Exhibit 10.2

 

WELLS FARGO

 

REVOLVING LINE OF CREDIT NOTE

 

 

 

$10,000,000.00

 

West Covina, California

 

 

December 28, 2007

 

FOR VALUE RECEIVED, the undersigned Willdan Group, Inc. (“Borrower”) promises to
pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its
office at San Gabriel Valley RCBO, 1000 Lakes Drive, Suite #250, West Covina, CA
91790, or at such other place as the holder hereof may designate, in lawful
money of the United States of America and in immediately available funds, the
principal sum of $10,000,000.00, or so much thereof as may be advanced and be
outstanding, with interest thereon, to be computed on each advance from the date
of its disbursement as set forth herein.

 

1.                         DEFINITIONS:

 

As used herein, the following terms shall have the meanings set forth after
each, and any other term defined in this Note shall have the meaning set forth
at the place defined:

 

1.1                     “Business Day” means any day except a Saturday, Sunday
or any other day on which commercial banks in California are authorized or
required by law to close.

 

1.2                     “Fixed Rate Term” means a period commencing on a
Business Day and continuing for 1, 2 or 3 months, as designated by Borrower,
during which all or a portion of the outstanding principal balance of this Note
bears interest determined in relation to LIBOR; provided however, that no Fixed
Rate Term may be selected for a principal amount less than $100,000.00; and
provided further, that no Fixed Rate Term shall extend beyond the scheduled
maturity date hereof. If any Fixed Rate Term would end on a day which is not a
Business Day, then such Fixed Rate Term shall be extended to the next succeeding
Business Day.

 

1.3                     “LIBOR” means the rate per annum (rounded upward, if
necessary, to the nearest whole 1/8 of 1%) determined by dividing Base LIBOR by
a percentage equal to 100% less any LIBOR Reserve Percentage.

 

(a)                       “Base LIBOR” means the rate per annum for United
States dollar deposits quoted by Bank as the Inter-Bank Market Offered Rate,
with the understanding that such rate is quoted by Bank for the purpose of
calculating effective rates of interest for loans making reference thereto, on
the first day of a Fixed Rate Term for delivery of funds on said date for a
period of time approximately equal to the number of days in such Fixed Rate Term
and in an amount approximately equal to the principal amount to which such Fixed
Rate Term applies. Borrower understands and agrees that Bank may base its
quotation of the Inter-Bank Market Offered Rate upon such offers or other market
indicators of the Inter-Bank Market as Bank in its discretion deems appropriate
including, but not limited to, the rate offered for U.S. dollar deposits on the
London Inter-Bank Market.

 

(b)                      “LIBOR Reserve Percentage” means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for “Eurocurrency Liabilities” (as defined in Regulation D of the
Federal Reserve Board, as amended), adjusted by Bank for expected changes in
such reserve percentage during the applicable Fixed Rate Term.

 

1.4                     “Prime Rate” means at any time the rate of interest most
recently announced within Bank at its principal office as its Prime Rate, with
the understanding that the Prime Rate is one of Bank’s base rates and serves as
the basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.

 

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2.                         INTEREST:

 

2.1                     Interest. The outstanding principal balance of this Note
shall bear interest (computed on the basis of a 360-day year, actual days
elapsed) either (a) at a fluctuating rate per annum 0.50000% below the Prime
Rate in effect from time to time, or (b) at a fixed rate per annum determined by
Bank to be 1.25000% above LIBOR in effect on the first day of the applicable
Fixed Rate Term. When interest is determined in relation to the Prime Rate, each
change in the rate of interest hereunder shall become effective on the date each
Prime Rate change is announced within Bank. With respect to each LIBOR selection
option selected hereunder, Bank is hereby authorized to note the date, principal
amount, interest rate and Fixed Rate Term applicable thereto and any payments
made thereon on Bank’s books and records (either manually or by electronic
entry) and/or on any schedule attached to this Note, which notations shall be
prima facie evidence of the accuracy of the information noted.

 

