UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                      
                                  FORM 8-K
                                      
                               CURRENT REPORT
   Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
                                      
                                      
       Date of Report (Date of earliest event reported) June 30, 1997
                                      
                                      
                                      
                                 Unifi, Inc.
           (Exact name of registrant as specified in its charter)
                                      
     New York              1-10542            11-2165495
  (State or Other       (Commission         (IRS Employer
  Jurisdiction of       File Number)       Identification
  Incorporation)                                No.)

P.O. Box 19109-7201 West Friendly Avenue, Greensboro, North Carolina 27419

       (Address of principal executive offices)     (Zip Code)




 (Registrant's telephone number, including area code)       910-294-4410
                                      
                                      

       (Former name or former address, if changed since last report.)

Item 2.  Acquisition or Disposition of Assets.
On June 30, 1997, Unifi, Inc. ("Unifi") entered into a Contribution Agreement
(the "Agreement") with Parkdale Mills, Inc. ("Parkdale") that set forth the
terms and conditions by which Parkdale and Unifi will each contribute all of
the assets of their spun cotton yarn operations utilizing open-end and air
jet spinning technologies to a newly created limited liability company named
Parkdale America, LLC (the "LLC").  The Agreement specified that each
entity's inventory, owned real and tangible personal property and
improvements thereon and Unifi, Inc.'s leased real property associated with
these operations were to be contributed to the LLC.  Additionally, Unifi is
required to contribute cash to the LLC as follows:  $32.9 million on June 30,
1997, $10.0 million on June 30, 1998 and $10.0 million on June 30, 1999,
whereas Parkdale is required to contribute cash of $51.6 million on June 30,
1997.  The LLC will assume certain long-term debt obligations of Unifi and
Parkdale in the amounts of $23.5 million and $46.0 million, respectively.

In exchange for the assets contributed to the LLC and the liabilities assumed
by the LLC Unifi received a 34% ownership interest in the LLC and Parkdale
received a 66% ownership interest in the LLC.


Item 7.  Financial Statements and Exhibits.

(b)  Pro forma Financial Information (Unaudited)

   Pro forma condensed Balance Sheet as of March 30, 1997
 
    Pro forma condensed Statements of Income for the nine months ended March
     30, 1997 and for the fiscal year ended June 30, 1996
 
(c) Exhibits

   Exhibit No.            Description

   (2)         Contribution Agreement by and Among
               Parkdale Mills, Incorporated Unifi, Inc. Unifi
               Manufacturing, Inc. and Parkdale America, LLC Dated:
               June 30, 1997

                                      
                       PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma financial information sets forth the
results of operations and the financial position of Unifi, Inc. ("Unifi")
after giving effect to the contribution of the spun cotton yarn assets and
other consideration to and the assumption of liabilities by Parkdale America,
LLC (the "LLC") (a) as of the end of the most recent period presented for the
Balance Sheet and (b) as of the beginning of each period presented in the
Statements of Income.

The unaudited pro forma financial information reflects the Balance Sheet of
Unifi at March 30, 1997, and the Statements of Income of Unifi for the nine
months ended March 30, 1997, and the fiscal year ended June 30, 1996, after
giving effect to the contribution of Unifi's spun cotton yarn assets to and
the assumption of certain liabilities by the LLC.  The pro forma adjustments
to the Statements of Income for the contribution of Unifi's spun cotton yarn
operations to the LLC include only those revenues and direct operating
expenses associated with such spun cotton yarn business.

The following pro forma data are not necessarily indicative of the financial
position or results of operations that would actually have been reported had
the spun yarn asset contribution been effected during those periods or that
may be reported in the future.  The pro forma data should be read in
conjunction with the respective historical Consolidated Financial Statements
and Notes thereto of Unifi.

                     PRO FORMA BALANCE SHEET (UNAUDITED)
                                      
                                          Unifi, Inc.
 (Amounts in 000's)           March 30,                   March 30,
                                1997        Pro Forma       1997
                             Historical    Adjustments    Pro Forma
Assets:                                                            
Current assets:                                                    
 Cash and cash equivalents        $22,951 (1)$(32,902)       $   -- 
                                          (2)   9,951
 Accounts receivable, net         221,799          --       221,799
 Inventories                      126,672 (1) (21,399)      105,273
                                              
 Other current assets               4,420          --         4,420

Total current assets              375,842     (44,350)      331,492
                                                                   
Property, plant and               586,246 (1)(133,389)      452,857
equipment, net                               
Investment in affiliate                -- (4) 180,490       180,490
                 
Other noncurrent assets            41,564          --        41,564
Total assets                   $1,003,652      $2,751    $1,006,403
                             
Liabilities and                                                    
shareholders' equity:
Current liabilities:                                               
 Accounts payable                $101,761        $ --      $101,761
 Accrued expenses                  38,914          --        38,914
 Income taxes                      19,056          --        19,056
Total current liabilities         159,731          --       159,731
                                                                   
Long-term debt                    235,000  (1)(23,500)      221,451
                                           (2)  9,951             
Due to Parkdale America, LLC           --  (1) 20,000        20,000
Deferred income taxes              44,156  (3) (3,700)       40,456
Total liabilities                 438,887       2,751       441,638
                                                                   
Shareholders' equity:                                              
 Common stock                       6,228          --         6,228
 Capital in excess of par              --          --            --
  value
 Retained earnings                557,537          --       557,537
 Cumulative translation             1,000          --         1,000
  adjustment
Total shareholders' equity        564,765          --       564,765
Total liabilities and          $1,003,652      $2,751    $1,006,403
  shareholders' equity

Explanation of pro forma adjustments:
(1)  Reflects Unifi's contribution of assets to and the liabilities  assumed
 by the LLC.
(2)  To  record additional borrowings required to fund the cash  payment  of
 $32.9 million on the closing date.
(3)  To  adjust  deferred income taxes for the tax effect of the  difference
  between  the  initial financial statement carrying value of its  investment
  in  the LLC and its 34.0% ownership in the tax basis of the underlying  net
  assets of the LLC.
(4)  To  record  the initial financial statement carrying value  of  Unifi's
  34.0% ownership in the LLC.



                                        
                   PRO FORMA STATEMENTS OF INCOME (UNAUDITED)
Unifi, Inc. (Amounts in 000's, Nine Months Ended March 30, 1997 Fiscal Year Ended June 30, 1996 except per share (1)Pro forma (1)Pro forma amounts) Historical Adjustments Pro forma Historical Adjustments Pro forma Net sales $1,272,312 (2) $(222,898) $1,049,414 $1,603,280 (2)$(303,390) $1,299,890 Cost and expenses: Cost of sales 1,101,701 (2) (212,307) 889,394 1,407,608 (2) (296,022) 1,111,586 Selling, general and administrative 33,704 (2) (1,833) 31,871 45,084 (2) (2,379) 42,705 expense Interest expense 8,900 (3) (595) 8,305 14,593 (3) (763) 13,830 Interest income (1,675) -- (1,675) (6,757) -- (6,757) Other (income) 1,779 -- 1,779 (4,390) -- (4,390) expense Equity in (earnings) losses of affiliate -- (4) (13,960) (13,960) -- (4) (6,126) (6,126) Non-recurring -- -- -- 23,826 -- 23,826 charge Income before income taxes and extraordinary item 127,903 5,797 133,700 123,316 1,900 125,216 Provision for 43,691 (5) 2,290 45,981 44,939 (5) 751 45,690 income taxes Income before extraordinary item $84,212 $3,507 $87,719 $78,377 $1,149 $79,526 Per share data: Income before extraordinary item $ 1.31 $ 1.36 $ 1.18 $ 1.20 Fully diluted $ 1.31 $ 1.36 $ 1.18 $ 1.20 Weighted average shares outstanding: Primary 64,518 -- 64,518 66,211 -- 66,211 Fully diluted 64,563 -- 64,563 66,251 -- 66,251 Explanation of pro forma adjustments: (1) The pro forma adjustments to the Statements of Income for the contribution of Unifi's spun cotton yarn operations to the LLC include only those revenues and direct operating expenses associated with such business. In addition to the direct manufacturing and direct selling, general and administrative expenses eliminated in (2) below, Unifi on a historical basis had allocated $7.8 million and $11.3 million of such corporate costs to the spun yarn operations for the nine months ended March 30, 1997 and fiscal year ended June 30, 1996, respectively. These corporate allocated costs have not been included in the pro forma adjustments, however Management of Unifi is in the process of implementing a formal plan that should eliminate certain of these costs. A reasonable estimate of these cost reductions is not currently available. (2) To record the elimination of revenues and direct manufacturing costs and direct selling, general and administrative expenses associated with the contribution of Unifi's spun yarn operations to the LLC. (3) To reduce the interest expense at the rate of 5.85% for the nine months ended March 30, 1997 and 5.63% for the fiscal year ended June 30, 1996 related to the $23.5 million of Unifi debt assumed by the LLC, net of additional required borrowings of $9.95 million. (4) To reflect Unifi's 34.0% ownership equity in the pro forma earnings of the LLC. The pro forma earnings of the LLC for the nine months ended March 30, 1997 and the fiscal year ended June 30, 1996 combine the historical operating results of the Unifi spun yarn business for the respective nine and twelve month periods with the historical operating results of the open-end and air jet spinning business of Parkdale for the nine months ended June 30, 1997 and the year ended September 30, 1996, respectively, net of the amortization of the excess of Unifi's investment in the LLC over the underlying net assets. (5) For purposes of the pro forma adjustments, the statutory rate of 39.5% is used in the provision for income tax calculations.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Unifi, Inc. WILLIS C. MOORE, III Willis C. Moore, III Vice President and Chief Financial Officer Date July 15, 1997 UNIFI, INC. CURRENT REPORT ON FORM 8-K EXHIBIT INDEX Exhibit No. Description (2) Contribution Agreement by and Among Parkdale Mills, Incorporated Unifi, Inc. Unifi Manufacturing, Inc. and Parkdale America, LLC Dated: June 30, 1997






                              CONTRIBUTION AGREEMENT
                                   BY AND AMONG
                           PARKDALE MILLS, INCORPORATED
                                   UNIFI, INC.
                             UNIFI MANUFACTURING, INC.
                                      A N D
                               PARKDALE AMERICA, LLC

                               DATED: June 30, 1997


                                TABLE OF CONTENTS
                              CONTRIBUTION AGREEMENT
  Statement of Purpose                                           1

  ARTICLE 1 ASSETS TO BE CONTRIBUTED                             1
  1.1 Parkdale Assets                                            1
  (a) Owned Real Property                                        1
  (b) Improvements                                               1
  (c) Tangible Personal Property                                 1
  (d) Inventories                                                2
  (e) Contracts                                                  2
  (f) Permits                                                    2
  (g) Cash                                                       2
  (h) Deposits                                                   2
  1.2 Unifi and UMI Assets                                       2
  (a) Owned Real Property                                        2
  (b) Leased Real Property                                       2
  (c) Improvements.                                              2
  (d) Tangible Personal Property                                 2
  (e) Inventories                                                3
  (f) Contracts                                                  3
  (g) Permits                                                    3
  (h) Cash                                                       3
  (i) Deposits                                                   3
  1.3 Date of Contributions                                      3
  1.4 Operating Agreement                                        3
  1.5 Operating Expenses, Proration                              3
  (a) Taxes                                                      4
  (b) Utilities                                                  4
  (c) Leases                                                     4
  1.6 Additional Cash Contributions.                             4
  (a) By Unifi                                                   4
  (b) By Parkdale                                                4
  1.7 Liabilities                                                5

  ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF PARKDALE           5
  2.1 Organization and Good Standing; Governing Documents        5
  2.2 Authority                                                  5
  2.3 No Conflict or Breach                                      5
  2.4 Consents and Approvals                                     6
  2.5 Title to and Sufficiency of Assets                         6
  2.6 Real Property                                              6
  (a) Real Property                                              6
  (b) Improvements                                               7
  2.7 Tangible Personal Property                                 7
  2.8 Inventories                                                7
  2.9 Contracts                                                  7
  2.10Litigation                                                 7
  2.11Compliance with Decrees and Laws                           8
  2.12Permits                                                    8
  2.13Environmental Protection                                   8
  2.14Insurance                                                  10
  2.15Labor and Employment Matters                               10
  2.16Product Warranties                                         10
  2.17Related Party Transactions                                 10
  2.18Brokers                                                    10
  2.19Disclosure                                                 11
  2.20Taxes                                                      11

  ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF UNIFI AND UMI      11
  3.1 Organization and Good Standing; Governing Documents        11
  3.2 Authority                                                  12
  3.3 No Conflict or Breach                                      12
  3.4 Consents and Approvals                                     12
  3.5 Title to and Sufficiency of Assets                         12
  3.6 Real Property                                              13
  (a) Owned                                                      13
  (b) Leased                                                     13
  (c) Improvements                                               13
  3.7 Tangible Personal Property                                 13
  3.8 Inventories                                                14
  3.9 Contracts                                                  14
  3.10Litigation                                                 14
  3.11Compliance with Decrees and Laws                           14
  3.12Permits                                                    15
  3.13Environmental Protection                                   15
  3.14Insurance                                                  16
  3.15Labor and Employment Matters                               16
  3.16Product Warranties                                         17
  3.17Related Party Transactions                                 17
  3.18Brokers                                                    17
  3.19Disclosure                                                 17
  3.20Taxes                                                      17

  ARTICLE 4 COVENANTS                                            18
  4.1 Covenants of Parkdale                                      18
  (a) Real Property and Improvements                             18
  (b) Access and Information                                     18
  (c) Termination of Parkdale's Employees;
       Settlement of Obligations of Parkdale                     18
  4.2 Covenants of Unifi and UMI                                 19
  (a) Real Property                                              19
  (b) Access and Information                                     19
  (c) Termination of Unifi's and UMI's Employees;
       Settlement of Obligations of Unifi and UMI                19
  4.3 Mutual Covenants                                           19
  (a) Best Efforts                                               19
  (b) Confidentiality                                            20
  (c) Employee Benefits                                          20
  (d) Transfer Taxes                                             20
  (e) Cooperation on Tax Matters                                 21
  4.4 Noncompetition                                             21
  4.5 Magnolia Assets                                            21

  ARTICLE 5 CONDITIONS PRECEDENT TO PARKDALE'S OBLIGATIONS       22
  5.1 Initial Closing                                            22
  (a) Representations and Warranties                             22
  (b) Compliance with Covenants                                  22
  (c) Absence of Litigation                                      22
  (d) Consents and Approvals                                     22
  (e) Legal Opinion                                              22
  5.2 Subsequent Closing                                         22
  (a) Compliance with Covenants                                  22
  (b) Absence of Litigation                                      23
  (c) Consents and Approvals                                     23
  (d) Subdivision                                                23
  (e) Title Insurance; Survey                                    23
  (f) Environmental Audit                                        23

  ARTICLE 6 CONDITIONS PRECEDENT TO UNIFI'S AND UMI'S OBLIGATIONS24
  6.1 Initial Closing                                            24
  (a) Representations and Warranties                             24
  (b) Compliance with Covenants                                  24
  (c) Absence of Litigation                                      24
  (d) Consents and Approvals                                     24
  (e) Legal Opinion                                              24
  6.2 Subsequent Closing                                         24
  (a) Compliance with Covenants                                  24
  (b) Absence of Litigation                                      25
  (c) Consents and Approvals                                     25
  (d) Title Insurance; Survey                                    25
  (e) Environmental Audit                                        25

  ARTICLE 7 CLOSING                                              25
  7.1 Initial Closing                                            25
  (a) Deliveries by Parkdale                                     26
  (b) Deliveries by Unifi and UMI                                26
  7.2 Subsequent Closing                                         27
  (a) Deliveries by Parkdale                                     27
  (b) Deliveries by Unifi and UMI                                27
  7.3 Further Assurances                                         27

  ARTICLE 8 INDEMNIFICATION                                      28
  8.1 Indemnification by Parkdale                                28
  8.2 Indemnification by Unifi and UMI                           28
  8.3 Notice of Claim                                            29
  8.4 Defense                                                    29
  8.5 Loss to the Company                                        29
  8.6 Other Remedies                                             30

  ARTICLE 9 TERMINATION                                          30
  9.1 Termination                                                30
  9.2 Effect on Obligations                                      30

  ARTICLE XMISCELLANEOUS                                         30
  10.1Survival of Representations                                30
  10.2Bulk Sales                                                 31
  10.3Expenses                                                   31
  10.4Publicity                                                  31
  10.5Best Efforts                                               31


  10.6Notices                                                    31
  10.7Governing Law                                              32
  10.8Counterparts                                               32
  10.9Assignment                                                 32
  10.10 Third Party Beneficiaries                                32
  10.11 Headings                                                 32
  10.12 Amendments                                               33
  10.13 Specific Performance                                     33
  10.14 Severability                                             33
  10.15 Entire Agreement                                         33


            EXHIBIT A - Opinion of Counsel to Unifi and UMI
            EXHIBIT B - Opinion of Counsel to Parkdale
            EXHIBIT C - Noncompetition Covenant



                              CONTRIBUTION AGREEMENT


       This Contribution Agreement (the "Agreement") is entered into on June
  30, 1997, by and among PARKDALE MILLS, INCORPORATED, a North Carolina
  corporation ("Parkdale"), UNIFI, INC., a New York corporation ("Unifi"),
  UNIFI MANUFACTURING, INC., a North Carolina corporation ("UMI"), and PARKDALE
  AMERICA, LLC, a North Carolina limited liability company (the "Company").

  Statement of Purpose.

       Each of Parkdale, Unifi and UMI is in the business of manufacturing spun
  cotton yarn utilizing open-end and air jet manufacturing technologies (the
  ``Business'').  UMI is a wholly-owned subsidiary of Unifi.  On June 27, 1997,
  Parkdale and Unifi filed Articles of Organization to create a North Carolina
  limited liability corporation entitled Parkdale America, LLC (the "Company").
  Parkdale, Unifi, the Company and the Managers of the Company have entered
  into an Operating Agreement dated June 30, 1997 (the ``Company Operating
  Agreement''), which provides, among other things, that Parkdale owns
  sixty-six percent (66%) interest in the Company and Unifi owns a thirty-four
  percent (34%) interest in the Company.  Parkdale, Unifi, UMI and the Company
  are entering into this Agreement in order to set forth the terms and
  conditions by which Parkdale, Unifi and UMI will each contribute  to the
  Company all of its assets used in the Business as conducted by each.


  ARTICLE 1

  ASSETS TO BE CONTRIBUTED


       1.1  Parkdale Assets.  Parkdale agrees to contribute and transfer to the
  Company the following assets and properties of Parkdale (referred to
  collectively as the "Parkdale Assets"):

            (a)  Owned Real Property.  The manufacturing plants and associated
       real property owned by Parkdale and listed on attached Schedule 1.1(a)
       (the "Parkdale Real Property");

            (b)  Improvements.  All buildings and other improvements, fixtures
       and appurtenances owned by Parkdale and located on the Parkdale Real
       Property (the "Parkdale Improvements");

            (c)  Tangible Personal Property.  All machinery, equipment, office
       equipment, supplies, materials and other items of tangible personal
       property owned or leased by Parkdale and located on the Parkdale Real
       Property, including (without limitation) the items listed on attached
       Schedule 1.1(c) (the "Parkdale Personal Property") together with any
       express or implied warranty by the manufacturers or sellers of any item
       or component part thereof, and all maintenance records and other
       documents relating thereto;

            (d)  Inventories.  All inventories of Parkdale, including (without
       limitation) all finished goods, work in process and raw materials,
       located on the Parkdale Real Property (the "Parkdale Inventory");

            (e)  Contracts.  All of Parkdale's interests in the contracts and
       commitments described on attached Scheduled 1.1(e) (the "Parkdale
       Contracts");

            (f)  Permits.  All permits, authorizations, certificates, approvals
       and licenses relating to the ownership and operation of the foregoing
       assets and properties ("Parkdale Permits");

            (g)  Cash.  Cash in the amount determined pursuant to Section 1.6
       below; and

            (h)  Deposits.  Parkdale's right to and interest in all utility,
       lease and other deposits paid by Parkdale with respect to the foregoing
       assets and properties (the "Parkdale Deposits").

       1.2  Unifi and UMI Assets.  Unifi and UMI agree to contribute and
  transfer to the Company the following assets and properties of Unifi and UMI
  (referred to collectively as the "Unifi Assets");

            (a)  Owned Real Property.  The manufacturing plants and associated
       real property owned by Unifi and UMI and described on attached Schedule
       1.2(a) (the "Unifi Owned Real Property");

            (b)  Leased Real Property.  All of Unifi's and UMI's interests in
       the real property leased by Unifi and/or UMI (the ``Unifi Leased Real
       Property''), together with the leases relating thereto (the ``Unifi Real
       Property Leases''), described on attached Schedule 1.2(b).

            (c)  Improvements. All buildings and other improvements, fixtures
       and appurtenances owned by Unifi or UMI and located on the Unifi Owned
       Real Property or the Unifi Leased Real Property (the "Unifi
       Improvements");

            (d)  Tangible Personal Property.  All machinery, equipment, office
       equipment, supplies, materials and other items of tangible personal
       property owned or leased by Unifi or UMI and located on the Unifi Owned
       Real Property or the Unifi Leased Real Property, including (without
       limitation) the items listed on attached Schedule  1.2(d) (the "Unifi
       Personal Property"), together with any express or implied warranty by
       the manufacturers or sellers of any item or component part thereof, and
       all maintenance records and other documents relating thereto;

            (e)  Inventories.  All inventories of Unifi, including (without
       limitation), all finished goods, work in process and raw materials,
       located on the Unifi Owned Real Property and the Unifi Leased Real
       Property (the "Unifi Inventory");

            (f)  Contracts.  All of Unifi's interests in the contracts and
       commitments described on attached Schedule 1.2(f) (the "Unifi
       Contracts");

            (g)  Permits.  All permits, authorizations, certificates, approvals
       and licenses relating to the ownership and operation of the foregoing
       assets and properties ("Unifi Permits");

            (h)  Cash.  Cash in the amount determined pursuant to Sections 1.6
       below; and

            (i)  Deposits.  Unifi's right to and interest in all utility, lease
       and other deposits paid by Unifi with respect to the foregoing assets
       and properties (the "Unifi Deposits").

       1.3  Date of Contributions.  Subject to the terms, covenants and
  conditions contained in this Agreement, on the Initial Closing Date (as
  defined in Section 7.1 below), (a) Parkdale will contribute to the Company
  the Parkdale Personal Property, the Parkdale Inventory, the Parkdale
  Contracts, the Parkdale Permits, and the Parkdale Deposits, and (b) Unifi and
  UMI will contribute to the Company the Unifi Personal Property, the Unifi
  Inventory, the Unifi Contracts, the Unifi Permits, the cash referenced in
  Section 1.7(a) and the Unifi Deposits.  Subject to the terms, covenants and
  conditions contained in this Agreement, on the Subsequent Closing Date (as
  defined in Section 7.2 below), (a) Parkdale will contribute to the Company
  the Parkdale Real Property and the Parkdale Improvements, and (b) Unifi and
  UMI will contribute the Unifi Owned Real Property, the Unifi Leased Real
  Property and the Unifi Improvements.

       1.4  Operating Agreement.  From and after the Initial Closing Date, the
  Company will operate all of the Parkdale Assets and the Unifi Assets,
  including (without limitation) the Parkdale Real Property, the Parkdale
  Improvements, the Unifi Owned Real Property, the Unifi Leased Real Property
  and the Unifi Improvements, and will conduct the Business currently conducted
  by Parkdale and Unifi.  Promptly after the Initial Closing, Parkdale, Unifi,
  UMI and the Company will negotiate, in good faith, and execute operating
  agreements, leases and other agreements necessary or appropriate to set forth
  in more detail the arrangement contemplated by this Section 1.4.

