EXHIBIT 10.2
REVOLVING LINE OF CREDIT NOTE

      $65,000,000   West Covina, California
March 12, 2008

     FOR VALUE RECEIVED, the undersigned VIRCO MFG. CORPORATION (“Borrower”)
promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”)
at its office at San Gabriel Valley Regional Commercial Banking Office, 1000
Lakes Drive, Suite 250, West Covina, California, 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 Sixty Five Million Dollars
($65,000,000), 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.
     This Revolving Line of Credit Note (this “Note”) is the Line of Credit Note
issued pursuant to the Second Amended and Restated Credit Agreement dated as of
March 12, 2008 (as amended, restated, supplemented or otherwise modified, the
“Credit Agreement”) between Borrower and Bank. Terms defined in the Credit
Agreement and not otherwise defined herein are used herein as therein defined.
Reference hereby is made to the Loan Documents for a description of the assets
in which a Lien has been granted, the nature and extent of the security and the
guaranties, the terms and conditions upon which the Liens and each guaranty were
granted and the rights of the holder of this Note in respect thereof.
     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:
     (a) “Applicable Margin” means the following percentages per annum, based
upon the Consolidated EBITDA as set forth in the most recent Compliance
Certificate received by Bank pursuant to Section 4.3(f) of the Credit Agreement:

                          Trailing 12 month         Tier   Consolidated EBITDA  
LIBOR Margin   Prime Rate Margin I  
<$17,999,999
    2.50       0.0   II  
$18,000,000 to $19,999,999
    2.25       0.0   III  
$20,000,000 to $21,999,999
    2.00       -0.25   IV  
> $22,000,000
    1.75       -0.50  

Any increase or decrease in the Applicable Margin resulting from a change in the
Consolidated EBITDA for any relevant period shall become effective as of the
first Business Day immediately following the date a Compliance Certificate is
delivered pursuant to Section 4.3(f); provided, however, that if a Compliance
Certificate is not delivered when due in accordance with such Section, then
Pricing Tier 1 shall apply as of the first Business Day after the date on which
such Compliance Certificate was required to have been delivered. The Applicable
Margin in effect from the Closing Date through the date that the Compliance
Certificate (and audited financial

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statements) required to be delivered for the fiscal year ended January 31, 2008
is delivered to Bank shall be determined based upon Pricing Tier 1.
     (b) “Fixed Rate Term” means a period commencing on a Business Day and
continuing for one (1), two (2), three (3), six (6), nine (9) or twelve
(12) 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 $1,000,000; and provided further, that no Fixed Rate
Term shall extend beyond the Line of Credit Termination Date. 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.
     (c) “LIBOR” means the rate per annum (rounded upward, if necessary, to the
nearest whole 1/8 of 1%) and determined pursuant to the following formula:

             
 
  LIBOR =   Base LIBOR    
 
     
 
100% - LIBOR Reserve Percentage    

     (i) “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.
     (ii) “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.
     (d) “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.
INTEREST:
     (a) Interest. The outstanding principal balance of this Note shall bear
interest (computed on the basis of a 360-day year, actual days elapsed) either
(i) at a fluctuating rate per annum equal to the Prime Rate in effect from time
to time plus the Applicable Margin or (ii) at a fixed rate per annum determined
by Bank equal to LIBOR in effect on the first day of the

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applicable Fixed Rate Term plus the Applicable Margin. 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 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.
     (b) 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: (i) the
interest rate option selected by Borrower; (ii) the principal amount subject
thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed
Rate Term; provided, however, that if an Event of Default has occurred and is
continuing, Borrower may not elect to continue or convert any Advance
outstanding hereunder into a LIBOR rate loan. 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, (A) if requested by Bank, Borrower provides to
Bank written confirmation thereof not later than three (3) Business Days after
such notice is given, and (B) 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.
     (c) 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 (i) withholdings, interest equalization taxes, stamp taxes or other taxes
(except income and franchise taxes) imposed by any Governmental Authority and
related in any manner to LIBOR, and (ii) 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 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.

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     (d) Payment of Interest. Interest accrued on this Note shall be payable on
the first day of each month, commencing March 1, 2008.
     (e) 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 four percent (4%) above
the rate of interest from time to time applicable to this Note.
BORROWING AND REPAYMENT:
     (a) 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 any document executed in connection with or governing this Note; provided
however, that the total outstanding borrowings under this Note shall not at any
time exceed the principal amount set forth above or such lesser amount as shall
at any time be available hereunder, as set forth in the Credit Agreement. 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 any 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 Line of Credit Termination Date.
     (b) Advances. Advances hereunder, to the total amount of the principal sum
stated above, may be made by the holder at the oral or written request of
(i) Robert A. Virtue, Robert Dose, Doug Virtue or Bassey Yau, any one of them
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 (ii) 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.
     (c) 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.
PREPAYMENT:
     (a) 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.

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     (b) 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 $1,000,000; 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:
     (i) 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.
     (ii) Subtract from the amount determined in (i) 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.
     (iii) If the result obtained in (ii) for any month is greater than zero,
discount that difference by LIBOR used in (ii) above.
     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 two percent (2%) above the Prime
Rate in effect from time to time (computed on the basis of a 360 day year,
actual days elapsed). Each change in the rate of interest on any such past due
prepayment fee shall become effective on the date each Prime Rate change is
announced within Bank.
     (c) The principal Indebtedness evidenced hereby shall be payable as follows
and without set off, counterclaim or reduction of any kind:
     (i) the amount, if any, by which the LC Usage Amount at any time exceeds
the Maximum Line of Credit Amount at such date shall be payable immediately; and
     (ii) the principal Indebtedness evidenced hereby shall be payable on the
Line of Credit Termination Date
EVENTS OF DEFAULT:
     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.

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MISCELLANEOUS:
     (a) 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.
     (b) Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of California.
[Signature Page Follows]

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

            VIRCO MFG. CORPORATION
      By:   /s/ Robert E. Dose        Robert E. Dose        Vice President –
Finance, Secretary and Treasurer     

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