January 20, 1998
Xx. Xxxx X. Xxxxxx
Chief Financial Officer
Xxxxxx Color-Fi, Inc.
Star Fibers Corp.
Xxxxxxxx Industries, Inc.
X.X. Xxx 000
Xxxxxxxxx, XX 00000
Re: Modification of Revolving Credit Loan having a current maximum
principal availability of up to $30,000,000 extended by
NationsBank, N.A.
Dear Xxxx:
This letter shall serve as a written modification to that certain
Fourth Amended and Restated Loan and Security Agreement dated to be effective as
of September 30, 1997 (as amended or modified the "Loan Agreement") by and
between Xxxxxx Color-Fi, Inc., (for itself and as successor by merger to Custom
Colorants, Inc. and Palmetto Spinning Corporation) Star Fibers Corp., and
Xxxxxxxx Industries, Inc. (collectively, the "Borrowers") and NationsBank, N.A.
("NationsBank").
The Loan Agreement is amended by deleting the words "fifty-five percent
(55%) of the total principal outstanding under the Revolving Credit Loan"
appearing on line 13 of Section 2.5 entitled Margin Requirements under the
Revolving Credit Loan and substituting in lieu thereof the following:
(i) except as provided in (ii), fifty-five percent (55%) of the total
principal outstanding under the Revolving Credit Loan; and (ii) during
the period of time commencing on January 9, 1998 and ending on April
15, 1998, sixty percent (60%) of the total principal outstanding under
the Revolving Credit Loan.
The intent of the modification described in this letter is to provide Borrowers
a period of time commencing on January 9, 1998 and ending on April 15, 1998
during which the inventory "cap" will be raised from 55% of the total principal
outstanding under the Revolving Credit Loan to 60% of the total principal
outstanding under the Revolving Credit Loan. On and after April 16, 1998, the
maximum principal advanced and outstanding under the Revolving Credit Loan
against Eligible Inventory shall not exceed, at any time, fifty-five percent
(55%) of the total principal outstanding under the Revolving Credit Loan.
Xx. Xxxx X. Xxxxxx
January 20, 1998
Page 2
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 Agreement and any other document executed in connection
with the Revolving Credit Loan (collectively, the "Loan Documents") shall remain
in full force and effect. Except as specifically set forth below, Borrowers
represent and warrant that, as of the date of this letter; (i) all
representations contained in the Loan Agreement or the Loan Documents are true
and accurate; (ii) all covenants contained in the Loan Agreement and the Loan
Documents have been and remain satisfied; and (iii) no Event of Default exists
or no condition exists which with the giving of notice or the passage of time,
or both, would constitute an Event of Default under Loan Agreement or the Loan
Documents. NationsBank acknowledges that Borrowers have informed NationsBank
that Borrowers may have violated the covenant contained in Section 7.1(aa) of
the Loan Agreement. The execution of this letter by NationsBank shall not be
deemed to be a waiver by NationsBank of any rights it may have under the Loan
Agreement, the other Loan Documents or otherwise in connection with a violation
of the covenant contained in Section 7.1(aa), and NationsBank specifically
reserves all such rights.
Please have all parties execute the original of this letter to indicate
the Borrowers' agreement to be bound by the terms and conditions of this letter
and return the original fully- executed 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.
This letter supersedes and replaces our letter to you dated January 12,
1998.
Kindest regards,
NationsBank, N.A.
Xxxx X. Xxxxxxxx
Senior Vice President
Xx. Xxxx X. Xxxxxx
January 20, 1998
Page 3
Agreed to on this 20th day of January, 1998.
BORROWERS:
XXXXXX COLOR-FI, INC.
By: Xxxx X. Xxxxxx
Its: Chief Financial Officer
STAR FIBERS CORP.
By: Xxxx X. Xxxxxx
Its: Chief Financial Officer
XXXXXXXX INDUSTRIES, INC.
By: Xxxx X. Xxxxxx
Its: Chief Financial Officer
