EXHIBIT 10.37

                                                            MCF's Taxpayer
                                                          Identification No.

                                 1997 TERM LOAN                57-0879569
                                 PROMISSORY NOTE

$5,000,000.00
                                                           March 27, 1997
                                                      Columbia, South Carolina

         FOR VALUE RECEIVED, MARTIN COLOR-FI, INC., a South Carolina corporation
("MCF"),  STAR FIBERS CORP., a special purpose South Carolina corporation ("Star
Fibers"), CUSTOM COLORANTS,  INC., a South Carolina corporation ("CC"), BUCHANAN
INDUSTRIES,  INC., a South Carolina  corporation  ("BI"),  and PALMETTO SPINNING
CORPORATION,  a South Carolina  corporation ("PS") (MCF, Star Fibers, CC, BI and
PS are  individually  or collectively  as the context  requires,  referred to as
"Borrower" or "Borrowers"), jointly and severally promise to pay to the order of
NATIONSBANK,  N.A., a national  banking  association  ("Bank") at its offices in
Columbia,  South  Carolina  (or at such  other  place or  places as the Bank may
designate)  the  principal  sum  of  up  to  FIVE  MILLION  AND  NO/100  DOLLARS
($5,000,000.00) under the terms and conditions of this 1997 Term Loan Promissory
Note (the "1997 Term Note") and in  accordance  with that certain  Third Amended
and  Restated  Revolving  Credit  Loan and  Security  Agreement  by and  between
Borrowers and Bank dated of even date (as further amended or modified, the "Loan
Agreement"). This 1997 Term Note is secured by liens on all of Borrowers' assets
pursuant inter alia to various (i) Security Agreements dated as of July 14, 1994
and  August 9,  1995  (collectively,  as  amended  or  modified,  the  "Security
Agreements")  (ii)  Mortgages,  Deeds to Secure Debts,  Security Deeds and other
instruments  dated as of July 14,  1994 and  August  9, 1995  (collectively,  as
amended or modified, the "Mortgage Instruments");  and (iii) other agreements by
and between  Borrowers and Bank.  All of the terms,  conditions and covenants of
the Loan  Agreement,  the Security  Agreements and the Mortgage  Instruments are
expressly made a part of this 1997 Term Note by reference in the same manner and
with the same  effect as if set forth  herein at length  and any  holder of this
1997 Term Note is entitled to the benefits of and remedies  provided in the Loan
Agreement,   the  Security  Agreements,   the  Mortgage  Instruments  and  other
agreements by and between the Borrowers and the Bank. Any Event of Default under
the Loan  Agreement  is an Event of  Default  under  the terms of this 1997 Term
Note.

         Definitions.  As used herein:

         "Leverage  Ratio"  shall mean the ratio that (total  liabilities  minus
         Subordinated   Indebtedness)   BEARS  TO   (Tangible   Net  Worth  plus
         Subordinated  Indebtedness),  as such are computed in  accordance  with
         GAAP.

         "Prime Rate" shall mean the fluctuating rate of interest established by
         Bank from time to time,  at its  discretion,  whether  or not such rate
         shall be otherwise published.  The Prime Rate is established by Bank as
         an  index  or base  rate  and may or may not at any time be the best or
         lowest rate charged by Bank on any loan.

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All other  capitalized  terms not otherwise defined in this 1997 Term Note shall
have the meaning ascribed to such term in the Loan Agreement.

         Interest.  Interest on the principal  outstanding of the 1997 Term Loan
shall accrue,  during each Interest  Period,  at the lesser of the Prime Rate or
the following, as calculated and established on each Determination Date:

                  (i)      During such time that the  Leverage  Ratio is greater
                           than 2.50 to 1.00 but less  than  3.00 to 1.00,  at a
                           rate per  annum  equal  to  Adjusted  LIBOR  plus two
                           hundred fifty (250) basis points; and

                  (ii)     During the period of time that the Leverage  Ratio is
                           less  than or equal  to 2.50 to  1.00,  at a rate per
                           annum  equal  to  Adjusted  LIBOR  plus  two  hundred
                           twenty-five (225) basis points.

