Fourth Amended and Restated Loan and Security Agreement

 October 1, 1997

Mr. Bret J. Harris
Chief Financial Officer
Martin Color-Fi, Inc.
Star Fibers Corp.
Custom Colorants, Inc.
Buchanan Industries, Inc.
Palmetto Spinning Corporation
P.O. Box 469
Edgefield, SC  29824

     Re: Modification of Loans Extended by NationsBank, N.A. to Martin Color-Fi,
Inc., et al.

Dear Bret:

         This  letter  shall  serve as a written  modification  to that  certain
Fourth Amended and Restated Loan and Security  Agreement (as amended or modified
the "Loan  Agreement")  dated to be effective  as of  September  30, 1997 by and
between  Martin  Color-Fi,  Inc.,  Star Fibers Corp.,  Custom  Colorants,  Inc.,
Buchanan Industries,  Inc. and Palmetto Spinning Corporation (collectively,  the
"Borrowers") and NationsBank, N.A. ("NationsBank").

         The Loan Agreement is amended as follows:

         (i)      By including the following definition after the definition of
                  "Financing Statements" in Section 1.1:

                  "Formtap  Receivables" shall mean an Account which would be an
                  Eligible   Accounts   Receivable   except  for  the  terms  of
                  subparagraph  (i) and  subparagraph  (iv) of the definition of
                  Eligible  Accounts  Receivable,  which the  Account  Debtor is
                  Formtap  Industria,  a Brazilian  company and which  otherwise
                  satisfies the  definitions  of Eligible  Accounts  Receivable;
                  provided,  no Formtap  Receivable shall exist, for purposes of
                  Section 2.5 of this Agreement regarding availability under the
                  Revolving Credit Loan, after September 30, 1998; and provided,
                  further,   at  no  time  shall  the  face  amount  of  Formtap
                  Receivables exceed $1,450,000;

         (ii)     By inserting the following clause to Section 2.5 after the end
                  of clause (c):

Mr. Bret J. Harris
October 1, 1997
Page 9

                  plus (d) 90% of the face amount of Borrower's and any Approved
                  Subsidiaries  Formtap Receivables (with the face amount of all
                  Formtap  Receivables to be $0 at all times after September 30,
                  1998).

The intent of the foregoing modifications described in this letter is to include
the face amount of the Formtap  Receivables up to a maximum amount of $1,450,000
in the borrowing base through September 30, 1998.

         All capitalized  terms not otherwise  defined in this letter shall have
the  meaning  ascribed to such term in the Loan  Agreement.  All other terms and
conditions  of the  Loan  Documents  shall  remain  in full  force  and  effect.
Borrowers  represent  and  warrant  that,  as of the date of this letter (i) all
representations contained in the Loan Agreement and the other Loan Documents are
true and accurate;  (ii) all covenants  contained in the Loan  Agreement and the
other  Loan  Documents  have been and  remain  satisfied;  and (iii) no Event of
Default  exists or no  condition  exists which with the giving of notice for the
passage  of time,  or both,  would  constitute  an Event of  Default  under Loan
Agreement or the other Loan Documents.

         Please be  advised  that  NationsBank's  agreement  to modify  the Loan
Agreement in  accordance  with the terms of this letter is expressly  limited to
the  terms of this  letter.  NationsBank  shall  require  strict  compliance  by
Borrowers  with the terms of the Loan Documents and shall be under no obligation
to provide any further consents or modifications with respect to any covenant or
agreement  contained in the Loan Agreement,  including a modification to include
accounts  receivable in the borrowing base which do not specifically comply with
the definition of Eligible Accounts Receivable.

         Please have all parties execute the original of this letter to indicate
each of the Borrowers' agreement to be bound by the terms and conditions of this
letter and return the original  fullyexecuted  letter to me as soon as possible.
This letter  agreement  will be binding on all  parties  upon our receipt of the
original fully-executed and dated letter.

                                                         Kindest regards,

                                                         NationsBank, N.A.

                                                         Greg A. Lapointe
                                                         Vice President

Mr. Bret J. Harris
October 1, 1997
Page 10

Agreed to on this      day of                , 1997.

BORROWERS:

MARTIN COLOR-FI, INC.

By: Bret J. Harris
    Its: Chief Financial Officer

STAR FIBERS CORP.

By: Bret J. Harris
    Its: Chief Financial Officer

CUSTOM COLORANTS, INC.

By: Bret J. Harris
    Its: Chief Financial Officer

BUCHANAN INDUSTRIES, INC.

By: Bret J. Harris
    Its: Chief Financial Officer

PALMETTO SPINNING CORPORATION

By: Bret J. Harris
    Its: Chief Financial Officer 

Basic Info X:

Name: Fourth Amended and Restated Loan and Security Agreement
Type: Fourth Amended and Restated Loan and Security Agreement
Date: Nov. 17, 1997
Company: MARTIN COLOR-FI INC
State: South Carolina

Other info:

Date:

  • September 30 , 1997
  • September 30 , 1998
  • October 1 , 1997
  • this day of , 1997

Organization:

  • Financial Officer Martin Color-Fi , Inc. Star Fibers Corp
  • Colorants , Inc. Buchanan Industries , Inc. Palmetto Spinning Corporation P.O
  • Star Fibers Corp.
  • Custom Colorants , Inc.
  • Revolving Credit Loan
  • Event of Default
  • definition of Eligible Accounts Receivable

Location:

  • Edgefield

Money:

  • $ 0
  • $ 1,450,000

Person:

  • Greg A. Lapointe
  • Bret J. Harris

Percent:

  • 90 %