printer-friendly

Sample Business Contracts

Receivables Sale Agreement - Collins & Aikman Products Co., Ack-Ti-Lining Inc., WCA Canada Inc., Imperial Wallcoverings (Canada) Inc., Imperial Wallcoverings Inc., The Akro Corp., Dura Acquisition Corp., C&A Products and Carcorp Inc.

Sponsored Links


                                                                EXECUTION COPY


                                                   
                                                   
                                                   
                                                   



                                    CARCORP, INC.









                             RECEIVABLES SALE AGREEMENT 

                                                      









                              Dated as of July 13, 1994














<PAGE>



                                  TABLE OF CONTENTS


                                                                          Page



                                      ARTICLE I

                                     DEFINITIONS

        1.1  Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . 1
        1.2  Other Definitional Provisions . . . . . . . . . . . . . . . . . 1

                                      ARTICLE II

                           PURCHASE AND SALE OF RECEIVABLES

        2.1  Purchase and Sale of Receivables  . . . . . . . . . . . . . . . 2
        2.2  Purchase Price  . . . . . . . . . . . . . . . . . . . . . . . . 3
        2.3  Payment of Purchase Price . . . . . . . . . . . . . . . . . . . 3
        2.4  No Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . 5
        2.5  Rebates, Adjustments, Returns and Reductions; Modifications . . 5
        2.6  Limited Repurchase Obligation . . . . . . . . . . . . . . . . . 5
        2.7  Obligations Unaffected  . . . . . . . . . . . . . . . . . . . . 6
        2.8  Certain Charges . . . . . . . . . . . . . . . . . . . . . . . . 6
        2.9  Certain Allocations . . . . . . . . . . . . . . . . . . . . . . 6


                                     ARTICLE III

                           CONDITIONS TO PURCHASE AND SALE

        3.1  Conditions Precedent to the Company's Initial Purchase of
               Receivables . . . . . . . . . . . . . . . . . . . . . . . . . 6
        3.2  Conditions Precedent to All the Company's Purchases of
               Receivables . . . . . . . . . . . . . . . . . . . . . . . . . 7
        3.3  Conditions Precedent to Sellers' Obligations  . . . . . . . . . 8
        3.4  Conditions Precedent to the Addition of a Seller  . . . . . . . 9


                                      ARTICLE IV

                            REPRESENTATIONS AND WARRANTIES

        4.1  Representations and Warranties of the Sellers Relating to the
               Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . .10
               (a)  Organization, Corporate Powers . . . . . . . . . . . . .10
               




                                     -i-



<PAGE>




                                                                          Page


               (b)  Authorization  . . . . . . . . . . . . . . . . . . . . .10
               (c)  Enforceability . . . . . . . . . . . . . . . . . . . . .11
               (d)  Capitalization . . . . . . . . . . . . . . . . . . . . .11
               (e)  Litigation; Compliance with Laws . . . . . . . . . . . .11
               (f)  Agreements . . . . . . . . . . . . . . . . . . . . . . .11
               (g)  Tax Returns. . . . . . . . . . . . . . . . . . . . . . .12
               (h)  No Material Misstatements  . . . . . . . . . . . . . . .12
               (i)  Employee Benefit Plans . . . . . . . . . . . . . . . . .13
               (j)  Solvency . . . . . . . . . . . . . . . . . . . . . . . .13
         . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
         . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
               (l)  Indebtedness to Company. . . . . . . . . . . . . . . . .13
               (m)  Lockboxes. . . . . . . . . . . . . . . . . . . . . . . .13
               (n)  Filings  . . . . . . . . . . . . . . . . . . . . . . . .14
               (o)  Receivables Documents  . . . . . . . . . . . . . . . . .14
        4.2  Representations and Warranties of the Sellers Relating to the
               Agreement and the Receivables . . . . . . . . . . . . . . . .14


                                      ARTICLE V

                                AFFIRMATIVE COVENANTS

        5.1  Certificates; Other Information . . . . . . . . . . . . . . . .16
        5.2  Compliance with Laws, etc.  . . . . . . . . . . . . . . . . . .16
        5.3  Preservation of Corporate Existence . . . . . . . . . . . . . .16
        5.4  Visitation Rights . . . . . . . . . . . . . . . . . . . . . . .16
        5.5  Keeping of Records and Books of Account . . . . . . . . . . . .17
        5.6  Location of Records . . . . . . . . . . . . . . . . . . . . . .17
        5.7  Computer Files  . . . . . . . . . . . . . . . . . . . . . . . .17
        5.8  Policies  . . . . . . . . . . . . . . . . . . . . . . . . . . .17
        5.9  Taxes; ERISA  . . . . . . . . . . . . . . . . . . . . . . . . .17
        5.10  Collections  . . . . . . . . . . . . . . . . . . . . . . . . .18
        5.11  Lockbox Agreements; Lockbox Accounts . . . . . . . . . . . . .18
        5.12  Furnishing Copies, etc . . . . . . . . . . . . . . . . . . . .19
        5.13  Obligations with Respect to Obligors and Receivables . . . . .19
        5.14  Responsibilities of the Sellers  . . . . . . . . . . . . . . .19
        5.15  Further Action . . . . . . . . . . . . . . . . . . . . . . . .20


               5.16  Certain Procedures
        6.1  Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
        6.2  Extension or Amendment of Receivables . . . . . . . . . . . . .22
        6.3  Change in Payment Instructions to Obligors  . . . . . . . . . .22
        6.4  Change in Name  . . . . . . . . . . . . . . . . . . . . . . . .22
        


                                    -ii-

<PAGE>

                                                                          Page
        6.5  Modification of Ledger  . . . . . . . . . . . . . . . . . . . .22
        6.6  Business of the Sellers . . . . . . . . . . . . . . . . . . . .23
        6.7  Accounting of Purchases . . . . . . . . . . . . . . . . . . . .23
        6.8  Chattel Paper . . . . . . . . . . . . . . . . . . . . . . . . .23
        6.9  Ineligible Receivables  . . . . . . . . . . . . . . . . . . . .23


                                     ARTICLE VII

                             PURCHASE TERMINATION EVENTS   . . . . . . . . .23


                                     ARTICLE VIII


                                THE SUBORDINATED NOTES

        8.1  Subordinated Notes  . . . . . . . . . . . . . . . . . . . . . .25
        8.2  Restrictions on Transfer of Subordinated Notes  . . . . . . . .25
                                      ARTICLE IX

                                    MISCELLANEOUS

        9.1  Further Assurances  . . . . . . . . . . . . . . . . . . . . . .26
        9.2  Payments  . . . . . . . . . . . . . . . . . . . . . . . . . . .26
        9.3  Costs and Expenses  . . . . . . . . . . . . . . . . . . . . . .26
        9.4  Successors and Assigns  . . . . . . . . . . . . . . . . . . . .27
        9.5  GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . .27
        9.6  No Waiver; Cumulative Remedies  . . . . . . . . . . . . . . . .28
        9.7  Amendments and Waivers  . . . . . . . . . . . . . . . . . . . .28
        9.8  Severability  . . . . . . . . . . . . . . . . . . . . . . . . .28
        9.9  Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
        9.10  Counterparts . . . . . . . . . . . . . . . . . . . . . . . . .28
        9.11  Construction of Agreement as Security Agreement  . . . . . . .29
        9.12  Waivers of Jury Trial  . . . . . . . . . . . . . . . . . . . .29
        9.13  Jurisdiction; Consent to Service of Process  . . . . . . . . .29
        9.14  Addition of Sellers  . . . . . . . . . . . . . . . . . . . . .30
        9.15  Optional Termination of Seller . . . . . . . . . . . . . . . .30
        9.16  No Bankruptcy Petition . . . . . . . . . . . . . . . . . . . .31
        9.17  Termination  . . . . . . . . . . . . . . . . . . . . . . . . .31
        9.18  Confidentiality  . . . . . . . . . . . . . . . . . . . . . . .31


   ANNEX X     Definitions




                                    -iii-



<PAGE>



                                                                          Page
   SCHEDULES

         1     Locations of Chief Executive Offices; Locations of 
                 Books and Records
         2     Lockboxes
         3     Discounted Percentage
         4     Tax Matters


   EXHIBITS

        A      Form of U.S. Dollar Subordinated Note
        BB     Form of Canadian Dollar Subordinated Note
        CC     Form of Additional Seller Supplement












                                    -iv-



<PAGE>




                    RECEIVABLES SALE AGREEMENT, dated as of July 13, 1994,
          among Collins & Aikman Products Co., a Delaware corporation ("C&A
          Products"), Ack-Ti-Lining, Inc., WCA Canada, Inc., Imperial
          Wallcoverings (Canada), Inc., Imperial Wallcoverings, Inc., The
          Akro Corporation, Dura Acquisition Corp. and each of the other
          subsidiaries of C&A Products from time to time parties hereto
          (each of the foregoing, a "Seller"), C&A Products, as Master
          Servicer (in such capacity, the "Master Servicer"), and Carcorp,
          Inc., a Delaware corporation (the "Company").


                                W I T N E S S E T H :


                    WHEREAS, in the ordinary course of business, each
          Seller generates accounts receivable; and

                    WHEREAS, each Seller desires to sell to the Company,
          and the Company is willing to purchase from such Seller, all of
          such Seller's right, title and interest in, to and under the
          Receivables (as defined herein) now existing or hereafter created
          and the rights of such Seller in, to and under all Related
          Property (as so defined) related thereto;

                    NOW, THEREFORE, in consideration of the premises and of
          the mutual covenants herein contained, the parties hereto agree
          as follows:


                                      ARTICLE I

                                     DEFINITIONS

                    1.1  Defined Terms.  Capitalized terms used in this
          Agreement shall have the respective meanings assigned to such
          terms in Annex X hereto unless otherwise defined herein.

                    1.2  Other Definitional Provisions.  (a)  The words
          "hereof", "herein" and "hereunder" and words of similar import
          when used in this Agreement shall refer to this Agreement as a
          whole and not to any particular provision of this Agreement, and
          article, section, subsection, schedule and exhibit references are
          to this Agreement unless otherwise specified.

                    (b)  As used herein and in any certificate or other
          document made or delivered pursuant hereto, accounting terms
          relating to the Sellers and the Company, unless otherwise defined
          herein, shall have the respective meanings given to them under
          generally accepted accounting principles.

                    (c)  The meanings given to terms defined herein shall
          be equally applicable to both the singular and plural forms of
          such terms.


<PAGE>

                                                                          2

                                      ARTICLE II

                           PURCHASE AND SALE OF RECEIVABLES

                    2.1  Purchase and Sale of Receivables.  (a)  By
          execution of this Agreement, each of the Sellers does hereby
          sell, transfer, assign, set over and otherwise convey, without
          recourse (except as expressly provided herein), to the Company,
          on the Effective Date, all Receivables owned by the Sellers at
          the close of business on the Effective Date and all Related
          Property in respect of such Receivables.  Subject to Article VII,
          as of each Payment Date, each of the Sellers does hereby sell,
          transfer, assign, set over and otherwise convey, without recourse
          (except as expressly provided herein), to the Company, all of its
          right, title and interest in, to and under all Receivables owned
          by the Sellers at the close of business on such Payment Date and
          not theretofore conveyed to the Company and all Related Property
          in respect of such Receivables.  The foregoing sale, transfer,
          assignment, set-over and conveyance and any subsequent sales,
          transfers, assignments, set-overs and conveyances do not
          constitute, and are not intended to result in, the creation or an
          assumption by the Company or any other Person of any obligation
          of the Sellers in connection with the Receivables or under any
          agreement or instrument relating thereto, including any
          obligation to any Obligor.

                    (b)   On the Effective Date and on the date of creation
          of each newly created Receivable, all of the applicable Seller's
          right, title and interest in and to (i) in the case of the
          Effective Date, all existing Receivables and Related Property in
          respect of such Receivables and (ii) in the case of each such
          date of creation, all such newly created Receivables and all
          Related Property in respect of such Receivables shall be
          immediately and automatically sold, assigned, transferred and
          conveyed to the Company pursuant to paragraph (a) above without
          any further action by such Seller or any other Person.  If any
          Seller shall not have received payment from the Company of the
          Purchase Price for any newly created Receivable on the Payment
          Date therefor in accordance with the terms of subsection 2.3(c),
          such newly created Receivable and the Related Property with
          respect thereto shall, upon receipt of notice from the applicable
          Seller of such failure to receive payment, immediately and
          automatically be sold, assigned, transferred and reconveyed by
          the Company to such Seller without any further action by the
          Company or any other Person.

                    (c)  In connection with the foregoing conveyances, each
          Seller agrees to record and file, or cause to be recorded and
          filed, at its own expense, financing statements (and continuation
          statements with respect to such financing statements when
          applicable), and any other similar instruments, with respect to
          the Receivables and Related Property now existing and hereafter
          acquired by the Company from the Sellers meeting the requirements
          of applicable law in such manner and in such jurisdictions as are
          necessary to perfect the purchases of the Receivables and Related
          Property by the Company from the Sellers, and to deliver evidence
          of such filings to the Company on or prior to the Effective Date. 
          The parties hereto intend that the transfer of Receivables
          effected by this Agreement be sales.

                    (d)  In connection with the foregoing conveyances, each
          Seller agrees at its own expense, as agent of the Company, that
          it will (i) indicate or cause to be indicated on the

<PAGE>

                                                                            3

          computer files and other listings relating to the Receivables that
          all Receivables and Related Property have been sold to the Company
          and that the Company has sold an interest therein and has granted
          a security interest in the Company's retained interest therein
          and (ii) deliver or cause to be delivered to the Company computer
          files, microfiche lists or typed or printed lists containing true
          and complete lists of all such Receivables, identified by Obligor
          and by the Receivables balance as of June 15, 1994.

                    2.2  Purchase Price.  The amount payable by the Company
          to a Seller (the "Purchase Price") for newly created Receivables
          and Related Property on any Payment Date under this Agreement
          shall be equal to the product of (a) the aggregate outstanding
          Principal Amount of such Receivables as set forth in the
          applicable Daily Report and (b) the Discounted Percentage with
          respect to such Seller.  To the extent the Purchase Price of any
          Receivable is denominated in Canadian Dollars, the Dollar
          equivalent of such Purchase Price shall be equal to the Canadian
          Exchange Percentage thereof.

                    2.3  Payment of Purchase Price.  (a)  Upon fulfillment
          of the conditions set forth in Article III, the Purchase Price
          for Receivables and the Related Property shall be paid or
          provided for in the manner provided below on each day for which a
          Daily Report is prepared and delivered to the Company (each such
          day, a "Payment Date").  Each Seller hereby appoints the Master
          Servicer as its agent to receive payment of the Purchase Price
          for Receivables sold by it to the Company and hereby authorizes
          the Company to make all payments due to such Seller directly to,
          or as directed by, the Master Servicer.  The Master Servicer
          hereby accepts and agrees to such appointment.

                    (b)  The Purchase Price for Receivables and the Related
          Property with respect thereto purchased by the Company on the
          Effective Date from each Seller shall be paid by the Company as
          follows:

                    (i)  in cash from the net proceeds of the sale of an
               interest in such Purchased Receivables by the Company to
               other Persons; and

                   (ii)  in cash from the proceeds of capital contributed
               by C&A Products to the Company in respect of its equity
               interest in the Company.


                    (c)  The Purchase Price for Receivables and the Related
          Property with respect thereto purchased by the Company on any
          Payment Date after the Effective Date shall be paid by the
          Company on such Payment Date as follows:

                    (i)  by netting the amount of any Seller Adjustment
               Payments or Seller Repurchase Payments pursuant to
               subsection 2.5 or 2.6 against such Purchase Price;

                   (ii)  to the extent available for such purpose, in cash
               from Collections;  it being understood that Canadian Dollar
               cash Collections shall be applied solely to the Purchase
               Price of Canadian Dollar denominated Receivables;

<PAGE>

                                                                          4

                  (iii)  to the extent available for such purpose, in cash
               from the net proceeds of the sale of an interest in such
               Purchased Receivables by the Company to other Persons;

                   (iv)  at the option of the Company, by means of an
               addition to the principal amount of the Canadian Dollar
               Subordinated Note or U.S. Dollar Subordinated Note, as
               appropriate in accordance with this subsection, in an
               aggregate amount equal to the remaining portion of the
               Purchase Price; provided, however, that the Company may pay
               by means of additions to the principal amount of either
               Subordinated Note only if, at the time of such payment and
               after giving effect thereto, the fair market value of its
               assets, including any beneficial interests or indebtedness
               of a trust and all Receivables and Related Property it owns,
               after giving effect for this purpose to any Adjustments with
               respect to the Purchased Receivables or any participation
               interest therein sold to the Banks under the Receivables
               Transfer Agreement, is greater than the amount of its
               liabilities including its liabilities on the Subordinated
               Notes and in respect of the Purchase Discount Amounts and
               all fees payable under the Receivables Transfer Agreement. 
               Any such addition to the principal amount of the
               Subordinated Notes shall be allocated among the Sellers by
               the Master Servicer provided, however, that additions to the
               principal amount of the Canadian Dollar Subordinated Note
               may only be made to evidence the purchase price of
               Receivables denominated in Canadian Dollars and additions to
               the U.S. Dollar Subordinated Note may only be made to
               evidence the purchase price of Receivables denominated in
               Dollars.  The Master Servicer may evidence such payments by
               means of additions to the principal amount of the
               appropriate Subordinated Note by recording the date and
               amount thereof on the books and records of the Master
               Servicer or the Sellers or on the grid attached to such
               Subordinated Note; provided that the failure to make any
               such recordation or any error in such grid shall not
               adversely affect any Seller's rights; and

                    (v)  in cash from the proceeds of capital contributed
               by C&A Products to the Company in respect of its equity
               interest in the Company. 

                    (d)  The Master Servicer may allocate among the Sellers
          the payment of the Purchase Price for Receivables and any amounts
          netted therefrom pursuant to subsection 2.3(c)(i).  The Company
          shall be entitled to pay all amounts in respect of the Purchase
          Price of Receivables to an account of the Master Servicer without
          regard to whether or how such payments are allocated by the
          Master Servicer to the Sellers.  All payments under this
          Agreement (i) to the extent such payments are made in Canadian
          Dollars, shall be made on the date specified therefor in Canadian
          Dollars in same day funds or by check, as the Master Servicer
          shall elect, (ii) in all other cases, shall be made on the date
          specified therefor in Dollars in same day funds or by check, as
          the Master Servicer shall elect, (iii) in all cases, shall be
          made not later than 3:00 p.m (New York City time) and (iv) shall
          be made (x) if to any Seller, to the bank account for such Seller
          designated in writing by the Master Servicer to the Company and
          (y) if to the Master Servicer, to the bank account designated in
          writing by the Master Servicer to the Company.


<PAGE>

                                                                          5


                    (e)  Whenever any payment to be made under this
          Agreement shall be stated to be due on a day other than a
          Business Day, such payment shall be made on the next succeeding
          Business Day.  Amounts not paid when due in accordance with the
          terms of this Agreement shall bear interest at a rate equal at
          all times to the ABR plus the Applicable ABR Margin plus 2%,
          payable on demand.

                    2.4  No Repurchase.  Except to the extent expressly set
          forth herein, no Seller shall have any right or obligation under
          this Agreement, by implication or otherwise, to repurchase from
          the Company any Purchased Receivables or Related Property or to
          rescind or otherwise retroactively effect any purchase of any
          Purchased Receivables or Related Property after the Payment Date
          relating thereto.

                    2.5  Rebates, Adjustments, Returns and Reductions;
          Modifications.  From time to time a Seller may make Adjustments
          to Receivables in accordance with this subsection 2.5 and
          subsection 6.2.  The Sellers, jointly and severally, agree to pay
          to the Company, on the Payment Date immediately succeeding the
          date of the grant of any Adjustment (regardless of which Seller
          shall have granted such Adjustment), the amount of any such
          Adjustment (a "Seller Adjustment Payment"); provided, that, prior
          to any Purchase Termination Event, any such payments to the
          Company shall be netted against the Purchase Price of newly
          created Receivables in accordance with subsection 2.3(c)(i).  An
          "Adjustment" shall mean any rebate, discount, refund or
          adjustment (including, without limitation, as a result of the
          application of any special or other discounts or any
          reconciliations) of any Receivable, the amount owing for any
          returns (including, without limitation, as a result of the return
          of any stale goods) or cancellations and the amount of any other
          reduction of any payment under any Receivable in each case
          granted or made by the applicable Seller to the related Obligor,
          provided, that, an "Adjustment" does not include any Charge-Off. 
          The amount of any Adjustment shall be set forth on the first
          Daily Report prepared after the date of the grant thereof.