       1.5  Operating Expenses, Proration.  Subject to the specific provisions
  of this Section 1.5,  Parkdale and Unifi shall continue to be responsible for
  all costs and expenses attributable to the operation and the ownership of the
  Parkdale Assets and the Unifi Assets, respectively, up to the Effective Time,
  and the Company shall become responsible for all costs and expenses
  attributable to the operation and/or ownership of the Parkdale Assets and the
  Unifi Assets from and after the Effective Time of the Initial Closing Date.
  With respect to certain expenses incurred in the operation and ownership of
  the contributed assets, the following prorations shall be made:

               (a)Taxes.  Ad valorem property taxes shall be apportioned
            between Parkdale, Unifi or UMI, as applicable, and the Company as
            of the date of transfer of the property subject to the tax, based
            on current tax bills if available and, if not available, based on
            the most recent tax bills available with appropriate subsequent
            adjustment when bills for the current year are received.

               (b)Utilities.  Utilities, water and sewer charges shall be paid
            directly to the obligee by Parkdale, Unifi or UMI as applicable,
            based on meter readings as of the Effective Time and at the
            prevailing rates, if possible; otherwise such charges shall be
            apportioned based on the number of operating days occurring before
            and after the Effective Time during the billing period for each
            such charge.

               (c)Leases.  The next payment due to lessors after the Effective
            Time with respect to any leased property, vehicles or equipment
            that are assigned to and assumed by the Company shall be
            apportioned between Parkdale, Unifi or UMI, as applicable, and the
            Company based on the time in such period before and after the
            Effective Time.

  Appropriate cash payments by Parkdale, Unifi, UMI, and the Company, as the
  case may require, shall be made from time to time, as soon as practicable
  after the facts giving rise to the obligation for such payments are known, to
  give effect to the prorations provided in this Section 1.5.

       1.6  Additional Cash Contributions.

               (a)By Unifi.  In addition to the assets to be contributed by
            Unifi listed above, Unifi will contribute cash to the Company as
            follows:

                  (i)   $32,902,000 will be contributed on the Initial Closing
                 Date;

                  (ii)  $10,000,000 will be contributed on the first
                 anniversary of the Initial Closing Date; and

                  (iii) $10,000,000 will be contributed on the second
                 anniversary of the Initial Closing Date.

               (b)By Parkdale.  In addition to the assets to be contributed by
            Parkdale listed above, Parkdale will contribute $51,555,000 to the
            Company on the Initial Closing Date.

       1.7  Liabilities.

               (a)The Parkdale Assets and the Unifi Assets shall be transferred
            to the Company free and clear of all liabilities, obligations,
            liens, security interests and encumbrances whatsoever; provided,
            however, that the Company will assume the obligations described in
            Section 1.7(b) below.  The Company shall in no event assume or be
            liable for any liability or obligation not specifically assumed
            pursuant to this Section 1.7 and in instruments of assumption
            delivered by it at the Initial Closing, and each of Parkdale, Unifi
            and UMI shall retain responsibility for their respective
            liabilities accrued as of the Effective Time and all liabilities
            arising from  their respective operations prior to the Effective
            Time, whether or not accrued and whether or not disclosed.

               (b)As of the sole exception to the provisions of paragraph (a)
            above, the Company will assume (i) the obligations of Parkdale
            under the Parkdale Contracts, to the extent that such obligations
            are not performed prior to the Effective Time; (ii) the obligations
            of Parkdale under the Promissory Note in the principal amount of
            $46,000,000; and (iii) the obligations of Unifi and UMI under the
            Unifi Contracts and the Unifi Real Property Leases.


  ARTICLE 2

  REPRESENTATIONS AND WARRANTIES OF PARKDALE

       Parkdale represents and warrants to Unifi and UMI and the Company as
  follows:

       2.1  Organization and Good Standing; Governing Documents.  Parkdale is a
  corporation duly organized, validly existing and in good standing under the
  laws of the State of North Carolina.  Parkdale has all requisite power and
  authority to own, operate and lease the Parkdale Assets.

       2.2  Authority.  Parkdale has all requisite power and authority to
  execute and deliver this Agreement and to perform the transactions
  contemplated hereby.  The execution, delivery and performance of this
  Agreement have been duly and validly authorized by all necessary corporate
  action on the part of Parkdale.  This Agreement has been duly executed and
  delivered by Parkdale and constitutes a valid and binding obligation of
  Parkdale, enforceable against Parkdale in accordance with its terms.

       2.3  No Conflict or Breach.  The execution, delivery and performance of
  this Agreement do not and will not:

            (1)       conflict with or constitute a violation of the Articles
            of Incorporation or Bylaws of Parkdale;

            (1)       conflict with or constitute a violation of any law,
            statute, judgment, order, decree or regulation of any legislative
            body, court, administrative agency, governmental authority or
            arbitrator applicable to or relating to Parkdale or the Parkdale
            Assets;

            (1)       conflict with, constitute a default under, result in a
            breach or acceleration of or, except as set forth on Schedule 2.4,
            require notice to or the consent of any third party under any
            contract, agreement, commitment, mortgage, note, license or other
            instrument or obligation to which Parkdale is party or by which it
            is bound or by which the Parkdale Assets are affected; or

            (1)       result in the creation or imposition of any lien, charge
            or encumbrance of any nature whatsoever on any of the Parkdale
            Assets.

       2.4  Consents and Approvals.  Schedule 2.4 describes (a) each consent,
  approval, authorization, registration or filing with any federal, state or
  local judicial or governmental authority or administrative agency, and (b)
  each consent, approval, authorization of or notice to any other third party,
  which is required in connection with the valid execution and delivery by
  Parkdale of this Agreement or the consummation by Parkdale of the
  transactions contemplated herein (the items described in clauses (a) and (b),
  collectively, the "Parkdale Required Consents").

       2.5  Title to and Sufficiency of Assets.  Parkdale has good and
  marketable title to all of the Parkdale Assets, free and clear of any liens,
  encumbrances, claims, security interests, mortgages or pledges of any nature
  (collectively, "Liens"), other than:

               (a)  easements of record that do not affect the  full use and
            enjoyment of the Parkdale Real Property for the purposes for which
            it is currently used or detract from its value; and

               (b)  Liens for taxes not yet due and payable.

  The Parkdale Assets constitute all of the assets, tangible and intangible,
  used by Parkdale in the Business.

       2.6  Real Property.

               (a)Real Property.  Schedule 1.1(a) contains a true and correct
            list of all real property owned by Parkdale and used in connection
            with the Business.  True and correct copies of  (i) all deeds,
            title insurance policies and surveys of the Parkdale Real Property
            and (ii) all documents evidencing any mortgages, liens or
            encumbrances upon the Parkdale Real Property have been made
            available to Unifi.  Parkdale does not lease any real property in
            connection with the Business.

               (b)Improvements.  The Parkdale Real Property is zoned for the
            various purposes for which the Parkdale Improvements are presently
            being used.  All Parkdale Improvements are in compliance with all
            applicable zoning and land use laws, ordinances and regulations.
            All Parkdale Improvements are in good repair and in good operating
            condition, ordinary wear and tear excepted.  No part of any
            Parkdale Improvement encroaches on any real property not included
            in the Parkdale Real Property.

       2.7  Tangible Personal Property.  All of the tangible personal property
  owned or leased by Parkdale and used in connection with the Business is
  listed on Schedule 1.1(c).  Each item of Parkdale Personal Property is in
  good operating order, condition and repair, ordinary wear and tear excepted,
  is suitable for immediate use in the ordinary course of business of the
  Business and is free from defects.

       2.8  Inventories.  All items included in the Parkdale Inventory (i) are
  in materially good condition, not obsolete or defective, (ii) are useable or
  saleable in the ordinary course of business of the Business and at the
  current operating profit margins of Parkdale, (iii) are located on the
  Parkdale Real Property, and (iv) have been acquired by Parkdale only in bona
  fide transactions entered into in the ordinary course of business.

       2.9  Contracts.  Parkdale has provided to Unifi a true and correct list
  of  all contracts, commitments, agreements (including agreements for the
  borrowing of money or the extension of credit), licenses, understandings and
  obligations, whether written or oral, to which Parkdale is party or by which
  Parkdale or the Parkdale Assets are bound or affected, that are material to
  the operation of the Business as conducted by Parkdale.  Parkdale has made
  available to Unifi true and complete copies of all written Parkdale Contracts
  and true and complete memoranda of all oral Parkdale Contracts, including any
  and all amendments and other modifications thereto.  Each of the Parkdale
  Contracts is valid, binding and enforceable in accordance with its terms and
  is in full force and effect.  No Parkdale Contract will result in a material
  loss upon completion of performance, and no purchase commitments are in
  excess of the normal requirements of the Business as conducted by Parkdale.
  There are no existing defaults, and no events or circumstances have occurred
  which, with or without notice or lapse of time or both, would constitute
  defaults, under any of the Parkdale Contracts.  The assignment of the
  Parkdale Contracts by Parkdale to the Company will not, with respect to any
  Contract, (i) constitute a default thereunder, (ii) require the consent of
  any person or party, except for the Parkdale Required Consents, or (iii)
  affect the continuation, validity and effectiveness thereof or the terms
  thereof.

       2.10 Litigation.  There are no claims, actions, suits, arbitration
  proceedings, inquiries, hearings, injunctions or investigations ("Claims")
  pending, or to the best knowledge of Parkdale, threatened, against Parkdale
  and relating to Parkdale's ownership, use or operation of the Parkdale
  Assets. There are no facts or circumstances which could serve as the basis
  for any Claim against Parkdale involving the Parkdale Assets, or, by virtue
  of the execution, delivery and performance of this Agreement, against Unifi.

       2.11 Compliance with Decrees and Laws.  There is not outstanding or, to
  the best knowledge of Parkdale, threatened, any order, writ, injunction or
  decree of any court, governmental agency or arbitration tribunal against or
  involving Parkdale with respect to the Business or the Parkdale Assets.
  Parkdale is currently, and has been continuously throughout the past two
  years, in full compliance with all laws, statutes, rules, regulations, orders
  and licensing requirements ("Rules") of federal, state, local and foreign
  agencies and authorities applicable to the  properties and operations of the
  Business as conducted by Parkdale.  To the best knowledge of Parkdale, there
  has been no allegation of any violation of any such Rules, and no
  investigation or review by any federal, state or local body or agency is
  pending, threatened or planned and involving the Business as conducted by
  Parkdale or the Parkdale Assets.

       2.12 Permits.  Parkdale has obtained all permits, authorizations,
  certificates, approvals, licenses, exemptions and classifications required
  for the conduct of the Business by Parkdale and the ownership and operation
  of the Parkdale Assets.  Parkdale is not in violation of any of the Parkdale
  Permits, and no proceedings are pending or, to the best knowledge of
  Parkdale, threatened, to revoke or limit any Parkdale Permit.  All of the
  Parkdale Permits will be effectively assigned and transferred to the Company
  at the Closing to the extent permitted by law.

