EXHIBIT 10.35


                                                          February 18, 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  Revolving  Credit Loan having a current  maximum
              principal   availability   of  up  to   $25,000,000   extended  by
              NationsBank, N.A.

Dear Bret:

       This letter shall serve as a written  modification to that certain Second
Amended and  Restated  Loan and Security  Agreement  dated to be effective as of
December 16, 1996 (as amended or modified the "Loan  Agreement")  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 by deleting the provision that reads "(ii)
sixty  percent  (60%) of the total  principal  outstanding  under the  Revolving
Credit Loan during the period of time  commencing  on any  December 16, 1996 and
ending  on  January  31,  1997" at the end of the next to the last  sentence  of
Section 2.5 which appears on lines 4,5 and 6 of page 14 and substituting in lieu
thereof the following:

       (ii)   sixty  percent  (60%) of the  total  principal  outstanding  under
              Revolving  Credit  Loan  during the period of time  commencing  on
              December 16, 1996 and ending on April 30, 1997.

The intent of the modification  described in this letter is to provide Borrowers
a period of time  commencing  on December  16, 1996 and ending on April 30, 1997
during which the inventory  "cap" will be raised from 50% of the total principal
outstanding  under  the  Revolving  Credit  Loan to 60% of the  total  principal
outstanding  under the Revolving  Credit Loan.  From and after May 1, 1997,  the
maximum  principal  advanced and  outstanding  under the  Revolving  Credit Loan
against Eligible Inventory shall not exceed, at any time, fifty percent (50%) of
the total principal outstanding under the Revolving Credit Loan.

       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.  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
for the passage of time,  or both,  would  constitute  an Event of Default under
Loan Agreement or the Loan Documents.

       As a condition to NationsBank providing the modification to the inventory
"cap" as described  herein,  Borrowers  shall pay to  NationsBank a fee equal to
$15,000.00  which is due and  payable  upon  acceptance  of this  letter  by the
Borrowers and must be received by NationsBank  prior to NationsBank  being bound
by the terms and conditions of this letter agreement.


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Mr. Bret J. Harris
February 18, 1997


       Please have all parties  execute the  original of this letter to indicate
each of the Borrower's 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 and our fee.

                                        Kindest regards,

                                        NationsBank, N.A.



                                        Mary H. "Mze" Wilkins
                                        Senior Vice President


Mr. Bret J. Harris
February 18, 1997
Page 96



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Agreed to on this      day of February, 1997.

BORROWERS:

MARTIN COLOR-FI, INC.
STAR FIBERS CORP.
CUSTOM COLORANTS, INC.
BUCHANAN INDUSTRIES, INC.
PALMETTO SPINNING CORPORATION

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