                    2.6  Limited Repurchase Obligation.  In the event that
          any of the representations or warranties contained in subsection
          4.2 in respect of any Receivable shall be or have been incorrect
          in any material respect as of the date made or deemed made, or
          any Eligible Receivable shall become subject to any defense,
          dispute, offset or counterclaim of any kind (other than as
          expressly permitted by this Agreement) or any Seller shall breach
          any covenant contained in subsection 5.2, 5.8, 6.1, 6.2, 6.3,
          6.4, 6.5, 6.8 or 6.9 with respect to any Receivable (each of the
          foregoing events or circumstances, a "Repurchase Event"), such
          Receivable shall cease to be an Eligible Receivable on the date
          on which such Repurchase Event occurs.  In addition, if any
          Repurchase Event shall occur with respect to any Receivable, then
          the Sellers, jointly and severally, agree to pay to the Company
          an amount (the "Repurchase Amount") equal to the Purchase Price
          of such Receivable (whether the Company paid such Purchase Price
          in cash or otherwise) less Collections received by the Company in
          respect of such Receivable, regardless of which Seller shall have
          been responsible for such Repurchase Event, such payment to occur
          on the 30th day after the day such Repurchase Event becomes known
          (or should have become known with due diligence) to any Seller
          (except that if such 30th day is not a Business Day, such payment
          shall be made on the Business Day immediately succeeding such
          30th day) unless such Repurchase Event shall have been cured on
          or before such 30th day; provided, that, prior to the occurrence of


<PAGE>


                                                                          6


          any Purchase Termination Event, any such payments to the
          Company shall be netted against the Purchase Price of newly
          created Receivables in accordance with subsection 2.3(c)(i).  Any
          payment by any Seller pursuant to this subsection 2.6 is referred
          to as a "Seller Repurchase Payment".  If, on or prior to such
          30th day (or the Business Day immediately succeeding such 30th
          day, as applicable), any Seller shall so reacquire any such
          Receivable, then 
          the Company shall have no further remedy against the Sellers in
          respect of the Repurchase Event with respect to such reacquired
          Receivable. Upon a Seller Repurchase Payment, the Company shall
          automatically and without further action be deemed to sell,
          transfer, assign, set over and otherwise convey to the applicable
          Seller, without recourse, representation or warranty, all the
          right, title and interest of the Company in, to and under such
          Receivable and the Related Property with respect thereto.  The
          Company shall execute such documents and instruments of transfer
          or assignment and take such other actions as shall reasonably be
          requested by such Seller to effect the conveyance of such
          Receivable pursuant to this section 2.6.

                    2.7  Obligations Unaffected.  The obligations of the
          Sellers to the Company under this Agreement shall not be affected
          by reason of any invalidity, illegality or irregularity of any
          Receivable or any sale of a Receivable.

                    2.8  Certain Charges.  Each of the Sellers and the
          Company agrees that late charge revenue, reversals of discounts,
          other fees and charges and other similar items, whenever created,
          accrued in respect of Purchased Receivables shall be the property
          of the Company notwithstanding the occurrence of an Early
          Termination, and all Collections with respect thereto shall
          continue to be allocated and treated as Collections in respect of
          Purchased Receivables.

                    2.9  Certain Allocations.  Each of the Sellers hereby
          agrees that, following the occurrence of an Early Termination in
          respect of any Seller, all Collections and other proceeds
          received in respect of Receivables generated by such Seller shall
          be applied first, to pay the outstanding Principal Amount of
          Purchased Receivables (as of the date of such Early Termination)
          of the Obligor to whom such Collections are attributable until
          such Purchased Receivables are paid in full and, second, to such
          Seller to pay Receivables of such Obligor not sold to the
          Company; provided, however, that notwithstanding the foregoing,
          if any such Seller can attribute a Collection to a specific
          Obligor and a specific Receivable, then such Collection shall be
          applied to pay such Receivable of such Obligor.


                                     ARTICLE III

                           CONDITIONS TO PURCHASE AND SALE

                    3.1  Conditions Precedent to the Company's Initial
          Purchase of Receivables.  The obligation of the Company to
          purchase the Receivables and the Related Property hereunder on
          the Effective Date from any Seller is subject to the conditions
          precedent, which may be waived by the Company, that (a) each of
          the Sale Documents shall be in full force



<PAGE>


                                                                          7


          and effect and (b) the
          conditions set forth below shall have been satisfied on or before
          the Effective Date:

                    (i)  the Company shall have received copies of duly
               adopted resolutions of the Board of Directors of each Seller
               as in effect on the Effective Date and in form and substance
               reasonably satisfactory to the Company, authorizing this
               Agreement, the documents to be delivered by such Seller
               hereunder and the transactions contemplated hereby,
               certified by the Secretary or Assistant Secretary of such
               Seller;



                   (ii)  the Company shall have received duly executed
               certificates of the Secretary or an Assistant Secretary of
               each Seller, dated the Effective Date and in form and
               substance reasonably satisfactory to the Company, certifying
               the names and true signatures of the officers authorized on
               behalf of such Seller to sign this Agreement and any
               instruments or documents in connection with this Agreement;

                  (iii)  each Seller shall have filed and recorded, at its
               own expense, UCC-1 financing statements (and other similar
               instruments) with respect to the Receivables and the Related
               Property in such manner and in such jurisdictions as are
               necessary or desirable to perfect the Company's ownership
               interest thereof under the Uniform Commercial Code (or any
               other similar law) and delivered evidence of such filings to
               the Company on or prior to the Effective Date; and all other
               action necessary or desirable, in the reasonable judgment of
               the Company, to perfect the Company's ownership of the
               Receivables shall have been duly taken;

                   (iv)  each Seller shall have delivered to the Company a
               microfiche, typed or printed list or other tangible evidence
               reasonably acceptable to the Company showing as of a date no
               later than five Business Days preceding the Effective Date,
               the Obligors whose Receivables are to be transferred to the
               Company on the Effective Date and the balance of the
               Receivables with respect to each such Obligor as of such
               preceding date; and

                    (v)  the Company shall have received reports of UCC-1
               and other searches of the Sellers with respect to the
               Receivables and the Related Property reflecting the absence
               of Liens thereon, except Liens created in connection with
               the sale by the Company of an interest in the Purchased
               Receivables and except for Liens as to which the Company has
               received Uniform Commercial Code termination statements to
               be filed on or prior to the Effective Date.

                    3.2  Conditions Precedent to All the Company's
          Purchases of Receivables.  The obligation of the Company to pay a
          Seller for any Receivable and the Related Property with respect
          thereto on each Payment Date (including the Effective Date) shall
          be subject to the further conditions precedent, which may be
          waived by the Company, that on such Payment Date:

                    (a)  the following statements shall be true (and the
               acceptance by such Seller of the Purchase Price for any
               Receivables on any Payment Date shall constitute a




<PAGE>


                                                                          8
               representation and warranty by such Seller that on such
               Payment Date such statements are true):

                         (i)  the representations and warranties of such
                    Seller contained in subsections 4.1 and 4.2 shall be
                    true and correct in all material respects on and as of


                    such Payment Date as though made on and as of such
                    date, except insofar as such representations and
                    warranties are expressly made only as of another date;
                    and

                        (ii)  no Purchase Termination Event or Incipient
                    Purchase Termination Event shall have occurred and be
                    continuing; and

                       (iii)  there has been no material adverse change
                    since the date of this Agreement in the collectibility
                    of the Receivables (other than due to a change in the
                    creditworthiness of the Obligors); 

                    (b)  the Company shall be satisfied that such Seller's
               systems, procedures and record-keeping relating to the
               Purchased Receivables are in all material respects
               sufficient and satisfactory in order to permit the purchase
               and administration of the Purchased Receivables in
               accordance with the terms and intent of this Agreement (it
               being understood and agreed that as of the date hereof, the
               Sellers' systems, procedures and record-keeping relating to
               the Receivables are in all material respects sufficient and
               satisfactory);

                    (c)  the Company shall have received payment in full of
               all amounts for which payment is due from such Seller
               pursuant to subsection 2.5, 2.6 or 9.3;

                    (d)  the Company shall have received such other
               approvals, opinions or documents as the Company may
               reasonably request; and

                    (e)  such Seller shall have complied with all of its
               covenants in all material respects and satisfied all of its
               obligations in all material respects under this Agreement
               required to be complied with or satisfied as of such date;

          provided, however, that the failure of any Seller to satisfy any
          of the foregoing conditions shall not prevent such Seller from
          subsequently selling Receivables upon satisfaction of all such
          conditions or exercising its rights under subsection 2.1(b).

                    3.3  Conditions Precedent to Sellers' Obligations. 
          (a)  The obligations of each Seller on the Effective Date shall
          be subject to the conditions precedent that such Seller shall
          have received on or before the Effective Date the following, each
          dated the Effective Date and in form and substance satisfactory
          to such Seller:

                    (i)  a copy of duly adopted resolutions of the Board of
               Directors of the Company authorizing this Agreement, the
               documents to be delivered by the Company



<PAGE>


                                                                          9

               hereunder and the transactions contemplated hereby, certified 
               by the Secretary or Assistant Secretary of the Company; and

                   (ii)  a duly executed certificate of the Secretary or
               Assistant Secretary of the Company certifying the names and
               true signatures of the officers authorized on its behalf to
               sign this Agreement and the other documents to be delivered
               by it hereunder.

                    (b)  The obligations of each Seller on each Payment
          Date shall be subject to the condition precedent that no
          Termination Event set forth in paragraph (f) of Article IX of the
          Receivables Transfer Agreement shall have occurred and be
          continuing.

                    3.4  Conditions Precedent to the Addition of a Seller. 
          No Subsidiary of C&A Products approved by the Company as an
          additional Seller pursuant to subsection 9.14 shall be added as a
          Seller hereunder unless the conditions set forth below shall have
          been satisfied on or before the date designated for the addition
          of such Seller (the "Seller Addition Date"):

                    (i)  the Company shall have received an Additional
               Seller Supplement substantially in the form of Exhibit C
               hereto, duly executed and delivered by such Seller;

                   (ii)  the Company shall have received copies of duly
               adopted resolutions of the Board of Directors of such Seller
               as in effect on the related Seller Addition Date and in form
               and substance reasonably satisfactory to the Company,
               authorizing this Agreement, the documents to be delivered by
               such Seller hereunder and the transactions contemplated
               hereby, certified by the Secretary or Assistant Secretary of
               such Seller;

                  (iii)  the Company shall have received duly executed
               certificates of the Secretary or an Assistant Secretary of
               such Seller dated the related Seller Addition Date and in
               form and substance reasonably satisfactory to the Company,
               certifying the names and true signatures of the officers
               authorized on behalf of such Seller to sign the Additional
               Seller Supplement or any instruments or documents in
               connection with this Agreement;

                   (iv)  a Lockbox Account with respect to Receivables to
               be sold by such Seller shall have been established in the
               name of the Company;

                    (v)  such Seller shall have filed and recorded, at its
               own expense, UCC-1 financing statements (and other similar
               instruments) with respect to the Receivables and the Related
               Property in such manner and in such jurisdictions as are
               necessary or desirable to perfect the Company's ownership
               interest thereof under the Uniform Commercial Code (or any
               other similar law) and delivered evidence of such filings to
               the Company on or prior to the date hereof; and all other
               action necessary or desirable, in the opinion of the
               Company, to perfect the Company's ownership of the
               Receivables shall have been duly taken;


<PAGE>


                                                                         10
                                                                       
                   (vi)  such Seller shall have delivered to the Company a
               microfiche, a typed or printed list or other tangible
               evidence reasonably acceptable to the Company showing as of
               a date acceptable to the Company prior to the related Seller
               Addition Date the Obligors whose Receivables are to be
               transferred to the Company and the balance of the
               Receivables with respect to each such Obligor as of such
               date; and

                  (vii)  the Company shall have received reports of UCC-1
               and other searches of such Seller with respect to the
               Receivables and the Related Property reflecting the absence
               of Liens thereon, except Liens created in connection with
               the sale by the Company of an interest in the Purchased
               Receivables and except for Liens as to which the Company has
               received Uniform Commercial Code termination statements to
               be filed on or prior to the related Seller Addition Date.


                                      ARTICLE IV

                            REPRESENTATIONS AND WARRANTIES

                    4.1  Representations and Warranties of the Sellers
          Relating to the Sellers.  Each Seller hereby represents and
          warrants to the Company on the Effective Date and on each Payment
          Date that:

                    (a)  Organization, Corporate Powers.  It (i) is a
               corporation duly organized, validly existing and in good
               standing under the laws of the jurisdiction in which it is
               incorporated, (ii) has all requisite corporate power and
               authority, and all material licenses, permits, franchises,
               consents and approvals, to own or lease its property and
               assets and to carry on its business as now conducted and as
               proposed to be conducted, (iii) is qualified and in good
               standing as a foreign corporation to do business in every
               jurisdiction where such qualification is necessary, except
               where the failure so to qualify would not have a Material
               Adverse Effect and (iv) has the corporate power and
               authority to execute, deliver and perform this Agreement and
               each of the other Sale Documents to which it is a party and
               each other agreement or instrument contemplated hereby or
               thereby to which it is or will be a party.  It does not have
               any assets or business, nor is it a party to any material
               contract within the meaning of Item 6.01(b)(10) of
               Regulation S-K of the Securities and Exchange Commission,
               other than as disclosed or referred to in the registration
               statement of which the Preliminary Prospectus is a part or
               as contemplated hereby and thereby.

                    (b)  Authorization.  The execution, delivery and
               performance by it of this Agreement and each of the other
               Sale Documents to which it is a party, the sale of
               Receivables by it hereunder and the consummation of the
               other transactions contemplated by any of the foregoing
               (collectively, the "Sale Transactions") (i) have been duly
               authorized by all requisite corporate and, if required,
               stockholder action and (ii) will not (x) violate (A) any
               provision of law, statute, rule or regulation (including,
               without limitation, Regulations G, T, U and X) or the
               certificate of incorporation or by-laws (or similar
               governing documents) of such Seller, (B) any applicable
               order of 


<PAGE>


                                                                         11
               any court or any rule, regulation or order of any
               Governmental Authority or (C) any indenture, certificate of
               designation for preferred stock, agreement or other
               instrument to which such Seller is a party or by which it or
               any of its property is bound, (y) be in conflict with,
               result in a breach of or constitute (with notice or lapse of
               time or both) a default under any such indenture, agreement
               or other instrument where any such conflict, violation,
               breach or default referred to in clause (ii)(x) or (ii)(y)
               of this subsection, individually or in the aggregate, would
               have a Material Adverse Effect or (z) result in the creation
               or imposition of any Lien upon any of its property or
               assets, except for Liens created under this Agreement and
               Liens created in connection with the sale by the Company of
               an interest in the Receivables. 

                    (c)  Enforceability.  Each of this Agreement and each
               of the other Sale Documents to which it is a party has been
               duly executed and delivered by such Seller and constitutes a
               legal, valid and binding obligation of such Seller
               enforceable against it in accordance with its terms, except
               as enforceability may be limited by bankruptcy, insolvency,
               moratorium, reorganization or other similar laws affecting
               creditors' rights generally and except as enforceability may
               be limited by general principles of equity (regardless of
               whether such enforceability is considered in a proceeding in
               equity or at law).

                    (d)  Capitalization.  All of its Capital Stock is owned
               directly or indirectly by C&A Products. 

                    (e)  Litigation; Compliance with Laws.  (1)  Except as
               described in the registration statement of which the
               Preliminary Prospectus is a part, there are not any actions,
               suits or proceedings at law or in equity or by or before any
               court or Governmental Authority now pending or, to the
               knowledge of such Seller, threatened against or affecting
               such Seller or any of its property or rights as to which
               there is a reasonable possibility of an adverse
               determination and which (i) if adversely determined, could
               individually or in the aggregate result in a Material
               Adverse Effect or (ii) involve the Transaction Documents or
               (iii) if adversely determined, could materially adversely
               affect the Sale Transactions. 

                    (2)  It is not in default with respect to any law,
               order, judgment, writ, injunction, decree, rule or
               regulation of any Governmental Authority where such default
               could have a Material Adverse Effect.  The sales hereunder
               and the use of the proceeds thereof will not violate any
               applicable law or regulation or violate or be prohibited by
               any judgment, writ, injunction, decree or order of any court
               or Governmental Authority or subject such Seller to any
               civil or criminal penalty or fine.  No Purchase Termination
               Event or Incipient Purchase Termination Event has occurred
               and is continuing.

                    (f)  Agreements.  (1)  It is not a party to any
               agreement or instrument or subject to any corporate
               restriction that has resulted or could reasonably be
               expected to result in a Material Adverse Effect.


<PAGE>


                                                                         12

                    (2)  It is not in default in any manner under any
               provision of any indenture or other agreement or instrument
               evidencing Indebtedness or any other material agreement or
               instrument to which it is a party or by which it or any of
               its properties or assets are or may be bound, in either case
               where such default could result in a Material Adverse
               Effect.  

                    (g)  Tax Returns.  It has filed or caused to be filed
               all Federal, and all material state, local and foreign, tax
               returns required to have been filed by it and has paid or
               caused to be paid all taxes shown thereon to be due and
               payable, and any assessments in excess of $2,000,000 in the
               aggregate received by it, except taxes the amount or
               validity of which are currently being contested in good
               faith by appropriate proceedings and with respect to which
               reserves in conformity with GAAP have been provided on its
               books and taxes, assessments, charges, levies or claims in
               respect of property taxes for property that it has
               determined to abandon where the sole recourse for such tax,
               assessment, charge, levy or claim is to such property.  It
               has paid in full or made adequate provision (in accordance
               with GAAP) for the payment of all taxes due with respect to
               the periods ending on or before January 29, 1994, which
               taxes, if not paid or adequately provided for, would have a
               Material Adverse Effect.  The tax returns of such Seller
               have been examined by relevant Federal tax authorities for
               all periods through January 26, 1985, and all deficiencies
               asserted as a result of such examinations have been paid. 
               Except as set forth on Schedule 4, as of the Effective Date,
               with respect to such Seller, (i) no material claims are
               being asserted in writing with respect to any taxes, (ii) no
               presently effective waivers or extensions of statutes of
               limitation with respect to taxes have been given or
               requested, (iii) no tax returns are being examined by, and
               no written notification of intention to examine has been
               received from, the Internal Revenue Service or any other
               taxing authority and (iv) no currently pending issues have
               been raised in writing by the Internal Revenue Service or
               any other taxing authority.  For purposes of this paragraph,
               "taxes" shall mean any present or future tax, levy, impost,
               duty, charge, assessment or fee of any nature (including
               interest, penalties and additions thereto) that is imposed
               by any Governmental Authority.

                    (h)  No Material Misstatements.  The information,
               reports, financial statements, exhibits and schedules
               furnished by or on behalf of such Seller to the Company in
               connection with the negotiation of any Sale Document or
               included therein or delivered pursuant thereto did not
               contain and will not contain as of the Effective Date any
               material misstatement of fact and did not omit and will not
               omit to state as of the Effective Date any material fact
               necessary to make the statements therein, in the light of
               the circumstances under which they were, are or will be
               made, not materially misleading in their presentation of the
               Sale Transactions or such Seller. 

<PAGE>



                                                                         13


                    (i)  Employee Benefit Plans.  Each of such Seller and
               each of its ERISA Affiliates is in compliance in all
               material respects with the applicable provisions of ERISA
               and the regulations and published interpretations thereunder
               except for such noncompliance which would not be expected to
               result in a Material Adverse Effect.  No Reportable Event
               has occurred as to which such Seller or any of its ERISA
               Affiliates was required to file a report with the PBGC,
               other than reports for which the 30 day notice requirement
               is waived, reports that have been filed and reports the
               failure of which to file would not result in a Material
               Adverse Effect and, as of the Effective Date, the present
               value of all benefit liabilities under each Plan of such
               Seller or any of its ERISA Affiliates (on a termination
               basis and based on those assumptions used to fund such Plan)
               did not, as of the last annual valuation report applicable
               thereto, exceed by more than $7,500,000 the value of the
               assets of such Plan.  None of such Seller or any of its
               ERISA Affiliates has incurred or could reasonably be
               expected to incur any Withdrawal Liability that could result
               in a Material Adverse Effect.  None of such Seller or any of
               its ERISA Affiliates has received any notification that any
               Multiemployer Plan is in reorganization or has been termi-
               nated within the meaning of Title IV of ERISA, and no
               Multiemployer Plan is reasonably expected to be in reorgan-
               ization or to be terminated where such reorganization or
               termination has resulted or could reasonably be expected to
               result, through increases in the contributions required to
               be made to such Plan or otherwise, in a Material Adverse
               Effect.

                    (j)  Solvency.  The fair salable value of the assets of
               such Seller exceeds the amount that will be required to be
               paid on or in respect of the existing debts and other
               liabilities (including contingent liabilities) of such
               Seller.  The assets of such Seller do not constitute
               unreasonably small capital to carry out its business as
               conducted or as proposed to be conducted.  Such Seller does
               not intend to, or believe that it will, incur debts beyond
               its ability to pay such debts as they mature (taking into
               account the Recapitalization Transactions but assuming that
               the Overallotment Option is not exercised).

                    (k)  Absence of Certain Restrictions.  No indenture,
               certificate of designation for preferred stock, agreement or
               other instrument to which such Seller or any of its
               Subsidiaries is a party will prohibit or materially
               restrain, or have the effect of prohibiting or materially
               restraining, or imposing materially adverse conditions upon,
               the sale of Receivables or the granting of Liens thereon. 

                    (l)  Indebtedness to Company.  Immediately prior to
               consummation of the transactions contemplated hereby on the
               Effective Date, it had no outstanding Indebtedness to the
               Company.

                    (m)  Lockboxes.  Set forth in Schedule 2 is a complete
               and accurate description as of the Effective Date of each
               Lockbox Account currently maintained by such Seller.  Each
               of the Lockbox Agreements, once entered into, shall be the
               legal, valid and binding obligation of the parties thereto,
               enforceable against such parties in accordance with its
               terms, except as such enforceability may be limited by
               bankruptcy, insolvency, 


<PAGE>


                                                                         14


               reorganization, moratorium or other
               similar laws now or hereafter in effect affecting the
               enforcement of creditors' rights in general and except as
               such enforceability may be limited by general principles of
               equity (whether considered in a suit at law or in equity).

                    (n)  Filings.  Upon the making of the filings and the
               performance of the acts described in the legal opinions
               delivered pursuant to subsections 6.1(b)(iii) and (iv) of
               the Receivables Transfer Agreement (which shall be made or
               performed no later than five Business Days after the
               Effective Date), all filings and other acts necessary or
               advisable (including but not limited to all filings and
               other acts necessary or advisable under the Uniform
               Commercial Code of each relevant jurisdiction) shall have
               been made or performed in order to grant the Company a first
               priority perfected ownership interest in respect of all
               Receivables.

