ 
                                                    583,206            603,502
                                                ___________       ____________
                                                $   951,084       $  1,040,902
                                                ___________       ____________


The accompanying notes are an integral part of the financial statements.



                              Page 14

CONSOLIDATED STATEMENTS OF INCOME



(Amounts in thousands,
           June 30, 1996  June 25, 1995  June 26, 1994
 except per share data)

Net sales                          $ 1,603,280    $1,554,557     $1,384,797
                                   ___________    __________     __________
Costs and expenses:
   Cost of sales                     1,407,608     1,330,410      1,185,386
   Selling, general and       
     administrative expense             45,084        43,116         40,429
   Interest expense                     14,593        15,452         18,241 
   Interest income                      (6,757)      (10,372)        (8,290)
   Other income                         (4,390)       (9,659)        (1,238)
   Non-recurring charge                 23,826         ---           13,433
                                   ___________    __________     __________ 
                                     1,479,964     1,368,947      1,247,961
                                   ___________    __________      _________

Income before income taxes             123,316       185,610        136,836
   and extraordinary item
Provision for income taxes              44,939        69,439         60,344
                                   ___________    __________     __________
Income before extraordinary
   item                                 78,377       116,171         76,492
                                   ___________    __________     __________
Extraordinary item (net of
   applicable income taxes
   of $3,692)                            5,898          ---            ---
                                   ___________    __________     __________
Net income                         $    72,479    $  116,171     $   76,492
                                   ___________    __________     __________
Per share data:
   Primary earnings per share:
   Income before 
     extraordinary item            $      1.18    $     1.67     $     1.08
   Extraordinary item                      .09          ---           ---
                                   ___________    __________     __________
   Net income                      $      1.09    $     1.67     $     1.08
                                   ___________    __________     __________ 
   Fully diluted net               $      1.09    $     1.62     $     1.08
     income per share
                                   ___________    __________     __________


The accompanying notes are an integral part of the financial statements.













                                       Page 15

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Amounts in thousands, except per share data)

                                    Cap in Ex-           Cumul     Unrlzd Gns
                    Shares   Com     cess of   Retained  Transl    (Losses) on
                    Outsdg   Stk     ParVal    Earnings  Adj       Cert Invtmts

Bal Jun 27, 1993    70,340   $7,034  $196,133   $348,821  $(5,515)  $ (920)
                    ______   ______  ________   ________  ________  _______

Purchase of stk       (98)      (10)  (2,051)       ---      ---      ---
Options exer.d        191        19      899        ---      ---      ---
Cash dividends---
$.56 per share        ---       ---      ---     (39,053)    ---      ---
Net contributions
and tax benefits
from (to) S Corp
shareholders          ---       ---    4,562        (372)    ---      ---
Currency trans-       ---       ---      ---        ---     2,455     ---
lation adjs
Change in unrealzd
gains(losses) on
certain invmts        ---       ---      ---        ---      ---        28
Net income            ---       ---      ---      76,492     ---      ---
Reclass of S Corp
net earnings to
capital in excess
of par value          ---       ---       416       (416)    ---      ---
                    ______    ______  ________  ________  _______   _______
Bal Jun 26, 1994    70,433     7,043  199,959    385,472   (3,060)    (892)
                    ______    ______  ________  ________  _______   _______
Purch. of stk.      (3,362)     (336) (83,414)      ---      ---      ---
Options exer.d          69         7      732       ---      ---      ---
Cash dividends---
$.40 per share        ---       ---      ---     (27,681)    ---      ---
Currency trans- 
lation adjs           ---       ---      ---        ---     7,475     ---
Change in unrealzd
gains(losses) on 
certain invtmts       ---       ---      ---        ---      ---     2,026
Net income            ---       ---      ---     116,171     ---      ---
                    ______    ______  ________  ________  ________  ________
Bal Jun 25, 1995    67,140    6,714   117,277    473,962    4,415    1,134
                   _______    ______  ________  ________  ________  ________
Purch. of stk.      (2,347)    (235)  (55,315)      ---      ---      ---  
Options exer.d          36        4       242       ---      ---      ---
Conversion of 6% 
subord.d notes           2      ---        51       ---      ---      ---
Cash dividends---
$.52 per share        ---       ---       ---   (34,188)     ---      ---
Currency trans-
lation adjs           ---       ---      ---        ---    (2,200)    ---
Change in unrealzd
gains(losses) on
certain invtmts       ---       ---      ---        ---      ---    (1,134)
Net income            ---       ---      ---     72,479      ---      ---
                   _______    ______  ________ ________  ________  ________
Bal Jun 30, 1996    64,831    $6,483  $62,255  $512,253  $  2,215  $  ---
                   _______    ______  ________ ________  ________  ________

The accompanying notes are an integral part of the financial statements.
                                      Page 16
CONSOLIDATED STATEMENTS OF CASH FLOWS


(Amounts in thousands)              June 30, 1996  June 25, 1995  June 26, 1994

Cash and cash equivalents 
 at beginning of year                  $ 60,350       $ 80,653       $ 76,093

Operating activities:
Net income                               72,479        116,171         76,492
Adjustments to reconcile net income
  to net cash provided by operating
  activities:
  Extraordinary item (net of applicable
  income taxes)                           5,898          -              -
Income tax effect of extraordinary
  item                                    3,692          -              -
Depreciation and amortization            81,889         75,805         70,116
Non-cash portion of non-recurring
  charge                                 21,750          -             13,433
Gain on sale of investments              (4,476)        (6,697)         -
Provision for deferred income
  taxes                                  (4,795)         7,505          6,939
Other                                     4,263         (2,316)        (1,492)
Changes in assets and liabilities,
  excluding effects of acquisition
  and foreign currency adjustments:
Receivables                               9,428        (11,665)           374
Inventories                              13,640        (42,751)         4,921
Other current assets                        987             27           (272)
Payables and accruals                    (3,789)        19,804        (31,118)
Income taxes                                490           (542)        (8,605)
                                       _________      _________      _________
Net-operating activities                201,456        155,341        130,788
                                       _________      _________      _________
Investing activities:
Capital expenditures                   (133,967)       (88,941)      (104,672)
Purchase of investments                 (60,474)       (93,671)      (151,565)
Acquisition                             (48,444)         -              -
Sale of capital assets                    2,290          3,479          3,611
Sale of investments                     149,015         94,379        198,855
Sale of subsidiary                        -             13,798          -
Proceeds from notes receivable           11,444          5,311          -
Other                                     -                  3           (423)
                                       _________      _________      _________
Net-investing activities                (80,136)       (65,642)       (54,194)
                                       _________      _________      _________
Financing activities:
Borrowing of long-term debt             225,000          -              -
Repayments of long-term debt           (284,949)         -            (32,221)
Premium paid on early retirement
  of debt                                (7,657)         -              -
Issuance of Company stock                   246            739            898
Purchase and retirement of
  Company stock                         (55,550)       (83,750)        (2,061)
Cash dividends paid                     (34,188)       (27,681)       (39,053)
                                       _________      _________      _________
Net-financing activities               (157,098)      (110,692)       (72,437)
                                       _________      _________      _________
Currency translation adjustment             (99)           690            403
                                       _________      _________      _________
Net increase (decrease) in cash
  and cash equivalents                  (35,877)       (20,303)         4,560

