Document:

Exhibit 10.2

Exhibit 10.2

FORBEARANCE AGREEMENT

This Forbearance Agreement (this “Agreement”) is dated as of August 14, 2009 by and
among National Consumer Cooperative Bank, D/B/A National Cooperative Bank (“Borrower”),
SunTrust Bank, as administrative agent (in such capacity, “Administrative Agent”), and the
Banks (as defined below) signatory hereto.

W I T N E S S E T H:

WHEREAS, pursuant to that certain Credit Agreement, dated as of May 1, 2006 (as amended,
restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”),
by and among Borrower, Administrative Agent, PNC Bank, National Association and Wachovia Bank,
National Association, as co-syndication agents (“Syndication Agents”), Calyon New York
Branch and Union Bank of California, N.A., as co-documentation agents (“Documentation
Agents”), SunTrust Capital Markets, Inc., as lead arranger and book manager
(“Arranger”; Administrative Agent, Syndication Agents, Documentation Agents and Arranger
are each an “Agent” and are, collectively, the “Agents”), and the lenders party
thereto from time to time (collectively, “Banks”), Banks have made certain loans and
financial accommodations to Borrower;

WHEREAS, Borrower has notified Administrative Agent that certain Defaults and Events of
Default have occurred and are continuing under the Credit Agreement as a result of (a) Borrower’s
failure to maintain (i) the ratio of Consolidated Earnings Available for Fixed Charge to
Consolidated Fixed Charges as required under Section 6.9(b) of the Credit Agreement for the period
ended June 30, 2009, (ii) the ratio of Consolidated Debt to Consolidated Adjusted Net Worth as
required under Section 6.9(c) of the Credit Agreement for the period ended June 30, 2009, (iii) the
ratio of Nonperforming Assets to Total Loans as required under Section 6.9(e) of the Credit
Agreement for the period ended May 31, 2009 and (iv) the Return on Average Assets as required under
Section 6.9(g) of the Credit Agreement as of June 30, 2009, (b) Events of Default under Section 8.5
of the Credit Agreement with respect to Borrower’s failure to perform its obligations under the
Senior Note Agreement, and (c) Borrower’s failure to promptly notify Administrative Agent in
writing of the foregoing pursuant to Section 6.7(a) of the Credit Agreement (collectively, the
“Existing Events of Default”). No other Default or Event of Default is, or shall be deemed
to be, an Existing Event of Default;

WHEREAS, Borrower has requested that Administrative Agent and Banks forbear from exercising
remedies with respect to the Existing Events of Default as set forth herein; and

WHEREAS, on and subject to the terms and conditions set forth herein, Administrative Agent and
Banks have agreed to forbear from exercising remedies with respect to the Existing Events of
Default.

 

 

 

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions
contained herein and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

1. Capitalized Terms. Each capitalized term used but not defined herein shall have
the meaning ascribed to such term in the Credit Agreement.

2. Events of Default and Forbearance. Administrative Agent and Banks hereby agree as
of the Effective Date (defined below) to forbear from exercising the Enforcement Actions (defined
below) solely with respect to the Existing Events of Default until the earliest to occur of any of
the following (each, a “Termination Event”): (a) the occurrence of a breach or default
under this Agreement; (b) the occurrence of a Default or Event of Default that does not constitute
an Existing Event of Default; (c) the acceleration of all or any part of the Indebtedness
outstanding under the Senior Notes or the Senior Note Agreement, any enforcement action with
respect to the Senior Notes or upon payment by Borrower of any principal under the Senior Notes;
(d) termination or amendment of any forbearance agreement entered into with the requisite holders
of the Senior Notes or any other failure of any such agreement to continue to be in full force and
effect; and (e) November 16, 2009 (the earliest date of occurrence of any Termination Event, the
“Forbearance Termination Date”). The time period from the Effective Date to the
Forbearance Termination Date is the “Forbearance Period.” Borrower acknowledges and agrees
that upon the Forbearance Termination Date, the forbearance provided under this Section 2
shall terminate and Administrative Agent and Banks shall have the right to exercise any and all
rights and remedies to the extent provided under Article 8 of the Credit Agreement or
otherwise under the Loan Documents or under applicable law or at equity (collectively, the
“Enforcement Actions”) due to the Existing Events of Default or any other Event of Default
that has occurred and is continuing. Borrower hereby further acknowledges and agrees that from and
after the Forbearance Termination Date, Administrative Agent and Banks shall be under no obligation
of any kind whatsoever to forbear from exercising any remedies on account of the Existing Events of
Default or any other Event of Default (whether similar or dissimilar to the Existing Events of
Default).

Borrower hereby further acknowledges and agrees that during the Forbearance Period,
Administrative Agent and Banks have no obligation to make any Loans to, or on behalf of, Borrower.
The foregoing notwithstanding, if and to the extent that Administrative Agent or any Bank continue
to make Revolving Loans, notwithstanding the occurrence of any Default or Event of Default, whether
the Existing Events of Default or otherwise, (a) such Revolving Loans shall be made, issued, caused
to be issued, or executed, as applicable, in Administrative Agent’s and such Bank’s sole and
absolute discretion, and (b) no such action shall be construed as (i) a waiver or forbearance of
any of Administrative Agent’s and Banks’ rights, remedies, and powers against Borrower, NCBFC or
the Collateral (including, without limitation, the right to terminate without notice, the making of
Revolving Loans) or (ii) a waiver of any such Default or Event of Default or the Existing Events of
Default.

 

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3. Forbearance Covenants by Borrower. As a material inducement to the execution by
Administrative Agent and the undersigned Banks of this Agreement, each
Borrower hereby agrees that it shall comply with each of the following covenants and that the
failure to comply with any of such covenants shall constitute an immediate default under this
Agreement and an immediate Event of Default under the Credit Agreement, which shall not be a
Existing Event of Default, and shall result in the immediate termination of the forbearance by
Banks as provided under Section 2 of this Agreement:

(a) Borrower shall maintain a minimum Cash balance of $60 million at all times during the
Forbearance Period, unless otherwise consented to in writing by Majority Banks;

(b) At all times during the Forbearance Period, Borrower shall maintain a ratio of
Nonperforming Assets of Borrower and its Subsidiaries to Total Loans (excluding letters of credit)
of not greater than 0.075:1.0;

(c) as soon as available, but not later than 30 days following the Effective Date, a runoff
analysis of Borrower’s loan portfolio updated as of July 31, 2009, including projections to and
through the date the Loans are paid in full;

(d) Commencing by 4:00 p.m. (Eastern time) on August 19, 2009 and by 4:00 p.m. (Eastern time)
each Wednesday thereafter, Borrower shall deliver to Administrative Agent, or its designated
advisors, a Cash balance report as of close of business (Eastern time) on Friday of the previous
week;

(e) Commencing by 4:00 p.m. (Eastern time) on August 21, 2009 and by 4:00 p.m. (Eastern time)
each Friday thereafter, Borrower shall deliver to Administrative Agent, or its designated advisors,
a 13-week rolling cash flow forecast together with a detailed variance report with respect to the
previous 13-week rolling cash flow forecast delivered, which shall be in the form attached hereto
as Exhibit A;

