Exhibit 10.1

 

 

 

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AMENDED AND RESTATED

CREDIT AGREEMENT

 

dated to be effective as of

 

September 30, 2010

 

among

 

SUPREME INDUSTRIES, INC.,

SUPREME INDIANA OPERATIONS, INC.,

SUPREME MID-ATLANTIC CORPORATION,

SUPREME TRUCK BODIES OF CALIFORNIA, INC.,

SUPREME CORPORATION OF TEXAS,

SUPREME NORTHWEST, L.L.C.,

 

THE OTHER LOAN PARTIES,

 

and

 

JPMORGAN CHASE BANK, N.A.

 

 

 

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TABLE OF CONTENTS

 

 

Page

 

 

ARTICLE I Definitions

1

Defined Terms

1

Classification of Loans and Borrowings

23

Terms Generally

23

Accounting Terms; GAAP

23

 

 

ARTICLE II The Credits

23

Commitment

23

SECTION 2.02. Loans and Borrowings

24

SECTION 2.03. Borrowing Procedures; Requests for Revolving Borrowings

25

Protective Advances

26

SECTION 2.05. Workers Comp Letter of Credit

26

Funding of Borrowings

28

SECTION 2.07. Interest Elections

28

SECTION 2.08. Termination of Commitment

29

SECTION 2.09. Repayment of Loans; Evidence of Debt

30

SECTION 2.10. Prepayment of Loans

31

SECTION 2.11. Fees

33

SECTION 2.12. Interest

34

Alternate Rate of Interest

34

SECTION 2.14. Increased Costs

35

Break Funding Payments

36

SECTION 2.16. [This Section Reserved]

36

SECTION 2.17. Payments Generally; Allocation of Proceeds; Sharing of Set-offs

36

Indemnity for Returned Payments

37

 

 

ARTICLE III Representations and Warranties

37

Organization; Powers

37

Authorization; Enforceability

37

Governmental Approvals; No Conflicts

38

 

38

SECTION 3.05. Properties

38

SECTION 3.06. Litigation and Environmental Matters

38

Compliance with Laws and Agreements

39

Investment Company Status

39

Taxes

39

ERISA

39

Disclosure

39

Material Agreements

40

Solvency

40

Insurance

40

Subsidiaries

40

Security Interest in Collateral

40

Employment Matters

40

Affiliate Transactions

40

Common Enterprise

41

Reorganization Transactions

41

 

 

ARTICLE IV Conditions

41

Effective Date

41

 

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Each Credit Event

44

Post-closing Conditions

44

 

 

ARTICLE V Affirmative Covenants

44

Financial Statements; Borrowing Base and Other Information

44

Notices of Material Events

47

Existence; Conduct of Business

47

Payment of Obligations

47

Maintenance of Properties

48

Books and Records; Inspection Rights

48

Compliance with Laws

48

Use of Proceeds

48

Insurance

48

Casualty and Condemnation

48

Appraisals

49

Depository Banks

49

SECTION 5.13. Additional Collateral; Further Assurances

49

 

 

ARTICLE VI Negative Covenants

50

Indebtedness

50

Liens

51

SECTION 6.03. Fundamental Changes

52

Investments, Loans, Advances, Guarantees and Acquisitions

52

Asset Sales

52

Sale and Leaseback Transactions

53

Swap Agreements

53

SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness

53

Transactions with Affiliates

54

Restrictive Agreements

54

Amendment of Material Documents

55

SECTION 6.12. Financial Covenants

55

Accounting Policies/Change of Business

55

 

 

ARTICLE VII Events of Default

55

 

 

ARTICLE VIII Miscellaneous

58

SECTION 8.01. Notices

58

SECTION 8.02. Waivers; Amendments

59

SECTION 8.03. Expenses; Indemnity; Damage Waiver

60

SECTION 8.04. Successors and Assigns

61

Survival

62

Counterparts; Integration; Effectiveness

62

Severability

62

Right of Setoff

63

SECTION 8.09. Governing Law; Jurisdiction; Consent to Service of Process

63

WAIVER OF JURY TRIAL

63

Headings

64

Confidentiality

64

Nonreliance; Violation of Law

64

USA PATRIOT Act

64

Disclosure

64

Interest Rate Limitation

64

Amendment and Restatement of Former Credit Agreement

65

 

 

ARTICLE IX Loan Guaranty

65

Guaranty

65

 

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Guaranty of Payment

65

SECTION 9.03. No Discharge or Diminishment of Loan Guaranty

65

Defenses Waived

66

Rights of Subrogation

66

Reinstatement; Stay of Acceleration

66

Information

66

Termination

67

Taxes

67

Maximum Liability

67

Contribution

67

Liability Cumulative

68

Amendment and Restatement

68

 

SCHEDULES:

 

Minimum Required EBITDA Schedule

 

Schedule 1.01 – Raw Material Inventory

 

Schedule 2.05 - Allocable Shares of Borrowers

 

Schedule 3.05 - Properties

 

Schedule 3.06 - Disclosed Matters

 

Schedule 3.14 - Insurance

 

Schedule 3.15 - Capitalization and Subsidiaries

 

