Document:

Exhibit 10.1

 

FIRST AMENDMENT
TO CREDIT AGREEMENT

 

 

THIS AMENDMENT TO CREDIT AGREEMENT (this "Amendment")
is entered into as of June 30, 2017, by and between FLEXSTEEL INDUSTRIES, INC., a Minnesota corporation ("Borrower"),
and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank").

 

RECITALS

 

WHEREAS, Borrower is currently indebted to Bank
pursuant 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 ("Credit Agreement").

 

WHEREAS, Bank and Borrower have agreed to certain
changes in the terms and conditions set forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect
said changes.

 

NOW, THEREFORE, for valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as
follows:

 

1.       Section
1.1. (a) is hereby amended by deleting "June 30, 2017" as the last day on which Bank will make advances under the Line
of Credit, and by substituting for said date "June 30, 2018," with such change to be effective upon the execution and
delivery to Bank of a promissory note dated as of June 30, 2017 (which promissory note shall replace and be deemed the Line of
Credit Note defined in and made pursuant to the Credit Agreement) and all other contracts, instruments and documents required by
Bank to evidence such change.

 

2.       Section 1.2.
(c) is hereby deleted in its entirety, and the following substituted therefor:

 

       "(c)     Unused Commitment Fee. Borrower shall
pay to Bank a fee equal to one and twenty-five hundredths percent (0.125%) per annum (computed on the basis of a 360-day year,
actual days elapsed) on the daily unused amount of the Line of Credit, which fee shall be calculated on a quarterly basis by Bank
and shall be due and payable by Borrower in arrears on the last day of each quarter, commencing on September 30, 2017."

 

3.       Except
as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver
or modification. All terms defined in the Credit Agreement shall have the same meaning when used in this Amendment. This Amendment
and the Credit Agreement shall be read together, as one document.

 

4.       Borrower
hereby remakes all representations and warranties contained in the Credit Agreement and reaffirms all covenants set forth therein.
Borrower further certifies that as of the date of this Amendment there exists no Event of Default as defined in the Credit Agreement,
nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event
of Default.

 

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5.       Borrower
acknowledges receipt of a copy of this Amendment signed by the parties hereto.

 

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 parties hereto have caused
this Amendment to be executed as of the day and year first written above.

 

	 	 	 	WELLS FARGO BANK,
	FLEXSTEEL INDUSTRIES, INC	 	NATIONAL ASSOCIATION
	 	 	 	 	 	 
	By:	/s/Timothy E. Hall	 	By:  	 	/s/ James J. Hilgenberg	 
	 	TIMOTHY E. HALL,	 	 	 	JAMES J. HILGENBERG,
	 	SR. VP FINANCE, CFO, SECRETARY	 	 	 	VICE PRESIDENT
	 	TREASURER	 	 	 	 

 

    	-2-Exhibit 10.2

 

REVOLVING LINE
OF CREDIT NOTE

 

 

	$10,000,000.00	Davenport, Iowa
	 	June 30, 2017

 

 

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 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, 2018.

 

(b)       Payment
of Interest. Interest accrued on this Note shall be payable on the last day of each month, commencing July 31, 2017, 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.

 

    	-2-

     

    

 

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.

 

 

    	-3-

     

    

 

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	 

 

    	-4-

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