(f) on the day that is 30 days following the end of each calendar month, draft monthly
financial statements including balance sheets, statements of income and statements of shareholders
equity, and on the date that is 45 days following the end of each calendar month, final copies of
such monthly financial statements;

(g) Borrower shall prepare and deliver to each of Administrative Agent and Banks, in form and
detail reasonably satisfactory to Banks, such additional information (including information
provided by Borrower to its other creditors) regarding the assets, liabilities, business and
financial condition of Borrower, NCBFC and their respective subsidiaries (and projections relating
thereto) as shall be reasonably requested by Administrative Agent or Banks;

(h) On or before September 15, 2009, Borrower shall deliver to Administrative Agent, or its
designated advisors, a plan of restructuring, which shall include, but shall not be limited to,
liquidity projections and needs, proposed designations and timing of asset dispositions, and any
projected capital raises (the “Restructuring Plan”);

 

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(i) On or before September 18, 2009 (but following the delivery of the Restructuring Plan),
Borrower shall meet with Administrative Agent and Banks to discuss the Restructuring Plan;

(j) During the Forbearance Period, Borrower (i) shall not make any voluntary capital
contribution to the Thrift (whether directly or through NCBFC) without the prior written consent of
Majority Banks and (ii) shall, notwithstanding the limitation in Section 7.9(xiii) of the Credit
Agreement or 5M of the Senior Note Agreement, be permitted to make a capital contribution expressly
requested by the Office of Thrift Supervision or other Governmental Authority to the Thrift
(whether directly or through NCBFC) in an aggregate amount up to $10 million without the prior
written consent of Majority Banks; provided that Borrower remains in compliance with Section 3(a)
above;

(k) During the Forbearance Period, Borrower shall not open any new depository account,
securities account or investment account unless such account shall be maintained at one or more of
the Banks;

(l) Within thirty (30) days of the Effective Date, Borrower will enter into account control
agreements among the Collateral Agent (as defined in the Intercreditor Agreement), Borrower and the
applicable depository institution, in form and substance reasonably satisfactory to the Collateral
Agent, with respect to each of Borrower’s deposit accounts, investment accounts and securities
accounts (in each case, except with respect to Excluded Accounts (as defined in the Security
Agreement)) held at any bank or financial institution other than Banks.

(m) Borrower shall allow full access to its books and records, inspection of its facilities
and access to its officers, employees, independent certified public accountants, pursuant to and
consistent with Section 6.2 of the Credit Agreement for Administrative Agent, Banks and their
advisors, it being understood that Borrower and/or its financial advisor shall have the opportunity
to be present for any discussions with the independent certified public accountants.

4. Acknowledgements.

(a) Acknowledgement of Obligations. Borrower hereby acknowledges, confirms and agrees
that as of the close of business on August 12, 2009, Borrower was indebted to Administrative Agent
and Banks for Loans and other financial accommodations under the Loan Documents in the following
principal amounts:

	 	 	 	 	 
	 

	 	Revolving Loans:
	 	$165,000,000.00 plus accrued
interest thereon plus
accrued and unpaid fees, costs and expenses due and
owing under the Loan Documents
	 
	 	 	 	 
	 

	 	Letters of Credit:
	 	$417,268.00 plus accrued and unpaid fees, costs and
expenses due and owing under the Loan Documents

 

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All such obligations under the Credit Agreement owing by Borrower together with interest
accrued and accruing thereon, and all fees, costs, expenses and other charges now or hereafter
payable by Borrower to Administrative Agent and each Bank, are unconditionally owing by Borrower to
each Bank, without offset, defense or counterclaim of any kind, nature or description whatsoever.

(b) Acknowledgement of Payment of Costs and Fees. Borrower hereby acknowledges,
confirms and agrees that Borrower shall pay to Administrative Agent and each Bank all reasonable
and documented costs, fees, expenses and charges of every kind in connection with the preparation,
negotiation, execution and delivery of this Agreement and any documents and instruments relating
hereto.

(c) Acknowledgement of Security Interests. Borrower hereby acknowledges, confirms and
agrees that Collateral Agent, for itself and the benefit of the Secured Creditors (as defined in
the Security Agreement), has and shall continue to have valid, enforceable and perfected
first-priority liens (subject to Permitted Liens and Liens permitted pursuant to Section 7.2 of the
Credit Agreement) upon and security interests in the Collateral granted to Collateral Agent, for
itself and the benefit of the Banks, pursuant to the Loan Documents or otherwise granted to or held
by Collateral Agent, for itself and the benefit of the Secured Creditors (as defined in the
Security Agreement).

(d) Acknowledgment of No Bank Obligations. Borrower hereby acknowledges, confirms and
agrees that as a result of the Existing Events of Default, Administrative Agent and Banks have no
obligations to make, issue or otherwise provide any Loans or other financial accommodations to
Borrower.

(e) Acknowledgment of Interest Rates. Borrower hereby acknowledges, confirms and
agrees that as a result of the Existing Events of Default (i) upon expiration of the applicable
Interest Period in effect for any LIBOR Loans, such LIBOR Loans shall become Base Rate Loans,
(ii) no Base Rate Loans may be converted into LIBOR Loans and (iii) Section 8(a) below shall be
applicable with respect to all Base Rate Loans.

(f) Binding Effect of Documents. Borrower hereby acknowledges, confirms and agrees
that: (i) each of the Loan Documents to which it is a party has been duly executed and delivered
to Administrative Agent and Banks thereto by Borrower, and each is in full force and effect as of
the Forbearance Effective Date (except to the extent set forth therein), (ii) the agreements and
obligations of Borrower contained in the Loan Documents and in this Agreement constitute the legal,
valid and binding obligations of Borrower, enforceable against Borrower in accordance with their
respective terms, and Borrower has no valid defense to the enforcement of the obligations under the
Credit Agreement, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other similar laws, now or
hereafter in effect, relating to or affecting creditor rights and subject to equitable principles
and (iii) Administrative Agent and each Bank are and shall be entitled to the rights, remedies and
benefits provided for in the Loan Documents and under applicable law or at equity.

 

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5. Representations and Warranties. Borrower hereby represents and warrants in favor
of Administrative Agent and each Bank as follows:

(a) The execution, delivery and performance by Borrower of this Agreement are within
Borrower’s powers and have been duly authorized by all necessary action on the part of Borrower;

(b) This Agreement has been duly executed and delivered by Borrower and constitutes a legal,
valid and binding obligation of Borrower enforceable in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or other similar laws,
now or hereafter in effect, relating to or affecting creditor rights and subject to equitable
principles;

(c) The execution and delivery of this Agreement and performance by Borrower under the Credit
Agreement, as amended from time to time, (i) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority, (ii) will not
violate the articles or certificate of incorporation, certificate of organization or limited
partnership, or other registered organizational documents of Borrower, (iii) will not violate any
requirement of law except for violation that could not reasonably be expected to have a Material
Adverse Effect, and (iv) will not violate or result in a default or require any consent or approval
under any indenture, agreement or other instrument binding upon Borrower or its property, or give
rise to a right thereunder to require any payment to be made by Borrower, except for violations,
defaults or the creation of such rights that could not reasonably be expect to have a Material
Adverse Effect;

(d) The representations and warranties set forth in Sections 3.8, 3.9,
3.10, and 3.11 of the Notes Forbearance Agreement are hereby incorporated herein by
reference as if made to Administrative Agent and each Bank in all respects; and

(e) Other than the Existing Events of Default, no event has occurred or is continuing, that
would constitute a Default or an Event of Default under the Credit Agreement or any other Loan
Documents.