                    (o)  Receivables Documents.  Upon the delivery, if any,
               by such Seller to the Company of licenses, rights, computer
               programs, related materials, computer tapes, disks,
               cassettes and data relating to the administration of the
               Purchased Receivables pursuant to subsection 5.15(d)(5), the
               Company shall have been furnished with all materials and
               data necessary to permit immediate collection of the
               Purchased Receivables without the participation of any
               Seller in such collection.

                    4.2  Representations and Warranties of the Sellers
          Relating to the Agreement and the Receivables.  Each Seller
          hereby represents and warrants to the Company on the Effective
          Date and on each Payment Date that with respect to the
          Receivables being paid for as of such date:

                    (a)  Receivables Description.  The microfiche, printed
               or typed list or computer file delivered pursuant to
               subsection 3.1(b)(iv) is an accurate and complete listing in
               all material respects of all its Receivables as of June 15,
               1994 and the information contained therein with respect to
               the identity of such Receivables is true and correct in all
               material respects as of such date.

                    (b)  Eligible Receivable.  Each Receivable sold by it
               hereunder and included as an Eligible Receivable in the
               calculation of Applicable Eligible Receivables Percentage
               will be, on and as of the date of such inclusion, an
               Eligible Receivable.  The aggregate outstanding Principal
               Amount of Receivables sold by it on any Payment Date is
               correctly set forth on the Seller Daily Report with respect
               to such Seller and with respect to such Payment Date.  The
               aggregate outstanding Adjusted Principal Amount of
               Receivables denominated in Canadian Dollars and sold by it
               on any Payment Date is correctly set forth on the Seller
               Daily Report with respect to such Seller and with respect to
               such Payment Date.

                    (c)  Title; No Liens.  Other than with respect to
               Receivables which such Seller states in writing (in the
               applicable Seller Daily Report or otherwise) are not
               Eligible Receivables on such date, such Seller is the sole
               legal and beneficial owner of its Receivables, and upon the
               sale of each Receivable of such Seller, the Company will


<PAGE>


                                                                         15

               become the sole legal and beneficial owner of such
               Receivable, free and clear of any Liens (except for Liens
               granted by such Seller in favor of the Company and the
               interest in such Purchased Receivables sold and the security
               interest therein granted by the Company to other Persons and
               except for Liens which are released on or prior to the
               Effective Date), and no effective financing statement or
               other instrument similar in effect covering all or any part
               of such Purchased Receivable, Related Property or
               Collections with respect thereto will at such time be on
               file against such Seller in any filing or recording office
               except such as have been filed in favor of the Company in
               accordance with this Agreement.

                    (d)  Governmental Consents.  Other than with respect to
               Receivables which such Seller states in writing (in the
               applicable Seller Daily Report or otherwise) are not
               Eligible Receivables on such date, all consents, licenses,
               approvals or authorizations of or registrations or
               declarations with any Governmental Authority required to be
               obtained, effected or given by the Company in connection
               with the conveyance of each Receivable pursuant to the
               Receivables Transfer Agreement have been duly obtained,
               effected or given and are in full force and effect.

                    (e)  Compliance With Laws. Other than with respect to
               Receivables which such Seller states in writing (in the
               applicable Seller Daily Report or otherwise) are not
               Eligible Receivables on such date, all laws, statutes, rules
               and regulations (including, without limitation, usury laws),
               applicable at the related Payment Date to any of the
               Receivables have been duly complied with by such Seller
               except to the extent any failure to so comply could not
               affect the validity or collectibility of such Receivable.

                    (f)  No Set-Off.  Other than with respect to
               Receivables which such Seller states in writing (in the
               applicable Seller Daily Report or otherwise) are not
               Eligible Receivables on such date, the Receivables are not
               subject to any defense, dispute, offset or counterclaim,
               whether arising out of the transactions represented by the
               Receivables or independently thereof and whether arising out
               of any assertion by any Obligor that its obligations in
               respect of any Receivable are, or may be, payable to a third
               party, instead of the owner of such Receivable, or
               otherwise.

                    (g)  Chief Executive Office.  The chief executive
               office of such Seller is listed opposite its name on
               Schedule 1, which office is the place where such Person is
               "located" for the purposes of Section 9-103(3)(d) of the
               Uniform Commercial Code of the State of New York, and the
               offices of such Seller where such Seller keeps its records
               concerning the Receivables are also listed in said Schedule
               opposite its name.

                    (h)  Absence of Changes.  As of the related Payment
               Date, there has not been since the date of this Agreement
               any material adverse change in the ability of such Seller,
               acting as the Servicer, to perform its obligations hereunder
               or under the Receivables Transfer Agreement.


<PAGE>


                                                                         16



                                      ARTICLE V

                                AFFIRMATIVE COVENANTS

               Each Seller hereby agrees that, so long as there are any
          amounts outstanding with respect to Purchased Receivables
          previously sold by such Seller to the Company or until an Early
          Termination with respect to such Seller, whichever is later, such
          Seller or the Master Servicer on behalf of such Seller shall:

                    5.1  Certificates; Other Information.  Furnish to the
          Company:

                    (a)  not later than 90 days after the end of each
               fiscal year and not later than 45 days after the end of each
               of the first three fiscal quarters of each fiscal year, a
               certificate of a Responsible Officer of the Master Servicer
               stating that, to the best of such Officer's knowledge, such
               Seller during such period has observed or performed all of
               its covenants and other agreements, and satisfied every
               condition, contained in the Sale Documents to which it is a
               party to be observed, performed or satisfied by it, and that
               such Officer has obtained no knowledge of any Purchase
               Termination Event or Incipient Purchase Termination Event
               except as specified in such certificate; and

                    (b)  promptly, such additional financial and other
               information as the Company may from time to time reasonably
               request.

                    5.2  Compliance with Laws, etc.  Comply in all material
          respects with its Certificate of Incorporation and by-laws and
          all laws, rules, regulations and orders of any Governmental
          Authority, whether now in effect or hereafter enacted, applicable
          to the Purchased Receivables, except to the extent that failure
          to comply therewith could not materially adversely affect the
          rights of the Company in the Purchased Receivables or the
          collectibility or validity thereof.  Each Seller will comply, in
          all material respects, with its obligations under contracts with
          Obligors relating to the Purchased Receivables except to the
          extent such compliance would result in a violation of a laws,
          rules, regulations and orders of any Governmental Authority. 

                    5.3  Preservation of Corporate Existence.  Do or cause
          to be done all things necessary to preserve, renew and keep in
          full force and effect its legal existence and maintain such legal
          existence separate from that of the Company, provided that any
          Seller may be merged or consolidated with or into any other
          Seller or C&A Products. 


                    5.4  Visitation Rights.  At any reasonable time during
          normal business hours and from time to time, in each case upon
          reasonable notice to such Seller and the Master Servicer, permit
          (i) the Company, or any of its agents or representatives, (A) to
          examine and make copies of and abstracts from the records, books
          of account and documents (including computer tapes and disks) of
          each Seller relating to the Purchased Receivables hereunder and
          (B) following the termination of the appointment of C&A Products
          as Master Servicer or of such Seller as Servicer with respect to
          the Purchased Receivables, to be present at the offices and
          properties of such Seller to administer and control the
          collection of amounts owing on the 


<PAGE>


                                                                         17

          Purchased Receivables and (ii)
          the Company, or any of its agents or representatives, to visit
          the properties of such Seller for the purpose of examining such
          records, books of account and documents, and to discuss the
          affairs, finances and accounts of such Seller relating to the
          Purchased Receivables or such Seller's performance hereunder with
          any of its officers or directors and with its independent
          certified public accountants (subject to any requirements of
          confidentiality imposed by law or contract).

                    5.5  Keeping of Records and Books of Account.  Maintain
          and implement, or cause to be maintained or implemented,
          administrative and operating procedures reasonably necessary or
          advisable for the collection of amounts owing on all Purchased
          Receivables, and, until any delivery to the Company, keep and
          maintain, or cause to be kept and maintained, all documents,
          books, records and other information reasonably necessary or
          advisable for the collection of amounts owing on all such
          Purchased Receivables and the Related Property with respect
          thereto.

                    5.6  Location of Records.  Keep its chief place of
          business and chief executive office, and the offices where it
          keeps the records concerning the Purchased Receivables (and all
          original documents relating thereto) at the locations referred to
          for it on Schedule 1 hereto or, upon 30 days' prior written
          notice to the Company, at such other locations in a jurisdiction
          where all action required by subsection 5.15(a) shall have been
          taken and completed and be in full force and effect.

                    5.7  Computer Files.  At its own cost and expense,
          retain the ledger used by such Seller as a master record of the
          Obligors and retain copies of all documents relating to each
          Obligor as custodian and agent for the Company and other Persons
          with interests in the Purchased Receivables and mark the computer
          tape or other physical records of the Purchased Receivables to
          the effect that interests in the Purchased Receivables existing
          with respect to the Obligors listed thereon have been sold to the
          Company. 

                    5.8  Policies.  Perform its obligations in accordance
          with and comply in all material respects with the Policies and
          the Company Policies and neither change nor modify the Policies
          or the Company Policies in any material respect, except with the
          prior written consent of the Company or if such changes are
          necessary under any law, rule, regulation or order of any
          Governmental Authority applicable to it; it being understood that
          material changes to the Policies and the Company Policies shall
          include, without limitation, changes to the timing of Charge-Offs
          of Receivables and changes to the creditworthiness criteria used
          in determining whether to extend credit to a Person and in
          determining the amount of such credit to extend.

                    5.9  Taxes; ERISA.  (a)  Pay and discharge promptly all
          taxes, assessments and governmental charges or levies imposed
          upon it or upon its income or profits or in respect of its
          property, before the same shall become delinquent or in default,
          as well as all lawful claims for labor, materials and supplies or
          otherwise which, if unpaid, might give rise to a Lien upon such
          properties or any part thereof; provided, however, that such
          payment and discharge shall not be required with respect to any
          such tax, assessment, charge, levy or claim so long as (i) the
          validity or amount thereof shall be contested in good faith by
          appropriate 


<PAGE>


                                                                         18

          proceedings and Holdings or such Seller, as
          applicable, shall set aside on its books adequate reserves as
          required by GAAP with respect thereto, (ii) such tax, assessment,
          charge, levy or claim is in respect of property taxes for
          property that such Seller has determined to abandon and the sole
          recourse for such tax, assessment, charge, levy or claim is to
          such property or (iii) the amount of such taxes assessments,
          charges, levies and claims and interest and penalties thereon
          does not exceed $1,000,000 in the aggregate for the Master
          Servicer and all Sellers taken as a whole.

                    (b)  (i)  Comply in all material respects with the
          applicable provisions of ERISA and (ii) furnish to the Company
          (w) as soon as possible, and in any event within 30 days after
          any Responsible Officer of such Seller or any ERISA Affiliate of
          such Seller knows or has reason to know that any Reportable Event
          has occurred that alone or together with any other Reportable
          Event could reasonably be expected to result in liability of the
          Master Servicer, such Seller or any of their ERISA Affiliates to
          the PBGC in an aggregate amount exceeding $10,000,000, a
          statement of a Financial Officer setting forth details as to such
          Reportable Event and the action proposed to be taken with respect
          thereto, together with a copy of the notice, if any, of such
          Reportable Event given to the PBGC, (x) promptly after any
          Responsible Officer learns of receipt thereof, a copy of any
          notice such Seller or any of its ERISA Affiliates may receive
          from the PBGC relating to the intention of the PBGC to terminate
          any Plan or Plans (other than a Plan maintained by any of their
          ERISA Affiliates which is considered an ERISA Affiliate only
          pursuant to subsection (m) or (o) of Section 414 of the Code) or
          to appoint a trustee to administer any Plan or Plans, (y) within
          20 days after the due date for filing with the PBGC pursuant to
          Section 412(n) of the Code a notice of failure to make a required
          installment or other payment with respect to a Plan, a statement
          of a Financial Officer setting forth details as to such failure
          and the action proposed to be taken with respect thereto,
          together with a copy of such notice given to the PBGC and (z)
          promptly after any Responsible Officer learns thereof and in any
          event within 30 days after receipt thereof by such Seller or any
          ERISA Affiliate from the sponsor of a Multiemployer Plan, a copy
          of each notice received by such Seller or such ERISA Affiliate
          concerning (I) the imposition of Withdrawal Liability or (II) a
          determination that a Multiemployer Plan is, or is expected to be,
          terminated or in reorganization, in each case within the meaning
          of Title IV of ERISA.

                    5.10  Collections.  Use its best efforts to cause any
          Obligor which currently pays its Receivables by checks mailed to
          such Seller to make future payments in respect of Receivables to
          a Lockbox Account or by wire transfer to the Collection Account,
          provided, that, prior to an Incipient Purchase Termination Event
          or a Purchase Termination Event, no Seller shall be obliged to
          make any such request of any such Obligor if such Seller
          determines in its reasonable judgment that such request could be
          detrimental to its ongoing business relationship with such
          Obligor.

                    5.11  Lockbox Agreements; Lockbox Accounts.  Within 60
          days of the Effective Date,

                    (a)  if such Seller has not established a Lockbox
               Account on the Effective Date, it shall establish one and
               enter into a Lockbox Agreement with respect thereto;


<PAGE>


                                                                         19

                    (b)  if such Seller shall not have entered into a
               Lockbox Agreement with respect to any existing Lockbox
               Account on the Effective Date, it shall enter into such a
               Lockbox Agreement.

                    5.12  Furnishing Copies, etc.  Furnish to the Company:

                    (a)  within two Business Days of the Company's request,
               but no more than once each month, a certificate of the chief
               financial officer of such Seller or of the Master Servicer
               on behalf of such Seller certifying, as of the date thereof,
               to the best knowledge of such officer, that no Purchase
               Termination Event has occurred and is continuing, and
               setting forth the computations used by the chief financial
               officer of such Seller in making such determination or if
               one has so occurred specifying the nature and extent thereof
               and any corrective action taken or proposed to be taken with
               respect thereto;

                    (b)  promptly upon obtaining knowledge of the
               occurrence of any Purchase Termination Event or Incipient
               Purchase Termination Event, written notice thereof;

                    (c)  promptly following request therefor, such other
               information, documents, records or reports regarding or with
               respect to the Purchased Receivables of the applicable
               Seller, as the Company may from time to time reasonably
               request;

                    (d)  promptly upon obtaining knowledge of the
               occurrence thereof, written notice of any event of default
               or default under any other Sale Document;

                    (e)  promptly upon obtaining knowledge of the
               occurrence thereof, written notice of any development that
               has resulted in, or could reasonably be expected to result
               in, a Material Adverse Effect; and

                    (f)  promptly upon determining that any Purchased
               Receivable designated as an Eligible Receivable on the
               applicable Daily Report or Settlement Statement was not an
               Eligible Receivable as of the date provided therefor,
               written notice of such determination.

                    5.13  Obligations with Respect to Obligors and
          Receivables.  Take all actions on its part reasonably necessary
          to maintain in full force and effect its material rights under
          all contracts relating to the Purchased Receivables.

                    5.14  Responsibilities of the Sellers.  Notwithstanding
          anything herein to the contrary, (i) each Seller shall perform or
          cause to be performed all its obligations under the Policies and
          the Company Policies related to the Purchased Receivables to the
          same extent as if such Purchased Receivables had not been
          transferred to the Company hereunder, (ii) the exercise by the
          Company of any of its rights hereunder shall not relieve any
          Seller of its obligations with respect to such Purchased
          Receivables and (iii) except as provided by law, the Company
          shall not have any obligation or liability with respect to any
          Purchased 


<PAGE>


                                                                         20


          Receivables, nor shall the Company be obligated to
          perform any of the obligations or duties of any Seller
          thereunder.

                    5.15  Further Action.  In addition to the foregoing:

                    (a)  Each Seller agrees that from time to time, at its
               expense, it will promptly execute and deliver all further
               instruments and documents, and take all further action, that
               may be necessary or desirable in such Seller's reasonable
               judgment or that the Company may reasonably request, in
               order to protect or more fully evidence the Company's right,
               title and interest in the Purchased Receivables, or to
               enable the Company to exercise or enforce any of its rights
               in respect thereof.  Without limiting the generality of the
               foregoing, each Seller will upon the request of the Company
               (A) execute and file such financing or continuation
               statements, or amendments thereto, and such other
               instruments or notices, as may be necessary or, in the
               opinion of the Company, advisable, (B) indicate on its books
               and records that the Purchased Receivables have been
               purchased by the Company and that the Company has sold an
               interest therein and has granted a security interest therein
               in the Company's retained interest, and provide to the
               Company, upon request, copies of any such records, and (C)
               obtain the agreement of any Person having a Lien on any
               Receivables owned by any Seller (other than any Lien created
               or imposed hereunder or any Lien expressly permitted
               pursuant to subsection 6.1) to release such Lien upon the
               purchase of any such Receivables by the Company.

                    (b)  Each Seller hereby irrevocably authorizes the
               Company to file one or more financing or continuation
               statements (and other similar instruments), and amendments
               thereto, relative to all or any part of the Purchased
               Receivables and the Related Property sold or to be sold by
               such Seller without the signature of such Seller to the
               extent permitted by applicable law.

                    (c)  If any Seller fails to perform any of its
               agreements or obligations under this Agreement, the Company
               may (but shall not be required to) perform, or cause
               performance of, such agreements or obligations, and the
               expenses of the Company incurred in connection therewith
               shall be payable by such Seller as provided in subsection
               9.3.

                    (d)  Each Seller agrees that, upon the occurrence and
               during the continuation of a Purchase Termination Event,
               Incipient Purchase Termination Event or a Servicer Event of
               Default:

                         (1)  the Company (and its assignees) shall have
                    the right at any time to notify, or require that any
                    Seller at such Seller's expense notify, the respective
                    Obligors of the Company's ownership of the Purchased
                    Receivables and may direct that payment of all amounts
                    due or to become due under the Purchased Receivables be
                    made directly to the Company or its designee;


<PAGE>


                                                                         21

                         (2)  the Company (and its assignees) shall have
                    the right to (x) sue for collection on any Purchased
                    Receivables or (y) sell any Purchased Receivables to
                    any Person for a price that is acceptable to the
                    Company.  If required by the terms of Section 9-504 or
                    9-505 of the Uniform Commercial Code, the Company (and
                    its assignees) may offer to sell any Purchased
                    Receivable to any Person, together, at its option, with
                    all other Purchased Receivables created by the same
                    Obligor.  Any Purchased Receivable sold hereunder shall
                    cease to be a Receivable for all purposes under this
                    Agreement as of the effective date of such sale;

                         (3)  each Seller shall, upon the Company's written
                    request and at such Seller's expense, (x) assemble all
                    such Seller's documents, instruments and other records
                    (including credit files and computer tapes or disks)
                    that (1) evidence or will evidence or record
                    Receivables sold by such Seller and (2) are otherwise
                    necessary or desirable to effect Collections of such
                    Purchased Receivables (collectively, the "Documents")
                    and (y) deliver the Documents to the Company or its
                    designee at a place designated by the Company.  In
                    recognition of each Seller's need to have access to any
                    Documents which may be transferred to the Company
                    hereunder, whether as a result of its continuing
                    business relationship with any Obligor for Receivables
                    purchased hereunder or as a result of its
                    responsibilities as Servicer, the Company hereby grants
                    to the applicable Seller an irrevocable license to
                    access the Documents transferred by such Seller to
                    Company and to access any such transferred computer
                    software in connection with any activity arising in the
                    ordinary course of such Seller's business or in
                    performance of such Seller's duties as Servicer,
                    provided that such Seller shall not disrupt or
                    otherwise interfere with the Company's use of and
                    access to the Documents and its computer software
                    during such license period;

                         (4)  each Seller hereby irrevocably authorizes the
                    Company or its designee to take any and all steps in
                    such Seller's name necessary or desirable, in the
                    reasonable opinion of the Company, to collect all
                    amounts due under the Purchased Receivables, including
                    endorsing such Seller's name on checks and other
                    instruments representing Collections, enforcing the
                    Purchased Receivables and exercising all rights and
                    remedies in respect thereof; and

                         (5)  upon written request of the Company, each
                    Seller will (x) deliver to the Company or a party
                    designated by the Company all licenses, rights,
                    computer programs, related material, computer tapes,
                    disks, cassettes and data necessary to the immediate
                    collection of the Purchased Receivables by the Company,
                    with or without the participation of any Seller
                    (excluding software licenses which by their terms are
                    not permitted to be so delivered, provided, that such
                    Seller shall use its best efforts to obtain the consent
                    of the relevant licensor to such delivery) and (y) make
                    such arrangements with respect to the collection of the
                    Purchased Receivables as may be reasonably required by
                    the Company.


<PAGE>



                                                                         22


                    5.16  Certain Procedures.  Each Seller shall take, or
          refrain from taking, as the case may be, all actions that are
          necessary to be taken or not taken in order to (a) ensure that
          the assumptions and factual recitations set forth in the
          Specified Bankruptcy Opinion Provisions remain true and correct
          with respect to such Seller and (b) comply with those procedures
          described in such provisions which are applicable to such Seller.

                                      ARTICLE VI

                                  NEGATIVE COVENANTS

                    Each Seller hereby agrees that, so long as there are
          any amounts outstanding with respect to Purchased Receivables
          previously sold by such Seller to the Company or until an Early
          Termination with respect to such Seller, whichever is later, such
          Seller shall not, directly or indirectly:

                    6.1  Liens.  Except as otherwise expressly herein
          provided, sell, assign (by operation of law or otherwise) or
          otherwise dispose of, or create or suffer to exist any Lien upon
          or with respect to, any Receivables or Related Property, or
          assign any right to receive proceeds in respect thereof except
          for Liens created or imposed hereunder or under the Receivables
          Transfer Agreement.