Schedule 3.18 - Affiliate Transactions

 

Schedule 6.01 - Existing Indebtedness

 

Schedule 6.02 - Existing Liens

 

Schedule 6.04 - Existing Investments

 

Schedule 6.10 - Existing Restrictions

 

Schedule 9.13 – Amended and Restated Guaranties

 

 

 

EXHIBITS:

 

 

 

Exhibit A - Form of Borrowing Base Certificate

 

Exhibit B - Form of Compliance Certificate

 

Exhibit C - Joinder Agreement

 

 

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AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 30, 2010 (as it may
be amended or modified from time to time, this “Agreement”), by and among
SUPREME INDUSTRIES, INC., SUPREME INDIANA OPERATIONS, INC., SUPREME MID-ATLANTIC
CORPORATION, SUPREME TRUCK BODIES OF CALIFORNIA, INC., SUPREME CORPORATION OF
TEXAS, SUPREME NORTHWEST, L.L.C., the other Loan Parties party hereto, and
JPMORGAN CHASE BANK, N.A., a national banking association.

 

The parties hereto agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01.  Defined Terms.  As used in this Agreement, the following terms
have the meanings specified below:

 

“Account” has the meaning assigned to such term in the Security Agreements.

 

“Account Debtor” means any Person obligated on an Account.

 

“Acquisition” means any transaction, or any series of related transactions,
consummated on or after the Effective Date, by which any Loan Party (a) acquires
any going business or all or substantially all of the assets of any Person,
whether through purchase of assets, merger or otherwise or (b) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the Equity
Interests of a Person which has ordinary voting power for the election of
directors or other similar management personnel of a Person (other than Equity
Interests having such power only by reason of the happening of a contingency) or
a majority of the outstanding Equity Interests of a Person.

 

“Adjusted LIBO Rate” means, with respect to any Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by
(b) the Statutory Reserve Rate.

 

“Adjusted One Month LIBOR Rate” means, for any day, an interest rate per annum
equal to the sum of (i) 2.50% per annum, plus (ii) the Adjusted LIBO Rate for a
one month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day); provided that, for the avoidance of doubt,
the Adjusted LIBO Rate for any day shall be based on the rate appearing on the
Reuters Screen LIBOR01 Page (or on any successor or substitute page) at
approximately 11:00 a.m. London time on such day (without any rounding).

 

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

 

“Allocable Share” means, with respect to each Borrower set forth below, the
applicable percentage set forth below under the caption “Allocable Share.”

 

Borrower

 

Allocable Share

 

 

 

 

 

SIOperations

 

30

%

 

 

 

 

SCTexas

 

15

%

 

 

 

 

SMid-Atlantic

 

35

%

 

 

 

 

SNorthwest

 

5

%

 

 

 

 

STBCalifornia

 

15

%

 

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“Annualized EBITDA” means (a) for the two consecutive Fiscal Quarters of
SIndustries ending September 25, 2010, an amount equal to EBITDA for such two
consecutive Fiscal Quarters multiplied by two, and (b) for the three consecutive
Fiscal Quarters of SIndustries ending December 25, 2010, an amount equal to
EBITDA for such three consecutive Fiscal Quarters multiplied by four thirds.

 

“Applicable Rate” means, for any day, with respect to any CBFR Loan or
Eurodollar Revolving Loan, or with respect to the commitment fees payable
hereunder, as the case may be, (a) from and after the Effective Date through
November 30, 2010 (or if an Event of Default has occurred and is continuing on
that date, through the date such Event of Default is cured or the Lender waives
such Event of Default in writing), (i) with respect to any CBFR Loan, a rate
equal to 2.35% per annum; (ii) with respect to any Eurodollar Revolving Loan, a
rate equal to 4.80% per annum; and (iii) with respect to the commitment fees
payable pursuant to Section 2.11(a) of this Agreement, a rate equal to 0.50% per
annum, and (b) from and after the December 1, 2010 (or such later date as any
Event of Default existing on November 30, 2011 is cured or waived by the Lender
in writing), the applicable rate per annum set forth below under the caption
“CBFR Spread”, “Eurodollar Spread” or “Commitment Fee Rate”, as the case may be,
based upon the Funded Debt to EBITDA Ratio of SIndustries’ and its Subsidiaries
as of the most recent determination date:

 

Funded Debt to
EBITDA Ratio

 

CBFR
Spread

 

Eurodollar
Spread

 

Commitment Fee
Rate

 

Category 1
Less than 3.0 to 1.0

 

1.00

%

3.35

%

0.20

%

Category 2
Less than 3.5 to 1.0, but greater than or equal to 3.0 to 1.0

 

1.25

%

3.60

%

0.30

%

Category 3
Less than 4.0 to 1.0, but greater than or equal to 3.5 to 1.0

 

1.50

%

3.85

%

0.40

%

Category 4
Greater than or equal to 4.0 to 1.0

 

1.75

%

4.10

%

0.50

%

 

For purposes of the foregoing, (a) beginning with the Fiscal Quarter ending
September 25, 2010, the Applicable Rate shall be determined as of the end of
each Fiscal Quarter of SIndustries based upon the Funded Debt to EBITDA Ratio of
SIndustries and its Subsidiaries as of the close of such Fiscal Quarter and
(b) each change in the Applicable Rate resulting from a change in the Funded
Debt to EBITDA Ratio shall be effective during the period commencing the next
succeeding March 1, June 1, September 1, or December 1, as applicable, and
ending on the date immediately preceding the effective date of the next such
change, provided that the Funded Debt to EBITDA Ratio shall be deemed to be in
Category 4 at any time that an Event of Default has occurred and is continuing,
or at the option of the Lender, if the Borrowers fail to deliver the annual or
quarterly financial statements required to be delivered by it pursuant to
Section 5.01 and until the Borrowers deliver such financial statements.