       2.13 Environmental Protection.  To the best knowledge of Parkdale, the
  existing and prior uses of the Parkdale Assets comply with, and at all times
  have complied with, and Parkdale is not in violation of, and has not
  violated, in connection with the ownership, use, maintenance or operation of
  the Parkdale Assets, any applicable federal, state, county or local statutes,
  laws, regulations, rules, ordinances, codes, licenses or permits of any
  governmental authorities relating to environmental matters, including by way
  of illustration and not by way of limitation the Comprehensive Environmental
  Response, Compensation and Liability Act as amended, the Resource
  Conservation Recovery Act as amended, the Clean Air Act, the Clean Water Act,
  the Occupational Safety and Health Act, the Toxic Substances Control Act, any
  "Superfund" or "Superlien" law, the North Carolina Oil Pollution and
  Hazardous Substances Control Act of 1978, or any other federal, state or
  local statute, law, ordinance, code, rule, regulation, order, decree or
  guideline (whether published or unpublished) regulating, relating to or
  imposing liability or standards of conduct concerning any petroleum,
  petroleum by-product (including but not limited to crude oil, diesel oil,
  fuel oil, gasoline, lubrication oil, oil refuse, oil mixed with other waste,
  oil sludge, and all other liquid hydrocarbons, regardless of specific
  gravity), natural or synthetic gas, hazardous substance or materials, toxic
  or dangerous waste, substance or material, pollutant or contaminant
  (collectively "Environmental Laws").  Specifically, but not in limitation of
  the foregoing, to the best knowledge of Parkdale:

               (a)Parkdale has obtained and is in full compliance with the
            terms and provisions of all licenses and permits necessary for
            compliance with the Environmental Laws with respect to the
            ownership and operation of the Parkdale Assets;

               (b)The Parkdale Assets are free of asbestos containing materials
            ("ACM's"), and are free of Hazardous Materials. As used in this
            Agreement, "Hazardous Material" means and includes asbestos, ACM's,
            polychlorinated biphenyls, lead-based paints, any petroleum
            product, petroleum by-products (including but not limited to crude
            oil or any fraction of it, diesel oil, fuel oil, gasoline,
            lubrication oil, oil refuse, oil mixed with other wastes, oil
            sludge and all other liquid hydrocarbons, regardless of specific
            gravity), natural or synthetic gas products and/or hazardous
            substance or materials, waste, pollutant or contaminant, defined as
            such in (or for the purposes of) the Environmental Laws.

               (c)Parkdale and its predecessors in interest have operated the
            Parkdale Assets, and have at all times received, handled, used,
            stored, treated and disposed of all Hazardous Materials, in strict
            compliance with all Environmental Laws.  Parkdale has not
            transported or arranged for the transport of any Hazardous
            Materials to or from any property included in the Parkdale Assets.

               (d)No Hazardous Material has been released, deposited,
            discharged, placed, disposed of or originated on or under the
            Parkdale Assets, nor has any real estate included in the Parkdale
            Assets been used at any time by any person as a landfill or a waste
            disposal site.

               (e)There is no electrical equipment, including transformers,
            containing polychlorinated biphenyls (PCBs) included in the
            Parkdale Assets

               (f)There are no monitoring wells on any real property included
            in the Parkdale Assets for monitoring any Hazardous Materials.

               (g)There are no liens on any of the Parkdale Assets resulting
            from any cleanup or proposed cleanup under the Environmental Laws.

               (h)No part of the real estate included in the Parkdale Assets
            constitutes "wetlands" as defined under any Environmental Law or
            other law or regulation.

               (i) No Environmental Law imposes standards or requirements, or
            will impose standards or requirements, which will require the owner
            or operator of the Parkdale Assets to engage in any work, repairs,
            construction or capital expenditures in order to comply with such
            Environmental Law or such proposed Environmental Law.

               (j)No notices of any violation, inquiries or requests for
            information relating to any of the matters referred to in
            Subsections (a) through (i) above relating to the Parkdale Assets
            or their use have been received by Parkdale.

       2.14 Insurance.  All insurance policies maintained by Parkdale with
  respect to and the Parkdale Assets are valid, binding and enforceable in
  accordance with their terms, are in full force and effect, and all premiums
  due thereon have been paid and will be paid through the Effective Time.  Such
  policies provide adequate coverage for all risks normally insured against.
  Parkdale has not been refused any insurance by any insurance carrier during
  the past two years.

       2.15 Labor and Employment Matters.  With respect to employment matters:

               (a)No employees of Parkdale who work in the Business are or have
            been represented by a union or other labor organization or covered
            by any collective bargaining agreement, and to the best knowledge
            of Parkdale, no union is attempting to organize any such employees.

               (b)There is no labor strike, dispute, slowdown, stoppage or
            similar labor difficulty pending or, to the best knowledge of
            Parkdale, threatened against or affecting Parkdale with respect to
            the Business.

               (c)Parkdale is in compliance with all federal, state and local
            laws and regulations respecting employment and employment
            practices, terms and conditions of employment and wages and hours,
            and there is no unfair labor practice complaint against Parkdale
            pending or, to the best knowledge of Parkdale, threatened.

               (d)Parkdale has made available to Unifi a complete and correct
            list of the name, age, position, rate of compensation and any
            incentive compensation arrangements, bonuses or commissions or
            fringe or other benefits, whether payable in cash or in kind, of
            each current employee, independent contractor, consultant and agent
            of Parkdale who is associated with the Business.

       2.16 Product Warranties.  There are no continuing or outstanding
  warranties applicable to goods manufactured or sold by Parkdale.

       2.17 Related Party Transactions.  The Parkdale Assets do not include any
  agreement with, or any other commitment to (a) any officer or director of
  Parkdale; (b) any person related by blood or marriage to any such officer or
  director; or (c) any corporation, partnership, trust or other entity in which
  Parkdale or any such officer, director or related person has an equity or
  participating interest.

       2.18 Brokers.  No finder, broker, agent or other intermediary has acted
  for or on behalf of Parkdale in connection with the negotiation or
  consummation of this Agreement, and there are no claims for any brokerage
  commission, finder's fee or similar payment due from Parkdale.

       2.19 Disclosure.  No representation, warranty or statement made by
  Parkdale in this Agreement, or any document furnished or to be furnished to
  Unifi and UMI pursuant to this Agreement, contains or will contain any untrue
  statement of a material fact, or omits or will omit to state any material
  fact necessary to make the statements contained herein or therein not
  misleading.

       2.20 Taxes.  As of the date of this Agreement, the Initial Closing Date
  and the Subsequent Closing Date, Parkdale represents and warrants to Unifi,
  UMI and the Company as follows.  Parkdale has completed and duly filed in
  correct form with the appropriate governmental authorities all tax returns
  and reports required to be filed.  Such returns were accurate and complete as
  filed.  Parkdale has timely paid in full all taxes and other amounts,
  including without limitation interest, penalties, assessments, deficiencies,
  and additional amounts (``Taxes'') shown to be due on such tax returns and
  reports or claimed to be due by any taxing authority or otherwise due and
  owing.  No liens or other encumbrances exist on the Parkdale Assets because
  of unpaid Taxes.  No officer, director, shareholder or employee responsible
  for tax matters of Parkdale expects any governmental authority to assess
  additional Taxes for any period for which tax returns and reports have
  already been filed except as listed on Schedule 2.20.  There is no dispute or
  claim concerning any liabilities for Taxes of Parkdale either (i) claimed or
  raised by any governmental authority in writing; or (ii) as to which any of
  Parkdale's shareholders, officers, directors, or employees responsible for
  tax matters has knowledge based upon personal contact with any agent of a
  governmental authority except as listed on Schedule 2.20.  Parkdale has never
  been party to any income tax allocation or sharing agreement or a member of
  an affiliated group of corporations filing a consolidated federal income tax
  return.  Parkdale has withheld and paid all taxes required to have been
  withheld and paid in connection with amounts paid or owing to any employee,
  independent contractor, creditor, stockholder, or other third party.


  ARTICLE 3

  REPRESENTATIONS AND WARRANTIES OF UNIFI AND UMI

       Unifi and UMI jointly and severally represent and warrant to Parkdale
  and the Company as follows:

       3.1  Organization and Good Standing; Governing Documents.

               (a)Unifi is a corporation duly organized, validly existing and
            in good standing under the laws of the State of New York.  Unifi
            has all requisite power and authority to own, operate and lease the
            Unifi Assets.

               (b)UMI is a corporation duly organized, validly existing and in
            good standing under the laws of the State of North Carolina.  UMI
            has all requisite power and authority to own, operate and lease the
            UMI assets.  Unifi owns all of the issued and outstanding capital
            stock of UMI.

       3.2  Authority.  Each of UMI and Unifi has all requisite power and
  authority to execute and deliver this Agreement and to perform the
  transactions contemplated hereby.  The execution, delivery and performance of
  this Agreement have been duly and validly authorized by all necessary
  corporate action on the part of Unifi and UMI.  This Agreement has been duly
  executed and delivered by Unifi and UMI and constitutes a valid and binding
  obligation of Unifi and UMI, enforceable against Unifi and UMI in accordance
  with its terms.

       3.3  No Conflict or Breach.  The execution, delivery and performance of
  this Agreement do not and will not:

               (a)    conflict with or constitute a violation of the respective
            Articles of Incorporation or Bylaws of Unifi or UMI;

               (b)    conflict with or constitute a violation of any law,
            statute, judgment, order, decree or regulation of any legislative
            body, court, administrative agency, governmental authority or
            arbitrator applicable to or relating to Unifi, UMI or the Parkdale
            Assets;

               (c)    conflict with, constitute a default under, result in a
            breach or acceleration of or, except as set forth on Schedule 3.4,
            require notice to or the consent of any third party under any
            contract, agreement, commitment, mortgage, note, license or other
            instrument or obligation to which Unifi or UMI is party or by which
            it is bound or by which the Unifi Assets are affected; or

               (d)    result in the creation or imposition of any lien, charge
            or encumbrance of any nature whatsoever on any of the Unifi Assets.

       3.4  Consents and Approvals.  Schedule 3.4 describes (a) each consent,
  approval, authorization, registration or filing with any federal, state or
  local judicial or governmental authority or administrative agency and (b)
  each consent, approval, authorization of or notice to any other third party,
  which is required in connection with the valid execution and delivery by
  Unifi or UMI of this Agreement or the consummation by Unifi of the
  transactions contemplated herein (the items described in clauses (a) and (b),
  collectively, the "Unifi Required Consents").

       3.5  Title to and Sufficiency of Assets.  Unifi has good and marketable
  title to all of the Unifi Assets, free and clear of any Liens, other than:

               (a)easements of record that do not affect the  full use and
            enjoyment of the Unifi Real Property for the purposes for which it
            is currently used or detract from its value; and

               (b)Liens for taxes not yet due and payable.

  The Unifi Assets constitute all of the assets, tangible and intangible, used
  by Unifi and UMI in the Business.

       3.6  Real Property.

               (a)Owned.  Schedule 1.2(a) contains a true and correct list of
            all real property owned by Unifi or UMI and used in connection with
            the Business.  True and correct copies of  (i) all deeds, title
            insurance policies and surveys of the Unifi Owned Real Property and
            (ii) all documents evidencing any mortgages, liens or encumbrances
            upon the Unifi Owned Real Property have been delivered to Parkdale.

               (b)Leased.  Schedule 1.2(b) contains a true and correct list of
            all real property leased by Unifi or UMI and used in connection
            with the Business.  True and correct copies of each of the Unifi
            Real Property Leases have been delivered to Parkdale.  Each of the
            Unifi Real Property Leases is valid, binding and enforceable in
            accordance with its terms and is in full force and effect, and
            there are no offsets or defenses by either landlord or tenant
            thereunder.  There are no existing defaults, and no events or
            circumstances have occurred which, with or without notice or lapse
            of time or both, would constitute defaults, under any of the Unifi
            Real Property Leases.  The assignment of the Unifi Real Property
            Leases by Unifi or UMI to the Company will not, with respect to any
            such lease, (i) permit the landlord to accelerate the rent or cause
            the lease terms to be renegotiated, (ii) constitute a default
            thereunder or (iii) require the consent of the landlord or any
            third party, other than the Unifi Required Consents.

               (c)Improvements.  The Unifi Owned Real Property and the Unifi
            Leased Real Property are zoned for the various purposes for which
            the Unifi Improvements thereon are presently being used.  All Unifi
            Improvements are in compliance with all applicable zoning and land
            use laws, ordinances and regulations.  All Unifi Improvements are
            in good repair and in good operating condition "ordinary wear and
            tear excepted.  No part of any Unifi Improvement encroaches on any
            real property not included in the Unifi Owned Real Property or the
            Unifi Leased Real Property.

       3.7  Tangible Personal Property.  All of the tangible personal property
  owned or leased by Unifi or UMI and used in connection with the Business is
  listed on Schedule 1.2(d).  Each item of Unifi Personal Property is in good
  operating order, condition and repair ordinary wear and tear excepted, is
  suitable for immediate use in the ordinary course of business of the
  Business, is free from defects.