                  Provided,  however,  during  the  period  of time (x) prior to
                  Borrowers  entering  into  a  Swap  Agreement;  or  (y)  after
                  Borrowers terminate or modify the Swap Agreement,  interest on
                  the outstanding  principal of the 1997 Term Loan shall accrue,
                  during each Interest  Period,  at the lesser of the Prime Rate
                  plus one-eight of one percent  (0.125%) or the  following,  as
                  calculated on each Determination Date:

                  (i)      During such time that the  Leverage  Ratio is greater
                           than  2.50 to 1.0 but less  than  3.00 to 1.00,  at a
                           rate per  annum  equal  to  Adjusted  LIBOR  plus two
                           hundred sixty-five (265) basis points; and

                  (ii)     During the period of time that the Leverage  Ratio is
                           less  than or equal  to 2.50 to  1.00,  at a rate per
                           annum equal to Adjusted  LIBOR plus two hundred forty
                           (240) basis points.

Interest shall be calculated on the basis of a 360 day year and actual number of
days elapsed during each Interest Period. The most recent financial  information
delivered  to, and reviewed by, Bank in  accordance  with  subsection  7.1(i) or
7.1(j) of the Loan Agreement  will govern the  calculation of the Leverage Ratio
on each  Determination  Date for purposes of establishing  the interest rate for
each  Interest  Period.  The interest  rate shall be fixed during each  Interest
Period and shall be adjusted on each successive Determination Date.

         Repayment of Principal and Payment of Interest.  On the twelfth  (12th)
day of each month  commencing  on May 12, 1997 and ending on December  12, 1997,
inclusive,  equal installments of principal in the amount of $33,333.33 plus all
accrued but unpaid interest shall be due and payable.  Commencing on January 12,
1998 and on the twelfth (12th) day of each month thereafter,  equal installments
of  principal in the amount equal to the  outstanding  principal  balance of the
1997 Term Loan as of January 1, 1998  divided by 48 plus all  accrued but unpaid
interest  shall be due and  payable,  with a final  payment  of all  outstanding
principal  plus all accrued but unpaid  interest  due and payable  June 2, 1999.
Additionally,  if the Term Loan has been satisfied in full, Borrowers shall make
additional  payments to Bank to satisfy  Borrowers'  obligations  under the 1997
Term Loan (each, a "1997 Income  Recapture  Payment") in the amount equal to the
amount,  if any,  otherwise  required  to be used to  satisfy  the Term  Loan in
accordance  with Section 3.2 of the Loan Agreement and the Term Note  designated
as "Income Recapture  Payments".  Any such 1997 Income Recapture Payment must be
made when the Income Recapture Payments would have been due if the Term Loan has
not been  satisfied.  So long as no Event of Default  shall have  occurred or is
continuing,  each 1997 Income  Recapture  Payment  shall be applied to principal
outstanding  under  the  1997  Term  Loan  in the  inverse  order  of  scheduled
maturities.

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         Acceleration. If payment of all sums due hereunder is accelerated under
the terms of the Loan Agreement or if payment is not made in full at maturity of
this 1997 Term Note, the then  outstanding  principal and all accrued but unpaid
interest  shall bear  interest  at the rate  provided  for  hereunder  plus four
percent (4%) per annum until such principal and interest have been paid in full;
provided,  however,  that in no event shall this or any other  provision  herein
permit the  collection  of any  interest  which would be usurious  under the law
governing this  transaction,  and if any such interest is collected,  the amount
above the  maximum  rate  permitted  by law  shall be  deemed to be a  principal
payment hereunder.

         Prepayment.  Borrowers  may  prepay  the 1997  Term Loan in whole or in
part; provided, any such prepayment shall be applied to principal in the inverse
order of scheduled  maturities,  and, provided,  further, any prepayments of the
1997 Term Loan  with  proceeds  of a loan or  private  placement  from a banking
institution other than Bank (with the term "banking institutions" to exclude The
Robinson-  Humphrey  Company  and  similar  brokerage  firms  not  connected  or
affiliated  with the banking  institutions)  must be accompanied by a prepayment
premium  calculated as follows:  (1) Two percent (2.0%) of the principal  amount
prepaid  if the  prepayment  occurs on or before  March  26,  1998;  and (2) One
percent (1.0%) of the principal  amount  prepaid if the prepayment  occurs after
March 26, 1998 but on or before March 26, 1999.  Notwithstanding anything to the
contrary contained above, Borrowers shall not be obligated to pay any prepayment
premiums  in  connection  with  prepayments  of the 1997 Term Loan made  after a
merger or other business combination involving the Borrowers the result of which
is that none of the Borrowers is the surviving entity.

