Exhibit
10.2


 


REVOLVING LINE OF CREDIT NOTE


 


 


	$10,000,000.00	Davenport, Iowa

June 30, 2016


 


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 N8200-026, 666 Walnut Street, 2nd Floor, Des Moines, Iowa 50309 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


 




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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, 2017.


 


(b)     Payment of Interest.
Interest accrued on this Note shall be payable on the last day of each month, commencing July 31, 2016.


 


(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.


 




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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.


 




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


 


 


	FLEXSTEEL INDUSTRIES, INC.
	 	 
	By:  	/s/ Timothy E. Hall
	 	TIMOTHY E. HALL, SR. VP FINANCE,

CFO, SECRETARY, TREASURER


 


 


 


 



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