       3.8  Inventories.  All items included in the Unifi Inventory (i) are in
  materially good condition, not obsolete or defective, (ii) are useable or
  saleable in the ordinary course of business of the Business and at the
  current operating profit margins of Unifi or UMI, (iii) are located on Unifi
  Real Property and (iv) have been acquired by Unifi or UMI only in bona fide
  transactions entered into in the ordinary course of business.

       3.9  Contracts.  Unifi and UMI have delivered to Parkdale a true and
  correct list of all contracts, commitments, agreements (including agreements
  for the borrowing of money or the extension of credit), licenses,
  understandings and obligations, whether written or oral, to which Unifi or
  UMI is party or by which Unifi or UMI or the Unifi Assets are bound or
  affected, that are material to the operation of the Business as conducted by
  Unifi or UMI.  Unifi and UMI have made available to Parkdale true and
  complete copies of all written Unifi Contracts and true and complete
  memoranda of all oral Unifi Contracts, including any and all amendments and
  other modifications thereto.  Each of the Unifi Contracts is valid, binding
  and enforceable in accordance with its terms and is in full force and effect.
  No Unifi Contract will result in a material loss upon completion of
  performance, and no purchase commitments are in excess of the normal
  requirements of the Business as conducted by Unifi or UMI.  There are no
  existing defaults, and no events or circumstances have occurred which, with
  or without notice or lapse of time or both, would constitute defaults, under
  any of the Unifi Contracts.  The assignment of the Unifi Contracts by Unifi
  and UMI to the Company will not, with respect to any Unifi Contract, (i)
  constitute a default thereunder, (ii) require the consent of any person or
  party, except for the Unifi Required Consents, or (iii) affect the
  continuation, validity and effectiveness thereof or the terms thereof.

       3.10 Litigation.  There are no claims, actions, suits, arbitration
  proceedings, inquiries, hearings, injunctions or investigations ("Claims")
  pending, or to the best knowledge of Unifi and UMI, threatened, against Unifi
  or UMI and relating to Unifi's or UMI's ownership, use or operation of the
  Unifi Assets. There are no facts or circumstances which could serve as the
  basis for any Claim against Unifi or UMI involving the Unifi Assets, or, by
  virtue of the execution, delivery and performance of this Agreement, against
  Parkdale.

       3.11 Compliance with Decrees and Laws.  There is no outstanding or, to
  the best knowledge of Unifi and UMI, threatened, any order, writ, injunction
  or decree of any court, governmental agency or arbitration tribunal against
  or involving Unifi or UMI with respect to the Business or the Unifi Assets.
  Unifi and UMI are currently, and have been continuously throughout the past
  two years, in full compliance with all laws, statutes, rules, regulations,
  orders and licensing requirements ("Rules") of federal, state, local and
  foreign agencies and authorities applicable to the business, properties and

  operations of the Business as conducted by Unifi or UMI.  To the best
  knowledge of Unifi and UMI, there has been no allegation of any violation of
  any such Rules, and no investigation or review by any federal, state or local
  body or agency is pending, threatened or planned and involving the Business
  as conducted by Unifi or UMI or the Unifi Assets.

       3.12 Permits.  Unifi and UMI have obtained all permits, authorizations,
  certificates, approvals, licenses, exemptions and classifications required
  for the conduct of the Business by Unifi or UMI and the ownership and
  operation of the Unifi Assets.  Neither Unifi nor UMI is in violation of any
  of the Unifi Permits, and no proceedings are pending or, to the best
  knowledge of Unifi, threatened, to revoke or limit any Unifi Permit.  All of
  the Unifi Permits will be effectively assigned and transferred to the Company
  at the Closing to the extent permitted by law.

       3.13 Environmental Protection.  To the best knowledge of Unifi and UMI,
  the existing and prior uses of the Unifi Assets comply with, and at all times
  have complied with, and Unifi and UMI are not in violation of, and have not
  violated, in connection with the ownership, use, maintenance or operation of
  the Unifi Assets, any applicable federal, state, county or local statutes,
  laws, regulations, rules, ordinances, codes, licenses or permits of any
  governmental authorities relating to environmental matters, including by way
  of illustration and not by way of limitation the Comprehensive Environmental
  Response, Compensation and Liability Act as amended, the Resource
  Conservation Recovery Act as amended, the Clean Air Act, the Clean Water Act,
  the Occupational Safety and Health Act, the Toxic Substances Control Act, any
  "Superfund" or "Superlien" law, the North Carolina Oil Pollution and
  Hazardous Substances Control Act of 1978, or any other federal, state or
  local statute, law, ordinance, code, rule, regulation, order, decree or
  guideline (whether published or unpublished) regulating, relating to or
  imposing liability or standards of conduct concerning any petroleum,
  petroleum by-product (including but not limited to crude oil, diesel oil,
  fuel oil, gasoline, lubrication oil, oil refuse, oil mixed with other waste,
  oil sludge, and all other liquid hydrocarbons, regardless of specific
  gravity), natural or synthetic gas, hazardous substance or materials, toxic
  or dangerous waste, substance or material, pollutant or contaminant
  (collectively "Environmental Laws").  Specifically, but not in limitation of
  the foregoing, to the best knowledge of Unifi and UMI:

               (a)Each of Unifi and UMI has obtained and is in full compliance
            with the terms and provisions of all licenses and permits necessary
            for compliance with the Environmental Laws with respect to the
            ownership and operation of the Unifi Assets;

               (b)The Unifi Assets are free of asbestos containing materials
            ("ACM's"), and are free of Hazardous Materials. As used in this
            Agreement, "Hazardous Material" means and includes asbestos, ACM's,
            polychlorinated biphenyls, lead-based paints, any petroleum
            product, petroleum by-products (including but not limited to crude
            oil or any fraction of it, diesel oil, fuel oil, gasoline,
            lubrication oil, oil refuse, oil mixed with other wastes, oil
            sludge and all other liquid hydrocarbons, regardless of specific
            gravity), natural or synthetic gas products and/or hazardous
            substance or materials, waste, pollutant or contaminant, defined as
            such in (or for the purposes of) the Environmental Laws.

               (c)Unifi and UMI have operated the Unifi Assets, and have at all
            times received, handled, used, stored, treated and disposed of all
            Hazardous Materials, in strict compliance with all Environmental
            Laws.  Neither Unifi nor UMI has  transported or arranged for the
            transport of any Hazardous Materials to or from any property
            included in the Unifi Assets.

               (d)No Hazardous Material has been released, deposited,
            discharged, placed, disposed of or originated on or under the Unifi
            Assets, nor has any real estate included in the Unifi Assets been
            used at any time by any person as a landfill or a waste disposal
            site.

               (e)There is no electrical equipment, including transformers,
            containing polychlorinated biphenyls (PCBs) included in the Unifi
            Assets

               (f)There are no monitoring wells on any real property included
            in the Unifi Assets for monitoring any Hazardous Materials.

               (g)There are no liens on any of the Unifi Assets resulting from
            any cleanup or proposed cleanup under the Environmental Laws.

               (h)No part of the real estate included in the Unifi Assets
            constitutes "wetlands" as defined under any Environmental Law or
            other law or regulation.

               (i) No Environmental Law, imposes standards or requirements, or
            will impose standards or requirements, which will require the owner
            or operator of the Unifi Assets to engage in any work, repairs,
            construction or capital expenditures in order to comply with such
            Environmental Law or such proposed Environmental Law.

               (j)No notices of any violation, inquiries or requests for
            information relating to any of the matters referred to in
            Subsections (a) through (i) above relating to the Unifi Assets or
            their use have been received by Unifi.

       3.14 Insurance.  All insurance policies maintained by Unifi and UMI with
  respect to and the Unifi Assets are valid, binding and enforceable in
  accordance with their terms, are in full force and effect, and all premiums
  due thereon have been paid and will be paid through the Effective Time.  Such
  policies provide adequate coverage for all risks normally insured against.
  Neither Unifi nor UMI has been refused any insurance by any insurance carrier
  during the past two years.

       3.15 Labor and Employment Matters.  With respect to employment matters:

               (a)No employees of Unifi or UMI who work in the Business are or
            have been represented by a union or other labor organization or
            covered by any collective bargaining agreement, and to the best
            knowledge of Unifi and UMI, no union is attempting to organize any
            such employees.

               (b)There is no labor strike, dispute, slowdown, stoppage or
            similar labor difficulty pending or, to the best knowledge of Unifi
            and UMI, threatened against or affecting Unifi or UMI with respect
            to the Business.

               (c)Each of Unifi and UMI is in compliance with all federal,
            state and local laws and regulations respecting employment and
            employment practices, terms and conditions of employment and wages
            and hours, and there is no unfair labor practice complaint against
            Unifi or UMI pending or, to the best knowledge of Unifi and UMI,
            threatened.

               (d)Unifi and UMI have made available to Parkdale a complete and
            correct list of the name, age, position, rate of compensation and
            any incentive compensation arrangements, bonuses or commissions or
            fringe or other benefits, whether payable in cash or in kind, of
            each current employee, independent contractor, consultant and agent
            of Unifi and UMI who is associated with the Business.

       3.16 Product Warranties.  There are no continuing or outstanding
  warranties applicable to goods manufactured or sold by Unifi or UMI

       3.17 Related Party Transactions.  The Unifi Assets do not include any
  agreement with, or any other commitment to (a) any officer or director of
  Unifi or UMI; (b) any person related by blood or marriage to any such officer
  or director; or (c) any corporation, partnership, trust or other entity in
  which Unifi or UMI or any such officer, director or related person has an
  equity or participating interest.

       3.18 Brokers.  No finder, broker, agent or other intermediary has acted
  for or on behalf of Unifi or UMI in connection with the negotiation or
  consummation of this Agreement, and there are no claims for any brokerage
  commission, finder's fee or similar payment due from Unifi or UMI.

       3.19 Disclosure.  No representation, warranty or statement made by Unifi
  in this Agreement, or any document furnished or to be furnished to Parkdale
  pursuant to this Agreement, contains or will contain any untrue statement of
  a material fact, or omits or will omit to state any material fact necessary
  to make the statements contained herein or therein not misleading.

       3.20 Taxes.  The term ``Affiliated Corporations'' is defined to include
  Unifi, UMI and all corporations that (i) are or have been a party with Unifi
  or UMI to a tax sharing agreement, or (ii) are or have been a member of an
  affiliated group of corporations that have filed or will file a consolidated
  federal income tax return with Unifi or UMI.  As of the date of this
  Agreement, the Initial Closing Date and the Subsequent Closing Date, Unifi
  and UMI represent and warrant to Parkdale and the Company as follows.  The
  Affiliated Corporations have completed and duly filed in correct form with
  the appropriate governmental authorities all tax returns and reports required
  to be filed.  Such returns were accurate and complete as filed.  The
  Affiliated Corporations have timely paid in full all Taxes shown to be due on
  such tax returns and reports or claimed to be due by any taxing authority or
  otherwise due and owing.  No liens or other encumbrances exist on the Unifi
  Assets because of unpaid Taxes.  No officer, director or employee responsible
  for tax matters of the Affiliated Corporations expects any governmental

  authority to assess additional Taxes for any period for which tax returns and
  reports have already been filed except as listed on Schedule 3.20.  There is
  no dispute or claim concerning any liabilities for Taxes of the Affiliated
  Corporations either (i) claimed or raised by any governmental authority in
  writing; or (ii) as to which any of the Affiliated Corporations' officers,
  directors, or employees responsible for tax matters has knowledge based upon
  personal contact with any agent of a governmental authority except as listed
  on Schedule 3.20.  Each Affiliated Corporation has withheld and paid all
  taxes required to have been withheld and paid in connection with amounts paid
  or owing to any employee, independent contractor, creditor, stockholder, or
  other third party.