                    6.2  Extension or Amendment of Receivables.  Extend,
          make any Adjustment to, rescind, cancel, amend or otherwise
          modify, or attempt or purport to extend, amend or otherwise
          modify, the terms of any Purchased Receivables, except (i) in
          accordance with the terms of the Policies and the Company
          Policies, (ii) as required by any Requirement of Law, (iii) in
          the case of Adjustments, upon making an Adjustment Payment
          pursuant to subsection 2.5, or (iv) with the consent of the
          Company, provided that the applicable Servicer may cause
          Receivables to become Charge-Offs.

                    6.3  Change in Payment Instructions to Obligors. 
          Instruct any Obligor of any Purchased Receivables to make any
          payments with respect to any Receivables other than in accordance
          with its current practices with respect to such Obligor; provided
          that, in accordance with subsection 5.10, it may instruct any
          Obligor to make such payments to a Lockbox Account or by wire
          transfer to the Collection Account.

                    6.4  Change in Name.  Change its name, identity or
          corporate structure in any manner which would or might make any
          financing statement or continuation statement (or other similar
          instrument) relating to this Agreement seriously misleading
          within the meaning of Section 9-402(7) of the Uniform Commercial
          Code (or any other similar law) without 30 days' prior written
          notice to the Company.

                    6.5  Modification of Ledger.  Delete or otherwise
          modify the marking on the ledger referred to in subsection 5.7.


<PAGE>


                                                                         23

                    6.6  Business of the Sellers.  (a) Engage at any time
          in any business or business activity other than the business
          currently conducted by it and business activities reasonably
          incidental thereto or (b) fail to maintain and operate such
          business in substantially the manner in which it is presently
          conducted and operated if such failure would materially adversely
          affect the interests of the Company under the Transaction
          Documents. 

                    6.7  Accounting of Purchases.  Prepare any financial
          statements which shall account for the transactions contemplated
          hereby (other than capital contributions and the Subordinated
          Notes) in any manner other than as sales of the Purchased
          Receivables by such Seller to the Company or in any other respect
          account for or treat the transactions contemplated hereby
          (including for accounting purposes and, where taxes are not
          consolidated, for tax reporting purposes, except as required by
          law) (other than capital contributions and the Subordinated
          Notes) in any manner other than as sales of the Purchased
          Receivables by such Seller to the Company.

                    6.8  Chattel Paper.  Not take any action to cause any
          Receivable to be evidenced by any instrument (as defined in the
          Uniform Commercial Code as in effect in the State of New York)
          except in connection with the enforcement or collection of a
          Receivable.

                    6.9  Ineligible Receivables.  Without the prior written
          approval of the Company, take any action to cause, or which would
          permit, an Eligible Receivable to cease to be an Eligible
          Receivable, except as otherwise expressly provided by this
          Agreement.

                                     ARTICLE VII

                             PURCHASE TERMINATION EVENTS

                    If any of the following events (herein called "Purchase
          Termination Events") shall have occurred and be continuing:

                    (a)  any Seller shall fail (i) to pay any amount due
               pursuant to subsection 2.6 in accordance with the provisions
               thereof and such failure shall continue unremedied for a
               period of five days from the earlier of (A) the date any
               officer of such Seller obtains knowledge of such default and
               (B) the date such Seller receives notice of such default
               from the Company or (ii) to pay any other amount required to
               be paid by such Seller hereunder within two Business Days of
               the date when due; or

                    (b)  any Seller shall fail to observe or perform any
               covenant or agreement applicable to it contained in
               subsection 5.6, 5.7, 5.12 or 5.15(a), provided no such
               failure shall constitute a Purchase Termination Event under
               this paragraph (b) unless such default shall continue
               unremedied for 10 consecutive days; or

                    (c)  any Seller shall fail to observe or perform any
               covenant or agreement applicable to it contained in
               subsection 5.2, 5.8, 6.1, 6.2, 6.3, 6.4, 6.5, 6.8 or 6.9;
               provided that a Purchase Termination Event shall not be
               deemed to have occurred under this paragraph (c) based upon
               a failure to observe a covenant contained in 


<PAGE>


                                                                         24


               subsection 5.2,
               5.8, 6.1, 6.2, 6.3, 6.4, 6.5, 6.8 or 6.9 if the Sellers
               shall have complied with the provisions of subsection 2.6 in
               respect thereof; or

                    (d)  any Seller shall fail to observe or perform any
               covenant or agreement applicable to it contained herein
               (other than as specified in paragraph (a), (b) or (c) of
               this Article VII), provided that no such failure shall
               constitute a Purchase Termination Event under this paragraph
               (d) unless such default shall continue unremedied for a
               period of 30 consecutive days from the earlier of (A) the
               date any Responsible Officer of such Seller obtains
               knowledge of such default and (B) the date such Seller
               receives notice of such default from the Company; or

                    (e)  any representation, warranty, certification or
               statement made or deemed made by any Seller in this
               Agreement or in any statement, record, certificate,
               financial statement or other document delivered pursuant to
               this Agreement shall prove to have been false or misleading
               in any material respect on or as of the date made or deemed
               made, provided, that a Purchase Termination Event shall not
               be deemed to have occurred under this paragraph (e) based
               upon a breach of any representation or warranty set forth in
               subsection 4.2 if the Sellers shall have complied with the
               provisions of subsection 2.6 in respect thereof; or

                    (f)  (i)  an involuntary proceeding shall be commenced
               or an involuntary petition shall be filed in a court of
               competent jurisdiction seeking (x) relief in respect of any
               Seller or of a substantial part of the property or assets of
               any Seller under Title 11 of the United States Code, as now
               constituted or hereafter amended, or any other Federal,
               state or foreign bankruptcy, insolvency, receivership or
               similar law, (y) the appointment of a receiver, trustee,
               custodian, sequestrator, conservator or similar official for
               any Seller or for a substantial part of the property or
               assets of any Seller or (z) the winding-up or liquidation of
               any Seller; and such proceeding or petition shall continue
               undismissed for 60 days or an order or decree approving or
               ordering any of the foregoing shall be entered; or (ii) any
               Seller shall (t) voluntarily commence any proceeding or file
               any petition seeking relief under Title 11 of the United
               States Code, as now constituted or hereafter amended, or any
               other Federal, state or foreign bankruptcy, insolvency,
               receivership or similar law, (u) consent to the institution
               of, or fail to contest in a timely and appropriate manner,
               any proceeding or the filing of any petition described in
               clause (f)(i) above, (v) apply for or consent to the
               appointment of a receiver, trustee, custodian, sequestrator,
               conservator or similar official for such Seller or for a
               substantial part of the property or assets of such Seller,
               (w) file an answer admitting the material allegations of a
               petition filed against it in any such proceeding, (x) make a
               general assignment for the benefit of creditors, (y) become
               unable, admit in writing its inability or fail generally to
               pay its debts as they become due or (z) take any action for
               the purpose of effecting any of the foregoing; or

                    (g)  there shall have occurred a Termination Event
               under the Receivables Transfer Agreement or the Commitments
               shall have terminated thereunder;  


<PAGE>


                                                                         25


          then, (x) in the case of any Purchase Termination Event described
          in paragraph (f) above with respect to any Seller, automatically
          the obligation of the Company to purchase Receivables from such
          Seller shall thereupon terminate without notice of any kind,
          which is hereby waived by the Sellers and (y) in the case of any
          Purchase Termination Event, so long as such Purchase Termination
          Event shall be continuing, the Company may terminate its
          obligation to purchase Receivables from any or all of the Sellers
          by written notice to each such Seller (any termination pursuant
          to clause (x) or (y) of this Article VII which affects a Seller
          is herein called an "Early Termination" with respect to such
          Seller).


                                     ARTICLE VIII

                                THE SUBORDINATED NOTES

                    8.1  Subordinated Notes.  On the Effective Date, the
          Company shall issue to the Sellers (i) a subordinated note
          substantially in the form of Exhibit A (the "U.S. Dollar
          Subordinated Note") and (ii) a subordinated note substantially in
          the form of Exhibit B (the "Canadian Dollar Subordinated Note";
          each, a "Subordinated Note" and collectively, the "Subordinated
          Notes").  The aggregate principal amount of the Subordinated
          Notes at any time shall be equal to the difference between (a)
          the aggregate principal amount on the issuance thereof and each
          addition to the principal amount of each Subordinated Note with
          respect to each Seller pursuant to the terms of subsection 2.3
          minus (b) the aggregate amount of all payments made in respect of
          the principal of the Subordinated Notes.  All payments made in
          respect of the Subordinated Notes shall be allocated among the
          Sellers by the Master Servicer.  Each Seller's interest in the
          Subordinated Notes shall equal the sum of each addition thereto
          allocated to such Seller pursuant to subsection 2.3(c) less the
          sum of each repayment thereof allocated to such Seller.  Interest
          on the principal amount of each Subordinated Note shall accrue on
          the last day of each fiscal month of the Sellers at the ABR from
          and including the Effective Date and shall be paid on each
          Settlement Date with respect to amounts accrued and not paid as
          of the last day of the preceding Settlement Period and/or the
          maturity date thereof provided, however, that accrued interest on
          a Subordinated Note which is not so paid may be added to the
          principal amount of such Subordinated Note. Principal not prepaid
          pursuant to the terms hereof and of the other Sale Documents
          shall be payable on the maturity date thereof.  Default in the
          payment of principal or interest under either Subordinated Note
          shall not constitute a default or event of default or a Purchase
          Termination Event hereunder or a Termination Event under the
          Receivables Transfer Agreement.

                    8.2  Restrictions on Transfer of Subordinated Notes. 
          Neither any Subordinated Note, nor any right of any Seller to
          receive payments thereunder, shall be assigned, transferred,
          exchanged, pledged, hypothecated, participated or otherwise
          conveyed; provided, however, that any Seller may pledge its
          rights to receive payments under either Subordinated Note to the
          lenders under the Credit Agreement subject to the conditions that
          the Collateral Agent and any present or future holder or
          beneficiary of such right to receive payments under a
          Subordinated Note agrees, in its capacity as such, to be bound by
          all the terms and conditions of this Agreement, including without
          limitation, subsection 9.16 hereof.


<PAGE>


                                                                         26


                                      ARTICLE IX

                                    MISCELLANEOUS

                    9.1  Further Assurances.  (a)  Each Seller agrees, from
          time to time, to do and perform any and all acts and to execute
          any and all further instruments reasonably required or requested
          by the Company more fully to effect the purposes of this
          Agreement and the sales of the Receivables hereunder, including,
          without limitation, the execution of any financing statements or
          continuation statements (and other similar instruments) relating
          to the Receivables for filing under the provisions of the Uniform
          Commercial Code, or any similar law, of any applicable
          jurisdiction.

                    (b)  From time to time at the request of a Seller, the
          Company shall deliver to such Seller such documents, assignments,
          releases and instruments of termination as such Seller may
          reasonably request to evidence the reconveyance by the Company to
          such Seller of a Receivable pursuant to the terms of subsection
          2.1(b) or 2.6, provided that the Company shall have been paid all
          amounts due thereunder; and the Company and the Master Servicer
          shall take such action as such Seller may reasonably request, at
          the expense of such Seller, to assure that any such Receivable,
          the Related Property with respect thereto and the proceeds
          thereof do not remain commingled with Collections hereunder.

                    9.2  Payments.  Each cash payment to be made by any of
          the Company or the Sellers hereunder shall be made on the
          required payment date and in immediately available funds at the
          office of the payee set forth below its signature hereto or to
          such other office as may be specified by either party in a notice
          to the other party hereto and (x) with respect to payments on
          account of Receivables denominated in Canadian Dollars, in
          Canadian Dollars except to the extent provided otherwise in
          Article II hereof and (ii) in all other cases, in Dollars.

                    9.3  Costs and Expenses.  The Sellers, jointly and
          severally, agree (a) to pay or reimburse the Company for all its
          out-of-pocket costs and expenses incurred in connection with the
          preparation and execution of, and any amendment, supplement or
          modification to, this Agreement, the other Sale Documents and any
          other documents prepared in connection herewith and therewith,
          the consummation and administration of the transactions
          contemplated hereby and thereby, including, without limitation,
          all reasonable and documented fees and disbursements of counsel,
          (b) to pay or reimburse the Company for all its costs and
          expenses incurred in connection with the enforcement or
          preservation of any rights under this Agreement and any of the
          other Related Documents, including, without limitation, the
          reasonable fees and disbursements of counsel to the Company, (c)
          to pay, indemnify, and hold the Company harmless from, any and
          all recording and filing fees and any and all liabilities with
          respect to, or resulting from any delay in paying, stamp, excise
          and other similar taxes, if any, which may be payable or
          determined to be payable in connection with the execution and
          delivery of, or consummation or administration of any of the
          transactions contemplated by, or any amendment, supplement or
          modification of, or any waiver or consent under or in respect of,
          this Agreement and any such other documents, (d) to pay,
          indemnify, and hold the 


<PAGE>


                                                                         27

          Company harmless from, any and all
          Canadian withholding taxes which may be imposed in respect of the
          Receivables or in connection with the Sale Transactions, and (e)
          to pay, indemnify, and hold the Company harmless from and against
          any and all other liabilities, obligations, losses, damages,
          penalties, actions, judgments, suits, costs, expenses or
          disbursements of any kind or nature whatsoever (i) which may at
          any time be imposed on, incurred by or asserted against the
          Company in any way relating to or arising out of this Agreement
          or the transactions contemplated hereby or in connection herewith
          or any action taken or omitted by the Company under or in
          connection with any of the foregoing (all such other liabilities,
          obligations, losses, damages, penalties, actions, judgments,
          suits, costs, expenses and disbursements being herein called
          "Indemnified Liabilities") or (ii) which would not have been
          imposed on, incurred by or asserted against the Company but for
          its having purchased the Receivables hereunder, provided, that
          such indemnity shall not be available to the extent that such
          losses, claims, damages, liabilities or related expenses are
          determined by a court of competent jurisdiction by final and
          nonappealable judgment to have resulted from the gross negligence
          or wilful misconduct of the Company, and provided, further, that
          the Sellers shall have no obligation under this subsection 9.3 to
          the Company with respect to Indemnified Liabilities arising from
          (i) any action taken, or omitted to be taken, by a Servicer which
          is not an Affiliate of the Sellers, (ii) any Eligible Receivable
          which becomes a Charge-Off as a result of non-payment by the
          Obligor with respect thereto or (iii) any action taken by the
          Banks or the Company at the direction of the Administrative Agent
          in collecting from an Obligor.  The agreements in this subsection
          shall survive the collection of all Receivables, the termination
          of this Agreement and the payment of all amounts payable
          hereunder.

                    9.4  Successors and Assigns.  This Agreement shall be
          binding upon and inure to the benefit of the Sellers and the
          Company and their respective successors (whether by merger,
          consolidation or otherwise) and assigns.  Except as expressly
          permitted pursuant to subsections 8.2 and 8.4, each Seller agrees
          that it will not assign or transfer all or any portion of its
          rights or obligations hereunder without the prior written consent
          of the Company.  The Sellers acknowledge that the Company shall
          assign all of its rights hereunder to the Banks and, after the
          termination of the Receivables Transfer Agreement, to another
          entity or entities (each, a "Subsequent Financing Party") buying
          an interest in the Receivables.  Each Seller consents to such
          assignment and agrees that the Administrative Agent and the
          Banks, to the extent provided in the Receivables Transfer
          Agreement, and each Subsequent Financing Party to the extent
          provided in the documents to which it is a party, shall be
          entitled to enforce the terms of this Agreement and the rights
          (including, without limitation, the right to grant or withhold
          any consent or waiver) of the Company directly against such
          Seller, whether or not a Purchase Termination Event or a
          Termination Event has occurred.  Each Seller further agrees that,
          in respect of its obligations hereunder, it will act at the
          direction of and in accordance with all requests and instructions
          from the Administrative Agent or such Subsequent Financing Party,
          as the case may be, until all amounts due to the Banks or such
          Subsequent Financing Party, as the case may be, are paid in full. 
          Each of the Administrative Agent and each such Subsequent
          Financing Party shall have the rights of third-party
          beneficiaries under this Agreement.

                    9.5  GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND
          OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE 


<PAGE>


                                                                           28

          GOVERNED
          BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
          THE STATE OF NEW YORK.

                    9.6  No Waiver; Cumulative Remedies.  No failure to
          exercise and no delay in exercising, on the part of the Company,
          any right, remedy, power or privilege hereunder, shall operate as
          a waiver thereof, nor shall any single or partial exercise of any
          right, remedy, power or privilege hereunder preclude any other or
          further exercise thereof or the exercise of any other right,
          remedy, power or privilege.  The rights, remedies, powers and
          privileges herein provided are cumulative and not exhaustive of
          any rights, remedies, powers and privileges provided by law.

                    9.7  Amendments and Waivers.  Neither this Agreement
          nor any terms hereof may be amended, supplemented or modified
          except in a writing signed by the Company and any affected
          Seller.

                    9.8  Severability.  Any provision of this Agreement
          which is prohibited or unenforceable in any jurisdiction shall,
          as to such jurisdiction, be ineffective to the extent such
          prohibition or unenforceability without invalidating the
          remaining provisions hereof, and any such prohibition or
          unenforceability in any jurisdiction shall not invalidate or
          render unenforceable such provision in any other jurisdiction.

                    9.9  Notices.  All notices, requests and demands to or
          upon the respective parties hereto to be effective shall be in
          writing (including by telecopy), and, unless otherwise expressly
          provided herein, shall be deemed to have been duly given or made
          when delivered by hand, or three days after being deposited in
          the mail, postage prepaid, or, in the case of telecopy notice,
          when received, addressed as follows in the case of the Company
          and C&A Products, and as set forth on Schedule 1 hereof in the
          case of the Sellers, or to such other address as may be hereafter
          notified by the respective parties hereto:

               The Company:        Carcorp, Inc.
                                   5025 S. Eastern Avenue

                                   Suite 16, Number 205
                                   Las Vegas, Nevada  89119
                                   Attention:
                                   Telecopy:

               C&A Products:       Collins & Aikman Products Co.
                                   701 McCullough Drive
                                   Charlotte, North Carolina  28262
                                   Attention:  Mark Remissong
                                   Telecopy:  704-548-2330


                    9.10  Counterparts.  This Agreement may be executed by
          one or more of the parties to this Agreement on any number of
          separate counterparts (including by telecopy), and all of said
          counterparts taken together shall be deemed to constitute one and
          the same 


<PAGE>


                                                                         29

          instrument.  A set of the copies of this Agreement
          signed by all the parties shall be lodged with the Company.

                    9.11  Construction of Agreement as Security Agreement.

          (a)  The parties to this Agreement intend that the transactions
          contemplated hereby shall be, and shall be treated as, a purchase
          by the Company and a sale by the applicable Seller of the
          Purchased Receivables and Related Property with respect thereto
          and not as a lending transaction.  If, however, notwithstanding
          the intent of the parties, such transactions are deemed to be
          loans, each Seller hereby grants to the Company a first priority
          security interest in all of such Seller's right, title and
          interest in and to the Receivables and the Related Property now
          existing and hereafter created, all monies due or to become due
          and all amounts received with respect thereto, including, without
          limitation, Recoveries, and all "proceeds" thereof, to secure all
          such Seller's obligations hereunder.

                    (b)  This Agreement shall constitute a security
          agreement under applicable law.

                    9.12  Waivers of Jury Trial.  Each party hereto hereby
          waives, to the fullest extent permitted by applicable law, any
          right it may have to a trial by jury in respect of any litigation
          directly or indirectly arising out of, under or in connection
          with this Agreement or any of the other Sale Documents.  Each
          party hereto (a) certifies that no representative, agent or
          attorney of any other party has represented, expressly or
          otherwise, that such other party would not, in the event of
          litigation, seek to enforce the foregoing waiver and (b)
          acknowledges that it and the other parties hereto have been
          induced to enter into this Agreement and the other Sale
          Documents, as applicable, by, among other things, the mutual
          waivers and certifications in this subsection 9.12.

                    9.13  Jurisdiction; Consent to Service of Process.  (a)
          Each party hereto hereby irrevocably and unconditionally submits,
          for itself and its property, to the nonexclusive jurisdiction of
          any New York State court or Federal court of the United States of
          America sitting in New York City, and any appellate court from
          any thereof, in any action or proceeding arising out of or
          relating to this Agreement or the other Sale Documents, or for
          recognition or enforcement of any judgment, and each of the
          parties hereto hereby irrevocably and unconditionally agrees that
          all claims in respect of any such action or proceeding may be
          heard and determined in such New York State or, to the extent
          permitted by law, in such Federal court.  Each of the parties
          hereto agrees that a final judgment in any such action or
          proceeding shall be conclusive and may be enforced in other
          jurisdictions by suit on the judgment or in any other manner
          provided by law.  Nothing in this Agreement shall affect any
          right that the Company may otherwise have to bring any action or
          proceeding relating to this Agreement or the other Sale Documents
          against any Seller or its properties in the courts of any
          jurisdiction.

               (b)  Each party hereto hereby irrevocably and
          unconditionally waives, to the fullest extent they may legally
          and effectively do so, any objection which it may now or
          hereafter have to the laying of venue of any suit, action or
          proceeding arising out of or relating to this Agreement or the
          other Sale Documents in any New York State or Federal court. 
          Each of the 


<PAGE>


                                                                         30

          parties hereto hereby irrevocably waives, to the
          fullest extent permitted by law, the defense of an inconvenient
          forum to the maintenance of such action or proceeding in any such
          court.

               (c)  Each party to this Agreement irrevocably consents to
          service of process in the manner provided for notices in
          subsection 9.9.  Nothing in this Agreement will affect the right
          of any party to this Agreement to serve process in any other
          manner permitted by law.