2.2                     Selection of Interest Rate Options. At any time any
portion of this Note bears interest determined in relation to LIBOR, it may be
continued by Borrower at the end of the Fixed Rate Term applicable thereto so
that all or a portion thereof bears interest determined in relation to the Prime
Rate or to LIBOR for a new Fixed Rate Term designated by Borrower. At any time
any portion of this Note bears interest determined in relation to the Prime
Rate, Borrower may convert all or a portion thereof so that it bears interest
determined in relation to LIBOR for a Fixed Rate Term designated by Borrower. At
such time as Borrower requests an advance hereunder or wishes to select a LIBOR
option for all or a portion of the outstanding principal balance hereof, and at
the end of each Fixed Rate Term, Borrower shall give Bank notice specifying:
(a) the interest rate option selected by Borrower: (b) the principal amount
subject thereto: and (c) for each LIBOR selection, the length of the applicable
Fixed Rate Term. Any such notice may be given by telephone (or such other
electronic method as Bank may permit) so long as, with respect to each LIBOR
selection, (i) if requested by Bank, Borrower provides to Bank written
confirmation thereof not later than 3 Business Days after such notice is given,
and (ii) such notice is given to Bank prior to 10:00 a.m. on the first day of
the Fixed Rate Term, or at a later time during any Business Day if Bank, at it’s
sole option but without obligation to do so, accepts Borrower’s notice and
quotes a fixed rate to Borrower. If Borrower does not immediately accept a fixed
rate when quoted by Bank, the quoted rate shall expire and any subsequent LIBOR
request from Borrower shall be subject to a redetermination by Bank of the
applicable fixed rate. If no specific designation of interest is made at the
time any advance is requested hereunder or at the end of any Fixed Rate Term,
Borrower shall be deemed to have made a Prime Rate interest selection for such
advance or the principal amount to which such Fixed Rate Term applied.

 

2.3                      Taxes and Regulatory Costs. Borrower shall pay to Bank
immediately upon demand, in addition to any other amounts due or to become due
hereunder, any and all (a) withholdings, interest equalization taxes, stamp
taxes or other taxes (except income and franchise taxes) imposed by any domestic
or foreign governmental authority and related in any manner to LIBOR, and
(b) future, supplemental, emergency or other changes in the LIBOR Reserve
Percentage, assessment rates imposed by the Federal Deposit Insurance
Corporation, or similar requirements or costs imposed by any domestic or foreign
governmental authority or resulting from compliance by Bank with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority and related in any manner to LIBOR to the extent
they are not included in the calculation of LIBOR. In determining which of the
foregoing are attributable to any LIBOR option available to Borrower hereunder,
any reasonable allocation made by Bank among its operations shall be conclusive
and binding upon Borrower.

 

2.4                      Payment of Interest. Interest accrued on this Note
shall be payable on the 1st day of each month, commencing January 1, 2008.

 

2.5                      Default Interest. From and after the maturity date of
this Note, or such earlier date as all principal owing hereunder becomes due and
payable by acceleration or otherwise, the outstanding principal balance of this
Note shall bear interest until paid in full at an increased rate per annum
(computed on the basis of a 360-day year, actual days elapsed) equal to 4% above
the rate of interest from time to time applicable to this Note.

 

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3.                         BORROWING AND REPAYMENT:

 

3.1                      Borrowing and Repayment. Borrower may from time to time
during the term of this Note borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions of this Note and of the Credit Agreement between Borrower and Bank
defined below; provided however, that the total outstanding borrowings under
this Note shall not at any time exceed the principal amount stated above. The
unpaid principal balance of this obligation at any time shall be the total
amounts advanced hereunder by the holder hereof less the amount of principal
payments made hereon by or for Borrower, which balance may be endorsed hereon
from time to time by the holder. The outstanding principal balance of this Note
shall be due and payable in full on January 1, 2010.

 

3.2                      Advances. Advances hereunder, to the total amount of
the principal sum available hereunder, may be made by the holder at the oral or
written request of (a) Thomas D. Brisbin, Mallory McCamant, Kimberly D. Gant,
Roy Gill and Kate Nguyen, any one acting alone, who are authorized to request
advances and direct the disposition of any advances until written notice of the
revocation of such authority is received by the holder at the office designated
above, or (b) any person, with respect to advances deposited to the credit of
any deposit account of Borrower, which advances, when so deposited, shall be
conclusively presumed to have been made to or for the benefit of Borrower
regardless of the fact that persons other than those authorized to request
advances may have authority to draw against such account. The holder shall have
no obligation to determine whether any person requesting an advance is or has
been authorized by Borrower.

 

3.3                      Application of Payments. Each payment made on this Note
shall be credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
LIBOR, with such payments applied to the oldest Fixed Rate Term first.

 

4.                         PREPAYMENT:

 

4.1                      Prime Rate. Borrower may prepay principal on any
portion of this Note which bears interest determined in relation to the Prime
Rate at any time, in any amount and without penalty.

 

4.2                      LIBOR. Borrower may prepay principal on any portion of
this Note which bears interest determined in relation to LIBOR at any time and
in the minimum amount of $100,000.00; provided however, that if the outstanding
principal balance of such portion of this Note is less than said amount, the
minimum prepayment amount shall be the entire outstanding principal balance
thereof. In consideration of Bank providing this prepayment option to Borrower,
or if any such portion of this Note shall become due and payable at any time
prior to the last day of the Fixed Rate Term applicable thereto by acceleration
or otherwise, Borrower shall pay to Bank immediately upon demand a fee which is
the sum of the discounted monthly differences for each month from the month of
prepayment through the month in which such Fixed Rate Term matures, calculated
as follows for each such month:

 

(a)                       Determine the amount of interest which would have
accrued each month on the amount prepaid at the interest rate applicable to such
amount had it remained outstanding until the last day of the Fixed Rate Term
applicable thereto.

