Exhibit 10.2


 


REVOLVING LINE OF CREDIT NOTE


 


	
  $5,000,000.00

  	
  West Covina, California

  
	
   

  	
  December 1, 2008

  



 


FOR
VALUE RECEIVED, the undersigned WILLDAN GROUP, INC. (“Borrower”) promises to
pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its San
Gabriel Valley Regional Commercial Banking Office at 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 Five Million Dollars ($5,000,000.00), 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.


 


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)           “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.


 


(b)           “Fixed Rate Term”
means a period commencing on a Business Day and continuing for one (1), three (3) or
six (6) month(s), 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 One Hundred Thousand Dollars ($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.


 


(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


 


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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 one-half percent
(0.50%) below the Prime Rate in effect from time to time, or (ii) at a
fixed rate per annum determined by Bank to be one and one-quarter percent
(1.25%) 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
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: (1) 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. 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 its 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


 


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franchise
taxes) imposed by any domestic or foreign 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 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.


 


(d)           Payment of
Interest. Interest
accrued on this Note shall be payable on the 1st day of each month, commencing January 1,
2009.


 


(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 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.


 


(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) Thomas D. Brisbin or Mallory McCamant or Kimberly
D. Gant or Roy Gill or 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 (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.


 


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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.


 


(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 One Hundred Thousand Dollars ($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:


 


(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 (2.0%) above the Prime Rate in effect from
time to time (computed on the basis of a 360-day year, actual days elapsed).


 


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.


 


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MISCELLANEOUS:


 


(a)           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.


 


(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 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

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  CFO

  	
   

  
				



 


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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 1, 2008, in
the principal amount of Five Million Dollars ($5,000,000.00) (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 October 26, 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:


 


	
  Total Funded Debt to

  EBITDA

  	
   

  	
  Applicable

  Prime Rate

  Margin

  	
   

  	
  Applicable

  LIBOR

  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

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  CFO