                    9.14  Addition of Sellers.  Subject to subsection 3.4
          hereof, subsection 8.22 of the Receivables Transfer Agreement and
          the terms and conditions of this subsection 9.14, from time to
          time one or more additional Subsidiaries of C&A Products may
          become Sellers hereunder and parties hereto.  If any such
          Subsidiary wishes to become an additional Seller, it shall submit
          a request to such effect in writing to the Company.  The Company,
          in its sole and absolute discretion, may agree to or deny any
          such request, provided that, if the Company shall have failed to
          respond to any such request within 30 days after receipt thereof,
          such request shall be deemed to have been denied.  If the Company
          shall have agreed to any such request, such Subsidiary shall
          become an additional Seller hereunder and a party hereto on the
          related Seller Addition Date upon satisfaction of the conditions
          set forth in subsection 3.4.

                    9.15  Optional Termination of Seller.  (a) Any Seller
          may be terminated as a Seller hereunder on the date such Seller
          ceases to be a wholly owned direct or indirect Subsidiary of C&A
          Products, provided (i) that the aggregate outstanding Adjusted
          Principal Amount of Purchased Receivables sold by all Sellers
          which so cease to be wholly owned Subsidiaries at such time
          (together with the aggregate outstanding Adjusted Principal
          Amount of Purchased Receivables sold by all Sellers which have
          been terminated pursuant to this subsection 9.15 within the
          preceding 90 days) shall not exceed 10% of the aggregate
          outstanding Adjusted Principal Amount of all Purchased
          Receivables and (ii) that no Purchase Termination Event or
          Incipient Purchase Termination Event has occurred and is
          continuing, or would result as a result thereof.  From and after
          the date any such Seller ceases to be a wholly owned Subsidiary
          of C&A Products, the Company shall cease buying Receivables and
          Related Property from such Seller.  Each such Seller shall be
          released as a Seller party hereto for all purposes and shall
          cease to be a party hereto on the date on which there are no
          amounts outstanding with respect to Purchased Receivables
          previously sold by such Seller to the Company, whether such
          amounts have been repurchased, collected or written off in
          accordance with the Policies and the Company Policies.  Prior to
          such date, such Seller shall be obligated to perform its
          servicing and other obligations hereunder and under the
          Transaction Documents to which it is a party with respect to
          Purchased Receivables previously sold by such Seller to the
          Company, including, without limitation, its obligation to deposit
          Collections into the appropriate Lockboxes.

                    (b)  From time to time the Sellers, or the Master
          Servicer on behalf of the Sellers, may request in writing that
          the Company designate one or more Sellers as Sellers that shall
          cease to be parties to this Agreement; provided that no Purchase
          Termination Event or Incipient Purchase Termination Event has
          occurred and is continuing, or would result as a result thereof. 
          Any such request shall specify the minimum aggregate Adjusted
          Principal Amount of outstanding Purchased Receivables to have
          been sold by the Sellers to be so designated by the Company.  The
          Company, in its sole and absolute discretion (subject to


<PAGE>


                                                                         31

          subsection 8.23 of the Receivables Transfer Agreement), shall,
          within 45 days of receipt of such request, select the Sellers to
          be so terminated, provided that the aggregate Adjusted Principal
          Amount of outstanding Purchased Receivables previously sold by
          such Sellers shall be substantially equal to the Adjusted
          Principal Amount specified in such request.  Promptly after
          receipt of any such designation by the Company, the Sellers shall
          either (i) elect not to terminate such designated Sellers or (ii)
          select a date, which date shall not be later than 30 days after
          the date of receipt of such designation, as the "Sale Termination
          Date" for such designated Sellers.  From and after such date, the
          Company shall cease buying Receivables and Related Property from
          such Sellers.  Each such Seller shall be released as a Seller
          hereunder and a party hereto for all purposes and shall cease to
          be a party hereto on the date on which there are no amounts
          outstanding with respect to Purchased Receivables previously sold
          by such Seller to the Company, whether such amounts have been
          repurchased in the manner provided in clause (a) above, collected
          or written off in accordance with the Policies and the Company
          Policies.  Prior to such date, such Seller shall be obligated to
          perform its servicing and other obligations hereunder and under
          the Related Documents with respect to Purchased Receivables
          previously sold by such Seller to the Company, including, without
          limitation, its obligation to deposit Collections into the
          appropriate Lockboxes.

                    (c)  A terminated Seller shall have no obligation to
          repurchase any Receivables other than Receivables previously sold
          by it to the Company which are subject to a Repurchase Event.

                    9.16  No Bankruptcy Petition.  Each Seller and C&A
          Products by entering into this Agreement, and any present or
          future holder of a Subordinated Note, by its acceptance thereof,
          covenants and agrees that, prior to the date which is one year
          and one day after the date of termination of this Agreement
          pursuant to subsection 9.17, it will not institute against, or
          join any other Person in instituting against, the Company any
          bankruptcy, reorganization, arrangement, insolvency or
          liquidation proceedings, or other proceedings under any federal
          or state bankruptcy or similar law.

                    9.17  Termination.  This Agreement will terminate at
          such time as (a) the commitment of the Company to purchase
          Receivables from all Sellers hereunder shall have terminated and
          (b) all Receivables purchased hereunder have been collected, and
          the proceeds thereof turned over to the Company and all other
          amounts owing to the Company hereunder shall have been paid in
          full or, if Receivables sold hereunder have not been collected
          such Receivables have become Defaulted Receivables and the
          Company shall have completed its collection efforts in respect
          thereto; provided, however, that the indemnities of the Sellers
          to the Company set forth in this Agreement shall survive such
          termination and provided, further, that, to the extent any
          amounts remain due and owing to the Company hereunder, the
          Company shall remain entitled to receive any collections on
          Receivables sold hereunder which have become Defaulted
          Receivables after it shall have completed its collection efforts
          in respect thereof.

                    9.18  Confidentiality.  The Company agrees that it
          shall maintain in confidence any information relating to any
          Seller furnished to it by or on behalf of such Seller (other than
          information that (x) has become generally available to the public
          other than as a result of 


<PAGE>


                                                                         32


          a disclosure by such party, (y) has
          been independently developed by such party without violating this
          subsection 9.18 or (z) was available to such party from a third
          party having, to such party's knowledge, no obligation of
          confidentiality to such Seller) and shall not reveal the same
          other than to its directors, officers, employees and advisors
          with a need to know except:  (a) to the extent necessary to
          comply with law or any legal process or the requirements of any
          Governmental Authority or of any securities exchange on which
          securities of the disclosing party or any Affiliate of the
          disclosing party are listed or traded, (b) as part of normal
          reporting or review procedures to Governmental Authorities or its
          parent companies, Affiliates or auditors, (c) in order to enforce
          its rights under any Sale Document in a legal proceeding and (d)
          in connection with the collection of any Purchased Receivable or
          the exercise of any remedy hereunder or under the Receivables
          Transfer Agreement. 

                    IN WITNESS WHEREOF, the parties hereto have caused this
          Agreement to be executed by their respective officers thereunto
          duly authorized, all as of the day and year first above written.

                                      COLLINS & AIKMAN PRODUCTS CO., as Master
                                      Servicer

                                      By: Paul W. Meeks
                                         Title: Vice President & Treasurer


                                      CARCORP, INC.

                                      By: Mark O. Remissong
                                         Title: President


                                      The Sellers:


                                      COLLINS & AIKMAN PRODUCTS CO.

                                      By: Paul W. Meeks
                                         Title: Vice President & Treasurer



                                      ACK-TI-LINING, INC.

                                      By: Paul W. Meeks
                                         Title: Vice President & Treasurer



<PAGE>


                                                                         33


                                      WCA CANADA, INC. 

                                      By: Paul W. Meeks
                                         Title: Assistant Treasurer


                                      IMPERIAL WALLCOVERINGS (CANADA), INC.

                                      By: Paul W. Meeks
                                         Title: Vice President & Treasurer


                                      IMPERIAL WALLCOVERINGS, INC.

                                      By: Paul W. Meeks
                                         Title: Vice President & Treasurer


                                      THE AKRO CORPORATION

                                      By: Paul W. Meeks
                                         Title: Vice President & Treasurer


                                      DURA ACQUISITION CORP.

                                      By: Paul W. Meeks
                                         Title: Vice President & Treasurer


<PAGE>


                                                              SCHEDULE 1



                                   State of
                                   Incorporation
       Seller                                   Location of Chief Executive Office      Office Where Records are Kept
                                                                               

       Ack-Ti-Lining, Inc.         New York     210 Madison Avenue, 6th Floor, New      701 McCullough Drive, Charlotte, NC
                                                York, NY 10016                          28262
       The Akro Corporation        Delaware     1212 7th Street SW, P.O. Box 8650,      701 McCullough Drive, Charlotte, NC
                                                Canton, OH  44711                       28262

       Collins & Aikman Products   Delaware     701 McCullough Drive, Charlotte, NC     701 McCullough Drive, Charlotte, NC
       Co.                                      28262                                   28262

       Dura Acquisition Corp.      Delaware     1365 East Beecher Street, Adrian, MI    1365 East Beecher Street, Adrian, MI 
                                                49221                                   49221
       Imperial Wallcoverings,     Delaware     23645 Mercantile Road, Beachwood, OH    23645 Mercantile Road, Beachwood, OH 
       Inc.                                     44122                                   44122

       Imperial Wallcoverings      Ontario      1051 Rue Galt Est, Sherbrooke, Quebec,  1051 Rue Galt Est, Sherbrooke, Quebec,
       (Canada), Inc.                           Canada  J1G 1Y7                         Canada, J1G 1Y7
       WCA Canada, Inc.            Ontario      150 Collins Street, Farnham, Quebec,    150 Collins Street, Farnham, Quebec,
                                                Canada, J2N 2R6                         Canada, J2N 2R6



<PAGE>


                                      SCHEDULE 2

                                      LOCKBOXES


<PAGE>



                                       SCHEDULE 3
                                 DISCOUNTED PERCENTAGE

      The Discounted Percentage applicable to the Receivables purchased on any
      date from any Seller shall equal the percentage obtained from the
      following formula:

                  100% - (A + B + C + D)

        all determined by the Company as of the related Payment Date,

        Where

        A =  Adjusted Loss Reserve Percentage, which as of such Payment Date
             will equal the ratio obtained by dividing (a) Charge-Offs (net of
             recoveries in respect of Charge-Offs) with respect to such Seller
             during the twelve-fiscal-month period immediately preceding the
             Settlement Date most recently preceding such Payment Date by (b)
             four times the aggregate amount of Collections during the three-
             fiscal-month period immediately preceding the Settlement Date most
             recently preceding such Payment Date with respect to Receivables
             originated by such Seller.

        B =  Adjusted Yield Reserve Percentage, which as of such Payment Date
             will equal the amount obtained by dividing (a) the product of (i)
             1.5, (ii) Days Sales Outstanding and (iii) the Adjusted Discount
             Rate by (b) 360.

        C =  Servicing Reserve Percentage.

        D =  Processing Expense Reserve Percentage, which will equal 1/2% and
             reflects the cost of the Company's overhead, including costs of
             processing the purchase of Receivables and other normal operating
             costs and a reasonable profit margin.

        None of the elements of the above-referenced formula, in respect of any
        purchase of Receivables, will be adjusted following the related Payment
        Date.

        "Adjusted Discount Rate" means as of such Payment Date the sum of (a)
        the weighted average of (i) the weighted average rate of interest
        payable to the Banks or any Subsequent Financing Party with respect to
        the outstanding Participating Interest and (ii) the rate of interest
        payable to the Sellers with respect to the outstanding principal amount
        of the Subordinated Notes as such rates are in effect as at the end of
        the fiscal month immediately preceding the Settlement Date most recent
        to such Payment Date and (iii) an assumed return on the shareholders'
        equity in the Company at a rate to be determined from time to time by
        the Master Servicer and (b) the amount obtained by dividing (i) the
        aggregate amount of fees (other than the Monthly Servicing Fee) accrued
        with respect to the Receivables Transfer Agreement during the fiscal
        month immediately preceding the Settlement Date most recent to such
        Payment Date by (ii) the average outstanding Adjusted Principal Amount
        of the Receivables during such fiscal month.

        With respect to each calculation set forth above with respect to a
        Settlement Date, such calculation as calculated on each Settlement
        Statement Date and included in the applicable Settlement Statement shall
        remain in effect from and including the related Settlement Date to but
        excluding the following Statement Date.


<PAGE>



                                      SCHEDULE 4

                                     TAX RETURNS


   (i) Material Claims

   The Internal Revenue Service has proposed adjustments which would disallow
   approximately $177 million of the approximately $434 million of net operating
   loss carryforwards at January 29, 1994.

   The California Franchise Tax Board has proposed a tax assessment of
   approximately $12 million for fiscal year 1987.  The interest on this
   assessment is estimated to be $9 million.

   (ii) Statute Extensions




  Taxing    Type of                                                                       Extension
 Authority  Tax                             Entity                    Period              Date
                                                                                    
   Federal  Income          Collins & Aikman Holdings II Corp. & Subs.   1/89 - 1/90           06/30/95 
   Federal  Income          Collins & Aikman Holdings II Corp. & Subs.   1/91                  12/31/95
   Federal  Income          Collins & Aikman Group, Inc. & Subs.         1/89 - 4/89           06/30/95
   Federal  Income          Collins & Aikman Export Corporation          1/91                  12/31/95
   Federal  Income          Collins & Aikman Export Corporation          1/89 - 1/90           06/30/95
   Federal  Withholding     Collins & Aikman Group, Inc. & Subs.        12/88 -12/90           06/30/95
California  Income          Collins & Aikman Group, Inc. & Subs.         1/88                  11/15/95
California  Unemployment    Collins & Aikman Group, Inc.                 9/90 -   3/91         07/31/94
  Illinois  Sales/Use       Collins & Aikman Corporation                 1/91 - 2/94           12/31/94
   NY City  Income          Collins & Aikman Group, Inc.                 1/86 - 1/89           12/31/94
   NY City  Income          Greeff Fabrics, Inc.                         1/90 - 1/91           12/31/94


   (iii) Tax Examinations



    Taxing             Type of
  Authority            Tax                                 Entity                  Period Under Exam
                                                                          
   Federal        Income                   Collins & Aikman Holdings II & Subs.    1/89 - 1/92
   Federal        Income                   Collins & Aikman Group, Inc. & Subs.    1/89 - 4/89
   Federal        Income                   Collins & Aikman Export Corporation     1/89 - 1/91
   Canada         Customs/GST              Imperial Wallcoverings (Canada) Inc.    6/91 - 6/94
   California     Income                   Collins & Aikman Group, Inc. & Subs.    1/88
   California     Unemployment             Collins & Aikman Group, Inc.            9/90 - 12/93
   Florida        Sales/Use                Imperial Wallcoverings, Inc.            3/88 - 2/93
   Illinois       Sales/Use                Collins & Aikman Corporation            1/91 - 2/94



<PAGE>


                                                                          2



    Taxing          Type of
   Authority            Tax                                Entity             Period Under Exam
                                                                     
   Massachusetts     Income                Collins & Aikman Group, Inc.       1/89   - 1/90
   Massachusetts     Income                Collins & Aikman Group, Inc.       1/83
   Massachusetts     Income                Wickes Manufacturing Co.           1/90
   Mecklenburg
     County (NC)     Property              Collins & Aikman Group, Inc.       1/92   - 12/93
   New York          Income                Collins & Aikman Corporation       1/88   - 1/91
   New York          Income                Wickes Manufacturing Company       1/88   - 1/91

   New York City     Income                Collins & Aikman Group, Inc.       1/86   - 1/89
   New York City     Income                Greeff Fabrics, Inc.               1/90   - 1/91
   New York City     Income                Collins & Aikman Group, Inc.       4/89   - 1/92
   North Carolina    Income                Collins & Aikman Corporation 
                                               and Collins & Aikman Lease Co. 1/91   - 1/93
   Ohio              Income                Collins & Aikman Group, Inc.       1/91   - 1/92
   Ohio           Sales/Use                Imperial Wallcoverings, Inc.       2/90   - 1/93

   Philadelphia      Income                Collins & Aikman Corporation       1/88   - 1/93

   Texas          Sales/Use                Collins & Aikman Group, Inc.       1/91   - 4/94
   Texas          Sales/Use                Collins & Aikman Corporation       7/88   - 6/92


   (iv) Pending Issues

   The Internal Revenue Service has proposed adjustments which would disallow
   approximately $177 million of the approximately $434 million of net operating
   loss carryforwards at January 29, 1994.

   The California Franchise Tax Board has proposed a tax assessment of
   approximately $12 million for  fiscal year 1987.  The interest on this
   assessment is estimated to be $9 million.


<PAGE>


                                                           EXHIBIT A TO THE
                                                 RECEIVABLES SALE AGREEMENT


                       [FORM OF U.S. DOLLAR SUBORDINATED NOTE]


                                                         New York, New York
                                                              July __, 1994


                    CARCORP, INC., a Delaware corporation (the "Company"),
          hereby promises to pay to the order of Collins & Aikman Products
          Co., a Delaware corporation ("C&A Products"), and to each of the
          subsidiaries of C&A Products which is from time to time a party
          to the Receivables Sale Agreement referred to below (together
          with C&A Products, collectively, the "Sellers"), the principal
          amount of this Subordinated Note, determined as described below,
          together with interest thereon at a rate per annum equal to the
          ABR (as defined in the Receivables Sale Agreement) in lawful
          money of the United States of America.  Capitalized terms used
          herein but not defined herein shall have the meanings assigned to
          such terms in the Receivables Sale Agreement, dated as of July
          13, 1994, among the Company, the Sellers and C&A Products, as
          Master Servicer (as amended, supplemented or otherwise modified
          from time to time, the "Receivables Sale Agreement").  This
          Subordinated Note is the U.S. Dollar Subordinated Note referred
          to in the Receivables Sale Agreement.

                    The aggregate principal amount of this Subordinated
          Note at any time shall be equal to the difference between (a) the
          aggregate principal amount on the issuance hereof and each
          addition to the principal amount of this Subordinated Note
          pursuant to the terms of subsection 2.3 of the Receivables Sale
          Agreement or pursuant to the proviso contained in the penultimate
          sentence of this paragraph minus (b) the aggregate amount of all
          payments made in respect of the principal of this Subordinated
          Note, in each case, as recorded on Schedule 1 annexed to and
          constituting a part of this Subordinated Note.  All payments made
          in respect of this Subordinated Note shall be allocated among the
          Sellers by the Master Servicer.  Principal not prepaid pursuant
          to the terms of the Receivables Sale Agreement and of the other
          Sale Documents shall be payable on the maturity date thereof (the
          "Maturity Date").  Payments of interest on this Subordinated Note
          shall be paid on each Settlement Date with respect to amounts
          accrued and not paid as of the last day of the preceding
          Settlement Period (or, in the case of the first Settlement Date,
          as of the date on which this Subordinated Note is issued) and on
          the Maturity Date by wire transfer of immediately available funds
          to such account of each Seller as such Seller may designate in
          writing, provided, however, that accrued interest hereon which is
          not so paid may instead be added to the principal amount hereof. 
          Notwithstanding the foregoing, no payments of interest or
          principal may be made under this Subordinated Note at any time



<PAGE>



                                                                          2

          except as permitted under the Subordination Agreement referred to
          below.

                    Default in the payment of principal or interest under
          this Subordinated Note shall not constitute a default or event of
          default hereunder or a Purchase Termination Event under the
          Receivables Sale Agreement or a Termination Event under the
          Receivables Transfer Agreement.

                    The indebtedness evidenced by this instrument is
          subordinated to the prior payment in full of the Senior
          Obligations pursuant to, and as defined in, the Subordination
          Agreement, dated as of July 13, 1994, among the maker hereof, the
          payees named herein and certain other parties.  Each holder of
          this Subordinated Note agrees that it shall have no right to be
          paid, and shall have no claim to payment, except in accordance
          with, and subject to the terms of, subsection 2.7 of the
          Receivables Transfer Agreement.

                    The Company hereby waives diligence, presentment,
          demand, protest and notice of any kind whatsoever.  The failure
          of any holder to exercise any of its rights hereunder in any
          particular instance shall not constitute a waiver thereof in that
          or any subsequent instance.

                    Neither this Subordinated Note, nor any right of any
          Seller to receive payments hereunder, shall be assigned,
          transferred, exchanged, pledged, hypothecated, participated or
          otherwise conveyed.

                    THIS SUBORDINATED NOTE SHALL BE GOVERNED BY, AND
          CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.


                                        CARCORP, INC.

                                        By:_________________________
                                           Title:


<PAGE>



                                                              Schedule 1 to
                                                          Subordinated Note


                     SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL





                                   Amount of   Unpaid
          Seller (if   Amount of   Principal   Principal   Notation
Date     specified)    Loans       Repaid      Balance     Made By 
                                            
____     __________    _________   _________   ________    ________

____     __________    _________   _________   _________   ________

____     __________    _________   ________    _________   ________

____     __________    _________   _________   _________   ________

____     __________    _________   _________   _________   ________

____     __________    _________   _________   _________   ________

____     __________    _________   _________   _________   ________

____     __________    _________   _________   _________   ________

____     __________    _________   _________   _________   ________

____     __________    _________   _________   _________   ________

____     __________    _________   _________   _________   ________

____     __________    _________   _________   _________   ________

____     __________    _________   _________   _________   ________

____     __________    _________   _________   _________   ________

____     __________    _________   _________   _________   ________

____     __________    _________   _________   _________   ________

____     __________    _________   _________   _________   ________

____     __________    _________   _________   _________   ________




<PAGE>


                                                           EXHIBIT B TO THE
                                                 RECEIVABLES SALE AGREEMENT


                     [FORM OF CANADIAN DOLLAR SUBORDINATED NOTE]


                                                         New York, New York
                                                              July __, 1994


                    CARCORP, INC., a Delaware corporation (the "Company"),
          hereby promises to pay to the order of Collins & Aikman Products
          Co., a Delaware corporation ("C&A Products"), and to each of the
          subsidiaries of C&A Products which is from time to time a party
          to the Receivables Sale Agreement referred to below (together 
          with C&A Products, collectively, the "Sellers"), the principal
          amount of this Subordinated Note, determined as described below,
          together with interest thereon at a rate per annum equal to the
          ABR (as defined in the Receivables Sale Agreement) in lawful
          money of Canada.  Capitalized terms used herein but not defined
          herein shall have the meanings assigned to such terms in the
          Receivables Sale Agreement, dated as of July 13, 1994, among the
          Company, the Sellers and C&A Products, as Master Servicer (as
          amended, supplemented or otherwise modified from time to time,
          the "Receivables Sale Agreement").  This Subordinated Note is the
          Canadian Dollar Subordinated Note referred to in the Receivables
          Sale Agreement.