6. Advice of Counsel. Borrower acknowledges that Borrower (a) has been advised by
Administrative Agent to engage independent counsel of its own choosing to obtain legal advice with
respect to this Agreement, (b) has obtained, or has had every opportunity to obtain, legal advice
from independent counsel of its own choosing with respect to this Agreement (and to the extent it
has chosen not to obtain legal advice of its own counsel, this choice was made freely and in
knowing contradiction of the suggestion of Administrative
Agent), (c) has read this Agreement in full and final form, and (d) has had this Agreement
fully explained to it to its satisfaction.

 

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7. Limitations. Except for the forbearance and other modifications expressly set
forth herein, the Credit Agreement and all other existing Loan Documents shall remain unchanged and
in full force and effect and Administrative Agent and each Bank expressly reserve the right to
require strict compliance with the terms of the Credit Agreement and the other Loan Documents. The
forbearance contained herein is limited to the precise terms hereof, and none of Administrative
Agent or any Bank is obligated to consider or consent to any additional request by Borrower for any
other forbearance with respect to the Credit Agreement.

8. Forbearance Fees.

(a) Notwithstanding anything to the contrary contained in the Credit Agreement, during the
Forbearance Period, all Obligations shall accrue interest at a rate per annum equal to the Base
Rate plus 3.00%.

(b) As consideration for Administrative Agent’s and Banks’ agreement to forbear from taking
any Enforcement Action during the Forbearance Period, Borrower shall pay to Administrative Agent on
the Effective Date, on behalf of Banks, a forbearance fee (“Forbearance Fee”) in the amount
of $412,500, which shall be fully earned on the Effective Date and shall be allocated pro rata
among Banks that execute this Agreement in accordance with each Bank’s Pro Rata Share.

9. Conditions to Effectiveness of this Agreement. This Agreement shall be deemed
effective as of August 14, 2009 (the “Effective Date”), provided that all the following
conditions have been satisfied, as determined in Administrative Agent’s and Majority Banks’ sole
and absolute discretion, on or before the Effective Date:

(a) Administrative Agent shall have received, in form and substance satisfactory to
Administrative Agent, duly executed counterparts of this Agreement from Borrower and the Majority
Banks on or before the Effective Date;

(b) Administrative Agent shall have received on or before the Effective Date an executed
forbearance agreement between Borrower and the requisite holders of the Senior Notes in form and
substance satisfactory to Administrative Agent and Majority Banks (the “Notes Forbearance
Agreement”);

(c) Borrower shall have paid all reasonable and documented fees, costs and expenses incurred
in connection with this Agreement and any other Loan Documents that have been invoiced and are
required to be paid hereunder or under the Credit Agreement (including, without limitation, the
Forbearance Fee and legal fees and expenses);

 

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(d) On or before the Effective Date, Borrower shall have transferred a retainer of $200,000 to
FTI Consulting, Inc. and a retainer of $200,000 to Paul, Hastings,
Janofsky & Walker, LLP, in each case pursuant to the terms of the retainer letter, dated
August 14, 2009, by Administrative Agent to Borrower; and

(e) The representations and warranties made or deemed made by Borrower under this Agreement
shall be true and correct in all material respects.

10. Effect on the Loan Documents. (a) The Credit Agreement and each of the other Loan
Documents shall be and remain in full force and effect in accordance with their respective terms
(except as expressly modified hereby) and hereby are ratified and confirmed in all respects. The
execution, delivery, and performance of this Agreement shall not operate, except as expressly set
forth herein, as a modification or waiver of any right, power, or remedy of Administrative Agent or
any Bank under the Credit Agreement or any other Loan Document. The waivers, consents, and
modifications herein are limited to the specifics hereof, shall not apply with respect to any facts
or occurrences other than those on which the same are based, shall not excuse future non-compliance
with the Loan Documents, and shall not operate as a consent to any further or other matter under
the Loan Documents. To the extent any provision in the Loan Documents restricts or otherwise
prohibits certain acts by any Loan Party during an Event of Default, those provisions shall remain
in full force and effect and are not waived, modified or excused unless specifically provided for
in this Agreement.

(b) Upon and after the Effective Date, each reference in the Credit Agreement to “this
Agreement,” “hereunder,” “herein,” “hereof” or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to “the Credit Agreement,” “thereunder,”
“therein,” “thereof” or words of like import referring to the Credit Agreement, shall mean and be a
reference to the Credit Agreement as modified hereby.

(c) Upon and after the Effective Date and until further notice, Borrower shall pay all
interest due under the Credit Agreement on a monthly basis, with the first monthly interest payment
due September 1, 2009, and on the first day of each month thereafter.

(d) During the Forbearance Period, Borrower shall not be required to comply with the financial
covenants set forth in Sections 6.9(a)-(e) and (g) of the Credit Agreement.

(e) During the Forbearance Period, notwithstanding anything to the contrary in the Loan
Documents, if any Governmental Authority having regulatory authority over Borrower or any
Subsidiary shall take any action or issue any order or notice of the type set forth in Section 8.11
of the Credit Agreement, such action, order or notice shall not be deemed an Event of Default so
long as it may be cured or complied with without violating the terms and conditions of this
Agreement or any other Loan Document.

(f) To the extent that any terms and conditions in any of the Loan Documents shall contradict
or be in conflict with any terms or conditions of the Credit Agreement, after giving effect to this
Agreement, such terms and conditions are hereby deemed
modified or amended accordingly to reflect the terms and conditions of the Credit Agreement as
modified hereby.

 

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11. Most Favored Lender Clause. On the Effective Date, each negative and affirmative
covenant (together with any defined terms and schedules related thereto) imposed under or in
connection with the Senior Notes Agreement or the Notes Forbearance Agreement, is hereby
incorporated into this Agreement and shall apply as if fully set forth herein, except as may be
amended, suspended or otherwise modified pursuant to the Notes Forbearance Agreement. If, after
the Effective Date, any holder of the Senior Notes or other holder of Indebtedness of Borrower or
any Subsidiary (a) imposes any additional negative or affirmative covenant or event of default
(including by amendment of an existing negative or affirmative covenant or event of default, by
waiver or consent or otherwise) that is more restrictive on Borrower or any Subsidiary (or more
favorable to such Bank or other holder of Indebtedness) than the covenants or events of default
contained in this Agreement or the Credit Agreement, or (b) increases the amount of any fees,
interest and/or other economic consideration to such Creditor or other holder of Indebtedness, or
(c) adds additional fees, interest and/or other economic consideration to such Creditor or other
holder of Indebtedness, then Borrower shall promptly notify Agent and each Bank and (irrespective
of such notification) this Agreement and the Credit Agreement shall be deemed to be amended
automatically to incorporate such additional, more restrictive or more favorable covenant, event of
default or other provision (together with any defined terms and schedules related thereto) as of
such date. Notwithstanding the foregoing, (y) the subsequent amendment, modification, release or
termination of any such covenant, event of default or other provision in such other document or
agreement shall not operate to amend, modify, release or terminate such covenant, event of default,
additional fees, interest or other economic consideration or other provision as incorporated into
the Credit Agreement pursuant hereto without the consent of Majority Banks and (z) no provision
shall be incorporated by reference herein to the extent that it would be more favorable to
Borrower, or less favorable to Banks, than any provision of this Agreement or the Credit Agreement
that would be operative absent such incorporation.