  ARTICLE 4

  COVENANTS

       4.1  Covenants of Parkdale.  Parkdale covenants and agrees with Unifi
  and the Company as follows:

               (a)Real Property and Improvements.  Between the date of this
            Agreement and the Subsequent Closing, Parkdale shall not create or
            permit to exist any security interest, mortgage, pledge, lien,
            charge, encumbrance or adverse claim of any kind or nature with
            respect to any of the Parkdale Real Property or the Parkdale
            Improvements except for Liens described in Section 2.5.

               (b)Access and Information.  Parkdale shall permit Unifi and UMI
            and their counsel, accountants and other representatives full
            access during normal business hours to the Parkdale Assets.
            Parkdale shall furnish to Unifi and UMI and their representatives
            all information concerning the Parkdale Assets as Unifi and UMI may
            reasonably request.

               (c)Termination of Parkdale's Employees; Settlement of
            Obligations of Parkdale.  Immediately prior to the Effective Time,
            Parkdale shall terminate all of its employees utilized in or
            necessary to the operation of the Business (the "Transferred
            Employees") and the Company shall employ such Transferred Employees
            as of the Effective Time.  Such transfer of employment shall not
            be treated as a separation from service with respect to such
            Transferred Employees for purposes of any employee benefit plan or
            policy of Parkdale (including, without limitation, any severance
            pay entitlements).  Parkdale shall make adequate provisions for a
            settlement of all obligations of Parkdale to such Transferred
            Employees, including accrued salaries, wages, payroll taxes,
            health, medical, retirement, vacation and any other obligations and
            expenses of any kind or description of Parkdale arising out of or
            relating to the employment by Parkdale of the Transferred Employees
            prior to the Effective Time.

       4.2  Covenants of Unifi and UMI.  Each of Unifi and UMI covenants and
  agrees with Parkdale and the Company as follows:

               (a)Real Property.  Between the date of this Agreement and the
            Subsequent Closing, Unifi and UMI shall not create or permit to

            exist any security interest, mortgage, pledge, lien, charge,
            encumbrance or adverse claim of any kind or nature with respect to
            any of the Unifi Owned Real Property, the Unifi Leased Real
            Property or the Unifi Improvements, except for the Liens described
            in Section 3.5.

               (b)Access and Information.  Unifi and UMI shall permit Parkdale
            and its counsel, accountants and other representatives full access
            during normal business hours to all the Unifi Assets.  Unifi shall
            furnish to Parkdale and its representatives all information
            concerning the Unifi Assets as Parkdale may reasonably request.

               (c)Termination of Unifi's and UMI's Employees; Settlement of
            Obligations of Unifi and UMI.  Effective at the Effective Time,
            Unifi and UMI shall terminate their direct plant specific spun yarn
            employees ("Spun Yarn Employees"), and the Company shall
            simultaneously employee such Spun Yarn Employees as of the
            Effective Time.  Unifi and UMI shall make adequate provisions for a
            settlement of all obligations of Unifi and UMI to such employees,
            including accrued salaries, wages, payroll taxes, any severance pay
            entitlements, health, medical, retirement, vacation or deferred
            compensation benefits and any other obligations and expenses of any
            kind or description of Unifi or UMI arising out of or relating to
            the employment by Unifi or UMI or Unifi's or UMI's termination of
            such employees.

       4.3  Mutual Covenants.  Each of Parkdale, Unifi and UMI covenants and
  agrees with the other as follows:

               (a)Best Efforts.  Each of Parkdale, Unifi and UMI shall use its
            best efforts to make or obtain all consents, approvals,
            authorizations, registrations and filings with all federal, state
            or local judicial or governmental authorities or administrative
            agencies as are required in connection with the consummation of the
            transactions contemplated by this Agreement.

               (b)Confidentiality.  In recognition of the confidential nature
            of certain of the information which will be provided to each party
            by the other, each of Parkdale, Unifi and UMI agrees to retain in
            confidence, and to require its directors, officers, employees,
            consultants, professional representatives and agents (collectively,
            "Representatives") to retain in confidence all confidential
            information transmitted or disclosed to it by the other, and
            further agrees that it will not use for its own benefit and will
            not use or disclose to any third party, or permit the use or
            disclosure to any third party of, any confidential information
            obtained from or revealed by the other, except that each of
            Parkdale, Unifi and UMI may disclose the information to those of
            its Representatives who need the information for the proper
            performance of their assigned duties with respect to the
            consummation of the transactions contemplated hereby.  In making
            such information available to its Representatives, each of
            Parkdale, Unifi and UMI shall take any and all precautions
            necessary to ensure that its Representatives use the information
            only as permitted hereby.  Notwithstanding anything to the contrary

            in the foregoing provisions, such information may be disclosed (a)
            where it is necessary to any regulatory authorities or governmental
            agencies, (b) if it is required by court order or decree or
            applicable law, (c) if it is ascertainable or obtained from public
            or published information, (d) if it is received from a third party
            not known to the recipient to be under an obligation to keep such
            information confidential, or (e) if the recipient can demonstrate
            that such information was in its possession prior to disclosure
            thereof in connection with this Agreement.  If any party shall be
            required to make disclosure of any such information by operation of
            law, such disclosing party shall give the other party prior notice
            of the making of such disclosure and shall use all reasonable
            efforts to afford such other party an opportunity to contest the
            making of such disclosure.  In the event that the Closing shall not
            occur, each of Parkdale, Unifi and UMI shall immediately deliver,
            or cause to be delivered, to the other (without retaining any
            copies thereof) any and all documents, statements or other written
            information obtained from the other that contain confidential
            information.

               (c)Employee Benefits.  Parkdale, Unifi and UMI shall cause the
            Company to adopt employee health and welfare benefit plans
            effective as of the Effective Time which provide benefits that are
            substantially equivalent to the benefits provided by Parkdale prior
            to the Effective Time, and shall make such plans available to each
            former employee of Parkdale, Unifi and UMI that is hired by the
            Company.

               (d)Transfer Taxes.  Parkdale, Unifi and UMI shall pay or cause
            to be paid all Taxes or recording fees imposed on any transfers by
            each respective party of real property and tangible and intangible
            personal property, including without limitation intellectual
            property, applicable to the transfers of property contemplated by
            this Agreement and all sales and use Taxes applicable to transfers
            contemplated by this Agreement.

               (e)Cooperation on Tax Matters.  Parkdale, Unifi, UMI and the
            Company shall cooperate fully, as and to the extent reasonably
            requested by the other party, in connection with any return
            preparation, audit, litigation or other proceeding with respect to
            Taxes.  Such cooperation shall include the retention and (upon the
            other party's request) the provision of records and information
            which are reasonably relevant to any such return preparation,
            audit, litigation or other proceeding and making employees
            available on a mutually convenient basis to provide additional
            information and explanation of any material provided hereunder.
            The Company and Parkdale, Unifi and UMI agree (i) to retain all
            books and records which are relevant to the determination of the
            tax liabilities pertinent to the parties until the expiration of
            the applicable statute of limitations and to abide by all record
            retention agreements entered into with any taxing authority, and
            (ii) to give the other party reasonable written notice prior to
            destroying or discarding any such books and records and, if the
            other party so requests, allow the other party to take possession
            of such books and records.

       4.4  Noncompetition.   In order to ensure to the Company the full
  benefits of the Parkdale Assets, the Unifi Assets and the Business (which,
  for purposes of this covenant, includes the manufacture and sale of spun
  cotton and cotton/non-cotton blend yarn using open-end and air jet
  technologies and any future improvements developed for exclusive application
  to such manufacturing technologies) as conducted by Parkdale, Unifi and UMI,
  Parkdale, Unifi and UMI and their respective affiliates hereby covenant and
  agree that they will not in any manner, directly or indirectly, engage in the
  Business anywhere within North America.  This covenant shall be effective on
  and from the date of this Agreement and (a) shall expire with respect to
  Parkdale on the earliest to occur of the following: (i) the date the Company
  ceases to be engaged in the Business,  (ii) the date Unifi and UMI cease to
  hold any ownership interest in the Company, or (iii) the date that is five
  years following the date that Parkdale ceases to hold any ownership interest
  in the Company, and (b) shall expire with respect to Unifi and UMI on the
  earliest to occur of the following: (i) the date the Company ceases to be
  engaged in the Business,  (ii) the date Parkdale ceases to hold any ownership
  interest in the Company, or (iii) the date that is five years following the
  date that Unifi and UMI cease to hold any ownership interest in the Company.
  Each of Parkdale, Unifi and UMI acknowledge that any breach of the covenants
  of this Section 4.4 will result in irreparable damage and continuing injury
  to the Company, and that, in the event of any such breach or threatened
  breach by Parkdale, Unifi, or UMI, the Company shall be entitled, without
  limiting any other remedies, to an injunction restraining the breaching party
  from committing any such violation, and each of Parkdale, Unifi and UMI
  hereby consent to the issuance of such injunction.  In the event that any
  provision of this Section 4.4 shall be determined by any court to be
  unenforceable, this Section 4.4 shall be interpreted to extend over the
  maximum time periods for which it may be enforceable and to the maximum
  extent in any and all other respects as to which it may be enforceable, all
  as shall be determined by such court.

       4.5  Magnolia Assets.   Following the Initial Closing and subject to all
  consents, approvals, notices or filings required with respect to any third
  party or any governmental or administrative authority, Parkdale and Unifi
  shall cause the Company to purchase from Magnolia Manufacturing Company
  ("Magnolia") all the assets of Magnolia's air jet spinning business for a
  price equal to 7.5 multiplied by the operating cash flow (defined as
  operating income plus depreciation and amortization, determined in accordance
  with generally accepted accounting principles) of Magnolia.


  ARTICLE 5

  CONDITIONS PRECEDENT TO PARKDALE'S OBLIGATIONS


       5.1  Initial Closing.   The obligations of Parkdale to consummate the
  transactions contemplated by this Agreement to occur at the Initial Closing
  are subject to the satisfaction of the following conditions on or before the
  Initial Closing Date, unless specifically waived in writing by Parkdale prior
  to the Initial Closing Date:

               (a)Representations and Warranties.  The representations and
            warranties of Unifi and UMI contained in this Agreement shall have
            been true and correct on the date of this Agreement and shall be
            true and correct on the Initial Closing Date as though made on and
            as of the Initial Closing Date.

               (b)Compliance with Covenants.  Each of Unifi and UMI shall have
            duly performed and complied with all covenants, agreements and
            obligations required by this Agreement to be performed or complied
            with by it on or prior to the Initial Closing.

               (c)Absence of Litigation.  No action or proceeding shall be
            pending by or before any court or other governmental body or agency
            seeking to restrain, prohibit or invalidate the transactions
            contemplated by this Agreement or which would materially adversely
            affect the right of the Company to own, operate or control the
            Parkdale Assets or Unifi Assets to be transferred on the Initial
            Closing Date.

               (d)Consents and Approvals.  All Parkdale Required Consents and
            Unifi Required Consents necessary for the transactions scheduled to
            occur on the Initial Closing Date shall have been obtained.

               (e)Legal Opinion.  Parkdale shall have received from Frazier,
            Frazier & Mahler, L.L.P., counsel to Unifi and UMI, an opinion,
            dated the Initial Closing Date, in the form of Exhibit  A.

       5.2  Subsequent Closing.   The obligations of Parkdale to consummate the
  transactions contemplated by this Agreement to occur at the Subsequent
  Closing subject to the satisfaction of the following conditions on or before
  the Subsequent Closing Date, unless specifically waived in writing by
  Parkdale prior to the Subsequent Closing Date:

               (a)Compliance with Covenants.  Each of Unifi and UMI shall have
            duly performed and complied with all covenants, agreements and
            obligations required by this Agreement to be performed or complied
            with by it on or prior to the Subsequent Closing.

               (b)Absence of Litigation.  No action or proceeding shall be
            pending by or before  any court or other governmental body seeking
            to restrain, prohibit or invalidate the transactions contemplated
            by this Agreement to occur on the Subsequent Closing Date or which
            would materially adversely affect the right of the Company to own,
            operate or control the Parkdale Assets or the Unifi Assets to be
            transferred on the Subsequent Closing Date.