                                       _________      _________      _________
Cash and cash equivalents
  at end of year                       $ 24,473       $ 60,350       $ 80,653
                                      _________      _________      _________

Cash paid during the year:
Interest                               $ 18,520       $ 14,777       $ 17,487
Income taxes                             38,427         61,495         61,653
Non-cash investing and
  financing activities:
Assets acquired by issuance
  of debt                              $  -           $  -           $  7,453
Note receivable obtained from
  sale of an affiliat                     -             10,436          -
Redemption of 6% convertible
  subordinated notes                      1,983          -              -



The accompanying notes are an integral part of the financial statements.








                                      Page 17






NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1
______
ACCOUNTING POLICIES AND FINANCIAL STATEMENT INFORMATION

PRINCIPLES OF CONSOLIDATION:  The consolidated financial statements include the
accounts of the Company and all subsidiaries.  The accounts of all foreign
subsidiaries have been included on the basis of fiscal periods ended three
months or less prior to the dates of the consolidated balance sheets.  All
significant intercompany accounts and transactions have been eliminated.

FISCAL YEAR:  The Company's fiscal year is the fifty-two or fifty-three weeks
ending the last Sunday in June.  The current year ended June 30, 1996, consists
of fifty-three weeks.  The years ended June 25, 1995, and June 26, 1994, consist
of fifty-two weeks.

RECLASSIFICATION:  The Company has reclassified the presentation of certain
prior year information to conform with the current presentation format.

REVENUE RECOGNITION:  Substantially all revenue from sales is recognized at the
time shipments are made.

FOREIGN CURRENCY TRANSLATION:  Assets and liabilities of foreign subsidiaries
are translated at year-end rates of exchange and revenues and expenses are
translated at the average rates of exchange for the year. Gains and losses
resulting from translation are accumulated in a separate component of
shareholders' equity. Gains and losses resulting from foreign currency
transactions (transactions denominated in a currency other than the 
subsidiary's functional currency) are included in net income.

CASH AND CASH EQUIVALENTS:  Cash equivalents are defined as short-term
investments having an original maturity of three months or less.

SHORT-TERM INVESTMENTS:  Short-term investments at June 25, 1995, were comprised
primarily of high-quality, highly-liquid, marketable securities with original
maturities greater than three months. These investments were classified as
available-for-sale securities and were carried at fair market value, with the
unrealized gains and losses, net of tax, reported as a separate component of
shareholders' equity.

RECEIVABLES:  Certain customer accounts receivable are factored without recourse
with respect to credit risk.  An allowance for losses is provided for 
accounts not factored based on a periodic review of the accounts. Reserve
for such losses was $6.6 million at June 30, 1996, and $6.5 million at June
25, 1995.

INVENTORIES:  The Company utilizes the last-in, first-out (LIFO) method for
valuing certain inventories representing 63% of all inventories at June 30,
1996, and the first-in first-out (FIFO) method for all other inventories.
Inventory values computed by the LIFO method are lower than current market 
values. Inventories valued at current or replacement cost would have been
approximately $13.1 million and $10.3 million in excess of the LIFO 
valuation at June 30, 1996, and June 25, 1995, respectively.  Finished goods,
work in process, and raw materials and supplies at June 30, 1996, and June
25, 1995, amounted to $60.4 million and $66.1 million; $13.3 million and 
$14.3 million; and $59.2 million and $59.0 million, respectively.

PROPERTY, PLANT AND EQUIPMENT:  Property, plant and equipment are stated at
cost. Depreciation is computed for asset groups primarily utilizing the
straight-line method for financial reporting and accelerated methods for tax
reporting.

OTHER ASSETS:  Other assets at June 30, 1996, consist primarily of the cash
surrender value of key executive life insurance policies, long-term notes
receivable, deferred debt expense associated with debt acquired in the current
fiscal year and goodwill related to current year acquisitions.  The deferred
debt expense and goodwill are being amortized on a straight-line method over
periods ranging from five to fifteen years.  Accumulated amortization at June
30, 1996, was $1.4 million.  In the prior year, other assets were also
comprised of marketable equity securities with a fair market value of 
$0.3 million.  Deferred debt expense associated with the convertible 
subordinated notes included in other assets at June 25, 1995, was written off
as part of  the extraordinary charge recorded in fiscal 1996 in conjunction 
with the debt redemption described in Note 4.

LONG-LIVED ASSETS:  In March 1995, the FASB issued Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of," (SFAS 121), which requires impairment losses to be
recorded on long-lived assets used in operations when indicators of 
impairment are present and the undiscounted cash flows estimated to be 
generated by those assets are less than the assets' carrying amount.  SFAS 
121 also addresses the accounting for long-lived assets that are expected to
be disposed of.  The Company adopted SFAS 121 in the first quarter of 1996. 
There was no cumulative effect on the Company's financial statements from the
initial adoption of SFAS 121; however, the accounting principles described in
this statement were utilized in estimating the non-recurring charge discussed
in Note 3.

INCOME TAXES:  The Company and its domestic subsidiaries file a consolidated
federal income tax return. Income tax expense is computed on the basis of
transactions entering into pretax operating results. Deferred income taxes have
been provided for the tax effect of temporary differences between financial
statement carrying amounts and the tax bases of existing assets and
liabilities. Income taxes have not been provided on the undistributed 
earnings of certain foreign subsidiaries as such earnings are deemed to be
permanently invested.
 