12. Sharing Provisions under the Intercreditor Agreement. As of the date hereof, a
Trigger Event (as defined in that certain Intercreditor and Collateral Agency Agreement dated as of
April 30, 2009 by and among Administrative Agent, in its capacity as collateral agent and
administrative agent under the Credit Agreement, and each of the Lenders and Noteholders signatory
thereto (as amended, restated, supplemented or otherwise modified from time to time, the
“Intercreditor Agreement”)) has occurred and SunTrust Bank, as Administrative Agent, has
provided the required notice under Section 3(b) of the Intercreditor Agreement to implement the
sharing provisions contained in Section 3 of the Intercreditor Agreement. Notwithstanding anything
to the contrary contained in the Intercreditor Agreement, the Administrative Agent and the Banks
hereby agree that “Shared Payments” (as defined in the Intercreditor Agreement) shall not include
any payments of interest in respect of the Secured Obligations (as defined in the Intercreditor
Agreement) or any fees in respect of the Financing Agreements (as defined in the Intercreditor
Agreement); provided that such agreement is expressly conditioned upon the continued agreement of
such arrangement by the holders of the Senior Notes.

 

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13. Mandatory Prepayments.

(a) The provisions of Section 4.4(a) of the Notes Forbearance Agreement are hereby
incorporated herein by reference as if made in favor of Administrative Agent and each Bank in all
respects.

(b) Borrower shall make no optional prepayments to the Lenders unless Borrower concurrently
makes a ratable payment to all of the holders of the Senior Notes in accordance with the terms of
sections 3(b) and 7(a) of the Intercreditor Agreement.

14. Restricted Payments, Investments and Loans. The provisions of Sections 4.7, 4.8
and 4.9 of the Notes Forbearance Agreement are hereby incorporated herein by reference as if made
in favor of Administrative Agent and each Bank in all respects.

15. Amendments to Senior Note Agreement, etc. Until the termination of any
forbearance or waiver period under the Notes Forbearance Agreement, Borrower shall not, without the
written consent of Majority Banks, except as contemplated by the Notes Forbearance Agreement, enter
into any amendment of, or modification or supplement to, the Senior Note Agreement, the Notes
Forbearance Agreement, or any related agreements, or enter into any other agreements with any of
the Noteholders or the Trustee with respect to the Senior Note Agreement or the Notes Forbearance
Agreement, that would have the direct or indirect effect of any of the following: shortening the
date of maturity of any loan or note, increasing the stated principal amount of any loan or note or
adding to such amounts, adding to or making more onerous the conditions for issuing letters of
credit, accelerating the time or increasing the amount of payment of principal, interest or other
amounts (other than as required herein), increasing the interest rate or effective interest rate on
any Indebtedness (whether by changing a contractual or default rate, changing a reference or base
rate (other than normal fluctuations in such rate as may be contemplated by changes in the
reference rates in the Senior Note Agreement) or by changing an interest rate spread above a
reference rate), increasing the amount of or imposing additional fees or costs, or adding covenants
or other restrictions or making more onerous existing covenants.

16. No Fees, etc. None of Borrower, its Subsidiaries, NCBFC or their respective
subsidiaries or affiliates has paid or will pay, directly or indirectly, any work fee,
administrative agent’s fee or any other fee, charge, increased interest, premium or other
consideration to, or has given or will give any additional security or collateral to, or has
shortened or will shorten the maturity or average life of any Indebtedness or permanently reduced
any borrowing capacity in favor of or for the benefit of, any creditor of Borrower, any creditor of
any Affiliate or any agent acting for or on behalf of any such creditors with respect to the Senior
Note Agreement in connection with or as an inducement to enter into the Notes Forbearance Agreement
or similar agreement, other than the fees and payments described in the Notes Forbearance Agreement
(including any fees to counsel and financial advisors) and the forbearance fee described herein in
each case payable under the terms of, and as disclosed in, the Notes Forbearance Agreement.

 

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17. Meetings. Borrower, NCBFC and their respective senior management and advisors
shall make themselves available for such periodic meetings as Banks and Banks’ attorneys and
advisors may reasonably request, to take place at mutually convenient times, in person or by
telephone with representatives of Banks and Banks’ attorneys and advisors and any financial or
other advisor or consultant to the Company and NCBFC, to discuss the Company’s and the NCBFC’s
business operations and such other matters as such representatives may reasonably request.

18. Further Assurances. Borrower and NCBFC will cooperate with Administrative Agent
and Banks and execute such further instruments and documents as the Administrative Agent and Banks
shall reasonably request to carry out to their satisfaction the transactions contemplated by this
Agreement.

19. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.

20. Loan Document . This Agreement shall be deemed to be a Loan Document for all
purposes.

21. RELEASE BY BORROWER AND NCBFC. Effective on the date hereof, each of Borrower and
NCBFC hereby waives, releases, remises and forever discharges Administrative Agent, each other
Agent, each Bank, each of the other Secured Parties and each of their respective Affiliates, and
each of the officers, directors, employees, and professionals of each Bank, Administrative Agent,
each other Agent and each of the other Secured Parties and their respective Affiliates
(collectively, the “Releasees”), from any and all claims, demands, obligations,
liabilities, causes of action, damages, losses, costs and expenses of any kind or character, known
or unknown, past or present, liquidated or unliquidated, suspected or unsuspected, which Borrower
or NCBFC ever had from the beginning of the world, now has or might hereafter have against any such
Releasee which relates, directly or indirectly to the Credit Agreement, any other Loan Document, or
to any acts or omissions of any such Releasee relating to the Credit Agreement or any other Loan
Document, except for the duties and obligations expressly set forth in this Agreement or with
respect to any act or omission that is taken or occurs after the Effective Date.

22. Time of Essence. Time is of the essence in the payment and performance of each of
the obligations of Borrower and with respect to all covenants and conditions to be satisfied by
Borrower in this Agreement and all documents, acknowledgments and instruments delivered in
connection herewith.

23. Integration. This Agreement (together with the other Loan Documents (each as
amended, supplemented or otherwise modified from time to time)) sets forth in full the terms of
agreement between the parties and is intended as the full, complete and exclusive contract
governing the relationship between the parties with respect to the transactions contemplated
herein, superseding all other discussions, promises, representations, warranties, agreements and
understandings, whether written or oral, between the parties with respect thereto.

 

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24. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising,
on the part of Administrative Agent or any Bank, any right, remedy, power or privilege hereunder,
shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided
by law.

25. Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.

26. Counterparts. This Agreement may be executed by one or more of the parties hereto
on any number of separate counterparts, each of which shall be deemed an original and all of which,
taken together, shall be deemed to constitute one and the same instrument. Delivery of an executed
counterpart of this Agreement by facsimile transmission or electronic mail shall be as effective as
delivery of a manually executed counterpart hereof.