                    The aggregate principal amount of this Subordinated
          Note at any time shall be equal to the difference between (a) the
          aggregate principal amount on the issuance hereof and each
          addition to the principal amount of this Subordinated Note
          pursuant to the terms of subsection 2.3 of the Receivables Sale
          Agreement or pursuant to the proviso contained in the penultimate
          sentence of this paragraph minus (b) the aggregate amount of all
          payments made in respect of the principal of this Subordinated
          Note, in each case, as recorded on Schedule 1 annexed to and
          constituting a part of this Subordinated Note.  All payments made
          in respect of this Subordinated Note shall be allocated among the
          Sellers by the Master Servicer.  Principal not prepaid pursuant
          to the terms of the Receivables Sale Agreement and of the other
          Sale Documents shall be payable on the maturity date thereof (the
          "Maturity Date").  Payments of interest on this Subordinated Note
          shall be paid on each Settlement Date with respect to amounts
          accrued and not paid as of the last day of the preceding
          Settlement Period (or, in the case of the first Settlement Date,
          as of the date on which this Subordinated Note is issued) and on
          the Maturity Date by wire transfer of immediately available funds
          to such account of each Seller as such Seller may designate in
          writing, provided, however, that accrued interest hereon which is
          not so paid may instead be added to the principal amount hereof. 
          Notwithstanding the foregoing, no payments of interest or
          principal may be made under this Subordinated Note at any time


<PAGE>


                                                                          2

          except as permitted under the Subordination Agreement referred to
          below.

                    Default in the payment of principal or interest under
          this Subordinated Note shall not constitute a default or event of
          default hereunder or a Purchase Termination Event under the
          Receivables Sale Agreement or a Termination Event under the
          Receivables Transfer Agreement.

                    The indebtedness evidenced by this instrument is
          subordinated to the prior payment in full of the Senior
          Obligations pursuant to, and as defined in, the Subordination
          Agreement dated as of July 13, 1994 among the maker hereof, the
          payees named herein and certain other parties.  Each holder of
          this Subordinated Note agrees that it shall have no right to be
          paid, and shall have no claim to payment, except in accordance
          with, and subject to the terms of, subsection 2.7 of the
          Receivables Transfer Agreement.

                    The Company hereby waives diligence, presentment,
          demand, protest and notice of any kind whatsoever.  The failure
          of any holder to exercise any of its rights hereunder in any
          particular instance shall not constitute a waiver thereof in that
          or any subsequent instance.

                    Neither this Subordinated Note, nor any right of any
          Seller to receive payments hereunder, shall be assigned,
          transferred, exchanged, pledged, hypothecated, participated or
          otherwise conveyed.

                    THIS SUBORDINATED NOTE SHALL BE GOVERNED BY, AND
          CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.


                                        CARCORP, INC.

                                        By:_________________________
                                           Title:



<PAGE>



                                                              Schedule 1 to
                                                          Subordinated Note


                     SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL





                                  Amount of   Unpaid
         Seller (if   Amount of   Principal   Principal   Notation
Date     specified)   Loans       Repaid      Balance     Made By 
                                           
____     __________   _________   _________   ________    ________

____     __________   _________   _________   _________   ________

____     __________   _________   ________    _________   ________

____     __________   _________   _________   _________   ________

____     __________   _________   _________   _________   ________

____     __________   _________   _________   _________   ________

____     __________   _________   _________   _________   ________

____     __________   _________   _________   _________   ________

____     __________   _________   _________   _________   ________

____     __________   _________   _________   _________   ________

____     __________   _________   _________   _________   ________

____     __________   _________   _________   _________   ________

____     __________   _________   _________   _________   ________

____     __________   _________   _________   _________   ________

____     __________   _________   _________   _________   ________

____     __________   _________   _________   _________   ________

____     __________   _________   _________   _________   ________

____     __________   _________   _________   _________   ________




<PAGE>



                                EXHIBIT C TO THE RECEIVABLES SALE AGREEMENT
                            EXHIBIT F TO THE RECEIVABLES TRANSFER AGREEMENT


                   [FORM OF ADDITIONAL SELLER/SERVICER SUPPLEMENT]


                    SUPPLEMENT, dated _________________, to (i) the
          Receivables Sale Agreement, dated as of July 13, 1994 (as
          amended, the "Receivables Sale Agreement"), among Collins &
          Aikman Products Co., a Delaware corporation ("C&A Products"), and
          each of the subsidiaries of C&A Products from time to time
          parties thereto (the "Sellers"), C&A Products, as master servicer
          (in such capacity, the "Master Servicer"), and Carcorp, Inc., a
          Delaware corporation (the "Company"), (ii) the Receivables
          Transfer and Servicing Agreement, dated as of July 13, 1994 (as
          amended, the "Receivables Transfer Agreement"), among the
          Company, the Master Servicer, certain of the Sellers, in their
          capacities as servicers of the Receivables (in such capacities,
          the "Servicers"), the several financial institutions from time to
          time parties thereto (the "Banks") and Chemical Bank, as
          administrative agent for the Banks (in such capacity, the
          "Administrative Agent"), and (iii) the Subordination Agreement,
          dated as of July 13, 1994 (as amended, the "Subordination
          Agreement"), among the Company, the Sellers from time to time
          parties thereto and the Administrative Agent.


                                W I T N E S S E T H :


                     WHEREAS, the Receivables Sale Agreement provides that
          any Subsidiary of C&A Products, although not originally a Seller
          thereunder, may become a Seller under the Receivables Sale
          Agreement, with (i) the consent of the Company and the Required
          Banks and (ii) the satisfaction of each of the conditions
          precedent set forth in subsection 3.4 of the Receivables Sale
          Agreement (one of which is the delivery to the Company of a
          supplement in substantially the form of this Supplement);

                     WHEREAS, the Receivables Transfer Agreement provides
          that any Subsidiary of C&A Products, although not originally a
          Servicer thereunder, may become a Servicer under the Receivables
          Transfer Agreement, with (i) the consent of the Company and the
          Required Banks to such Subsidiary becoming a Seller under the
          Receivables Sale Agreement, (ii) the delivery to the Company of a
          supplement in substantially the form of this Supplement and (iii)
          the satisfaction of each of the conditions precedent set forth in
          subsection 3.4 of the Receivables Sale Agreement;

                    WHEREAS, the Subordination Agreement provides that any
          Subsidiary of C&A Group, although not originally a Seller
          thereunder, shall become a Seller under the Subordination
          Agreement immediately upon such Subsidiary becoming a Seller
          under the Receivables Sale Agreement; and


<PAGE>



                                                                          2

                    WHEREAS, the undersigned was not an original Seller
          under the Receivables Sale Agreement and the Subordination
          Agreement or an original Servicer under the Receivables Transfer
          Agreement but now desires to become a Seller and a Servicer,
          respectively, thereunder.

                    NOW, THEREFORE, the undersigned hereby agrees as
          follows:

                    1.   The undersigned agrees to be bound by all of the
               provisions of each of the Receivables Sale Agreement, the
               Subordination Agreement and the Receivables Transfer
               Agreement applicable to a Seller and a Servicer,
               respectively, thereunder and agrees that it shall, on the
               date this Supplement is accepted by the Company and the
               Required Banks, become (a) in the case of the Receivables
               Sale Agreement and the Subordination Agreement, a Seller and
               (b) in the case of the Receivables Transfer Agreement, a
               Servicer, for all purposes of the Receivables Sale
               Agreement, the Subordination Agreement and the Receivables
               Transfer Agreement, respectively, to the same extent as if
               originally a party thereto.

                    2.   Terms defined in Annex X to the Receivables
               Transfer Agreement shall have their defined meanings when
               used herein.

                    IN WITNESS WHEREOF, the undersigned has caused this
          Supplement to be executed and delivered by a duly authorized
          officer on the date first above written.

                                        [Insert name of Seller/Servicer]


                                        By________________________________
                                          Title:

          Accepted as of the date first
          above written:

          CARCORP, INC.


          By:                         
             Title:

          [Required Banks]


          By:                         
             Title:


<PAGE>


                                                                    ANNEX X

                    "ABR":  for any day, a rate per annum (rounded upwards,
               if necessary, to the next 1/16 of 1%) equal to the greatest
               of (a) the Prime Rate in effect on such day, (b) the Base CD
               Rate in effect on such day plus 1% and (c) the Federal Funds
               Effective Rate in effect on such day plus 1/2 of 1%.  For
               purposes hereof, "Prime Rate" shall mean the rate of
               interest per annum publicly announced from time to time by
               Chemical as its prime rate in effect at its principal office
               in New York City; each change in the Prime Rate shall be
               effective on the date such change is publicly announced as
               being effective.  "Base CD Rate" shall mean the sum of (a)
               the product of (i) the Three-Month Secondary CD Rate and
               (ii) Statutory Reserves and (b) the Assessment Rate. 
               "Three-Month Secondary CD Rate" shall mean, for any day, the
               secondary market rate for three-month certificates of
               deposit reported as being in effect on such day (or, if such
               day shall not be a Business Day, the next preceding Business
               Day) by the Board through the public information telephone
               line of the Federal Reserve Bank of New York (which rate
               will, under the current practices of the Board, be published
               in Federal Reserve Statistical Release H.15(519) during the
               week following such day), or, if such rate shall not be so
               reported on such day or such next preceding Business Day,
               the average of the secondary market quotations for
               three-month certificates of deposit of major money center
               banks in New York City received at approximately 10:00 a.m.,
               New York City time, on such day (or, if such day shall not
               be a Business Day, on the next preceding Business Day) by
               the Administrative Agent from three New York City negotiable
               certificate of deposit dealers of recognized standing
               selected by it.  "Federal Funds Effective Rate" shall mean,
               for any day, the weighted average of the rates on overnight
               Federal funds transactions with members of the Federal
               Reserve System arranged by Federal funds brokers, as
               published on the next succeeding Business Day by the Federal
               Reserve Bank of New York, or, if such rate is not so
               published for any day which is a Business Day, the average
               of the quotations for the day of such transactions received
               by the Administrative Agent from three Federal funds brokers
               of recognized standing selected by it.  If for any reason
               the Administrative Agent shall have determined (which
               determination shall be conclusive absent manifest error)
               that it is unable to ascertain the Base CD Rate or the
               Federal Funds Effective Rate or both for any reason,
               including the inability or failure of the Administrative
               Agent to obtain sufficient quotations in accordance with the
               terms thereof, the ABR shall be determined without regard to
               clause (b) or (c), or both, of the first sentence of this
               definition, as appropriate, until the circumstances giving
               rise to such inability no longer exist.  Any change in the
               ABR due to a change in the Prime Rate, the Base CD Rate or
               the Federal Funds Effective Rate shall be effective on the
               effective date of such change in the Prime Rate, the Base CD
               Rate or the Federal Funds Effective Rate, respectively.

                    "ABR Participating Interest":  with respect to any
               Bank, that portion of its Participating Interest in the
               Receivables with respect to which the Purchase Discount
               Amount is determined by reference to the ABR.


<PAGE>



                                                                          2


                    "Accounts":  as defined in subsection 2.1(c)(ii) of the
               Receivables Transfer Agreement.

                    "Acquiring Banks":  as defined in subsection 11.4(d) of
               the Receivables Transfer Agreement.

                    "Additional Seller Supplement":  an instrument
               substantially in the form of Exhibit C to the Receivables
               Sale Agreement by which a Subsidiary of C&A Products becomes
               a Seller party to the Receivables Sale Agreement.

                    "Additional Servicer Supplement":  an instrument
               substantially in the form of Exhibit F to the Receivables
               Transfer Agreement by which a Subsidiary of C&A Products
               becomes a Servicer party to the Receivables Transfer
               Agreement.

                    "Adjusted Principal Amount":  (a) in the case of any
               Receivable denominated in U.S. Dollars, the Principal Amount
               in respect thereof and (b) in the case of any Receivable
               denominated in Canadian Dollars, the Canadian Exchange
               Percentage of the Principal Amount in respect thereof.

                    "Adjustment":  as defined in subsection 2.5 of the
               Receivables Sale Agreement.

                    "Adjustment Payment":  as defined in subsection 12.4 of
               the Receivables Transfer Agreement.

                    "Administrative Agent":  Chemical, together with its
               affiliates, as the arranger of the Commitments and as the
               agent for the Banks under the Receivables Transfer
               Agreement.

                    "Affiliate":  as to any Person, any other Person that
               directly, or indirectly through one or more intermediaries,
               Controls or is Controlled by or is under common Control with
               the Person specified.

                    "Aggregate Eligible Receivables":  the excess of (a)
               the Applicable Eligible Receivables Percentage of the
               aggregate outstanding Adjusted Principal Amount of all
               Receivables over (b) the aggregate Excess Amounts with
               respect to all Obligors.


                    "Agreement":  the agreement wherein such term is used,
               as the same may from time to time be amended, supplemented
               or otherwise modified.

                    "Amortization Period":  the period commencing after the
               end of the Commitment Period and ending with the termination
               of the Receivables Transfer Agreement pursuant to subsection
               4.1 thereof.

                    "Applicable ABR Margin":  (a) prior to the 270th day
               after the Effective Date, 0% and (b) on and after such 270th
               day, the "Applicable Margin" with respect to "ABR Loans" (as
               each such term is defined in the Credit Agreement),
               determined in 

<PAGE>


                                                                          3

               accordance with the provisions of the Credit
               Agreement as in effect on the Effective Date.

                    "Applicable Eligible Receivables Percentage":  at any
               date of determination, a fraction (expressed as a
               percentage) equal to (a) the aggregate Adjusted Principal
               Amount of all Eligible Receivables determined pursuant to
               the most recent Settlement Statement divided by (b) the
               aggregate Adjusted Principal Amount of all outstanding
               Receivables generated by the Sellers determined pursuant to
               such Settlement Statement.

                    "Applicable Eurodollar Margin":  (a) prior to the 270th
               day after the Effective Date, 0.625% and (b) on and after
               such 270th day, the "Applicable Margin" with respect to
               "Eurodollar Loans" (as each such term is defined in the
               Credit Agreement), determined in accordance with the
               provisions of the Credit Agreement as in effect on the
               Effective Date.

                    "Applicable Obligor Percentage":  with respect to any
               Obligor, (a) 7.5%, in the case of any such Obligor having a
               long-term senior unsecured debt rating of at least A- from
               S&P or A3 from Moody's or a short-term deposit or commercial
               paper rating of at least A-1 from S&P or P-1 from Moody's,
               provided, that in the case of General Motors Corporation,
               Chrysler Corporation, Ford Motor Company and Honda Motor
               Co., the Applicable Obligor Percentage shall instead be
               17.0% so long as such Obligor maintains a short-term deposit
               or commercial paper rating of at least A-2 from S&P or P-2
               from Moody's; (b) 5.0%, in the case of any such Obligor (not
               described in clause (a) above) having a long-term senior
               unsecured debt rating of at least BBB- from S&P or Baa3 from
               Moody's or a short-term deposit or commercial paper rating
               of at least A-3 from S&P or P-3 from Moody's; or (c) 2.0%,
               in the case of any other such Obligor.

                    "Assessment Rate":  for any date, the annual rate
               (rounded upwards, if necessary, to the next 1/100 of 1%)
               most recently estimated by the Administrative Agent as the
               then current net annual assessment rate that will be
               employed in determining amounts payable by Chemical to the
               Federal Deposit Insurance Corporation (or any successor) for
               insurance by such Corporation (or such successor) of time
               deposits made in dollars at Chemical's domestic offices.

                    "Average Default Ratio":  for any Settlement Period, a
               percentage equal to (a) the sum of the Default Ratios for
               such Settlement Period and each of the two preceding
               Settlement Periods divided by (b) 3.

                    "Average Dilution Ratio":  with respect to any
               Settlement Period, a fraction (a) the numerator of which is
               the aggregate amount of Dilutive Credits which are incurred
               with respect to the Receivables during the twelve-month
               period ended on the last day of such Settlement Period and
               (b) the denominator of which is the aggregate Adjusted
               Principal Amount of Receivables generated by the Sellers
               during the twelve-month period ended on the last day of such
               Settlement Period.

<PAGE>


                                                                          4


                    "Bank":  each financial institution listed on Schedule
               1 to the Receivables Transfer Agreement and each financial
               institution to which an assignment has been made pursuant to
               the terms of the Receivables Transfer Agreement, and any
               successor of the foregoing.

                    "benefitted Bank":  as defined in subsection 11.12 of
               the Receivables Transfer Agreement.

                    "Board":  the Board of Governors of the Federal Reserve
               System and any successor thereto.

                    "Business Day":  any day (other than a day which is a
               Saturday, Sunday or legal holiday in the State of New York)
               on which banks are open for business in New York City;
               provided, however, that, when used in connection with any
               Fixed Tranche or the determination of any Eurodollar Rate,
               the term "Business Day" shall also exclude any day on which
               banks are not open for dealings in dollar deposits in the
               London interbank market.

                    "Business Day Received": as defined in subsection
               12.1(d) of the Receivables Transfer Agreement.

                    "C&A Products":  Collins & Aikman Products Co., a
               Delaware corporation.

                    "Canada/Canadian Dollar Concentration Account":  as
               defined in subsection 2.7(a) of the Receivables Transfer
               Agreement.

                    "Canada/U.S. Dollar Concentration Account":  as defined
               in subsection 2.7(a) of the Receivables Transfer Agreement.


                    "Canadian Dollars":  dollars in lawful currency of
               Canada.

                    "Canadian Dollar Subordinated Note":  as defined in
               subsection 8.1 of the Receivables Sale Agreement.

                    "Canadian Exchange Percentage":  at any date, the rate
               at which Canadian Dollars may be exchanged into Dollars
               (expressed as the percentage of Dollars per Canadian
               Dollar), determined by reference to the relevant Bloomberg
               currency page.  In the event that such rate does not appear
               on any Bloomberg currency page, the "Canadian Exchange
               Percentage" shall be determined by reference to such other
               publicly available service for displaying exchange rates
               with respect to Canadian Dollars as may be selected by the
               Administrative Agent.

                    "Capital Lease Obligations":  with respect to any
               Person, the obligations of such Person to pay rent or other
               amounts under any lease of (or other arrangement conveying
               the right to use) real or personal property, or a combina-
               tion thereof, which obligations are required to be classi-
               fied and accounted for as capital leases on a 



<PAGE>



                                                                          5

               balance sheet of such Person under GAAP and, for the purposes 
               hereof, the amount of such obligations at any time shall be the 
               capitalized amount thereof at such time determined in accordance
               with GAAP.

                    "Capital Stock":  any and all shares, interests,
               participations or other equivalents (however designated) of
               capital stock of a corporation, any and all equivalent
               ownership interests in a Person (other than a corporation)
               and any and all warrants, options or other rights to
               purchase or acquire any of the foregoing.

                    "Cash Equivalents":  book-entry securities, negotiable
               instruments or securities represented by instruments in
               bearer or registered form which evidence:

                    (a)  direct obligations of, and obligations fully
               guaranteed as to timely payment by, the United States of
               America;

                    (b)  demand deposits, time deposits or certificates of
               deposit of any depository institution or trust company
               incorporated under the laws of the United States of America
               or any state thereof (or any domestic branch of a foreign
               bank) and subject to supervision and examination by Federal
               or State banking or depository institution authorities;
               provided, that at the time of the investment or contractual
               commitment to invest therein the commercial paper or other
               short-term unsecured debt obligations (other than such
               obligations the rating of which is based on the credit of a
               Person other than such depository institution or trust
               company) thereof shall have a credit rating from each of the
               Rating Agencies in the highest investment category granted
               thereby;

                    (c)  commercial paper having, at the time of the
               investment or contractual commitment to invest therein, a
               rating of A-1 from S&P or of P-1 from Moody's;

                    (d)  investments in money market funds having a rating
               from each of the Rating Agencies in the highest investment
               category granted thereby;

                    (e)  demand deposits, time deposits and certificates of
               deposit which are fully insured by the Federal Deposit
               Insurance Corporation;

                    (f)  bankers' acceptances issued by any depository
               institution or trust company referred to in clause (b)
               above;

                    (g)  repurchase obligations with respect to any
               security that is a direct obligation of, or fully guaranteed
               by, the United States of America or any agency or
               instrumentality thereof the obligations of which are backed
               by the full faith and credit of the United States of
               America, in either case entered into with (i) a depository
               institution or trust company (acting as principal) described
               in clause (b) above or (ii) so long as the Company takes
               actual or constructive possession of each security subject
               to such repurchase obligations, a depository institution or
               trust company the deposits of which are insured by the
               Federal Deposit Insurance Corporation; or


<PAGE>


                                                                          6


                    (h)  any other investment permitted by Moody's and S&P
               for short-term investment of funds supporting securities
               with a rating of A1/P1 or better.

                    "Change in Control":  (a) any "Change in Control"
               under the Credit Agreement (as such term is defined
               therein on the Effective Date), (b) except upon the
               exercise by the Collateral Agent of any of its remedies
               in accordance with the terms of the Pledge Agreement
               (as in effect on the Effective Date), the Company shall
               at any time not be a direct wholly owned Subsidiary of
               C&A Products or (c) except as permitted pursuant to
               subsection 9.15 of the Receivables Sale Agreement and
               subsection 12.10 of the Receivables Transfer Agreement,
               any Seller or Servicer (other than C&A Products) shall
               at any time not be wholly owned, either directly or
               indirectly, by C&A Products.