                                      Page 18



EARNINGS PER SHARE:  Earnings per common and common equivalent share are 
computed on the basis of the weighted average number of common shares
outstanding plus, to the extent applicable, common stock equivalents.  
Average common and common equivalent shares for primary earnings per share
were 66,211,344, 69,542,155 and 71,020,075 for fiscal years 1996, 1995 and
1994, respectively.  Fully diluted earnings per share amounts are based on 
72,422,047, 77,302,035 and 71,026,610 shares for 1996, 1995 and 1994, 
respectively.  The effect of the convertible subordinated notes was 
antidilutive for the fiscal years 1996 and 1994.  The convertible 
subordinated notes were redeemed in the fourth quarter of the current
year.

STOCK-BASED COMPENSATION:  In October 1995, the FASB issued Statement No. 123,
"Stock-Based Compensation," (SFAS 123).  SFAS 123 becomes effective beginning
with the Company's first quarter of fiscal year 1997, and will not have a 
material effect on the Company's financial position or results of operations.
Upon adoption of SFAS 123, the Company will continue to measure compensation
expense for its stock-based employee compensation plans using the intrinsic
value method prescribed by APB Opinion No. 25, "Accounting for Stock Issued
to Employees," and will provide pro forma disclosures of net income and 
earnings per share as if the fair value-based method prescribed by SFAS 123
had been applied in measuring compensation expense.

USE OF ESTIMATES:  The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make 
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes.  Actual results could differ from those
estimates.

NOTE 2
______
ACQUISITION

   The acquisition of the Norlina Division of Glen Raven Mills, Inc. was
consummated on November 17, 1995.  The acquisition, which is not deemed
significant to the Company's consolidated net assets or the results of 
operations, has been accounted for as a purchase and accordingly, the net 
assets and operations have been included in the Company's consolidated
financial statements beginning on the date the acquisition was consummated.
The purchase price of $48.4 million was allocated to the net assets acquired
with the excess of cost over fair value of the net assets acquired being 
approximately $33.7 million.  The excess of cost over fair value of net 
assets acquired is being amortized on a straight-line basis over 15 years.

NOTE 3
______
NON-RECURRING CHARGE

   During the fiscal 1996 first quarter, the Company recognized a non-recurring
charge to earnings of $23.8 million ($14.9 million after-tax or $0.23 per share)
related to restructuring plans to further reduce the Company's cost structure
and improve productivity through the consolidation of certain manufacturing 
operations and the disposition of underutilized assets.  The restructuring 
plan focused on the consolidation of production facilities acquired via 
mergers during the preceding four years.  As part of the restructuring 
action, the Company closed its spun cotton manufacturing facilities in 
Edenton and Mount Pleasant, North Carolina with the majority of the 
manufacturing production being transferred to other facilities.  The 
significant components of the non-recurring charge include $2.4 million of 
severance and other employee-related costs from the termination of employees 
and a $21.4 million write-down to estimated fair value less the cost
of disposal of underutilized assets and consolidated facilities to be disposed. 
Costs associated with the relocation of equipment or personnel are being 
expensed as incurred.

   In connection with the plan of restructuring and corporate consolidation, the
Company has incurred as of June 30, 1996, severance and other employee-related
costs of $1.7 million associated with the termination of 275 employees. 
Additionally, the Company has charged against the reserve costs incurred
associated with the plant closures of $ 0.6 million and losses incurred from the
disposal of assets of $7.4 million.  The Company anticipates that all 
significant aspects of the consolidation plan associated with the termination
of employees will be accomplished by September 1996.  However, the ultimate 
disposal of equipment and facilities may take longer due to current market 
conditions and the physical locations of the properties.  The balance sheet 
at June 30, 1996, reflects primarily in property, plant and equipment, the 
net book value of the remaining assets to be disposed amounting to 
approximately $17.9 million net of the anticipated losses to be sustained of
$13.4 million. The resulting net carrying value of the

                                      Page 19




remaining assets to be disposed is equivalent to the expected recoveries of $4.5
million.

   In the fiscal 1994 fourth quarter, the Company recorded a non-recurring 
charge of $13.4 million ($14.1 million after-tax or $0.20 per share) related
to the sale of the Company's investment in its wholly-owned French subsidiary,
Unifi Texturing, S.A. (UTSA), and the Company's decision to exit the European
nylon market.  Of the non-recurring charge, $3.1 million relates to the loss 
from the sale of UTSA, $8.8 million relates to the write-off of goodwill and 
other intangibles associated with the Company's European nylon operations and 
$1.5 million relates to the write-down of nylon production equipment and 
inventories. The sale was consummated during the first fiscal quarter of 1995. 
Net cash proceeds from the sale totaled $13.8 million, excluding $4.1 million of
cash remitted to the Company from UTSA coincident with the sale.  The results of
operations of UTSA were not significant to the consolidated Company.

NOTE 4
______
EXTRAORDINARY CHARGE

   During the fourth quarter of the current year, the Company recognized an
extraordinary after-tax charge of $5.9 million or $0.09 per share as a result of
the redemption of the $230 million in 6% convertible subordinated notes due 
2002. The notes were redeemed at 103.33% of principal amount, with accrued 
interest to the date of redemption.

NOTE 5
______
LONG-TERM DEBT

   A summary of long-term debt follows:


(Amounts in thousands)             June 30, 1996       June 25, 1995

Revolving credit facility            $ 170,000             ---
6% convertible subordinated
  notes due March 15, 2002               ---             $ 230,000

   The Company entered a $400 million revolving credit facility dated April 15,
1996, with a group of financial institutions that extends through April 15,
2001. The rate of interest charged is adjusted quarterly based on a pricing 
grid which is a function of the ratio of the Company's debt to earnings 
before income taxes, depreciation, amortization and other non-cash charges.
The credit facility provides the Company the option of borrowing at a spread
over the base rate (as defined) or the Adjusted London Interbank Offered Rate
(LIBOR).  The weighted average interest rate for the period ended June 30, 1996,
was 5.63%.  The Company pays a quarterly facility fee ranging from 0.090% - 
0.150%, in accordance with the pricing grid, of the total amount available 
under the revolving credit facility.