[signature pages follow]

 

12

 

IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized officers
or representatives to execute and deliver this Agreement as of the day and year first written
above.

	 	 	 	 	 	 	 	 	 
	 	 	NATIONAL CONSUMER COOPERATIVE BANK, as Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Acknowledged and agreed this
14th day of August, 2009:

	 	 	 	 	 	 	 
	NCB FINANCIAL CORPORATION
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	SUNTRUST BANK, as Administrative Agent and a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	PNC BANK, NATIONAL ASSOCIATION., as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	WACHOVIA BANK, N.A., as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	CALYON NEW YORK BRANCH, as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	UNION BANK, N.A., as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A., as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	MANUFACTURERS AND TRADERS TRUST COMPANY, as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	COÖPERATIEVE CENTRALE RAIFFEISEN BOERENLEENBANK B.A.,
“RABOBANK INTERNATIONAL”, NEW YORK BRANCH, as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	MIZUHO CORPORATE BANK (USA), as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	US BANK, N.A., as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	THE BANK OF NOVA SCOTIA, as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	TAIPEI FUBON COMMERCIAL BANK, NEW YORK AGENCY, as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature Page

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	FIRST COMMERCIAL BANK, LOS ANGELES BRANCH, as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Forbearance Agreement Signature PageEX-10.1

Exhibit 10.1

CHANGE IN CONTROL AGREEMENT

FOR

WILLIAM L. JASPER

     THIS CHANGE OF CONTROL AGREEMENT (“Agreement”) between UNIFI, INC., a New York Corporation
(the “Company”), and William L. Jasper (the “Executive”) effective the 14th day of
August, 2009 (the “Effective Date”).

WITNESSETH:

     WHEREAS, the Executive is the President and Chief Executive Officer of the Company and is
considered as an integral part of the Company’s management; and

     WHEREAS, the Company’s Board of Directors (the “Board”) considers the establishment and
maintenance of a sound and vital management to be essential in protecting and enhancing the best
interests of the Company and its Shareholders, recognizes that the possibility of a Change in
Control exists and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management personnel to the
detriment of the Company and its Shareholders; and

     WHEREAS, the Executive desires that in the event of any Change in Control he will continue to
have the responsibility and status he has earned; and

     WHEREAS, the Board has determined that it is appropriate to reinforce and encourage the
continued attention and dedication of the Executive, as a member of the Company’s management, to
his assigned duties without distraction in potentially disturbing circumstances arising from the
possibility of a Change in Control of the Company; and

     WHEREAS, the Executive and the Company have previously entered a Change in Control Agreement
which, by its own terms, expired November 1, 2008; and

     WHEREAS, the Executive and the Company desire to enter a new Change in Control Agreement that
complies with the provisions of section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”).

     NOW, THEREFORE, in order to induce the Executive to remain in the employment of the Company
and in consideration of the Executive agreeing to remain in the employment of the Company, subject
to the terms and conditions set out below, the Company agrees it will pay such amount, as provided
in Section 4 of this Agreement, to the Executive, if the Executive’s employment with the Company
terminates under one of the circumstances described herein following a Change in Control of the
Company, as herein defined.

     Section 1. Term This Agreement shall terminate, except to the extent that any

1

 

obligation of the Company hereunder remains unpaid as of such time, on the earliest
of:

     (a) December 31, 2011 if a Change in Control of the Company has not occurred within such
period;

     (b) The termination of the Executive’s employment with the Company for any reason prior to a
Change in Control; and

     (c) Two (2) years from the date of a Change in Control of the Company if the Executive has not
voluntarily terminated his employment for Good Reason as of such time.

     Section 2. Change in Control

     (a) No compensation shall be payable under this Agreement unless and until:

     (1) there shall have been a Change in Control of the Company, while the Executive is
still an employee of the Company; and

     (2) the Executive’s employment by the Company thereafter shall have been terminated in
accordance with Section 3.

     (b) For purposes of this Agreement, a Change in Control of the Company shall be deemed to have
occurred if:

     (1) There shall be consummated

     (A) any consolidation or merger of the Company in which the Company is not the
continuing or surviving legal entity or pursuant to which shares of the Company’s
Common Stock would be converted into cash, securities, or other property, other than
a merger of the Company in which the holders of the Company’s Common Stock
immediately prior to the merger have the same proportionate ownership of Common
Stock of the surviving company immediately after the merger, or

     (B) any sale, lease, exchange, or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the assets of the
Company; or

     (2) The shareholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company; or

     (3) Any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of twenty

2

 

percent (20%) or more of the Company’s outstanding Common Stock; or

     (4) During any period of two consecutive years, individuals who at the beginning of
such period constitute the entire Board of Directors shall cease for any reason to
constitute a majority thereof unless the election, or the nomination for election by the
Company’s Shareholders, of each new Director was approved by a vote of at least two-thirds
of the Directors then still in office who were Directors at the beginning of the period.

     Section 3. Termination Following Change in Control

     (a) If a Change in Control of the Company shall have occurred while the Executive is still an
employee of the Company, the Executive shall be entitled to the compensation provided in Section 4
on the subsequent termination of the Executive’s employment with the Company by the Executive
voluntarily for Good Reason or by the Company without Cause, as such terms are defined in
Subsections (d) and (e) below. If the Executive’s employment with the Company is terminated for
any of the following reasons, no benefits will be payable hereunder:

     (1)
the Executive’s death;

     (2) the Executive’s Disability (as defined in Subsection (b) below);

     (3) the Executive’s Retirement (as defined in Subsection (c) below);

     (4) the Executive’s termination by the Company for Cause (as defined in Subsection (d)
below); or

     (5) the Executive’s decision to terminate employment other than for Good Reason (as
defined in Subsection (e) below).

     (b) Disability: If, as a result of the Executive’s incapacity due to physical or
mental illness, the Executive shall have been absent from his duties with the Company on a
full-time basis for one hundred twenty (120) consecutive days or a period of one hundred eighty
(180) days within twelve (12) consecutive months (including days before and after the Change in
Control) and within 30 days after written notice of termination is thereafter given by the Company
the Executive shall not have returned to the full-time performance of the Executive’s duties, the
Executive shall have suffered a “Disability.”

     (c) Retirement: The term “Retirement” as used in this Agreement shall mean
termination in accordance with the Company’s retirement policy for its employees.

     (d) Cause: For purposes of this Agreement only, the Company shall have “Cause”
to terminate the Executive’s employment hereunder only on the basis of fraud, misappropriation, or
embezzlement on the part of the Executive or malfeasance or misfeasance by the Executive in

3

 

performing the duties of his office, as determined by the Board. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated for Cause unless and until
there shall have been a meeting of the Board (after at least ten (10) days written notice to the
Executive) and an opportunity for the Executive to be heard before the Board), and the delivery to
the Executive of a resolution duly adopted by the affirmative vote of not less than seventy-five
percent (75%) of the entire membership of the Board stating that in the good faith opinion of the
Board the Executive is guilty of conduct set forth in the second sentence of this Subsection (d)
and specifying the particulars thereof in detail.