                    "Charge-Offs":  with respect to the Receivables
               originated by any Seller, for any period, the aggregate
               amount of such Receivables that are written off, or should
               be written off, during such period as uncollectible in
               accordance with the Company Policies.

                    "Chemical":  Chemical Bank, a New York banking
               corporation.

                    "Closing Date":  as defined in subsection 2.3(a) of the
               Receivables Transfer Agreement.

                    "Code":  the Internal Revenue Code of 1986, as amended
               from time to time.

                    "Collateral Agent":  as defined in the Credit
               Agreement.

                    "Collections":  all cash collections and other cash
               proceeds received in respect of Receivables and Related
               Property including, without limitation, Seller Repurchase
               Payments and Seller Adjustment Payments and any Investment
               Earnings.

                    "Commitment":  of each Bank, the amount set forth
               opposite the name of such Bank on Schedule 1 to the
               Receivables Transfer Agreement, as such amount may be
               changed pursuant to subsection 2.10 or 11.4 of the
               Receivables Transfer Agreement.

                    "Commitment Fee":  as defined in subsection 2.4 of the
               Receivables Transfer Agreement.

                    "Commitment Percentage":  as to any Bank, (a) on or
               prior to the termination of the Commitments, the percentage
               equivalent of a fraction the numerator of which is the
               Commitment of such Bank and the denominator of which is the
               Maximum Commitment and (b) thereafter, the percentage
               equivalent of a fraction the numerator of which is the
               Commitment of such Bank immediately prior to such
               termination and the denominator of which is the Maximum
               Commitment immediately prior to such termination.


<PAGE>



                                                                          7

                    "Commitment Period":  the period from and including the
               Effective Date, up to but not including the first to occur
               of (a) the Scheduled Termination Date, (b) any termination
               of the Commitments pursuant to Article IX of the Receivables
               Transfer Agreement and (c) termination (but not reduction)
               of the Commitments pursuant to subsection 2.10 of the
               Receivables Transfer Agreement.

                    "Company":  Carcorp, Inc., a Delaware corporation.

                    "Company Policies":  the written policies of the
               Company with respect to Charge-Offs and Write-Offs of
               Receivables.



                    "Complete Servicing Transfer":  as defined in
               subsection 12.2(d) of the Receivables Transfer Agreement.

                    "Concentration Accounts":  the collective reference to
               the U.S. Concentration Account, the Canada/U.S. Dollar
               Concentration Account and the Canada/Canadian Dollar
               Concentration Account.

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

                    "Control":  the possession, directly or indirectly, of
               the power to direct or cause the direction of the management
               or policies of a Person, whether through the ownership of
               voting securities, by contract or otherwise, and
               "Controlling" and "Controlled" shall have meanings
               correlative thereto.

                    "Credit Agreement":  the Credit Agreement dated as of
               June 22, 1994 among the Credit Agreement Borrower, WCA
               Canada, Inc., as Canadian Borrower, Collins & Aikman
               Corporation, as Guarantor, the Lenders named therein,
               Continental Bank, N.A. and NationsBank, N.A., as Managing
               Agents, and Chemical Bank, as Administrative Agent, as
               amended, supplemented or otherwise modified from time to
               time.

                    "Credit Agreement Borrower":  C&A Products Co. 

                    "Daily Report":  as defined in subsection 12.5(a) of
               the Receivables Transfer Agreement.

                    "Days Sales Outstanding":  as of any day, the product
               of (a) 91 and (b) the amount obtained by dividing (i) the
               difference between (x) the aggregate Adjusted Principal
               Amount of the Receivables and (y) the aggregate bad debt
               reserve of the Sellers, in each case as at the end of the
               fiscal month immediately preceding the most recent
               Settlement Date, by (ii) aggregate net sales of the Sellers
               for the three-fiscal-month period immediately preceding the
               most recent Settlement Date.


<PAGE>


                                                                          8


                    "Defaulted Receivable":  any Receivable which has been
               charged off, or should have been charged off, by the related
               Servicer as uncollectible in accordance with the Policies of
               such Servicer and the Company Policies.

                    "Default Ratio": (a) with respect to any Settlement
               Period ending on or before April 30, 1994, a fraction (i)
               the numerator of which is the aggregate Adjusted Principal
               Amount of Receivables which first became 60 to 89 days past
               due as of the last day of such month and (ii) the
               denominator of which is the aggregate Adjusted Principal
               Amount of Receivables generated by the Sellers during the
               fourth preceding Settlement Period and (b) with respect to
               any Settlement Period ending on any date thereafter, a
               fraction (i) the numerator of which is the aggregate
               Adjusted Principal Amount of Receivables which first became
               90 to 119 days past due as of the last day of such month and
               (ii) the denominator of which is the aggregate Adjusted
               Principal Amount of Receivables generated by the Sellers
               during the fifth preceding Settlement Period.

                    "Dilution Reserve Ratio":  as of any day, the
               percentage equivalent, determined pursuant to the most
               recent Settlement Statement, of the product of (x) the sum
               of clauses (i) and (ii) below and (y) clause (iii) below:

                    (i) (A) 2.0 times (B) the Average Dilution Ratio for
               the most recently ended Settlement Period;

                    (ii) the product of (A)(x) the highest Peak Dilution
               Ratio during the period of 12 fiscal months ended on the
               last day of the most recently ended Settlement Period minus
               (y) the amount determined pursuant to clause (i)(B) of this
               definition and (B) the amount determined pursuant to clause
               (A)(x) above divided by the amount determined pursuant to
               clause (A)(y) above; and

                    (iii) (A) the aggregate Adjusted Principal Amount of
               Receivables generated by the Sellers during the most
               recently ended Settlement Period divided by (B) the
               aggregate Adjusted Principal Amount of Eligible Receivables
               on the last day of such Settlement Period.

                    "Dilutive Credits":  for any period, the aggregate
               amount of discount expense, rebates, refunds, billing error
               expense, credits against Receivables and other adjustments
               or allowances in respect of Receivables permitted or
               incurred by the Seller or Servicer with respect thereto
               during such period.

                    "Discount Rate":  as of any day, the sum of (a) the
               weighted average Purchase Discount Amount rate in effect
               with respect to the Participating Interest as at the end of
               the fiscal month immediately preceding the most recent
               Settlement Date and (b) the amount obtained by dividing (i)
               the aggregate amount of fees (other than the Monthly
               Servicing Fee and the Purchase Discount Amount) accrued with
               respect to the Participating Interest during the fiscal
               month immediately preceding the most recent Settlement Date
               by (ii) the average daily Net Investment during such fiscal 
               month.


<PAGE>


                                                                          9

                    "Discounted Percentage":  as defined in Schedule 3 to
               the Receivables Sale Agreement.

                    "Documents":  as defined in subsection 5.15(d)(3) of
               the Receivables Sale Agreement.

                    "Dollars", "U.S. Dollars" and "$":  dollars in lawful
               currency of the United States of America.

                    "Early Termination":  as defined in Article VII of the
               Receivables Sale Agreement.

                    "Effective Date":  as defined in subsection 6.1 of the
               Receivables Transfer Agreement.

                    "Eligible Letter of Credit":  any irrevocable direct
               pay or standby letter of credit (a) issued in favor of the
               Company by (i) any Bank or (ii) any commercial bank that (x)
               has combined capital and surplus of not less than
               $500,000,000 and (y) has (or the holding company parent of
               which has) a long-term senior unsecured debt rating of at
               least A from S&P or at least A2 from Moody's and (b) which
               permits the Company to draw, upon notice to the issuing
               bank, an amount equal to the entire face amount of any
               Receivable supported thereby, in Dollars payable by the
               issuing bank in the United States, no later than 90 days
               after the original invoice date with respect to such
               Receivable.

                    "Eligible Obligor":  each Obligor that satisfies each
               of the following eligibility criteria:

                         (a)  it is not organized or located (within the
                    meaning of Section 9-103(3)(d) of the New York Uniform
                    Commercial Code) in a jurisdiction other than the
                    United States; provided, however, that (i) Receivables
                    which have Obligors organized or located in Canada or
                    which are Japanese Obligors or (ii) Receivables which
                    have Obligors not otherwise described in clause (i)
                    above which are located (within the meaning of Section
                    9-103(3)(d) of the New York Uniform Commercial Code)
                    outside the United States shall be excluded from this
                    clause (a) if (x) in the case of clauses (i) and (ii)
                    above, such Receivables would otherwise be Eligible
                    Receivables and (y) in the case of clause (ii) above,
                    (1) such Receivables are supported by an Eligible
                    Letter of Credit and (2) the aggregate Adjusted
                    Principal Amount of all such Receivables does not
                    exceed 15% of the Adjusted Principal Amount of the
                    Eligible Receivables; 

                         (b)  it is not a direct or indirect Subsidiary of
                    Holdings; 

                         (c)  it is not a domestic or foreign government or
                    any agency, department, or instrumentality thereof;
                    provided, however, that up to 3% of the aggregate
                    Adjusted Principal Amount of the Eligible Receivables
                    may be 


<PAGE>


                                                                         10

                    owing by the United States government or any
                    agency, department or instrumentality thereof; and
           
                         (d)  it is not the subject of any reorganization,
                    bankruptcy, receivership, custodianship or insolvency,
                    unless the payment of Receivables from such Obligor is
                    secured in a manner satisfactory to the Administrative
                    Agent or, if such Receivables arise subsequent to a
                    decree or order for relief under the Bankruptcy Reform
                    Act of 1978, as amended, with respect to such Obligor,
                    the Administrative Agent shall have determined that
                    timely payment and collection of such Receivables will
                    not be impaired.

                    "Eligible Receivable":  as of any date, each Receivable
               in existence as of such date that is not subject to a
               Repurchase Event and (i) which the Administrative Agent
               determines, in its commercially reasonable judgment, to be
               an "Eligible Receivable" or (ii) that satisfies each of the
               following eligibility criteria:

                         (a)  the Company has lawful title to such
                    Receivable, free and clear of all Liens other than the
                    security interest in favor of the Banks;

                         (b)  the Banks have a Lien on such Receivable,
                    which Lien is legal, valid, binding, perfected and
                    first priority under the Uniform Commercial Code or
                    other applicable law;

                         (c)  the Company has the full and unqualified
                    right to assign and grant a Lien on such Receivable to
                    the Banks;

                         (d)  such Receivable is payable in Dollars in the
                    United States or Canada and is a legal, valid, binding
                    and enforceable obligation of the Obligor under such
                    Receivable; provided, however, that Receivables having
                    an aggregate Adjusted Principal Amount equal to no more
                    than 10% of the aggregate Adjusted Principal Amount of
                    all Eligible Receivables may be payable in Canadian
                    dollars in the United States or Canada;

                         (e)  such Receivable is not subject to any bona
                    fide dispute, setoff, counterclaim or other claim or
                    defense on the part of the related Obligor denying
                    liability under such Receivable in whole or in part;
                    provided, however, that any such Receivable shall
                    constitute an Eligible Receivable to the extent it is
                    not subject to any such dispute, setoff, counterclaim
                    or other claim or defense;

                         (f)  such Receivable is evidenced by an invoice
                    rendered to the related Obligor and is not evidenced by
                    any "instrument" or "chattel paper", as such terms are
                    defined in the Uniform Commercial Code;

                         (g)  such Receivable is a bona fide Receivable
                    which arose in the ordinary course of business, and
                    with respect to which,

<PAGE>

                                                                         11


                              (i)  in the case of a Receivable arising from
                         the sale of goods, such goods have been shipped or
                         delivered to and accepted by the Obligor, such
                         Receivable was created as a result of a sale on an
                         absolute basis and not on a consignment, approval
                         or sale-and-return basis and all other actions
                         have been taken necessary to create a binding
                         obligation on the part of the Obligor for such
                         Receivable, and

                              (ii)  in the case of a Receivable relating to
                         the sale of services, such services have been
                         performed or completed and accepted by the Obligor
                         and all other actions have been taken necessary to
                         create a binding obligation on the part of the
                         Obligor;

                         (h)  the Obligor with respect to such Receivable
                    is an Eligible Obligor; 

                         (i)  such Receivable is not outstanding more than
                    90 days past the original invoice date with respect
                    thereto (which date, for all purposes of eligibility,
                    shall not be later than the shipment date of the goods
                    giving rise to such Receivable); provided, however,
                    that Receivables of Imperial Wallcoverings, Inc. and
                    Imperial Wallcoverings (Canada), Inc. (not to exceed an
                    aggregate Adjusted Principal Amount of $12,500,000) may
                    be outstanding for up to, but not in excess of, 120
                    days past such original invoice date; 

                         (j)  payment with respect to such Receivable, if
                    by check, has not been returned for insufficient funds;

                         (k)  such Receivable has not been placed with an
                    attorney for collection;

                         (l)  such Receivable, to the extent it represents
                    a consumer credit card receivable, conforms to all
                    federal and state consumer protection laws;

                         (m)  if such Receivable represents a consumer
                    credit card receivable, the outstanding balance of such
                    Receivable does not reflect more than two arrearages;
                    and



                         (n)  such Receivable has such other
                    characteristics or criteria as the Administrative
                    Agent, in its reasonable discretion, may specify in
                    writing to the Company.

                    "Equipment":  as defined in subsection 2.1(c)(i) of the
               Receivables Transfer Agreement.

                    "ERISA":  the Employee Retirement Income Security Act
               of 1974, as the same may be amended from time to time.

<PAGE>


                                                                         12


                    "ERISA Affiliate":  with respect to any Person, any
               trade or business (whether or not incorporated) that is a
               member of a group of which such Person is a member and which
               is treated as a single employer under Section 414 of the
               Code.

                    "Eurodollar Participating Interest":  with respect to
               any Bank, that portion of its Participating Interest in the
               Receivables with respect to which the Purchase Discount
               Amount is determined by reference to the Eurodollar Rate.

                    "Eurodollar Rate":  with respect to each day during
               each Transfer Period pertaining to a Fixed Tranche, a rate
               per annum (rounded upwards, if necessary, to the next 1/16
               of 1%) equal to the product of (a) the Eurodollar Base Rate
               in effect for such Transfer Period and (b) Statutory
               Reserves.  For purposes hereof, (a) if at least two offered
               rates for deposits in dollars for a period comparable to the
               applicable Transfer Period appear on page 3750 (or any
               successor page) of the Dow Jones Telerate Screen as of 11:00
               a.m., London time, on the day that is two Business Days
               prior to the first day of such Transfer Period, the term
               "Eurodollar Base Rate" shall mean the arithmetic mean of all
               such offered rates and (b) if fewer than two such offered
               rates so appear on page 3750 (or any successor page) of the
               Dow Jones Telerate Screen, the term "Eurodollar Base Rate"
               shall mean the rate (rounded upwards, if necessary, to the
               next 1/16 of 1%) at which dollar deposits approximately
               equal in principal amount to Chemical's portion of the
               applicable Fixed Tranche and for a period comparable to the
               applicable Transfer Period are offered to Chemical's office
               in which its relevant eurodollar operations are being
               conducted in immediately available funds in the eurodollar
               market at approximately 11:00 a.m., New York time, on the
               day that is two Business Days prior to the first day of such
               Transfer Period.

                    "Excess Amount":  at any time, with respect to any
               Obligor, the excess (if any) of (a) the aggregate
               outstanding Adjusted Principal Amount of the Eligible
               Receivables owing by such Obligor over (b) the Applicable
               Obligor Percentage of the aggregate outstanding Adjusted
               Principal Amount of all Eligible Receivables; provided, that
               the Excess Amount of each Obligor shall be deemed to be zero
               until the first Settlement Date subsequent to the 270th day
               after the Effective Date.

                    "Excess Application Amount":  as defined in subsection
               2.12(c) of the Receivables Transfer Agreement.

                    "Facility Amount":  $150,000,000.

                    "Financial Officer":  of any corporation, the chief
               financial officer, Senior Vice President-Finance and
               Accounting, Vice President-Finance, Controller, or Treasurer
               of such corporation. 

                    "Fixed Tranche":  a portion of the Net Investment on
               which the rate at which the Purchase Discount Amount accrues
               is based upon the Eurodollar Rate.

<PAGE>


                                                                         13


                    "Floating Tranche":  that portion of the Net Investment
               not allocated to a Fixed Tranche and the Purchase Discount
               Amount in respect of which is based upon the ABR.

                    "Force Majeure Delay":  with respect to any Servicer or
               the Master Servicer, any cause or event which is beyond the
               control and not due to the negligence of such Servicer or
               the Master Servicer, as the case may be, which delays,
               prevents or prohibits such Person's delivery of Seller Daily
               Reports or Daily Reports and/or Seller Settlement Statements
               or Settlement Statements, as the case may be, including,
               without limitation, computer, electrical and mechanical
               failures, acts of God or the elements and fire; provided
               that no such cause or event shall be deemed to be a Force
               Majeure Delay unless the affected Servicer or Master
               Servicer shall have given the Company and the Administrative
               Agent written notice thereof as soon as possible after the
               beginning of such delay.

                    "GAAP":  generally accepted accounting principles in
               the United States of America as in effect from time to time.

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

                    "Guarantee":  of or by any Person, shall mean (a) any
               obligation, contingent or otherwise, of such Person guaran-
               teeing or having the economic effect of guaranteeing any
               Indebtedness of any other Person (the "primary obligor") in
               any manner, whether directly or indirectly, and including
               any obligation of such Person, direct or indirect, (i) to
               purchase or pay (or advance or supply funds for the purchase
               or payment of) such Indebtedness (whether arising by virtue
               of partnership arrangements, by agreement to keep well, to
               purchase assets, goods, securities or services, to take-
               or-pay or otherwise) or to purchase (or to advance or supply
               funds for the purchase of) any security for the payment of
               such Indebtedness, (ii) to purchase property, securities or
               services for the purpose of assuring the owner of such
               Indebtedness of the payment of such Indebtedness, (iii) to
               maintain working capital, equity capital or other financial
               statement conditions or liquidity of the primary obligor so
               as to enable the primary obligor to pay such Indebtedness or
               (iv) entered into for the purpose of assuring in any other
               manner the holders of such Indebtedness of the payment
               thereof or to protect such holders against loss in respect
               thereof (in whole or in part), or (b) any Lien on any assets
               of such Person securing any Indebtedness of any other
               Person, whether or not such Indebtedness is assumed by such
               Person; provided, however, that the term Guarantee shall not
               include endorsements for collection or deposit, in either
               case in the ordinary course of business.

                    "Holdings":  Collins & Aikman Corporation, a Delaware
               corporation.

                    "Incipient Purchase Termination Event":  any condition
               or act specified in Article VII of the Receivables Sale
               Agreement that, with the giving of notice or the lapse of
               time or both, would become a Purchase Termination Event.


<PAGE>

                                                                         14

                    "Increase in Net Investment":  for any applicable
               Closing Date, the Dollar amount by which the Net Investment
               of the Banks is being increased on such Closing Date.

                    "Indebtedness":  of any Person at any date, (a) all
               indebtedness of such Person for borrowed money or for the
               deferred purchase price of property or services (other than
               current trade liabilities incurred in the ordinary course of
               business and payable in accordance with customary
               practices), (b) any other indebtedness of such Person which
               is evidenced by a note, bond, debenture or similar
               instrument, (c) all Capital Lease Obligations of such
               Person, (d) all obligations of such Person in respect of
               acceptances issued or created for the account of such
               Person, (e) all Indebtedness of others secured by (or for
               which the holder of such Indebtedness has an existing right,
               contingent or otherwise, to be secured by) any Lien on any
               property owned or acquired by such Person even though such
               Person has not assumed or otherwise become liable for the
               payment thereof, (f) all obligations of such Person in
               respect of interest rate protection agreements, foreign
               currency exchange agreements or other interest or exchange
               rate hedging arrangements and (g) all Guarantees by such
               Person of Indebtedness of others.  The Indebtedness of any
               Person shall include the Indebtedness of any partnership in
               which such Person is a general partner; provided that, if
               the sole asset of such Person is its general partnership
               interest in such partnership, the amount of such
               Indebtedness shall be deemed equal to the value of such
               general partnership interest and the amount of any
               Indebtedness in respect of any Guarantee of such partnership
               Indebtedness shall be limited to the same extent as such
               Guarantee may be limited.

                    "Indemnified Liabilities":  as defined in subsection
               9.3 of the Receivables Sale Agreement.

                    "Indemnitee":  as defined in subsection 11.3 of the
               Receivables Transfer Agreement.

                    "Intermediate Lockbox Account":  as defined in
               subsection 12.1(b) of the Receivables Transfer Agreement.

                    "Invested Percentage":  a fraction the numerator of
               which is Net Investment and the denominator of which is
               Aggregate Eligible Receivables.

                    "Investment Earnings":  as defined in subsection
               2.7(a)(iii) of the Receivables Transfer Agreement.

                    "Japanese Obligor":  any of Fuji Heavy Industries,
               Inc., Toyota Motor Co., Honda Motor Co., Ltd., Toyota Tsusho
               Corp., or Kotobakiya Fronte Co., Inc.

                    "Lien":  with respect to any asset, (a) any mortgage,
               deed of trust, lien, pledge, encumbrance, charge or security
               interest in or on such asset, (b) the interest of a vendor
               or a lessor under any conditional sale agreement, capital
               lease or title retention 


<PAGE>

                                                                         15

               agreement relating to such asset
               and (c) in the case of securities, any purchase option, call
               or similar right of a third party with respect to such
               securities.

                    "Lockbox Account" means each blocked deposit account
               identified by number and name of bank on Schedule 3 to the
               Receivables Transfer Agreement, including the box identified
               by location and number on such Schedule 3, and any
               replacements therefor or additions thereto which are
               acceptable to the Administrative Agent.