   The revolving credit facility also provides the Company the option to borrow
funds competitively from the individual lenders, at their discretion, provided
that the sum of the competitive bid loans and the aggregate funds committed 
under the revolving credit facility do not exceed the total committed amount.
The revolving credit facility allows the Company to reduce the outstanding 
commitment in whole or in part upon satisfactory notice up to an amount no less
than the sum of the aggregate competitive bid loans and the total committed 
loans.  Any such partial terminations are permanent.  The Company may also elect
to prepay loans in whole or in part.  Amounts paid in accordance with this 
provision may be reborrowed.

   The terms of the revolving credit facility contain, among other provisions,
requirements for maintaining certain net worth and other financial ratios and
specific limits or restrictions on additional indebtedness, liens and merger
activity.  Provisions under this agreement are not considered restrictive to
normal operations or anticipated stockholder dividends.

   The 6% convertible subordinated notes due March 15, 2002, were redeemed in
the fourth quarter of the current fiscal year utilizing the proceeds of the $400
million revolving credit facility.  The Company recorded an extraordinary
after-tax charge for the early retirement of debt of $5.9 million or $0.09 per
share.  In accordance with the debt agreement, the note holders had an option to
convert their notes at a conversion rate of 33.7 shares of common stock for each
$1,000 principal amount of notes.  Notes aggregating $51,000 were converted into
1,718 shares of common stock in accordance with this provision.  The remaining
notes, totaling $229.9 million, were redeemed at 103.33% of principal amount, 
with accrued interest to the date of redemption.

   The fair value of the Company's long-term debt at June 30, 1996, approximates
its carrying value.





                                      Page 20




NOTE 6
______
INCOME TAXES

   The provision for income taxes before extraordinary item consisted of the
following:


(Amounts in thousands)         June 30,     June 25,       June 26,
                                  1996         1995           1994

Currently payable:
   Federal                     $42,289      $51,597        $45,878
   State                         6,953        9,501          7,009
   Foreign                         492          836            518
                               _______      _______        _______
   Total current                49,734       61,934         53,405
                               _______      _______        _______

Deferred:
   Federal                      (4,080)       6,643          6,389
   State                          (604)         983            835
   Foreign                        (111)        (121)          (285)
                               ________     ________       ________
   Total deferred               (4,795)       7,505          6,939
                               ________     ________       ________
Income taxes before
  extraordinary item           $44,939      $69,439        $60,344


   Income taxes were 36.4%, 37.4% and 44.1% of pretax earnings in fiscal 1996,
1995 and 1994, respectively.  A reconciliation of the provision for income taxes
before extraordinary item with the amounts obtained by applying the federal
statutory tax rate is as follows:

                               June 30,     June 25,       June 26,
                                  1996         1995           1994

Federal statutory tax rate        35.0%        35.0%          35.0%
State income taxes net of
  federal tax benefit              3.3          3.1            3.6
Foreign taxes less than domestic
  rate                            (0.8)        (0.7)          (0.2)
Foreign Sales Corporation
  tax benefit                     (0.9)        (0.6)          (0.5)
Research and experimentation
  credit                          (0.6)         ---            ---
Nondeductible expenses and
  other                            0.4          0.6            6.2
                                  _____        _____          _____
Effective tax rate                36.4%        37.4%          44.1%


   The deferred income taxes reflect the net tax effects of temporary 
differences between the bases of assets and liabilities for financial 
reporting purposes and their bases for income tax purposes.  Significant 
components of the Company's deferred tax liabilities and assets as of June 30, 
1996, and June 25, 1995, were as follows:


(Amounts in thousands)                   June 30,        June 25, 
                                            1996            1995

Deferred tax liabilities:
   Property, plant and equipment         $43,172         $51,359
   Other items                               324           1,596
                                         _______         _______
Total deferred tax liabilities            43,496          52,955
                                         _______         _______

Deferred tax assets:
   Accrued liabilities and
     valuation reserves                    6,683           9,207
   Other items                             4,588           6,012
                                         _______         _______
Total deferred tax assets                 11,271          15,219
                                         _______         _______

Net deferred tax liabilities             $32,225         $37,736


NOTE 7
______
COMMON STOCK

   Shares authorized were 500 million in 1996 and 1995.  Common shares 
outstanding at June 30, 1996, and June 25, 1995, were 64,831,366 and 
67,140,005, respectively.

   The Company has Incentive Stock Option Plans with 1,915,561 shares 
reserved at June 30, 1996.  There remain 122,183 options available for grant 
at year end. The transactions for 1996, 1995 and 1994 were as follows:


                                 Page 21

                                      1996           1995           1994

Shrs under option---beginng of yr   1,739,968      1,122,694      1,305,095
Granted                               165,500        773,317        176,500
Exercised                             (55,500)       (68,110)      (189,890)
Canceled (from $10.19 to $24.38)      (56,590)       (87,933)      (169,011)
                                   ___________    ___________    ___________
Shrs under option---end of yr       1,793,378      1,739,968      1,122,694
                                   ___________    ___________    ___________
Opts exercisable---end of yr        1,687,018      1,328,900      1,067,055
                                   ____________  ____________   ____________
Option price range                 $3.80-$25.38  $3.80-$25.25   $1.62-$24.67
                                   ____________  ____________   ____________
Option price range for
  options exercised                $10.19-$24.67 $10.19-$23.88  $1.62-$24.67
                                   _____________ _____________  ____________

   The Company also has a Non-Qualified Stock Option Plan with 702,935 shares
reserved at June 30, 1996.  There remain 9,416 options available for grant at 
year end.  Transactions for 1996, 1995 and 1994 were as follows:


                                      1996            1995          1994

Shrs under option---beginng of yr     738,519        331,033        330,000
Granted                                  ---         408,519          2,065
Exercised                                ---          (1,033)        (1,032)
Canceled ($25.83)                     (45,000)         ---             ---
                                   ___________    ___________    ___________
Shrs under option---end of yr         693,519        738,519        331,033
                                   ___________    ___________    ___________
Opts exercisable---end of yr          693,519        338,519        331,033
                                   ___________    ___________    ___________
Option price range                 $23.88-$25.83  $10.57-$25.83  $10.57-25.83
                                   _____________  _____________  ____________
Option price range for
  options exercised                                  $ 10.57        $ 10.57
                                                     _______        _______   

   Additionally, the Company has granted in fiscal 1996 non-qualified stock
options on 195,000 shares, subject to shareholder approval of the 1996
Non-Qualified Stock Option Plan at the annual meeting of shareholders to be held
October 24, 1996.