     (e) Good Reason: The Executive may terminate the Executive’s employment for Good
Reason at any time during the term of this Agreement. For purposes of this Agreement “Good Reason”
shall mean the occurrence of any one or more of the following without the Executive’s express
written consent:

     (1) The assignment to the Executive by the Company of duties that are materially
inconsistent with the Executive’s position, duties, responsibilities, and status with the
Company immediately prior to a Change in Control of the Company; a material change in the
Executive’s titles or offices as in effect immediately prior to a Change in Control of the
Company; or any removal of the Executive from or any failure to reelect the Executive to any
of the positions held prior to a Change of Control of the Company, except in connection with
the termination of his employment for death, Disability, Retirement, or Cause or by the
Executive other than for Good Reason;

     (2) A material reduction by the Company in the Executive’s base salary as in effect on
the date hereof or as the same may be increased from time to time during the term of this
Agreement or the Company’s failure to increase (within 12 months of the Executive’s last
increase in base salary) the Executive’s base salary after a Change in Control of the
Company in an amount that at least equals, on a percentage basis, the average percentage
increase in base salary for all executive officers of the Company effected in the preceding
12 months;

     (3) A failure by the Company to continue in effect any benefit plan or
arrangement (including, without limitation, the Company’s 401(k) Plan, group life insurance
plan and medical, dental, accident, and disability plans) in which the Executive is
participating at the time of a Change in Control of the Company (hereinafter referred to as
“Benefit Plan”) without the substitution of a plan providing him with substantially similar
benefits, or the taking of any action by the Company which would adversely affect the
Executive’s participation in or materially reduce the Executive’s benefits under any such
Benefit Plan or deprive the Executive of any material fringe benefit enjoyed by the Executive
at the time of a Change in Control of the Company without the substitution of a plan or
fringe benefit providing him with substantially similar benefits;

     (4) A failure by the Company to continue in effect any plan or arrangement to receive
securities of the Company (including, without limitation, stock option plans or any other
plan or arrangement to receive and exercise stock options, restricted stock or grants

4

 

thereof) in which the Executive is participating at the time of a Change in Control of
the Company (a “Securities Plan”) without the substitution of a plan or arrangement providing
him with substantially similar benefits and the taking of any action by the Company that
would adversely affect the Executive’s participation in or materially reduce the Executive’s
benefits under any such Securities Plan without the substitution of a plan or arrangement
providing him with substantially similar benefits;

     (5) A failure by the Company to continue in effect any bonus plan, automobile allowance
plan, or other incentive payment plan in which the Executive is participating at the time of
a Change in Control of the Company, or said Executive had participated in during the previous
calendar year without the substitution of a plan or arrangement providing him with
substantially similar benefits;

     (6) A relocation of the Company’s principal executive offices to a location outside of
North Carolina, or the Executive’s relocation to any place other than the location at which
the Executive performed the Executive’s duties prior to a Change in Control of the Company,
except for required travel by the Executive on the Company’s business to an extent
substantially consistent with the Executive’s business travel obligations at the time of a
Change in Control of the Company;

     (7) A failure by the Company to provide the Executive with the number of paid vacation
days to which the Executive is entitled at the time of a Change in Control of the Company;

     (8) A material breach by the Company of any provision of this Agreement;

     (9) A failure by the Company to obtain the assumption of this Agreement by any
successor or assign of the Company; or

     (10) A purported termination of the Executive’s employment which is not made pursuant
to a Notice of Termination satisfying the requirements of Subsection (f).

In order to terminate his employment with the Company for Good Reason, the Executive must also
comply with the notice requirements of Subsection (f).

     (f) Notice of Termination:

     (1) Any termination by the Company pursuant to Subsections (b), (c) or (d) shall be
communicated by a Notice of Termination. For purposes of this Agreement, a “Notice of
Termination” shall mean a written notice that shall indicate those specific termination
provisions in this Agreement relied on and which sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated. For purposes of this Agreement, no such purported
termination by the Company shall be effective without such Notice of Termination.

5

 

     (2) Any termination by the Executive pursuant to Subsection (e) shall be communicated
by a Notice of Termination. For purposes of this Agreement, a “Notice of Termination” shall
mean a written notice that shall indicate those specific termination provisions in this
Agreement relied on and which sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under the provision
so indicated. For purposes of this Agreement, no such purported termination by the Company
shall be effective without such Notice of Termination.

     (3) The
Executive’s provision of a Notice of Termination must be within ninety (90)
days following the facts and circumstances claimed to provide a basis for termination for
Good Reason.

     (g) Date of Termination: “Date of Termination” shall mean:

     (1) If Executive’s employment is terminated by the Company for Disability, thirty (30)
days after the Notice of Termination is given to the Executive (provided that the Executive
shall not have returned to the performance of the Executive’s duties on a full-time basis
during such thirty (30) day period), or

     (2) If the Executive’s employment is terminated by the Company for any other reason,
the date on which a Notice of Termination is given; provided that if within thirty (30) days
after any Notice of Termination is given to the Executive by the Company the Executive
notifies the Company that a dispute exists concerning the termination, the Date of
Termination shall be the date the dispute is finally determined, whether by mutual agreement
by the parties or otherwise, or

     (3) If the Executive’s employment is terminated by the Executive for Good Reason,
thirty (30) days after the Notice of Termination is given to the Executive (provided that
the Company shall not have cured the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated during such
thirty (30) day period); provided that if within thirty (30) days after any Notice of
Termination is given to the Company by the Executive, the Company notifies the Executive
that a dispute exists concerning the termination, the Date of Termination shall be the date
the dispute is finally determined, whether by mutual agreement by the parties or otherwise.

     Section 4. Severance Compensation on Termination of Employment

     (a) If the Company shall terminate the Executive’s employment other than pursuant to Section
3(b), 3(c) or 3(d) or if the Executive shall voluntarily terminate his employment for Good Reason
pursuant to Section 3(e), then the Company shall pay to the Executive as severance pay an amount
equal to 2.99 times the average total compensation paid to the Executive by the

6

 

Company or any of its subsidiaries during the five (5) calendar years (or the period of the
Executive’s employment with the Company if the Executive has been employed with the Company for
less than five calendar years) preceding the Change in Control of the Company.

     (b) However, if the severance payment under this Section 4, either alone or together with
other payments that the Executive has the right to receive from the Company, would constitute a
“parachute payment” (as defined in section 280G of the Code), such severance payment shall be
reduced to the largest amount as will result in no portion of the severance payment under this
Section 4 being subject to the excise tax imposed by section 4999 of the Code. The determination
of any reduction in the lump sum severance payment under this Section 4 pursuant to the foregoing
proviso shall be made by the Company’s Independent Certified Public Accountants, and their decision
shall be conclusive and binding on the Company and the Executive.

     (c) Such amount shall be paid in twenty-four (24) equal monthly installments, without
interest, beginning on the regular payroll date for salaried employees of the Company in the month
following the Executive’s Date of Termination.

     (d) Notwithstanding the provisions of Subsection (c) to the contrary, the Company and
Executive further acknowledge that if the Executive is determined to be a “specified employee”, as
such term is defined in section 409A of the Code at the date that payments are otherwise scheduled
to commence in Subsection (c), that certain payments to Executive under this Agreement may be
required to be postponed to comply with section 409A. Thus, the parties agree that, in such event,
any payments that are so postponed will be paid to Executive, without interest, on the first day of
the calendar month following the end of the required postponement period.

