Exhibit 10.2


 


REVOLVING LINE OF CREDIT NOTE


 


 


	$10,000,000.00	Davenport, Iowa
	 	June 28, 2013


 


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 666 Walnut Street, 2nd Floor, Des Moines, Iowa, 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, 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 Iowa are authorized or required
by law to close.


 


(b)         "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.


 


(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, for delivery of funds for one (1) month in an amount equal to the outstanding principal balance of this Note.
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 term of this Note.


 


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.
Each change in the rate of interest hereunder shall become effective on each


 




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Business Day a change in Daily One Month LIBOR is announced within Bank. 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) 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.


 


(c)         Payment
of Interest.  Interest accrued on this Note shall be payable on the last day of each month, commencing July 31, 2013.


 


(d)         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 at Bank's option upon the occurrence, and during the continuance of an Event of
Default, 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.  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, 2014.


 


(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)
Timothy E. Hall, Dawn Rinehart, Rita K. Kelly or Carl J. Breen, 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


 




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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.


 


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 April 14, 2010, 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 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 Iowa.


 


(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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