NOTE 8
______
RETIREMENT PLANS

   The Company has a qualified profit-sharing plan, which provides benefits for
eligible salaried and hourly employees.  The annual contribution to the plan,
which is at the discretion of the Board of Directors, amounted to $17.0 million
in 1996, $17.0 million in 1995 and $15.8 million in 1994. The Company leases its
corporate office building from its profit-sharing plan through an independent
trustee.

NOTE 9
______
LEASES, COMMITMENTS AND CONCENTRATIONS OF CREDIT RISK

   The Company is obligated under operating leases consisting primarily of real
estate and equipment.  Future obligations for minimum rentals under the leases
during fiscal years after June 30, 1996, are $4.5 million in 1997, $4.7 million
in 1998, $4.1 million in 1999, $4.0 million in 2000, and $4.1 million
in 2001.

   Rental expense was $4.4 million, $3.7 million and $3.2 million for the fiscal
years 1996, 1995 and 1994, respectively.




                                      Page 22




   The Company had committed approximately $59.5 million for the purchase of
equipment and facilities at June 30, 1996.

   The Company had sales to one customer of approximately 12% in 1996, 11% in 
1995 and 12% in 1994.

   The concentration of credit risk for the Company with respect to trade
receivables is mitigated due to the large number of customers, dispersion across
different industries and its factoring arrangements.

NOTE 10
_______
BUSINESS SEGMENTS AND FOREIGN OPERATIONS

   The Company and its subsidiaries are engaged predominantly in the processing
of yarns by: texturing of synthetic filament polyester and nylon fiber, and
spinning of cotton and cotton blend fibers with sales domestically and
internationally, mostly to knitters and weavers for the apparel, industrial,
hosiery, home furnishing, automotive upholstery and other end-use markets.

   The Company's foreign operations are comprised primarily of its manufacturing
facility in Ireland along with its Foreign Sales Corporation and had net sales 
of $282.7 million, $231.1 million and $178.5 million; pretax income, before the
non-recurring charge in 1994, of $8.9 million, $10.4 million and $4.4 million; 
and identifiable assets of $150.9 million, $129.9 million and $132.0 million 
in 1996, 1995 and 1994, respectively.

NOTE 11
_______
DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

   The Company enters into commodity futures contracts as considered appropriate
to reduce the risk of future price increases in connection with the purchase of
cotton for projected manufacturing requirements.  These forward contracts
are accounted for as hedges and, accordingly, gains and losses are deferred and
recognized in cost of sales as a component of the product cost.  At June 30, 
1996, and June 25, 1995, there were no significant futures contracts 
outstanding.

   The Company conducts its business in various foreign currencies.  As a 
result, it is subject to the transaction exposure that arises from foreign 
exchange rate movements between the dates that foreign currency transactions 
are recorded (export sales and purchases) and the dates they are consummated
(cash receipts and cash disbursements in foreign currencies).  The Company 
utilizes some natural hedging to mitigate these transaction exposures.  The 
Company also enters into foreign currency forward contracts for the purchase 
and sale of European, Canadian and other currencies to hedge balance sheet and 
income statement currency exposures.  These contracts are principally entered 
into for the purchase of inventory and equipment and sale of Company products 
into export markets. Counterparties for these instruments are major financial 
institutions. The Company does not engage in speculative or trading derivative 
activities.  At June 30, 1996, and June 25, 1995, the U.S. dollar equivalent of
the contract value of these forward currency exchange agreements was $21.6 
million and $7.3 million, respectively. The agreements at June 30, 1996, mature
through June 1997.  Gains and losses on these contracts are deferred and 
generally recognized as offsets to losses and gains on the foreign currency 
denominated receivables and payables, thereby reducing exchange rate risk.

   The following methods were used by the Company in estimating its fair value
disclosures for financial instruments:

   CASH AND CASH EQUIVALENTS, TRADE RECEIVABLES AND TRADE PAYABLES---The 
carrying amounts approximate fair value because of the short maturity of these 
instruments.

   SHORT-TERM INVESTMENTS---The fair value of these instruments are based on
quoted market prices.

   LONG-TERM DEBT---The fair value of the Company's borrowings is estimated 
based on the quoted market prices for the same or similar issues or on the 
current rates offered to the Company for debt of the same remaining maturities.

   FOREIGN CURRENCY CONTRACTS---The fair value is based on quotes obtained from
brokers or reference to publicly available market information.  As of June 30,
1996, and June 25, 1995, the fair value of foreign currency forward contracts
approximated contract value.

   COMMODITY FUTURES CONTRACTS---The fair value is based on quotes obtained from
brokers.



                                      Page 23

MANAGEMENT'S REVIEW AND ANALYSIS OF OPERATIONS AND FINANCIAL POSITION

FISCAL 1996

   Consolidated net sales increased 3.1% from $1.555 billion in 1995 to $1.603
billion in 1996.  The growth in net sales was accomplished by a 6.4% increase in
per unit average sales price slightly offset by a decline in unit volume of 
3.1%. The decline in unit volume corresponds with the general softness 
experienced by the retail sector during the current year.

   Our domestic operations experienced an overall decline in unit volume of 6.2%
in 1996.  Average per unit sales price for these operations increased
approximately 7.5% during this period reflecting a change in product mix to
lower-volume, higher-priced products and in response to increased raw material
costs.  Domestic polyester texturing capacity will increase through the 1997
fiscal year as the Company's construction of a new texturing plant in 
Yadkinville, North Carolina comes on line.

   Sales growth of 45.4% in our international operations reflects increased
capacity due to expansion and higher average unit sales prices.  Sales from
foreign operations are denominated in local currencies and are hedged in part by
the purchase of raw materials and services in those same currencies.  The
net asset exposure is hedged by borrowings in local currencies which minimize 
the risk of currency fluctuations.  In addition, currency exchange rate risk is
mitigated by the utilization of foreign currency forward contracts.

   Cost of goods sold as a percentage of net sales increased from 85.6% last 
year to 87.8% this year.  On a per unit basis, increases in raw material, 
packaging and manufacturing costs and depreciation expense together with 
reduced unit volume offset the effect of higher average sales prices.

   Selling, general and administrative expenses as a percentage of net sales in
1996 remained consistent with the prior year at 2.8%.  On a dollar basis, 
selling, general and administrative expenses increased 4.6% from $43.1 million 
in 1995 to $45.1 million in 1996.  This increase primarily reflects our ongoing 
efforts to enhance our information systems to improve the operating performance 
throughout the Company and the level of service to our customers.