     (e) If the Executive dies while any amounts are still payable to him hereunder, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive’s legatee, or other designee or, if there be no such designee, to the
Executive’s estate.

     Section 5. No Obligation to Mitigate Damages; No Effect on Other Contractual Rights

     (a) The Executive shall not be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or otherwise, nor shall the amount of
any payment provided for under this Agreement be reduced by any compensation earned by the
Executive as the result of employment by another employer that is not related to the Company after
the Date of Termination, or otherwise.

     (b) Except as set forth in Section 4(b), the provisions of this Agreement, and any payment
provided for hereunder, shall not reduce any amounts otherwise payable, or in any way diminish the
Executive’s rights under any employment agreement or other contract, plan, or

7

 

employment arrangement with the Company.

     (c) The Company shall, on the termination of the Executive’s employment following a Change in
Control of the Company other than by death, Disability (as defined in Section 3(b)), Retirement (as
defined in Section 3(c)) or Cause (as defined in Section 3(d)), or the termination of the
Executive’s employment by the Executive without Good Reason, maintain in full force and effect, for
the Executive’s continued benefit until the earlier of:

     (1) two
(2) years after the Date of Termination, or

     (2) the Executive’s commencement of full time employment with a new employer,

all life insurance, medical, health and accident, and disability plans, programs, or arrangements
in which he was entitled to participate immediately prior to the Date of Termination, provided that
his continued participation is possible under the general terms and provisions of such plans and
programs. In the event the Executive is ineligible under the terms of such plans or programs to
continue to be so covered, the Company shall provide substantially equivalent coverage through
other sources.

     (d) The Executive’s account and rights in and under any retirement benefit or incentive plans
shall remain subject to the terms and conditions of the respective plans as they existed at the
time of the termination of the Executive’s employment.

     Section 6. Successors

     (a) The Company will require any successor or assign (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business and/or assets of
the Company, by agreement expressly, absolutely and unconditionally to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place. Any failure of the Company to
obtain such agreement prior to the effectiveness of any such succession or assignment shall be a
material breach of this Agreement and shall entitle the Executive to terminate the Executive’s
employment for Good Reason under Section 3.

     (b) “Company” shall mean the Company as hereinbefore defined and any successor or assign to
its business and/or assets as aforesaid that executes and delivers the agreement provided for in
this Section 6 or which otherwise becomes bound by all the terms and provisions of this Agreement
by operation of law. If at any time during the term of this Agreement the Executive is employed by
any corporation a majority of the voting securities of which is then owned by the Company,
“Company” as used in Sections 3, 4, and 10 hereof shall in addition include such employer. In such
event, the Company agrees that it shall pay or shall cause such employer to pay any amounts owed to
the Executive pursuant to Section 4 hereof.

     (c) This Agreement shall inure to the benefit of and be enforceable by the Executive’s

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legal representatives or attorney-in-fact, executors or administrators, heirs, distributees
and legatees.

     Section 7. Notice For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be deemed to have been
duly given when delivered or mailed by United States registered mail, return receipt requested,
postage prepaid, as follows:

     If to the Company:

Unifi, Inc.

P. O. Box 19109

Greensboro, NC 27419-9109

ATTENTION: General Counsel (currently Charles F. McCoy)

     If to the Executive:

Mr. William L. Jasper

15 Old Saybrook Drive

Greensboro, NC 27455

or such other address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective only on receipt.

     Section 8. Miscellaneous

     (a) The invalidity or unenforceability of any provisions of this Agreement shall not affect
the validity or enforceability of any other provision of this Agreement, which shall remain in full
force and effect.

     (b) Any payment or delivery required under this Agreement shall be subject to all requirements
of the law with regard to withholding (including FICA tax), filing, making of reports and the like,
and Company shall use its best efforts to satisfy promptly all such requirements.

     Section 9. Legal Fees and Expenses The Company shall pay all reasonable legal fees
and expenses that the Executive may incur as a result of the Company’s contesting the validity,
enforceability or the Executive’s interpretation of, or determinations under, this Agreement.

     Section 10. Disclosure of Confidential Information Executive agrees that:

9

 

     (a) During the term of this Agreement and for a period of five (5) years after his Date of
Termination, he will not disclose or make available to any person or other entity any trade
secrets, Confidential Information, or “know-how” relating to the Company’s, its affiliates’ and
subsidiaries’ businesses without written authority from the Board, unless he is compelled to
disclose it by judicial process.

     (b) “Confidential Information” shall mean all information about the Company, its affiliates or
subsidiaries, or relating to any of their products, services, or any phase of their operations, not
generally known to their Competitors or which is not public information, that the Executive knows
or of which the Executive acquired knowledge during the term of his employment with the Company.

     (c) Under
no circumstances shall Executive remove from the Company’s offices any of the
Company’s books, records, documents, files, computer discs or information, reports, presentations,
customer lists, or any copies of such documents for use outside of his employment with the Company,
except as specifically authorized in writing by the Board.

     Section 11. Non-Compete

     (a) Executive agrees that, during the period of employment and for a period of two (2) years
after his Date of Termination, he will not, directly or indirectly:

     (1) Seek employment or consulting arrangements with or offer advice, suggestions, or
input to any Competitor of the Company; or

     (2) Own any interest in, other than ownership of less than two percent (2%) of any
class of stock of a publicly held corporation, manage, operate, control, be employed by,
render advisory services to, act as a consultant to, participate in, assess or be connected
with any Competitor of the Company, unless approved by the Board; or

     (3) Solicit, induce, or attempt to induce any past or current customer of the Company
(A) to cease doing business in whole or in part with or through the Company; or (B) to do
business with any other person, firm, partnership, corporation, or other entity that sells
products or performs services materially similar to or competitive with those provided by
the Company; or

     (4) Initiate, encourage, or solicit for employment any person who is now employed or
during the term of this Agreement becomes employed by the Company (or whose activities or
services are dedicated to the Company).

     (b) “Competitor” shall mean any individual, partnership, joint venture, firm, corporation,
limited liability company, business trust, association, trust, or other enterprise (whether or not
incorporated) engaged in the business of developing, producing, manufacturing, selling and/or
distributing a product or providing services similar to any product produced or

10

 

service provided by the Company, its affiliates, or subsidiaries.

     Section 12. Remedy for Violation of Sections 10 and 11 The Executive acknowledges that
the Company has no adequate remedy at law and will be irreparably harmed if the Executive breaches
or threatens to breach the provisions of Sections 10 or 11 of this Agreement, and therefore, agrees
that the Company shall be entitled to injunctive relief to prevent any breach or threatened breach
of such Sections and that the Company shall be entitled to specific performance of the terms of
such Sections in addition to any other legal or equitable remedy it may have. Nothing in this
Agreement shall be construed as prohibiting the Company from pursuing any other remedies at law or
in equity that it may have or any other rights that it may have under any other agreement.

     Section
13. Arbitration

     (a) Any dispute or controversy between the Company and the Executive, whether arising out of
or relating to this Agreement, the breach of this Agreement, or otherwise, shall be settled by
arbitration administered by the American Arbitration Association (“AAA”) in accordance with its
Commercial Arbitration Rules then in effect, and judgment on the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof. Any arbitration shall be held before a
single arbitrator who shall be selected by the mutual agreement of the Company and the Executive.
However, if the parties are unable to agree to an arbitrator, the arbitrator will be selected under
the procedures of the AAA.

