10. LONG-TERM DEBT AND LINES OF CREDIT

A summary of long-term debt follows:

	April 27,			April 28,
(dollars in thousands)	2014			2013
unsecured senior term notes	$	4,400			6,600
current maturities of long-term debt		(2,200	)		(2,200	)
long-term debt, less current maturities	$	2,200			4,400

Unsecured Term Notes

We entered into a note agreement dated August 11, 2008 that provided for the issuance of $11.0 million of unsecured term notes with a fixed interest rate of 8.01% and a term of seven years. Principal payments of $2.2 million per year are due on the notes beginning August 11, 2011. The remaining principal payments are payable over an average term of 1.3 years through August 11, 2015. Any principal prepayments would be assessed a penalty as defined in the agreement. The agreement contains customary financial and other covenants as defined in the agreement.

Revolving Credit Agreement –United States

At April 28, 2013, we had an unsecured Amended and Restated Credit Agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) that provided for a loan commitment of $7.6 million that was due to expire on August 25, 2013. This agreement provided for a pricing matrix to determine the interest rate payable on loans made under this agreement.

Effective August 13, 2013, we entered into a Credit Agreement (“Credit Agreement”) with Wells Fargo that replaced the agreement noted above. This Credit Agreement contains terms and covenants similar to the previous agreement and extends the term of the credit facility through August 31, 2015. Interest is charged at a rate equal to the one-month LIBOR rate plus a spread based on our ratio of debt to EBITDA as defined in the agreement (applicable interest rate of 1.75% at April 27, 2014).

This Credit Agreement provides for an unsecured revolving loan commitment of $10.0 million to be used to finance working capital and general corporate purposes. The amount of borrowings that are outstanding under the revolving credit agreement with Culp Europe noted below decrease the $10.0 million available under this Credit Agreement.

At April 27, 2014, and April 28, 2013, there was a $195,000 outstanding letter of credit (all of which related to workers compensation) provided by the Credit Agreement. There were no borrowings outstanding under the agreement associated with our U.S. operations at April 27, 2014, and April 28, 2013.

Revolving Credit Agreement - China

We have an unsecured credit agreement associated with our operations in China that provides for a line of credit up to 40 million RMB (approximately $6.5 million USD at April 27, 2014), that was set to expire on June 8, 2014. This agreement has an interest rate determined by the Chinese government. There were no borrowings under this agreement as of April 27, 2014 and April 28, 2013.

On May 9, 2014, we renewed the unsecured credit agreement associated with our operations in China. The renewal extended the agreement to May 9, 2015, and provides for a line of credit up to 40 million RMB (approximately $6.5 million USD).

Revolving Credit Agreement – Culp Europe

We have an unsecured credit agreement with Wells Fargo that bears interest at WIBOR (Warsaw Interbank Offered Rate) plus 2% (applicable interest rate of 4.38% and 5.25% at April 27, 2014 and April 28, 2013, respectively). There were $586,000 and $561,000 (1.8 million Polish Zloty) in borrowings outstanding under the agreement at April 27, 2014 and April 28, 2013, respectively.

In connection with the Credit Agreement effective August 13, 2013 noted above, the outstanding borrowings, totaling $586,000 at April 27, 2014, are due on August 31, 2015 and decrease the $10.0 million available under the Credit Agreement.

Effective May 2, 2014, we converted our 1.8 million Polish Zloty ($586,000 USD) denominated borrowings under this agreement to EURO denominated borrowings totaling €424,000 ($588,000 USD). In addition, our applicable interest rate of 4.38% at April 27, 2014 was reduced to 2.31%.

Overall

Our loan agreements require, among other things, that we maintain compliance with certain financial covenants. At April 27, 2014, the company was in compliance with these financial covenants.

The principal payment requirements for long-term debt during the next two fiscal years are: 2015 – $2.2 million; and 2016 – $2.2 million.

Interest paid during 2014, 2013, and 2012 totaled $466,000, $666,000, and $817,000, respectively.