Flexsteel Industries, Inc. 8-K


 


Exhibit
10.2


 





REVOLVING
LINE OF CREDIT NOTE


 


 


$10,000,000.00


Davenport,
Iowa


June
5, 2018


 


 


FOR
VALUE RECEIVED, the undersigned FLEXSTEEL INDUSTRIES, INC. ("Borrower") promises to pay to the order of WELLS FARGO
BANK, NATIONAL ASSOCIATION ("Bank") at its office at MAC F8311-012, 104 West 2nd Street, 1st Floor,
Suite 1B, Davenport, Iowa 52801-1803 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 Ten Million Dollars ($10,000,000.00), or so much thereof
as may be advanced and be outstanding pursuant to the terms of the Credit Agreement, as defined herein, with interest thereon,
to be computed on each advance from the date of its disbursement as set forth herein.


 


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)


"Daily
One Month LIBOR" means, for any day, the rate of interest equal to LIBOR then in effect for delivery for a one (1) month
period.


 


(b)


"LIBOR"
means the rate of interest per annum determined by Bank based on the rate for United States dollar deposits for delivery of funds
for one (1) month as published by the ICE Benchmark Administration Limited, a United Kingdom company, at approximately 11:00 a.m.,
London time, or, for any day not a London Business Day, the immediately preceding London Business Day (or if not so published,
then as determined by Bank from another recognized source or interbank quotation); provided, however, that if LIBOR determined
as provided above would be less than zero percent (0.0%), then LIBOR shall be deemed to be zero percent (0.0%).


 


(c)


"London
Business Day" means any day that is a day for trading by and between banks in dollar deposits in the London interbank market.


 


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)
at a fluctuating rate per annum determined by Bank to be one percent (1.00%) above Daily One Month LIBOR in effect from time to
time. Bank is hereby authorized to note the date and interest rate applicable to this Note 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)


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 domestic or foreign governmental authority and related in any manner to LIBOR, and (ii) costs, expenses
and liabilities arising from or in connection with reserve
percentages 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), 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. 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.


 




    	 	 	 



    	 



    




 


(c)


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, or upon the occurrence and during the continuance of an Event of Default, then at the
option of Bank, in its sole and absolute discretion, the outstanding principal balance of this Note shall bear interest 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 of Principal. 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 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 June 30, 2019.


 


(b)


Payment
of Interest. Interest accrued on this Note shall be payable on the last day of each month, commencing June 30, 2018, and on
the maturity date set forth above.


 


(c)


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) the Borrower’s PRESIDENT, CEO, CFO, DIRECTOR OF FINANCIAL REPORTING and COMPLIANCE or the TREASURY ADMINISTRATOR,
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 (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.


 


(d)


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.


 




    	 	 	 



    	 



    

 


PREPAYMENT:


 


Borrower
may prepay principal on this Note at any time, in any amount and without penalty. If principal under this Note is payable in more
than one installment, then any prepayments of principal shall be applied to the most remote principal installment or installments
then unpaid.


 


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 June 30, 2016, 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.


 


MISCELLANEOUS:


 


(a)


Remedies.
Upon the sale, transfer, hypothecation, assignment or other encumbrance, whether voluntary, involuntary or by operation of law,
of all or any interest in any real property securing this Note, if any, or 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 whether or not suit is brought, 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.


 


(b)


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.


 


(c)


Governing
Law. This Note shall be governed by and construed in accordance with the laws of Iowa, but giving effect to federal laws applicable
to national banks, without reference to the conflicts of law or choice of law principles thereof.


 


(d)


Acknowledgment.
Borrower acknowledges receipt of a copy of this Note signed by Borrower.


 


IMPORTANT:
READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE.
NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS
AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT. THIS NOTICE ALSO APPLIES
TO ANY OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN YOU AND THIS LENDER.


 




    	 	 	 



    	 



    




 


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


 





	FLEXSTEEL
INDUSTRIES, INC.	 
	 	 
	 	 
	By:	/s/ Marcus Hamilton	 	 
	 	MARCUS
HAMILTON, CFO