         Late  Charges.  In the event any payment of interest  or  principal  is
delinquent more than fifteen (15) days, Borrowers will pay to Bank a late charge
of four percent (4%) of the amount of the overdue  payment.  This  provision for
late  charges  shall not be deemed to extend the time for payment or be a "grace
period"  or "cure  period"  that gives the  Borrowers  a right to cure a Default
Condition, except as provided in the Loan Agreement.  Imposition of late charges
is not  contingent  upon the  giving of any  notice or lapse of any cure  period
provided for in the Loan Agreement.

         Application of Payments.  All sums received by the Bank for application
to the 1997  Term Loan may be  applied  by the Bank to late  charges,  expenses,
costs,  interest,  principal  and other  amounts owing to the Bank in connection
with  the  1997  Term  Loan  in the  order  selected  by the  Bank  in its  sole
discretion.

         Expenses.  In the event this 1997 Term Note is not paid when due at any
stated or  accelerated  maturity,  Borrowers  jointly and severally will pay, in
addition  to  principal  and  interest,  all  costs  of  collection,   including
reasonable attorneys' fees.

         Governing  Law. This 1997 Term Note shall be governed by, and construed
in accordance with, the laws of the State of South Carolina.

         Non-waiver.  The  failure  at any time of Bank to  exercise  any of its
options or any other rights hereunder shall not constitute a wavier thereof, nor
shall it be a bar to the  exercise  of any of its  options  or rights at a later
date.  All rights and  remedies of Bank shall be  cumulative  and may be pursued
singly,  successively or together, at the option of Bank. The acceptance by Bank
of any partial  payment shall not constitute a waiver of any Event of Default or
of any of Bank's  rights under this 1997 Term Note or the other Loan  Documents.
No waiver of any of its rights  hereunder,  and no  modification or amendment of
this 1997 Term Note, shall be deemed to be made by Bank unless the same shall be
in writing,  duly signed on behalf of Bank; and each such waiver,  if any, shall
apply only with respect to the specific instance  involved,  and shall in no way
impair  the rights of Bank or the  obligations  of the  Borrower  to Bank in any
other respect at any other time.

         Partial Invalidity. The unenforceability or invalidity of any provision
of this 1997 Term Note shall not affect the  enforceability  or the  validity of
any  other  provision  herein  and the  invalidity  or  unenforceability  of any
provision  of this  1997  Term Note or of the Loan  Documents  to any  person or
circumstance  shall not affect the  enforceability or validity of such provision
as it may apply to other persons or circumstances.



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         Jurisdiction  and Venue.  In any  litigation in  connection  with or to
enforce  this 1997 Term Note or any  endorsement  or  guaranty of this 1997 Term
Note  or any  Loan  Documents,  Borrowers,  irrevocably  consent  to and  confer
personal  jurisdiction on the courts of Richland County, State of South Carolina
or the United  States courts  located  within the State of South  Carolina,  and
expressly  waive any  objections as to venue in any such courts,  and agree that
service of process may be made on Borrowers by mailing a copy of the summons and
complaint by registered or certified mail,  return receipt  requested,  to their
respective addresses. Nothing contained herein shall, however, prevent Bank from
bringing  any  action  or  exercising  any  rights  within  any  other  state or
jurisdiction  or  from  obtaining  personal  jurisdiction  by  any  other  means
available by applicable law.

         ARBITRATION.  ANY  CONTROVERSY  OR CLAIM  BETWEEN OR AMONG THE  PARTIES
HERETO  INCLUDING  BUT NOT  LIMITED TO THOSE  ARISING OUT OF OR RELATING TO THIS
1997 TERM NOTE OR ANY RELATED NOTES OR INSTRUMENTS, INCLUDING ANY CLAIM BASED ON
OR ARISING FROM AN ALLEGED TORT,  SHALL BE DETERMINED BY BINDING  ARBITRATION IN
ACCORDANCE  WITH  THE  FEDERAL  ARBITRATION  ACT  (OR  IF  NOT  APPLICABLE,  THE
APPLICABLE  STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR THE  ARBITRATION
OR COMMERCIAL  DISPUTES OR JUDICIAL  ARBITRATION  AND MEDIATION  SERVICES,  INC.
(J.A.M.S.)  AND THE  "SPECIAL  RULES"  SET  FORTH  BELOW.  IN THE  EVENT  OF ANY
INCONSISTENCE,  THE SPECIAL RULES SHALL CONTROL.  JUDGMENT UPON ANY  ARBITRATION
AWARD MAY BE ENTERED  IN ANY COURT  HAVING  JURISDICTION.  ANY PARTY TO THE 1997
TERM NOTE MAY BRING AN ACTION,  INCLUDING A SUMMARY OR EXPEDITED PROCEEDING,  TO
COMPEL  ARBITRATION  OF ANY  CONTROVERSY  OR CLAIM TO WHICH  THIS 1997 TERM NOTE
APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.

