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.


 


1

















 


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.


 


2

















 


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.


 


3

















 


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

  	
   

  	
   

  
								



 


4

















 


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

  	
   

  	
   

  
							



 


1