   Interest expense declined $0.9 million or 5.6%, from $15.5 million in 1995 to
$14.6 million in 1996.  In the fourth quarter of the current year the $230 
million of 6% convertible subordinated notes were redeemed.  The redemption was 
funded by the proceeds from a $400 million, five-year revolving credit facility,
which resulted in a lower effective interest rate than the convertible notes. 
The decrease in the interest rate in combination with the reduction in the debt 
level to $170 million at June 30, 1996, contributed to the decline in interest 
expense. Interest income declined from $10.4 million in 1995 to $6.8 million in 
1996.  This change reflects lower levels of invested funds which were used for 
capital expenditures, acquisitions, long-term debt extinguishment and the 
purchase and retirement of Company common stock.  Other income declined $5.3 
million from $9.7 million in 1995 to $4.4 million in 1996.  In the prior year, 
gains were recognized from the sale of equity affiliates and capital assets in 
excess of current year gains from the sale of short-term investments and capital
assets.

   In the first quarter of the current year, the Company recorded a 
non-recurring charge of $23.8 million, or an after-tax charge to earnings of
$14.9 million ($0.23 per share).  The significant components of the 
non-recurring charge included $2.4 million of severance and other 
employee-related costs ($1.7 million incurred through June 30, 1996, associated
with the termination of 275 employees) and a $21.4 million write-down to 
estimated fair value less the cost of disposal of underutilized or consolidated 
assets ($7.4 million realized as of June 30, 1996).  The charge resulted from 
the plan to restructure and further reduce the Company's cost structure and 
improve productivity through the consolidation of certain manufacturing 
facilities and the disposition of underutilized assets.  As part of the 
restructuring plan, the Company has closed, effective November 17, 1995, the 
spun yarn manufacturing facilities in Edenton and Mount Pleasant, North
Carolina.   The Company anticipates no material differences in charges remaining
compared to its original estimates.

   The effective tax rate has decreased from 37.4% in 1995 to 36.4% in 1996. 
The decline in the effective tax rate is attributed to the increase in earnings 
of foreign subsidiaries taxed at rates below the domestic rate and increased
federal tax benefits of the Company's Foreign Sales Corporation and research and
experimentation tax credits.

   During the fourth quarter of the current year, the Company recognized an
extraordinary after-tax charge of $5.9 million or $0.09 per share as a result of
the premium paid for the early retirement of the $230 million of 6% convertible
subordinated notes due 2002.

   As a result of the above, the Company realized during the current year net
income of $72.5 million, or $1.09 per share compared to corresponding totals in
the prior year of $116.2 million or $1.67 per share.  Before the effects of the
non-recurring and the extraordinary charges recognized in the current year, the
Company had net earnings of $93.3 million, or $1.41 per share.

   In March 1995, the FASB issued Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
(SFAS 121).  The Company adopted SFAS 121 in the first quarter of 1996.  There 
was no cumulative effect on the Company's financial statements from the initial
adoption of SFAS 121; however,




                                      Page 24




the accounting principles described in this statement were utilized in 
estimating the above described non-recurring charge.

   In October 1995, the FASB issued Statement No. 123, "Stock Based 
Compensation," (SFAS 123).  SFAS 123 becomes effective beginning with the 
Company's first quarter of fiscal 1997, and will not have a material effect on 
the Company's financial position or results of operations.  Upon adoption of 
SFAS 123, the Company will continue to measure compensation expense for its 
stock-based employee compensation plans using the intrinsic value method 
prescribed by APB No. 25 "Accounting for Stock Issued to Employees."

FISCAL 1995

   Net sales increased 12.3% from $1.385 billion in 1994 to $1.555 billion in
1995.  The growth was accomplished by an increase in unit volume for the
consolidated domestic and international operations.  The increase in unit sales
volume was predominantly in our lower average priced, natural textured and spun
yarn products.  The volume increase was supplemented by a slight increase in per
unit sales price.

   Our domestic operations experienced increased sales volume of approximately
12.4% during 1995 with significant gains noted in natural polyester and spun 
yarn products.  Domestic volume growth was achieved primarily through capacity
expansions, acquisitions and ongoing modernization projects.  Domestic polyester
texturing productive capacity will be increased throughout the 1996 fiscal year
as the Company continues with a modernization project in process in its
Reidsville, North Carolina facility and completes construction of a new
texturing plant in Yadkinville, North Carolina.

   The growth in sales in our international polyester operations was 
accomplished through increased capacity gained from fiscal 1995 expansions at
our Irish facility, higher average unit sales prices which were raised to 
partially offset escalating raw material costs and to the further weakening of 
the U.S. dollar compared to the prior year. Texturing capacity will be increased
approximately 30% during the upcoming fiscal year due to the installation of 
new texturing equipment.  Sales from foreign operations are denominated in 
local currencies and are hedged in part by the purchase of raw materials and 
services in those same currencies. The net asset exposure is hedged by 
borrowings in local currencies which minimize the risk of currency fluctuations.

   Cost of sales as a percentage of sales remained stable at 85.6% for both the
1995 and 1994 fiscal years.  On a consolidated basis for fiscal 1995, slight
increases in per unit raw material and packaging costs were offset by lower
manufacturing costs per unit.  Increased sales volume and a shift in product mix
to higher-volume, lower-cost items resulted in improved manufacturing costs on a
per unit basis.  These improvements reflect management's continued efforts to
improve operating efficiency and reduce manufacturing cost.

   Selling, general and administrative expenses as a percentage of net sales
decreased to 2.8% in 1995 from 2.9% in 1994 primarily as a result of further
consolidations of operations relating to the previous mergers and an increase in
the net sales base.

   Interest expense declined $2.8 million from $18.3 million in 1994 to $15.5
million in 1995. The decline was attributable to the retirement of debt acquired
in prior year mergers throughout fiscal 1994. The only long-term debt remaining
at June 25, 1995, is the $230 million in convertible subordinate notes issued in
March  1992.  Interest income increased $2.1 million from 1994 to 1995 as a 
result of increased short-term investment levels.  Other income increased $8.4 
million from 1994 to 1995 mainly as a result of the recognition of gains from 
the sale of equity affiliates and capital assets.