 

(b)                      Subtract from the amount determined in (a) above the
amount of interest which would have accrued for the same month on the amount
prepaid for the remaining term of such Fixed Rate Term at LIBOR in effect on the
date of prepayment for new loans made for such term and in a principal amount
equal to the amount prepaid.

 

(c)                       If the result obtained in (b) for any month is greater
than zero, discount that difference by LIBOR used in (b) above.

 

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Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Borrower, therefore, agrees to pay the above-described prepayment
fee and agrees that said amount represents a reasonable estimate of the
prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to pay
any prepayment fee when due, the amount of such prepayment fee shall thereafter
bear interest until paid at a rate per annum 2.000% above the Prime Rate in
effect from time to time (computed on the basis of a 360-day year, actual days
elapsed).

 

5.                         EVENTS OF DEFAULT:

 

This Note is made pursuant to and is subject to the terms and conditions of that
certain Credit Agreement between Borrower and Bank dated as of December 28,
2007, as amended from time to time (the “Credit Agreement”). Any default in the
payment or performance of any obligation under this Note, or any defined event
of default under the Credit Agreement, shall constitute an “Event of Default”
under this Note.

 

6.                         MISCELLANEOUS:

 

6.1                      Remedies. Upon the occurrence of any Event of Default,
the holder of this Note, at the holder’s option, may declare all sums of
principal and interest outstanding hereunder to be immediately due and payable
without presentment, demand, notice of nonperformance, notice of protest,
protest or notice of dishonor, all of which are expressly waived by Borrower,
and the obligation, if any, of the holder to extend any further credit hereunder
shall immediately cease and terminate. Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys’ fees (to include outside
counsel fees and all allocated costs of the holder’s in-house counsel), expended
or incurred by the holder in connection with the enforcement of the holder’s
rights and/or the collection of any amounts which become due to the holder under
this Note, and the prosecution or defense of any action in any way related to
this Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to
Borrower or any other person or entity.

 

6.2                      Obligations Joint and Several. Should more than one
person or entity sign this Note as a Borrower, the obligations of each such
Borrower shall be joint and several.

 

6.3                      Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of California.

 

IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first
written above.

 

Willdan Group, Inc.

 

 

 

By:

 /s/  Kimberly D. Gant

 

 

 

  Kimberly D. Gant

 

Title:

  Chief Financial Officer

 

 

 

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ADDENDUM TO PROMISSORY NOTE
(PRIME/LIBOR PRICING ADJUSTMENTS)

 

THIS ADDENDUM is attached to and made a part of that certain promissory note
executed by WILLDAN GROUP, INC. (“Borrower”) and payable to WELLS FARGO BANK,
NATIONAL ASSOCIATION (“Bank”), or order, dated as of December 28, 2007, in the
principal amount of Ten Million Dollars ($10,000,000.00) (the “Note”).

 

The following provisions are hereby incorporated into the Note to reflect the
interest rate adjustments agreed to by Bank and Borrower:

 

INTEREST RATE ADJUSTMENTS:

 

(a)                              Initial Interest Rates. The initial interest
rates applicable to this Note shall be the rates set forth in the “Interest”
paragraph herein.

 

(b)                             Interest Rate Adjustments. In addition to any
interest rate adjustments resulting from changes in the Prime Rate, Bank shall
adjust the Prime Rate and LIBOR margins used to determine the rates of interest
applicable to this Note on a quarterly basis, commencing with Borrower’s fiscal
quarter ending March 28, 2008, if required to reflect a change in Borrower’s
ratio of Total Funded Debt to EBITDA (as defined in the Credit Agreement
referenced herein), in accordance with the following grid:

 

 

 

Applicable

 

Applicable

 

Total Funded Debt to

 

Prime Rate

 

LIBOR

 

EBITDA

 

Margin

 

Margin

 

 

 

 

 

 

 

at least 1.75 to 1.0 but less than 2.50 to 1.0

 

0

%

1.75

%

 

 

 

 

 

 

at least 1.25 to 1.0 but less than 1.75 to 1.0

 

-0.25

%

1.50

%

 

 

 

 

 

 

less than 1.25 to 1.0

 

-0.50

%

1.25

%

 

Each such adjustment shall be effective on the first Business Day of Borrower’s
fiscal quarter following the quarter during which Bank receives and reviews
Borrower’s most current fiscal quarter-end financial statements in accordance
with any requirements established by Bank for the preparation and delivery
thereof.

 

IN WITNESS WHEREOF, this Addendum has been executed as of the same date as the
Note.

 

Willdan Group, Inc.

 

 

 

By:

 /s/  Kimberly D. Gant

 

 

 

  Kimberly D. Gant

 

Title:

  Chief Financial Officer

 

 

 

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