         (A) SPECIAL RULES.  THE  ARBITRATION  SHALL BE CONDUCTED IN THE CITY OF
BORROWER'S  DOMICILE  AT THE  TIME  OF  THIS  1997  TERM  NOTE'S  EXECUTION  AND
ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATION;  IF J.A.M.S. IS UNABLE
OR LEGALLY  PRECLUDED  FROM  ADMINISTERING  THE  ARBITRATION,  THEN THE AMERICAN
ARBITRATION  ASSOCIATION WILL SERVE. ALL ARBITRATION  HEARINGS WILL BE COMMENCED
WITHIN 90 DAYS OF THE DEMAND FOR  ARBITRATION;  FURTHER,  THE  ARBITRATOR  SHALL
ONLY, UPON A SHOWING OF CAUSE,  BE PERMITTED TO EXTEND THE  COMMENCEMENT OF SUCH
HEARING FOR AN ADDITIONAL 60 DAYS.

         (B)  RESERVATION  OF  RIGHTS.  NOTHING  IN THIS 1997 TERM NOTE SHALL BE
DEEMED TO (I) LIMIT THE  APPLICABILITY OF ANY OTHERWISE  APPLICABLE  STATUTES OF
LIMITATION  OR REPOSE AND ANY WAIVERS  CONTAINED IN THIS 1997 TERM NOTE; OR (II)
BE A WAIVER BY THE BANK OF THE PROTECTION  AFFORDED TO IT BY 12 U.S.C.  ss.91 OR
ANY  SUBSTANTIALLY  EQUIVALENT  STATE LAW;  OR (III) LIMIT THE RIGHT OF THE BANK
HERETO (A) TO EXERCISE  SELF HELP  REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF,
OR (B) TO FORECLOSURE AGAINST ANY REAL OR PERSONAL PROPERTY  COLLATERAL,  OR (C)
TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER
THE PENDENCY OF ANY ARBITRATION  PROCEEDING  BROUGHT  PURSUANT TO THIS 1997 TERM
NOTE.  NEITHER  THE  EXERCISE  OR SELF  HELP  REMEDIES  NOR THE  INSTITUTION  OR
MAINTENANCE OF AN ACTION FOR  FORECLOSURE  OR PROVISIONAL OR ANCILLARY  REMEDIES
SHALL  CONSTITUTE A WAIVER OF THE RIGHT TO ANY PARTY,  INCLUDING THE CLAIMANT IN
SUCH ACTION,  TO ARBITRATE THE MERITS OF THE  CONTROVERSY  OR CLAIM  OCCASIONING
RESORT TO SUCH REMEDIES.

         Bind  Effect.  This note shall be binding upon and inure to the benefit
of  Borrowers  and Bank and  their  respective  successor,  assigns,  heirs  and
personal  representatives,   provided,  however,  that  no  obligations  of  the
Borrowers hereunder can be assigned without prior written consent of Bank.

         NOTICE OF FINAL AGREEMENT.  THIS WRITTEN  PROMISSORY NOTE AND ANY OTHER
DOCUMENTS EXECUTED IN CONNECTION  HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT  ORAL  AGREEMENTS  OF  THE  PARTIES.  THERE  ARE  NO  UNWRITTEN  ORAL
AGREEMENTS BETWEEN THE PARTIES.

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         IN WITNESS  WHEREOF,  Borrowers  have  caused this 1997 Term Note to be
duly executed under seal as of the day and year first above written.

WITNESSES:                         MARTIN COLOR-FI, INC.                 (SEAL)
                                   STAR FIBERS CORP.                     (SEAL)
                                   CUSTOM COLORANTS, INC.                (SEAL)
                                   BUCHANAN INDUSTRIES, INC.             (SEAL)
                                   PALMETTO SPINNING CORPORATION         (SEAL)


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