October 1, 1997
Xx. Xxxx X. Xxxxxx
Chief Financial Officer
Xxxxxx Color-Fi, Inc.
Star Fibers Corp.
Custom Colorants, Inc.
Xxxxxxxx Industries, Inc.
Palmetto Spinning Corporation
X.X. Xxx 000
Xxxxxxxxx, XX 00000
Re: Modification of Loans Extended by NationsBank, N.A. to Xxxxxx Color-Fi,
Inc., et al.
Dear Xxxx:
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 Xxxxxx Color-Fi, Inc., Star Fibers Corp., Custom Colorants, Inc.,
Xxxxxxxx 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):
Xx. Xxxx X. Xxxxxx
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.
Xxxx X. Xxxxxxxx
Vice President
Xx. Xxxx X. Xxxxxx
October 1, 1997
Page 10
Agreed to on this day of , 1997.
BORROWERS:
XXXXXX COLOR-FI, INC.
By: Xxxx X. Xxxxxx
Its: Chief Financial Officer
STAR FIBERS CORP.
By: Xxxx X. Xxxxxx
Its: Chief Financial Officer
CUSTOM COLORANTS, INC.
By: Xxxx X. Xxxxxx
Its: Chief Financial Officer
XXXXXXXX INDUSTRIES, INC.
By: Xxxx X. Xxxxxx
Its: Chief Financial Officer
PALMETTO SPINNING CORPORATION
By: Xxxx X. Xxxxxx
Its: Chief Financial Officer