                    "Lockbox Agreement" means a lockbox agreement in form
               and substance satisfactory to the Administrative Agent, as
               the same may be amended, supplemented or otherwise modified
               from time to time in accordance with subsection 8.14 of the
               Receivables Transfer Agreement.

                    "Lockbox Bank" means each bank listed on Schedule 3,
               and any replacements therefor or additions thereto agreed to
               in writing by the Administrative Agent.


                    "Loss Reserve Ratio":  as of any day thereafter, the
               percentage equivalent, determined pursuant to the most
               recent Settlement Statement, of the product of:

                    (i) the highest Average Default Ratio during the period
               of twelve consecutive fiscal months ended on the last day of
               the most recently ended Settlement Period; and

                    (ii) (A) the aggregate Adjusted Principal Amount of
               Receivables generated by the Sellers during the 3.5
               preceding Settlement Periods divided by the outstanding
               Adjusted Principal Amount of Eligible Receivables as of the
               last day of the preceding Settlement Period; and

                    (iii) 2.0.

                    "Loss to Liquidation Ratio":  a ratio (expressed as a
               percentage), as of the last day of any fiscal month, equal
               to (a) the difference, if any, between (i) the aggregate
               reduction in the outstanding Adjusted Principal Amount of
               all Receivables as a result of Write-Offs during the
               immediately preceding twelve-fiscal-month period and (ii)
               the aggregate amount of Recoveries during such twelve-
               fiscal-month period, divided by (b) four times the aggregate
               amount of Collections during the immediately preceding
               three-fiscal-month period.

                    "Margin Stock":  as defined in Regulation U.

                    "Master Servicer":  C&A Products, in its capacity as
               Master Servicer under the Receivables Transfer Agreement.

                    "Material Adverse Effect":  (a) with respect to the
               Master Servicer, any Servicer or any Seller, (i) a materi-
               ally adverse effect on the business, assets, properties,
               operations or financial condition of C&A Products and its
               Subsidiaries, taken as a whole, (ii) a material impairment
               of the ability of the Master Servicer, any 


<PAGE>

                                                                         16


               Servicer or any
               Seller to perform any of its material obligations under any
               Transaction Document to which it is or will be a party or to
               consummate the Transactions or the Sale Transactions or
               (iii) an impairment of the validity or enforceability of, or
               a material impairment of the rights, remedies or benefits
               available to the Administrative Agent or the Banks under,
               any Transaction Document or (b) with respect to the Company,
               (i) a materially adverse effect on the business, assets,
               properties, operations or financial condition of the
               Company, (ii) a material impairment of the ability of the
               Company to perform any of its material obligations under any
               Transaction Document to which it is or will be a party or to
               consummate the Transactions or the Sale Transactions or
               (iii) an impairment of the validity or enforceability of, or
               a material impairment of the rights, remedies or benefits 
               available to the Administrative Agent or the Banks under,
               any Transaction Document.  

                    "Maximum Commitment":  $150,000,000, as such amount may
               be reduced pursuant to subsection 2.10 of the Receivables
               Transfer Agreement.

                    "Maximum Invested Percentage":  at a particular date,
               100% minus the greater of (a) 17% and (b) the Required
               Reserve Percentage.

                    "Maximum Transfer Amount":  at a particular date, the
               lesser of (a) the Maximum Commitment at such date and (b)
               the product of (i) the Maximum Invested Percentage at such
               date and (ii) Aggregate Eligible Receivables (which, for
               purposes of this definition, shall not include a Seller from
               which the Company has ceased purchasing Receivables pursuant
               to subsection 9.15 of the Receivables Sale Agreement and
               shall not include, from the date which is 30 days after the
               date of any such termination, a Seller with respect to which
               the Company has terminated its obligation to acquire
               Receivables pursuant to Article VII of the Receivables Sale
               Agreement) as of the close of business on the Business Day
               preceding such date.

                    "Monthly Servicing Fee":  for each Settlement Period,
               the product of (a) the number of days in such period, (b) 1%
               and (c) the average daily principal balance of Purchased
               Receivables during such period divided by 365.

                    "Moody's":  Moody's Investors Service, Inc. and its
               successors.

                    "Multiemployer Plan":  with respect to any Person, a
               multiemployer plan as defined in Section 4001(a)(3) of ERISA
               to which such Person or any ERISA Affiliate of such Person
               (other than one considered an ERISA Affiliate only pursuant
               to subsection (m) or (o) of Section 414 of the Code) is
               making or accruing an obligation to make contributions, or
               has within any of the preceding five plan years made or
               accrued an obligation to make contributions.

                    "Net Investment":  at any time, the excess, if any, of
               (a) the aggregate of the amount paid by the Banks pursuant
               to subsections 2.2 and 2.3 of the Receivables Transfer
               Agreement over (b) the aggregate amount of Collections
               distributed to the 


<PAGE>


                                                                        17

               Banks in repayment of the Net Investment
               pursuant to the Receivables Transfer Agreement.

                    "Obligor":  with respect to any Receivable, the Person
               or Persons obligated to make payments with respect to such
               Receivable, including any guarantor thereof.




                    "Overallotment Option":  as defined in the Credit
               Agreement.

                    "Partial Servicing Transfer":  as defined in subsection
               12.2(d) of the Receivables Transfer Agreement.

                    "Participants":  as defined in subsection 11.4(b) of
               the Receivables Transfer Agreement.

                    "Participating Interest":  as defined in subsection 2.2
               of the Receivables Transfer Agreement.

                    "Payment Date":  as defined in subsection 2.3(a) of the
               Receivables Sale Agreement.

                    "PBGC":  the Pension Benefit Guaranty Corporation
               referred to and defined in ERISA (or any successor).

                    "Peak Dilution Ratio":  with respect to any Settlement
               Period, a fraction (a) the numerator of which is the
               aggregate amount of Dilutive Credits which are incurred with
               respect to the Receivables during the two-month period ended
               on the last day of such Settlement Period and (b) the
               denominator of which is the aggregate Adjusted Principal
               Amount of Receivables generated by the Sellers during the
               two-month period ended on the last day of such Settlement
               Period.

                    "Person":  any natural person, corporation, business
               trust, joint venture, association, company, partnership or
               government, or any agency or political subdivision thereof.

                    "Plan":  with respect to any Person, any pension plan
               (other than a Multiemployer Plan) subject to the provisions
               of Title IV of ERISA or Section 412 of the Code which is
               maintained for employees of such Person or any ERISA
               Affiliate of such Person.

                    "Pledge Agreement":  the Pledge Agreement referred to
               in the Credit Agreement.

                    "Policies":  with respect to any Seller which has set
               forth its credit and collection policies in writing, such
               written credit and collection policies as they have been
               applied by such Seller in the ordinary course of its
               business prior to the Effective Date and, with respect to
               any Seller which has not set forth its credit and collection


<PAGE>


                                                                         18

               policies in writing, its credit and collection policies as
               in effect and applied by such Seller in the ordinary course
               of its business prior to the Effective Date, in each case as
               the same may be amended, supplemented or otherwise modified
               from time to time in accordance with the Receivables
               Transfer Agreement and the Receivables Sale Agreement.

                    "Pooled Property":  as defined in subsection 2.1(a) of
               the Receivables Transfer Agreement.

                    "Potential Termination Event":  any Termination Event
               and any event or condition that upon notice, lapse of time
               or both would constitute a Termination Event.

                    "Preliminary Prospectus":  the preliminary prospectus
               of Holdings dated June 2, 1994, filed with the Securities
               and Exchange Commission in connection with the underwritten
               public offering of shares of common stock, par value $.01
               per share, of Holdings, as amended or supplemented from time
               to time.

                    "Principal Amount":  with respect to any Receivable,
               the amount due thereunder (expressed in U.S. Dollars or
               Canadian Dollars, as the case may be), net of any available
               prompt payment discount, volume discount or other
               promotional discount or rebate.

                    "Purchase Discount Amount":  a purchase discount which
               (a) accrues to the Banks in respect of the Participating
               Interest; (b) is payable in arrears on each Purchase
               Discount Amount Payment Date (both prior to and after the
               commencement of the Amortization Period) occurring during
               the period commencing on the date of the first transfer and
               assignment of the Participating Interest in Receivables and
               Related Property pursuant to subsection 2.3(a) of the
               Receivables Transfer Agreement and ending on the date on
               which the Net Investment is equal to zero and the
               Commitments of the Banks have terminated; and (c) is
               calculated at a rate per annum equal to:  (i) in respect of
               that portion of the Net Investment allocated to any Fixed
               Tranche, the sum of the Eurodollar Rate with respect thereto
               plus the Applicable Eurodollar Margin and (ii) in respect of
               that portion of the Net Investment not allocated to any
               Fixed Tranche, the sum of the ABR in effect from time to
               time during the period for which payment is made plus the
               Applicable ABR Margin.

                    "Purchase Discount Amount Payment Date":  (a) as to the
               Floating Tranche, each Settlement Date, (b) as to any Fixed
               Tranche having a Transfer Period of one, two or three
               months, the last day of such Transfer Period, (c) as to any
               Fixed Tranche having a Transfer Period longer than three
               months, each day which is three months, or a whole multiple
               thereof, after the first day of such Transfer Period, and
               the last day of such Transfer Period and (d) as to any
               Tranche, any date on which the principal portion of the Net
               Investment represented thereby is paid, prepaid or is
               otherwise due (by mandatory prepayment, acceleration or
               otherwise).


<PAGE>


                                                                         19

                    "Purchase Price":  as defined in subsection 2.2 of the
               Receivables Sale Agreement.

                    "Purchase Termination Event":  as defined in Article
               VII of the Receivables Sale Agreement.

                    "Purchased Receivable":  any Receivable sold to the
               Company by any Seller pursuant to, and in accordance with
               the terms of, the Receivables Sale Agreement and not resold
               to such Seller pursuant to subsection 2.1(b) or 2.6 thereof.

                    "Rating Agencies":  Moody's and S&P.

                    "Recapitalization Transactions":  as defined in the
               Credit Agreement.

                    "Receivables":  the indebtedness and payment
               obligations of any Person to a Seller arising from a sale of
               merchandise or services by such Seller, including, without
               limitation, any right to payment for goods sold or leased or
               for services rendered, and including the right of payment of
               any interest, sales taxes, finance charges, returned check
               or late charges and other obligations of such Person with
               respect thereto.

                    "Receivables Sale Agreement":  the Receivables Sale
               Agreement, dated as of July 13, 1994, among the Sellers, the
               Master Servicer and the Company, as buyer, as amended,
               supplemented or otherwise modified from time to time.

                    "Receivables Transfer Agreement":  the Receivables
               Transfer and Servicing Agreement, dated as of July 13, 1994,
               among the Company, as seller, the Master Servicer, the
               Servicers, the Banks and the Administrative Agent, as
               amended, supplemented or otherwise modified from time to
               time.

                    "Recoveries":  amounts collected in respect of
               Defaulted Receivables.

                    "Reduction Date":  as defined in subsection 2.11(b) of
               the Receivables Transfer Agreement.

                    "Register":  as defined in subsection 11.4(e) of the
               Receivables Transfer Agreement.

                    "Regulation G, T, U or X":  Regulation G, T, U or X,
               respectively, of the Board as from time to time in effect
               and all official rulings and interpretations thereunder or
               thereof.

                    "Related Property":  as defined in subsection
               2.1(a)(iv) of the Receivables Transfer Agreement.

                    "Replacement Facility":  as defined in subsection 12.6
               of the Receivables Transfer Agreement.



<PAGE>


                                                                         20


                    "Reportable Event":  any reportable event as defined in
               Section 4043(b) of ERISA or the regulations issued
               thereunder with respect to a Plan (other than a Plan
               maintained by an ERISA Affiliate which is considered an
               ERISA Affiliate only pursuant to subsection (m) or (o) of
               Section 414 of the Code).

                    "Reporting Day":  as defined in subsection 12.5 of the
               Receivables Transfer Agreement.

                    "Repurchase Amount":  as defined in subsection 2.6 of
               the Receivables Sale Agreement.

                    "Repurchase Event":  as defined in subsection 2.6 of
               the Receivables Sale Agreement.

                    "Required Banks":  Banks having Commitment Percentages
               the sum of which, in the aggregate, is equal to or exceeds
               51%.

                    "Required Reserve Percentage":  as of any day, the sum,
               expressed as a percentage, of (a) the Loss Reserve Ratio,
               (b) the Dilution Reserve Ratio, (c) the Yield Reserve Ratio
               and (d) the Servicing Reserve Ratio.

                    "Requirement of Law":  as to any Person, any law,
               treaty, rule or regulation or determination of an arbitrator
               or a court or other Governmental Authority, in each case
               applicable to or binding upon such Person or any of its
               property or to which such Person or any of its property is
               subject.

                    "Responsible Officer":  with respect to any Person, the
               chief executive officer, the president, any senior vice
               president or any vice president of such Person or, with
               respect to financial matters, the chief financial officer,
               Senior Vice President-Finance and Accounting, Vice
               President-Finance, Controller, or Treasurer of such Person.

                    "Restricted Payments":  as defined in subsection 8.7 of
               the Receivables Transfer Agreement.

                    "Retransfer Payment":  as defined in subsection 5.3(b)
               of the Receivables Transfer Agreement.

                    "S&P":  Standard & Poor's Ratings Group and its
               successors.

                    "Sale Documents":  the Receivables Sale Agreement, the
               Subordinated Notes and the Subordination Agreement.

                    "Sale Termination Date":  as defined in subsection
               9.15(b) of the Receivables Sale Agreement.


<PAGE>


                                                                         21

                    "Sale Transactions":  as defined in subsection 4.1(b)
               of the Receivables Sale Agreement.

                    "Scheduled Termination Date":  the seventh anniversary
               of the Effective Date.

                    "Seller Addition Date":  as defined in subsection 3.4
               of the Receivables Sale Agreement.

                    "Seller Adjustment Payment":  as defined in subsection
               2.5 of the Receivables Sale Agreement.

                    "Seller Daily Report":  as defined in subsection
               12.5(a) of the Receivables Transfer Agreement.

                    "Seller Repurchase Payment":  as defined in subsection
               2.6 of the Receivables Sale Agreement.

                    "Seller Settlement Statement":  as defined in
               subsection 12.5(b) of the Receivables Transfer Agreement.

                    "Sellers":  as defined in the preamble to the
               Receivables Sale Agreement.  

                    "Servicer Default":  any Servicer Event of Default and
               any event or condition that upon notice, lapse of time or
               both would constitute a Servicer Event of Default.

                    "Servicer Event of Default":  as defined in subsection
               12.12 of the Receivables Transfer Agreement.

                    "Servicer Transfer Payment":  as defined in subsection
               12.7 of the Receivables Transfer Agreement.

                    "Servicers":  each Seller party to the Receivables
               Transfer Agreement in its capacity as a servicer (excluding
               any such Sellers which have been terminated as Servicers in
               accordance with the provisions of the Receivables Transfer
               Agreement) together with any other Person which has been
               added as a Servicer in accordance with the provisions of the
               Receivables Transfer Agreement, in their capacities as
               servicers under the Receivables Transfer Agreement.

                    "Servicing Reserve Percentage":  as of any day, 0.25%.

                    "Servicing Reserve Ratio":  as of any day, (a) 2.0
               times (b) the Servicing Reserve Percentage.

                    "Settlement Date":  with respect to any fiscal month,
               the day that is 22 calendar days following the last day of
               such fiscal month (or if such 22nd calendar day is not a
               Business Day, the next succeeding Business Day).



<PAGE>


                                                                         22

                    "Settlement Period":  each fiscal month.

                    "Settlement Statement":  as defined in subsection
               12.5(b) of the Receivables Transfer Agreement.

                    "Settlement Statement Date":  with respect to any
               fiscal month for which a Settlement Statement is required to
               be prepared, the day that is 20 calendar days following the
               last day of such fiscal month (or, if such 20th calendar day
               is not a Business Day, the next succeeding Business Day).

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

                    "Specified Bankruptcy Opinion Provisions":  the
               provisions contained in the legal opinion delivered pursuant
               to subsection 6.1(b)(i) of the Receivables Transfer
               Agreement (and substantially in the form of Exhibit D-2
               thereto) under the headings "Transactions", "Corporate
               Procedures and Financial Effect" and "Disclosure of the
               Transactions".

                    "Statutory Reserves":  a fraction (expressed as a
               decimal), the numerator of which is the number one and the
               denominator of which is the number one minus the aggregate
               of the maximum reserve percentages (including any marginal,
               special, emergency or supplemental reserves) expressed as a
               decimal established by the Board and any other banking
               authority to which the Administrative Agent is subject (a)
               with respect to the Base CD Rate (as such term is used in
               the definition of "ABR"), for new negotiable nonpersonal
               time deposits in dollars of over $100,000 with maturities
               approximately equal to three months, and (b) with respect to
               the Eurodollar Rate, for Eurocurrency Liabilities (as
               defined in Regulation D of the Board).  Such reserve
               percentages shall include those imposed pursuant to such
               Regulation D.  Fixed Tranches shall be deemed to constitute
               Eurocurrency Liabilities and to be subject to such reserve
               requirements without benefit of or credit for proration,
               exemptions or offsets which may be available from time to
               time to any Bank under such Regulation D.  Statutory
               Reserves shall be adjusted automatically on and as of the
               effective date of any change in any reserve percentage.

                    "Subordinated Notes":  as defined in subsection 8.1 of
               the Receivables Sale Agreement.

                    "Subordination Agreement":  the Subordination
               Agreement, dated as of July 13, 1994 among the Sellers, the
               Master Servicer, the Company and the Administrative Agent,
               as amended, supplemented or otherwise modified from time to
               time.

                    "Subsequent Financing Party":  as defined in subsection
               9.4 of the Receivables Sale Agreement.


<PAGE>


                                                                         23


                    "Subsidiary":  with respect to any Person (herein
               referred to as the "parent"), any corporation, partnership,
               association or other business entity (a) of which securities
               or other ownership interests representing more than 50% of
               the equity or more than 50% of the ordinary voting power or
               more than 50% of the general partnership interests are, at
               the time any determination is being made, owned, controlled
               or held, or (b) which is, at the time any determination is
               made, otherwise Controlled, by the parent or one or more
               subsidiaries of the parent or by the parent and one or more
               subsidiaries of the parent.

                    "Substitute Servicer":  as defined in subsection
               12.2(d) of the Receivables Transfer Agreement.

                    "Termination Event":  as defined in Article IX of the
               Receivables Transfer Agreement.

                    "Tranches":  the collective reference to the Floating
               Tranche and the Fixed Tranches.

                    "Transaction Documents":  the Receivables Transfer
               Agreement, the Receivables Sale Agreement, the Subordination
               Agreement and the Lockbox Agreements.

                    "Transaction Parties":  the Company, the Master
               Servicer, the Sellers and the Servicers.

                    "Transactions":  as defined in subsection 5.1(b) of the
               Receivables Transfer Agreement.

                    "Transfer Notice":  as defined in subsection 12.2(d) of
               the Receivables Transfer Agreement.

                    "Transfer Period":  with respect to any portion of the
               Net Investment allocated to a Fixed Tranche:

                         (a)  initially, the period commencing on the
                    Closing Date or conversion date, as the case may be,
                    with respect to such Fixed Tranche and ending one, two,
                    three or six months thereafter, as selected by the
                    Company in its notice of Closing Date or notice of
                    conversion, as the case may be, given with respect
                    thereto; and

                         (b)  thereafter, each period commencing on the
                    last day of the next preceding Transfer Period
                    applicable to such Fixed Tranche and ending one, two,
                    three or six months thereafter, as selected by the
                    Company by irrevocable notice to the Administrative
                    Agent not less than three Business Days prior to the
                    last day of the then current Transfer Period with
                    respect thereto;


<PAGE>


                                                                         24


               provided that, all of the foregoing provisions relating to
               Transfer Periods are subject to the following:

                         (1)  if any Transfer Period would otherwise end on
                    a day that is not a Business Day, such Transfer Period
                    shall be extended to the next succeeding Business Day
                    unless the result of such extension would be to carry
                    such Transfer Period into another calendar month in
                    which event such Transfer Period shall end on the
                    immediately preceding Business Day;

                         (2) any Transfer Period that would otherwise
                    extend beyond the Scheduled Termination Date shall end
                    on the Scheduled Termination Date; and

                         (3) any Transfer Period that begins on the last
                    Business Day of a calendar month (or on a day for which
                    there is no numerically corresponding day in the
                    calendar month at the end of such Transfer Period)
                    shall end on the last Business Day of a calendar month.

                    "Transferee":  as defined in subsection 11.4(g) of the
               Receivables Transfer Agreement.

                    "Transferred Agreement":  as defined in subsection
               2.1(b) of the Receivables Transfer Agreement.

                    "Transferring Servicer":  as defined in subsection
               12.2(d) of the Receivables Transfer Agreement.

                    "U.S. Concentration Account":  as defined in subsection
               2.7(a) of the Receivables Transfer Agreement.

                    "U.S. Dollar Subordinated Note":  as defined in
               subsection 8.1 of the Receivables Sale Agreement.

                    "Withdrawal Liability":  liability to a Multiemployer
               Plan as a result of a complete or partial withdrawal from
               such Multiemployer Plan, as such terms are defined in Part I
               of Subtitle E of Title IV of ERISA.

                    "Write-Offs":  with respect to any Seller, for any
               period, the aggregate amount of Receivables that are written
               off during such period as uncollectible in accordance with
               the Company Policies.

                    "Yield Reserve Ratio":  as of any day, the amount as of
               such day obtained by dividing (a) the product of (i) 1.75,
               (ii) Days Sales Outstanding as of the Settlement Date
               immediately preceding such day and (iii) the Discount Rate
               in effect as of the Settlement Date immediately preceding
               such day by (b) 360.