     (b) The arbitrator shall have the authority to award any remedy or relief that a court of
competent jurisdiction could order or grant, including, without limitation, the issuance of an
injunction. However, either party may, without inconsistency with this arbitration provision,
apply to any court having jurisdiction over such dispute relief until the arbitration award is
rendered or the controversy is otherwise resolved.

     (c) Except as necessary in court proceedings to enforce this arbitration provision or an award
rendered hereunder or to obtain interim relief, neither a party nor an arbitrator may disclose the
existence, content or results of any arbitration hereunder without the prior written consent of the
Company and the Executive.

     (d) The Company and the Executive acknowledge that this Agreement evidences a transaction
involving interstate commerce. Notwithstanding any choice of law provision included in this
Agreement, the United States Federal Arbitration Act shall govern the interpretation and
enforcement of this arbitration provision. The arbitration proceeding shall be conducted in
Greensboro, North Carolina or such other location to which the parties may agree. The Company
shall pay the costs of any arbitrator appointed hereunder.

11

 

     Section
14. Amendment and Termination

     (a) Amendment. This Agreement may be amended by the Company at any time, or from time
to time, but no such amendment shall reduce Executive’s benefit hereunder, determined as of the
date of amendment, and provided that such amendment is approved by both the Company and the
Executive.

     (b) Termination. The Company retains the discretion to terminate this Agreement if
(i) all arrangements sponsored by the Company that would be aggregated with any terminated
arrangement under Code section 409A and Treas. Reg.
§1.409A-1(c)(2) are terminated, (ii) no payments
(other than payments that would be payable under the terms of the arrangements if the termination
had not occurred) are made within twelve (12) months of the
termination of the arrangements, (iii)
all payments are made within twenty-four (24) months of the
termination of the arrangements, (iv)
the Company does not adopt a new arrangement that would be aggregated with any terminated
arrangement under Code section 409A and the regulations thereunder at any time within the three (3)
year period following the date of termination of the arrangement, and
(v) the termination does not
occur proximate to a downturn in the financial health of the Company.

     (c) Interpretation. The termination provisions of this Section will be construed in
accordance with Treas. Reg. §1.409A-3(j)(4)(ix). Further, the Company reserves the right to amend
the Agreement to provide that termination of the Agreement will occur under such conditions and
events as may be prescribed by the Secretary of the Treasury in generally applicable guidance
published in the Internal Revenue Bulletin.

     Section
15. Section 409A Compliance. It is intended that this Agreement comply with Code
section 409A, with any Treasury Regulations promulgated thereunder, and with other generally
applicable guidance and transition rules issued thereunder. The Agreement shall be interpreted and
operated consistently with that intent. If the Company shall determine that any provision of this
Agreement does not comply with the requirements of Code section 409A, the Company shall have the
authority to amend the Agreement to the extent necessary (including retroactively) in order to
preserve compliance with Code section 409A. The Company shall also have the discretionary
authority to take such other actions as may be permissible to correct any failures to comply in
operation with the requirements of Code section 409A.

12

 

     IN WITNESS WHEREOF, Unifi, Inc. has caused this Agreement to be signed by an officer of the
Company and a member of the Company’s Compensation Committee pursuant to resolutions duly adopted
by the Board of Directors and its seal affixed hereto and the Executive has hereunto affixed his
hand and seal effective as of the date first above written.

	 	 	 	 	 	 
	 

	 	UNIFI, INC.
	 
	 	 	 	 
	 

	 	 	 	Charles F. McCoy
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Charles F. McCoy

Vice President, Secretary &

General Counsel
	 
	 	 	 	 
	 

	 	 	 	William M. Sams
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	William M. Sams

Chairman of the Compensation Committee

of the Board of Directors
	 
	 	 	 	 
	 

	 	EXECUTIVE
	 
	 	 	 	 
	 

	 	William L. Jasper
	 

	 	 	 	 	(Seal)
	 

	 	 
	 

	 	William L. Jasper

13

 

SCHEDULE A

DELAYS IN DISTRIBUTION; ACCELERATION EVENTS

     Section A.1 Permitted Delays in Payment. Distributions may be delayed beyond
the date payment would otherwise occur in accordance with the provisions of the Agreement in
any of the following circumstances.

     (a) The Company may delay payment if it reasonably anticipates that the making of the
payment will violate federal securities laws or other applicable laws, provided that payment
is made at the earliest date on which the Company reasonably anticipates that the making of
the payment will not cause such violation.

     (b) The Company reserves the right to amend the Agreement to provide for a delay in
payment on such other events and conditions as the Secretary of the Treasury may prescribe
in generally applicable guidance published in the Internal Revenue Bulletin.

     Section A.2 Permitted Acceleration Events; Cancellation of Deferral Elections.

     (a) At the Executive’s request, the Company shall permit the acceleration of the time
and form of a payment under the Agreement under the following circumstances:

     (1) A payment to the extent necessary for any federal officer in the executive
branch of the U.S. government to comply with an ethics agreement with the federal
government.

     (2) A payment to the extent reasonably necessary to avoid the violation of any
applicable ethics or conflicts of interest law in accordance with Treas. Reg.
§1.409A-3(j)(4)(iii).

     (3) A payment equal to the U.S. employment tax imposed on compensation deferred
under the Agreement, plus the amount of applicable income tax required to be
withheld at source on such amount.

     (4) If the Agreement fails to meet the requirements of Code section 409A and
the regulations promulgated thereunder, a payment not to exceed the amount required
to be included in income as a result of such failure to comply.

     (5) A payment to reflect the payment of applicable state, local, and foreign
tax obligations arising from participation in the Agreement that apply to the amount
deferred under the Agreement before the amount is paid or made available to the
Executive, in accordance with Treas. Reg. §1.409A-3(j)(4)(xi).

     (6) A payment or reduction as a satisfaction of the Executive’s debt to

14

 

the Company, where (A) such debt has been incurred in the ordinary course of
the parties’ relationship, (B) the entire amount of the payment/reduction in any of
the Executive’s tax years does not exceed $5,000, and (C) the payment/reduction is
made at the same time and in the same amount as the debt would otherwise have been
due and collected.

     (7) A payment that is part of a settlement between the Executive and the
Company of a bona fide dispute as to the Executive’s right to the deferred amount,
in accordance with Treas. Reg. §1.409A-3(j)(4)(xiv).

     (b) The Company shall permit the acceleration of the time and form of a payment to make
a lump sum payment of amounts deferred on behalf of the Executive, provided that:

     (1) The payment results in the termination and liquidation of the entirety of
the Executive’s interest hereunder and all other plans and arrangements that are
deemed to be a single nonqualified deferred compensation plan under Treas. Reg.
§1.409A-1(c)(2),

     (2) The payment is not greater than the applicable amount under Code section
402(g), and

     (3) Such payment is mandatory and is not solely at the Executive’s request.

     (c) The Company reserves the right to amend this Agreement to provide for an
acceleration of payment on such other events and conditions as the Secretary of the Treasury
may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.

15

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