               (c)Consents and Approvals.   All Parkdale Required Consents and
            Unifi Required Consents necessary for the transactions scheduled to
            occur on the Subsequent Closing Date shall have been obtained.

               (d)Subdivision.   Parkdale shall have completed all steps
            necessary to subdivide the Parkdale Real Property from any other
            real property owned by Parkdale that is adjacent to the Parkdale
            Real Property and not used in the operation of the manufacturing
            plants located on the Parkdale Real Property.

               (e)Title Insurance; Survey.  The Company shall have obtained, at
            its own expense, title insurance policies insuring good and
            marketable title and fee simple absolute or leasehold title, as
            applicable, to all of the Parkdale Real Property, the Unifi Owned
            Real Property and the Unifi Leased Real Property, free and clear of
            all title defects or objections, liens, claims, charges, security
            interest or other encumbrances of any nature whatsoever, except
            those that have been disclosed pursuant to this Agreement.  Correct
            surveys shall have been certified to the Company showing boundaries
            of and the location of the Parkdale Real Property, the Unifi Owned
            Real Property and the Unifi Leased Real Property, and the locations
            of all Parkdale Improvements and the Unifi Improvements, and
            showing no encroachment by such Improvements on property of others.

               (f)Environmental Audit.   Parkdale shall have caused, at its
            sole option and at its expense, an independent environmental
            consultant, chosen by Parkdale at its sole discretion, to inspect,
            audit, and test the Unifi Assets for the existence of any and all
            environmental conditions and any and all violations of
            Environmental Laws, and to deliver a report describing the findings
            and conclusions of the inspection (hereafter referred to as the
            "Parkdale Environmental Assessment").  The scope, sequence and
            timing of the Parkdale Environmental Assessment shall be at the
            sole discretion and expense of Parkdale.  The results of the
            Parkdale Environmental Assessment shall be satisfactory in all
            respects to Parkdale.


  ARTICLE 6

  CONDITIONS PRECEDENT TO UNIFI'S AND UMI'S OBLIGATIONS

       6.1  Initial Closing.  The obligations of Unifi and UMI to consummate
  the transactions contemplated by this Agreement to occur at the Initial
  Closing are subject to the satisfaction of the following conditions on or
  before the Initial Closing Date, unless specifically waived in writing by
  Unifi and UMI prior to the Initial Closing Date:

               (a)Representations and Warranties.  The representations and
            warranties of Parkdale contained in this Agreement shall have been
            true and correct on the date of this Agreement and shall be true
            and correct on the Initial Closing Date as though made on and as of
            the Initial Closing Date.

               (b)Compliance with Covenants.  Parkdale shall have duly
            performed and complied with all covenants, agreements and
            obligations required by this Agreement to be performed or complied
            with by it on or prior to the Initial Closing.

               (c)Absence of Litigation.  No action or proceeding shall be
            pending by or before any court or other governmental body or agency
            seeking to restrain, prohibit or invalidate the transactions
            contemplated by this Agreement or which would materially adversely
            affect the right of the Company to own, operate or control the
            Unifi Assets or the Parkdale Assets to be transferred on the
            Initial Closing Date.

               (d)Consents and Approvals.  All Parkdale Required Consents and
            Unifi Required Consents necessary for the transactions to occur on
            the Initial Closing Date shall have been obtained.

               (e)Legal Opinion.  Unifi and UMI shall have received from
            Womble, Carlyle, Sandridge & Rice, PLLC, counsel to Parkdale, an
            opinion, dated the Initial Closing Date, in the form of Exhibit B.

       6.2  Subsequent Closing.   The obligations of Unifi and UMI to
  consummate the transactions contemplated by this Agreement to occur at the
  Subsequent Closing subject to the satisfaction of the following conditions on
  or before the Subsequent Closing Date, unless specifically waived in writing
  by Unifi and UMI prior to the Subsequent Closing Date:

               (a)Compliance with Covenants.  Parkdale shall have duly
            performed and complied with all covenants, agreements and
            obligations required by this Agreement to be performed or complied
            with by it on or prior to the Subsequent Closing.

               (b)Absence of Litigation.  No action or proceeding shall be
            pending by or before  any court or other governmental body seeking
            to restrain, prohibit or invalidate the transactions contemplated
            by this Agreement to occur on the Subsequent Closing Date or which
            would materially adversely affect the right of the Company to own,
            operate or control the Parkdale Assets or the Unifi Assets to be
            transferred on the Subsequent Closing Date.

               (c)Consents and Approvals.   All Parkdale Required Consents and
            Unifi Required Consents necessary for the transactions scheduled to
            occur on the Subsequent Closing Date shall have been obtained.

               (d)Title Insurance; Survey.  The Company shall have obtained, at
            its own expense, title insurance policies insuring good and
            marketable title and fee simple absolute or leasehold title, as
            applicable, to all of the Parkdale Real Property, the Unifi Owned
            Real Property and the Unifi Leased Real Property, free and clear of
            all title defects or objections, liens, claims, charges, security
            interest or other encumbrances of any nature whatsoever, except
            those that have been disclosed pursuant to this Agreement.  Correct
            surveys shall have been certified to the Company showing boundaries
            of and the location of the Parkdale Real Property, the Unifi Owned
            Real Property and the Unifi Leased Real Property, and the locations
            of all Parkdale Improvements and the Unifi Improvements, and
            showing no encroachment by such Improvements on property of others.

               (e)Environmental Audit.   Unifi and UMI shall have caused, at
            their sole option and at their expense, an independent
            environmental consultant, chosen by Unifi and UMI at their sole
            discretion, to inspect, audit, and test the Parkdale Assets for the
            existence of any and all environmental conditions and any and all
            violations of Environmental Laws, and to deliver a report
            describing the findings and conclusions of the inspection
            (hereafter referred to as the "Unifi Environmental Assessment").
            The scope, sequence and timing of the Unifi Environmental
            Assessment shall be at the sole discretion and expense of Unifi.
            The results of the Unifi Environmental Assessment shall be
            satisfactory in all respects to Unifi.

  ARTICLE 7

  CLOSING

       7.1  Initial Closing.  The initial closing of the transactions
  contemplated by this Agreement (the "Initial Closing") shall take place at
  the offices of Womble Carlyle Sandridge & Rice, PLLC, in Charlotte, North
  Carolina, at 10:00 a.m., on June 30, 1997, or such other date as may be
  mutually agreed upon by the parties hereto. The date of the Initial Closing
  is referred to as the "Initial Closing Date".  For the purposes of passage of
  title and risk of loss, allocation of expenses, adjustments and other
  economic or financial effects of the transactions contemplated hereby, the
  Initial Closing when completed shall be deemed to have occurred at 12:01
  a.m., local time, on the Initial Closing Date (the "Effective Time").

               (a)Deliveries by Parkdale.  At the Initial Closing, Parkdale
            shall deliver or cause to be delivered to Unifi, UMI, and the
            Company the following:

                  (i) A copy of all corporate resolutions authorizing the
                 execution, delivery and performance of this Agreement, and the
                 consummation of the transactions contemplated herein
                 accompanied by the certification of the Secretary of Parkdale
                 to the effect that such resolutions are in full force and
                 effect and have not been amended, modified or rescinded;

                  (ii)     The legal opinion referred to in Section 6.1(e);

                  (iii)    Evidence of that all Parkdale Required Consents
                 related to the transfer of the Parkdale Personal Property, the
                 Parkdale Inventory, the Parkdale Contracts and the Parkdale
                 Permits have been obtained or satisfied;

                  (iv)     Bills of Sale, Assignments and such other
                 instruments of transfer as are necessary to convey to the
                 Company the Parkdale Personal Property, the Parkdale
                 Inventory, the Parkdale Contracts and the Parkdale Permits,
                 free and clear of all Liens;

                  (v) Noncompetition Covenants in the form of Exhibit C
                 executed and delivered by W. Duke Kimbrell and Anderson D.
                 Warlick; and

                  (vi)     A lease agreement, in form and substance
                 satisfactory to Unifi, UMI and the Company, leasing the
                 Parkdale Owned Real Property to the Company.

               (b)Deliveries by Unifi and UMI.  At the Initial Closing, Unifi
            and UMI shall deliver or cause to be delivered to Parkdale and the
            Company the following:

                  (i) A copy of all corporate resolutions authorizing the
                 execution, delivery and performance of this Agreement by Unifi
                 and UMI, and the consummation of the transactions contemplated
                 herein, accompanied by the certification of the Secretaries of
                 Unifi and UMI to the effect that such resolutions are in full
                 force and effect and have not been amended, modified or
                 rescinded;

                  (ii)     The legal opinion referred to in Section 5.1(e);

                  (iii)    Evidence of that all Unifi Required Consents related
                 to the transfer of the Unifi Personal Property, the Unifi
                 Inventory, the Unifi Contracts and the Unifi Permits have been
                 obtained or satisfied;

                  (iv)     Bills of Sale, Assignments and such other
                 instruments of transfer as are necessary to convey to the
                 Company the Unifi Personal Property, the Unifi Inventory, the
                 Unifi Contracts and the Unifi Permits, free and clear of all
                 Liens;

                  (v) A wire transfer to the Company of cash in the amount
                 determined pursuant to Section 1.7 above;

                  (vi)     Noncompetition Covenants in the form of Exhibit C
                 executed and delivered by G. Allen Mebane, IV and William T.
                 Kretzer;

                  (vii)    A sublease, in form and substance satisfactory to
                 Parkdale and the Company, subleasing the Unifi Leased Real
                 Property to the Company; and

                  (viii)   A lease agreement, in form and substance
                 satisfactory to Parkdale and the Company, leasing the Unifi
                 Owned Real Property to the Company.

       7.2  Subsequent Closing. The Subsequent Closing of the transaction
  contemplated by  this Contribution Agreement (the ``Subsequent Closing'')
  shall take place at the offices of Womble, Carlyle, Sandridge & Rice, PLLC,
  in Charlotte, North Carolina, at 10:00 a.m. on or before the tenth business
  day following the satisfaction of all conditions set forth in Sections 5.2
  and 6.2 above, or such other date as may be mutually agreed upon by the
  parties.  The date of the Subsequent Closing is referred to as the
  ``Subsequent Closing Date.''

               (a)Deliveries by Parkdale. At the Subsequent Closing, Parkdale
            shall deliver or cause to be delivered to Unifi, UMI and the
            Company the following:

                  (i) A warranty deed or deeds transferring fee simple title to
                 the Parkdale Real Property to the Company;

                  (ii)     Evidence that all Parkdale Required Consents related
                 to the transfer of the Parkdale Real Property and the Parkdale
                 Improvements have been obtained or satisfied.

               (b)Deliveries by Unifi and UMI.   At the Subsequent Closing,
            Unifi and UMI shall deliver or cause to be delivered to Parkdale
            and the Company the following:

                  (i) A warranty deed or deeds transferring fee simple title to
                 the Unifi Owned Real Property to the Company;

                  (ii) Assignments transferring Unifi's and UMI's leasehold
                 interests in the Unifi Real Property Leases to the Company;
                 and

                  (iii) Evidence that Unifi Required Consents related to the
                 transfer of the  Unifi Owned Real Property, the Unifi Leased
                 Real Property and the Unifi Improvements have been obtained or
                 satisfied.

       7.3  Further Assurances.  Parkdale, Unifi and UMI shall, at any time on
  or after the Initial Closing Date and the subsequent Closing Dates, take any
  and all steps requested by the other to place the Company in possession and
  operating control of the Parkdale Assets and the Unifi Assets, and will do,
  execute, acknowledge and deliver all such further acts, deeds, assignments,
  transfers, conveyances, powers of attorney and assurances as may be required
  for the more effective transfer to and reduction to possession of the
  Company, or its successors or assigns, of any of the Assets.