   The effective income tax rate decreased from 44.1% in 1994 to 37.4% in 1995.
This decrease was mainly due to the non-deductible, non-recurring charge in the
prior year while no such charge was incurred in 1995. Also contributing to the
current year's lower effective tax rate was the increase in the earnings of
foreign operations, which are taxed at rates lower than the domestic federal tax
rate.

   Net income increased 51.9% from $76.5 million in 1994 to $116.2 million in
1995.  Earnings per share increased from $1.08 per share from fiscal 1994 to 
$1.67 for fiscal 1995, an increase of 54.6%. Net income and net income per share
in 1994 before the non-recurring charge were $90.6 million or $1.28 per share.

LIQUIDITY AND CAPITAL RESOURCES

   Cash provided by operations continues to be the Company's primary source of
funds to finance operating needs and capital expenditures.  Cash generated from
operations increased to $201.5 million for fiscal 1996 compared to $155.3 
million for fiscal 1995.  This improvement was achieved through the improved 
management of working capital and increases in non-cash items including 
depreciation and amortization, which increased $6.1 million during fiscal 1996.
Additionally, $21.8 million of the non-recurring charge of $23.8 million 
recognized in 1996 for the restructuring and consolidation of certain 
manufacturing facilities represented non-cash items.

   Working capital levels are more than adequate to meet the operating
requirements of the Company.  We ended the current year with working capital of
$196.2 million which included cash and cash equivalents of $24.5 million.  Cash
and short-term investments have decreased $121.7 million since June 25, 1995,
resulting primarily from the 



                                      Page 25



utilization of existing cash to fund the costs of acquisitions, capital
expansions, long-term debt extinguishment and the purchase and retirement of
Company common stock.

   The Company utilized $80.1 million and $157.1 million for net investing and
financing activities, respectively, during the year ended June 30, 1996. 
Significant expenditures during fiscal 1996 included $182.4 million for capacity
expansions, upgrades and acquisitions, $34.2 million for the payment of the
Company's cash dividends, $60.0 million for the net retirement of long-term 
debt, and $55.6 million for the purchase and retirement of Company common stock.

   On October 21, 1993, the Board of Directors authorized Management to 
repurchase up to 15 million shares of Unifi's common stock from time to time at 
such prices as Management feels advisable and in the best interest of the 
Company.  Through June 30, 1996, 5.8 million shares have been repurchased at a 
total cost of $141.4 million pursuant to this Board authorization.

   At June 30, 1996, the Company has committed approximately $59.5 million for 
the purchase and upgrade of equipment and facilities, which is scheduled to be
expended during fiscal years 1997 and 1998.  A significant component of these
committed funds as well as a major component of year to date capital 
expenditures is the continuing construction of a highly automated, 
state-of-the-art texturing facility in Yadkinville, North Carolina.  We have 
reached approximately one-fourth of productive capacity in this texturing 
facility which is scheduled for completion in fiscal 1997.

   On April 18, 1996, the Board of Directors approved Unifi's entrance into
polyester fiber production in the United States.  The facility, to be located in
Yadkinville, North Carolina will be capable of producing approximately 150 
million pounds of polyester fiber or one-third of the Company's annual 
domestic need. Expected start-up is in 1998.  This new productive capacity 
will support continued growth opportunities in textured polyester and will 
increase the Company's long-term competitiveness.  The cost of the equipment 
and the facilities is currently being negotiated and is not included in the 
$59.5 million commitment identified in the preceding paragraph.

   In the fourth quarter of the current year, the Company redeemed its $230
million in 6% convertible subordinated notes utilizing proceeds from a $400
million, five-year revolving credit facility.  The combination of the interest
rate environment together with the value of its common stock offered the Company
an opportunity to replace the subordinated notes with bank debt and 
simultaneously address the potential dilution of its earnings from conversion 
of the notes to common stock.  At June 30, 1996, the outstanding balance of 
the revolving credit facility was $170 million.  The remaining balance of the 
revolving credit facility is available to be used for future capital 
expenditures, stock repurchases, acquisitions and general corporate purposes.

   Management believes the current financial position of the Company in 
connection with its operations and its access to debt and equity markets are 
sufficient to meet anticipated capital expenditure, strategic acquisition, 
working capital and other financial needs.





                                      Page 26






SUMMARY OF SELECTED FINANCIAL DATA

(Amts in
thousands,
except per
shr data)    Jun 30,1996 Jun 25,1995  Jun 26,1994 Jun 27,1993  Jun 28,1992


Summary of
Earnings:

Net sales    $1,603,280  $1,554,557   $1,384,797  $1,405,651   $1,322,910
Cost of
 sales          1,407,608    1,330,410   1,185,386    1,141,126   1,090,611
Gross
 profit         195,672     224,147      199,411     264,525      232,299
Selling,
 general
 and admn        45,084      43,116       40,429      38,484       38,530
Interest
 expense         14,593      15,452       18,241      25,785       16,756
Interest
 income          (6,757)    (10,372)      (8,290)    (13,537)      (5,306)
Other
 income          (4,390)     (9,659)      (1,238)     (5,775)      (1,598)
Non-recurr-
 ing chrg        23,826        ---        13,433        ---          ---
Merger
 expenses          ---         ---          ---         ---        24,805
Inc before inc
 taxes and
 extraordnry 
 
item             123,316      185,610     136,836      219,568     159,112
Provision
 for inc
 taxes             44,939       69,439      60,344       82,924      62,263
Inc before
 extraordnry
 item              78,377      116,171      76,492      136,644      96,849
Extraordnry
 item               5,898         ---         ---          ---         ---
Net inc          72,479     116,171       76,492     136,644       96,849


Per Shr of
Common Stk:
Inc before
 extraordnry 
 item          $     1.18   $     1.67  $     1.08   $     1.93  $     1.38
Extraordnry
 item                 .09         ---         ---          ---         ---
Net inc            1.09        1.67         1.08        1.93         1.38
Cash 
 divids             .52         .40          .56         .42          .36

Fin Data:
Working
capital      $  196,222  $  333,357   $  304,274  $  320,215   $  389,826
Gross prop,
plant and
equipmt       1,027,128     910,383      848,637     750,552      640,963
Total
 assets         951,084   1,040,902    1,003,252   1,017,449      989,404
Long-term
 debt             170,000      230,000     230,000      250,241     328,685
Sharehldrs'
 equity         583,206     603,502      588,522     545,553      463,043


QUARTERLY RESULTS (Unaudited)
_____________________________

Quarterly financial data for the years ended June 30, 1996, and June 25, 1995, 
is presented below:

