8. Long-Term Debt and Lines of Credit

A summary of long-term debt follows:

(dollars in thousands)	November 1, 2015		November 2, 2014			May 3, 2015
Unsecured senior term notes	$	-	$	2,200		$	2,200
Current maturities of long-term debt		-		(2,200	)		(2,200	)
Long-term debt, less current maturities
of long-term debt	$	-	$	-		$	-

Unsecured Senior Term Notes

We entered into a note agreement dated August 11, 2008 that provided for the issuance of $11.0 million of unsecured senior term notes with a fixed interest rate of 8.01% and a term of seven years. Principal payments of $2.2 million per year were due on the notes beginning August 11, 2011. Any principal pre-payments would have been assessed a penalty as defined in the agreement. The agreement contained customary financial and other covenants as defined in the agreement.

On August 11, 2015, we paid our last annual payment of $2.2 million and this agreement has been paid in full.

Revolving Credit Agreement – United States

As of May 3, 2015, we had an unsecured credit agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) that provided for an unsecured revolving loan commitment of $10.0 million to be used to finance working capital and general corporate purposes. Any borrowings that are outstanding under the credit agreement with Culp Europe noted below will decrease the $10.0 million available. Interest is charged at a rate (applicable interest rate of 1.69%, 1.76%, and 1.78% at November 1, 2015, November 2, 2014, and May 3, 2015, respectively) equal to the one-month LIBOR rate plus a spread based on our ratio of debt to EBITDA as defined in the agreement. The Credit Agreement contained customary financial and other covenants as defined in the agreement and was set to expire on August 31, 2015.

Effective July 10, 2015, we amended the Credit Agreement to extend the expiration date to August 31, 2017, and maintain an annual capital expenditure limit of $12 million.

At November 1, 2015 and May 3, 2015 there was a $250,000 outstanding letter of credit (all of which related to workers compensation). At November 2, 2014, there was a $195,000 outstanding letter of credit (all of which related to workers compensation). At November 1, 2015, November 2, 2014, and May 3, 2015, there were no borrowings outstanding under the Credit Agreement.

Revolving Credit Agreement – China

We have an unsecured credit agreement associated with our operations in China that provides for a line of credit of up to 40 million RMB (approximately $6.3 million USD at November 1, 2015), expiring on February 9, 2016. This agreement has an interest rate determined by the Chinese government. There were no borrowings outstanding under the agreement as of November 1, 2015, November 2, 2014, and May 3, 2015.

Revolving Credit Agreement – Europe

In connection with the Wells Fargo credit agreement noted above, any outstanding borrowings associated with Culp Europe would decrease the $10 million available under the credit agreement and incur interest at the EURO LIBOR plus 2%.

At November 1, 2015, no borrowings were outstanding under this agreement, as the outstanding balance was paid in full during the second quarter of fiscal 2015.

Overall

Our loan agreements require, among other things, that we maintain compliance with certain financial covenants. At November 1, 2015, the company was in compliance with these financial covenants.

The fair value of the company’s long-term debt is estimated by discounting the future cash flows at rates currently offered to the company for similar debt instruments of comparable maturities. At November 2, 2014, the carrying value of the company’s long-term debt was $2.2 million and the fair value was $2.3 million. At May 3, 2015, the carrying value of the company’s long-term debt was $2.2 million and the fair value was $2.3 million.