  ARTICLE 8

  INDEMNIFICATION

       8.1  Indemnification by Parkdale.  Parkdale shall indemnify, defend and
  hold harmless Unifi, UMI, and the Company from, against, and with respect to
  any and all action or cause of action, loss, damage (including without
  limitation all foreseeable and unforeseeable consequential damages), claim,
  obligation, liability, penalty, fine, cost and expense (including without
  limitation reasonable attorneys' and consultants' fees and costs and expenses
  incurred in investigating, preparing, defending against or prosecuting any
  litigation, claim, proceeding, demand or request for action by any
  governmental or administrative entity), of any kind or character (a "Loss")
  arising out of or in connection with any of the following:

               (a)any breach of any of the representations or warranties of
            Parkdale contained in or made pursuant to this Agreement;
               (b)any failure by Parkdale to perform or observe, or to have
            performed or observed, in full, any covenant, agreement or
            condition to be performed or observed by it pursuant to this
            Agreement;

               (c)any and all liabilities and obligations of Parkdale, of any
            kind or nature whatsoever, whether accrued, absolute, contingent or
            otherwise, known or unknown, except for obligations under the
            Parkdale Contracts arising on or after the Closing;

               (d)Parkdale's ownership and operation of Parkdale Assets prior
            to the Effective Time, including any and all liabilities under the
            Parkdale Contracts which relate to events occurring prior to the
            Effective Time; or

               (e)noncompliance by Parkdale with the provisions of the North
            Carolina bulk sales laws (if applicable).

       8.2  Indemnification by Unifi and UMI.  Unifi and UMI shall jointly and
  severally indemnify, defend and hold harmless Parkdale and the Company from,
  against and with respect to any Loss arising out of or in connection with any
  of the following:

               (a)any breach of any of the representations and warranties of
            Unifi and UMI contained in or made pursuant to this Agreement;

               (b)any failure by Unifi or UMI to perform or observe, or to have
            performed or observed, in full, any covenant, agreement or
            condition to be performed or observed by it pursuant to this
            Agreement;

               (c)any and all liabilities and obligations of Unifi and UMI, of
            any kind or nature whatsoever, whether accrued, absolute,
            contingent or otherwise, known or unknown, except for obligations
            under the Unifi Contracts arising on or after the Closing;

               (d)Unifi's and UMI's ownership and operation of the Unifi Assets
            prior to the, including any and all liabilities under the Unifi
            Contracts which relate to events occurring prior to the Effective
            Time; or

               (e)noncompliance by Unifi or UMI with the provisions of the
            North Carolina bulk sales laws (if applicable).

       8.3  Notice of Claim.  Any party seeking to be indemnified hereunder
  (the "Indemnified Party") shall, within 15 days following discovery of the
  matters giving rise to a Loss,  notify the party from whom indemnity is
  sought (the "Indemnity Obligor") in writing of any claim for recovery,
  specifying in reasonable detail the nature of the Loss and the amount of the
  liability estimated to arise therefrom.  The Indemnified Party shall provide
  to the Indemnity Obligor as promptly as practicable thereafter all
  information and documentation reasonably requested by the Indemnity Obligor
  to verify the claim asserted.

       8.4  Defense.  If the facts pertaining to a Loss arise out of the claim
  of any third party, or if there is any claim against a third party available
  by virtue of the circumstances of the Loss, the Indemnity Obligor may, by
  giving written notice to the Indemnified Party within 15 days following its
  receipt of the notice of such claim, elect to assume the defense or the
  prosecution thereof, including the employment of counsel or accountants at
  its cost and expense; provided, however, that during the interim the
  Indemnified Party shall use its best efforts to take all action (not
  including settlement) reasonably necessary to protect against further damage
  or loss with respect to the Loss. The Indemnified Party shall have the right
  to employ counsel separate from counsel employed by the Indemnity Obligor in
  any such action and to participate therein, but the fees and expenses of such
  counsel shall be at the Indemnified Party's own expense.  Whether or not the
  Indemnity Obligor chooses so to defend or prosecute such claim, all the
  parties hereto shall cooperate in the defense or prosecution thereof and
  shall furnish such records, information and testimony and shall attend such
  conferences, discovery proceedings and trials as may be reasonably requested
  in connection therewith.   The Indemnity Obligor shall not be liable for any
  settlement of any such claim effected without its prior written consent,
  which shall not be unreasonably withheld.

       8.5  Loss to the Company.  In the event of a Loss to the Company
  resulting in the expenditure of funds by the Company or a write-down in the
  fair market value of any Parkdale Asset or Unifi Asset contributed to the
  Company hereunder, the following shall apply: first, the Capital Account (as
  defined in the Company Operating Agreement) of the defaulting party shall be
  decreased by the amount of the Loss, and second, the Company may require, at
  its option, that the defaulting party either (i) contribute cash to the
  Company in an amount equal to the Loss, or (ii) take such action as necessary
  to restore the value of the Parkdale Asset or the Unifi Asset, as applicable.

       8.6  Other Remedies.  The foregoing indemnification provisions are in
  addition to, and not in derogation of, any statutory, equitable or common law
  remedy any party may have as a result of a Loss.



  ARTICLE 9

  TERMINATION

       9.1  Termination.  This Agreement may be terminated at any time prior to
  the Subsequent Closing:

               (a)By the mutual written consent of Parkdale and Unifi; or

               (b)By either Parkdale or Unifi, if there shall be any order,
            writ, injunction or decree of any court or governmental or
            regulatory agency binding on Parkdale, Unifi or UMI which prohibits
            or restrains Parkdale, Unifi, UMI or the Company from consummating
            the transactions contemplated hereby; or

       9.2  Effect on Obligations.   Termination of this Agreement pursuant to
  this Article 9 shall terminate all obligation of the parties under this
  Agreement, except for the obligations under Section 10.3 (with respect to
  expenses), Section 10.4 (with respect to publicity) and Section  4.3(b) (with
  respect to confidentiality).  Any such termination pursuant to this Article 9
  shall be a dissolution event under Article XV of the Company Operating
  Agreement.


  ARTICLE X

  MISCELLANEOUS

       10.1 Survival of Representations.  All representations and warranties of
  the parties hereto contained in this Agreement or otherwise made in writing
  in connection with the transactions contemplated hereby shall survive the
  execution and delivery of this Agreement and the Closing hereunder.

       10.2 Bulk Sales.  The parties agree to waive the requirements, if any,
  of all applicable bulk sales laws.

       10.3 Expenses.  All costs and expenses incurred in connection with this
  Agreement and the transactions contemplated hereby shall be paid by the party
  incurring such expense, whether or not the transactions contemplated hereby
  are consummated.

       10.4 Publicity.  Each of Parkdale, Unifi and UMI agrees it will not make
  any press releases or other announcements prior to the Closing with respect
  to the transactions contemplated hereby, except as required by applicable
  law, without the prior approval of the other party.

       10.5 Best Efforts.  Each party hereto agrees to use its best efforts to
  satisfy the conditions to the Initial Closing and the Subsequent Closing set
  forth in this Agreement and otherwise to consummate the transactions
  contemplated by this Agreement.

       10.6 Notices.  All notices, demands and other communications made
  hereunder shall be in writing and shall be given either by personal delivery,
  by nationally recognized overnight courier (with charges prepaid) or by
  telecopy (with telephone confirmation), and shall be deemed to have been
  given or made when personally delivered, the day following the date deposited
  with such overnight courier service or when transmitted to telecopy machine
  and confirmed by telephone, addressed to the respective parties at the
  following addresses (or such other address for a party as shall be specified
  by like notice):

     If to Parkdale:

         Parkdale Mills, Incorporated
         1630 W. Garrison Boulevard
         P. O. Drawer 1787
         Gastonia, NC 28053-1787
         Attention:   Anderson D. Warlick, President
         Telephone: (704) 864-8761
         Telecopy: (704) 864-5677
         With a copy (which shall not constitute notice) to:
            Womble, Carlyle, Sandridge & Rice, PLLC
            3300 One First Union Center
            301 South College Street
            Charlotte, NC 28202-6025
            Attention: J. Alexander Salisbury
         Telephone: (704) 331-4900
         Telecopy: (704) 331-4955
         If to Unifi or UMI:
            Unifi, Inc.
            7201 W. Friendly Avenue
            P. O. Box 1910
            Greensboro, NC 27419-9109
            Attention: Willis C. Moore, Vice President
                        and Chief Financial Officer
         Telephone: (910) 316-5664
         Telecopy: (910) 294-4751

     With a copy (which shall not constitute notice) to:

         Frazier, Frazier & Mahler, L.L.P.
         Southeastern Building, Suite 206
         P. O. Drawer 1559
         Greensboro, NC 27402
         Attention:  C. Clifford Frazier, Jr.
                  Charles McCoy
         Telephone: (910) 378-9411
         Telecopy: (910) 274-7358

       10.7 Governing Law.  This Agreement shall be governed by the laws of the
  State of North Carolina applicable to agreements made and to be performed
  entirely within such state.

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

       10.9 Assignment.  This Agreement shall be binding upon and inure to the
  benefit of the parties hereto and their respective successors and permitted
  assigns.  Neither this Agreement nor any of the rights, interest or
  obligations hereunder shall be assigned by any of the parties hereto without
  the prior written consent of all other parties hereto, and any purported
  assignment without such consent shall be void.

       10.10     Third Party Beneficiaries.  None of the provisions of this
  Agreement or any document contemplated hereby is intended to grant any right
  or benefit to any person or entity which is not a party to this Agreement.

       10.11     Headings.  The article and section headings contained in this
  Agreement are solely for the purpose of reference, are not part of this
  Agreement and shall not in any way affect the meaning or interpretation of
  this Agreement.

       10.12     Amendments.  Any waiver, amendment, modification or supplement
  of or to any term or condition of this Agreement shall be effective only if
  in writing and signed by all parties hereto, and the parties hereto waive the
  right to amend the provisions of this Section orally.

       10.13     Specific Performance.

               (a)Parkdale acknowledges that the Parkdale Assets are unique and
            that if Parkdale fails to consummate the transactions contemplated
            by this Agreement such failure will cause irreparable harm to Unifi
            and UMI for which there will be no adequate remedy at law.  Unifi
            and UMI shall be entitled, in addition to its other remedies at law
            or at equity, to specific performance of this Agreement if Parkdale
            shall, without cause, refuse to consummate the transactions
            contemplated by this Agreement; and

               (b)Each of Unifi and UMI acknowledges that the Unifi Assets are
            unique and that if Unifi or UMI fails to consummate the
            transactions contemplated by this Agreement such failure will cause
            irreparable harm to Parkdale for which there will be no adequate
            remedy at law.  Parkdale shall be entitled, in addition to its
            other remedies at law or at equity, to specific performance of this
            Agreement if Unifi or UMI shall, without cause, refuse to
            consummate the transactions contemplated by this Agreement.

       10.14     Severability.  In the event that any provision in this
  Agreement shall be determined to be invalid, illegal or unenforceable in any
  respect, the remaining provisions of this Agreement shall not be in any way
  impaired, and the illegal, invalid or unenforceable provision shall be fully
  severed from this Agreement and there shall be automatically added in lieu
  thereof a provision as similar in terms and intent to such severed provision
  as may be legal, valid and enforceable.

       10.15     Entire Agreement.  This Agreement and the Schedules and
  Exhibits hereto constitute the entire contract between the parties hereto
  pertaining to the subject matter hereof, and supersede all prior and
  contemporaneous agreements and understandings between the parties with
  respect to such subject matter, including (without limitation) the letter of
  intent dated June 16, 1997, which are hereby expressly terminated.



       IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
  to be signed by its duly authorized officer as of the date first above
  written.

                           PARKDALE MILLS, INCORPORATED



                           By: ANDERSON D. WARLICK                              
                           Anderson D. Warlick, President

                           UNIFI, INC.


                           By:     WILLIS C. MOORE, III
                                   Willis C. Moore, III
                                   Vice President and
                                   Chief Financial Officer



                            UNIFI MANUFACTURING, INC.


                           By:     WILLIS C. MOORE, III
                                   Willis C. Moore, III
                                   Vice President and
                                   Chief Financial Officer



                              PARKDALE AMERICA, LLC


                           By:     ANDERSON D. WARLICK
                                   Anderson D. Warlick, President