(Amounts in
 thousands,
 except per
 share data)   First Quarter  Second Quarter    Third Quarter  Fourth Quarter


1995:
Net sales         $359,194       $387,297         $403,001       $405,065
Gross profit        48,334         55,115           58,302         62,396
Net income          22,689         28,120           31,050         34,312
Earnings per shr       .32            .40              .45            .50


1996:
Net sales         $387,369       $401,437         $375,509       $438,965
Gross profit        44,929         49,255           45,544         55,944
Income before
 extraordnry
 item                  6,767         24,118           20,747         26,745
Extraordnry
 item                   ---            ---              ---           5,898
Net income             6,767         24,118           20,747         20,847
Income before
 extraordnry
 item per shr          .10            .36              .32            .40
Earnings per shr       .10            .36              .32            .32




                                      Page 27



MARKET AND DIVIDEND INFORMATION (Unaudited)
___________________________________________

   The Company's common stock is listed for trading on the New York Stock
Exchange. 
The following table sets forth the range of high and low sales prices of the
Unifi Common Stock as reported on the NYSE Composite Tape and the regular cash 
dividends per share declared by Unifi during the periods indicated.

                                            High           Low        Dividends
Fiscal year 1994:

  First quarter ended September 26, 1993   $34.13         $20.00         $.14
  Second quarter ended December 26, 1993   $27.63         $20.88         $.14
  Third quarter ended March  27, 1994      $27.00         $21.75         $.14
  Fourth quarter ended June 26, 1994       $26.63         $20.50         $.14


Fiscal year 1995:

  First quarter ended September 25, 1994   $25.50         $23.38         $.10
  Second quarter ended December 25, 1994   $26.63         $23.88         $.10
  Third quarter ended March 26, 1995       $29.13         $25.00         $.10
  Fourth quarter ended June 25, 1995       $27.75         $22.63         $.10

Fiscal year 1996:

  First quarter ended September 24, 1995   $26.63         $23.50         $.13
  Second quarter ended December 24, 1995   $25.00         $21.88         $.13
  Third quarter ended March 24, 1996       $25.75         $21.25         $.13
  Fourth quarter ended June 30, 1996       $28.50         $23.00         $.13







                                      Page 28




                         EXHIBIT (13b-1)




REPORT OF INDEPENDENT AUDITORS



The Board of Directors and Shareholders of Unifi, Inc.

          We have audited the accompanying consolidated balance
sheets of Unifi, Inc. as of June 30, 1996, and June 25, 1995, and
the related consolidated statements of income, changes in
shareholders' equity, and cash flows for each of the three years
in the period ended June 30, 1996.  These financial statements
are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial
statements based on our audits.

          We conducted our audits in accordance with generally
accepted auditing standards.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our
opinion.

          In our opinion the financial statements
 referred to
above present fairly, in all material respects, the consolidated
financial position of Unifi, Inc. at June 30, 1996, and June 25,
1995, and the consolidated results of its operations and its cash
flows for each of the three years in the period ended June 30,
1996, in conformity with generally accepted accounting
principles.

ERNST & YOUNG LLP

Greensboro, North Carolina
July 16, 1996




                              Page 13


  

                               Exhibit (21)


                                UNIFI, INC.

                               SUBSIDIARIES


                                                     Percentage
                                                     of Voting
                                                     Securities
  Name              Address        Incorporation         Owned
- -----------------------------------------------------------------

Unifi, FSC Limited  Agana, Guam    Guam                100%


Unifi Textured      Letterkenny,
Yarns Europe, Ltd.  Ireland        United Kingdom      100%


Unifi International
Service, Inc.       Greensboro, NC North Carolina      100%
                                      




                               Exhibit (23)

                      Consent of Independent Auditors




We consent to the incorporation by reference in this Annual
Report (Form 10-K) of Unifi, Inc. of our report dated July 16,
1996, included in the 1996 Annual Report to Shareholders of
Unifi, Inc.

We also consent to the addition of the financial statement
schedule of Unifi, Inc. listed in Item 14(a), to the financial
statements covered by our report dated July 16, 1996,
incorporated herein by reference.

In addition, we consent to the incorporation by reference in the
Registration Statement (Form S-8 No. 33-23201) pertaining to the
Unifi, Inc. 1982 Incentive Stock Option Plan and the 1987 Non-
Qualified Stock Option Plan, and Registration Statement (Form S-8
No. 33-53799) pertaining to the Unifi, Inc. 1992 Incentive Stock
Option Plan and Unifi Spun Yarns, Inc. 1992 Employee Stock Option
Plan of our report dated July 16, 1996, with respect to the
consolidated financial statements and schedule of Unifi, Inc.
incorporated herein by reference in this Annual Report (Form
10-K) for the year ended June 30, 1996.



                            ERNST & YOUNG LLP


Greensboro, North Carolina
September 24, 1996





<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
Company's Annual Report to Shareholders for the fiscal year ended June,
30, 1996, and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1000
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          JUN-30-1996
<PERIOD-END>                               JUN-30-1996
<CASH>                                          24,473
<SECURITIES>                                         0
<RECEIVABLES>                                  205,956
<ALLOWANCES>                                     6,595
<INVENTORY>                                    132,946
<CURRENT-ASSETS>                               361,875
<PP&E>                                       1,027,128
<DEPRECIATION>                                 477,752
<TOTAL-ASSETS>                                 951,084
<CURRENT-LIABILITIES>                          165,653
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                         6,483
<OTHER-SE>                                     576,723<F1>
<TOTAL-LIABILITY-AND-EQUITY>                   951,084
<SALES>                                      1,603,280
<TOTAL-REVENUES>                             1,603,280
<CGS>                                        1,407,608
<TOTAL-COSTS>                                1,407,608
<OTHER-EXPENSES>                                23,826
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                              14,593
<INCOME-PRETAX>                                123,316
<INCOME-TAX>                                    44,939
<INCOME-CONTINUING>                             78,377
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                  5,898
<CHANGES>                                            0
<NET-INCOME>                                    72,479
<EPS-PRIMARY>                                     1.09
<EPS-DILUTED>                                     1.09
<FN>
<F1>Note:  Other Equity of $576,723 is comprised of Capital in Excess of Par
Value of $62,255, Retained Earnings of $512,253 and Cumulative Translation
Adjustment of $2,215.
</FN>
        

</TABLE>