 

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“Availability Period” means the period from and including the Effective Date to
the close of the date immediately preceding the Maturity Date or any earlier
date of termination of the Commitment.

 

“Available Revolving Commitment” means, at any time, the Revolving Commitment
then in effect minus the Revolving Exposure at such time.

 

“Banking Services” means each and any of the following bank services provided to
any Loan Party by the Lender or any of its Affiliates: (a) commercial credit
cards, (b) stored value cards and (c) treasury management services (including,
without limitation, controlled disbursement, automated clearinghouse
transactions, return items, overdrafts and interstate depository network
services).

 

“Banking Services Obligations” of a Loan Party means any and all obligations of
such Loan Party, whether absolute or contingent and whether joint or several and
howsoever and whensoever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions therefor) in
connection with Banking Services.

 

“Banking Services Reserves” means all Reserves which the Lender from time to
time establishes in its Permitted Discretion for Banking Services then provided
or outstanding.

 

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

 

“Borrower” means any of the Borrowers, individually, with each being generally
referred to in this Agreement as the “the Borrower.”

 

“Borrowers” means SIndustries, SIOperations, SMid-Atlantic, STBCalifornia,
SCTexas and SNorthwest, collectively, with them being generally referred to in
this Agreement as the “the Borrowers.”

 

“Borrowing” means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect, (b) a Protective Advance.

 

“Borrowing Base” means, with respect to any Borrower, the sum of (a) 80% of such
Borrower’s Eligible Accounts at such time, plus (b) 60% of such Borrower’s
Eligible Government Accounts at such time, plus (c) 80% of the such Borrower’s
Eligible Finished Goods Inventory, valued at cost, determined on a
first-in-first-out basis, at such time, plus (d) 60% of the such Borrower’s
Eligible Raw Material Inventory, valued at cost, determined on a
first-in-first-out basis, at such time, minus (e) Reserves.  Notwithstanding the
foregoing, in no event shall the portion of the Borrowing Base attributable to
clauses (c) and (d) above exceed $22,000,000.  The Lender may, in its Permitted
Discretion, reduce or increase the advance rates set forth above or reduce or
increase one or more of the other elements used in computing the Borrowing Base.

 

“Borrowing Base Certificate” means a certificate, signed and certified as
accurate and complete by a Financial Officer of each Borrower, in substantially
the form of Exhibit A or another form which is acceptable to the Lender in its
Permitted Discretion.

 

“Borrowing Request” means a request by a Borrower for a Revolving Borrowing in
accordance with Section 2.03.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

 

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“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

 

“CB Floating Rate” means, for any day, the Prime Rate; provided that the CB
Floating Rate shall never be less than the Adjusted One Month LIBOR Rate on such
day (or if such day is not a Business Day, the immediately preceding Business
Day).  Any change in the CB Floating Rate due to a change in the Prime Rate or
the Adjusted One Month LIBOR Rate shall be effective from and including the
effective date of such change in the Prime Rate or the Adjusted One Month LIBOR
Rate, respectively.

 

“CBFR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the CB Floating Rate.

 

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) other than
an Excluded Shareholder of Equity Interests representing more than 25% of the
aggregate ordinary voting power represented by the issued and outstanding Equity
Interests of SIndustries; or (b) occupation of a majority of the seats (other
than vacant seats) on the board of directors of SIndustries by Persons who were
neither (i) nominated by the board of directors of SIndustries nor
(ii) appointed by directors so nominated.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by the Lender (or, for purposes of
Section 2.14(b), by any lending office of the Lender or by the Lender’s holding
company, if any) with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority made or issued after the date of
this Agreement.

 

“Chassis Inventory Lender” means either of GMAC or FMCC.

 

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans or Protective
Advances.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Collateral” means any and all property owned, leased or operated by a Person
covered by the Collateral Documents and any and all other property of any Loan
Party, now existing or hereafter acquired, that may at any time be or become
subject to a security interest or Lien in favor of the Lender, to secure all or
any part of the Secured Obligations.

 

“Collateral Access Agreement” has the meaning assigned to such term in the
Security Agreements.

 

“Collateral Documents” means, collectively, the Security Agreements, and any
other documents granting a Lien upon the Collateral as security for payment of
all or any part of the Secured Obligations.

 

“Commitment” means the Revolving Commitment, the SIO Revolving Commitment, the
SCTexas Revolving Commitment, the SMid-Atlantic Revolving Commitment, the
SNorthwest Revolving

 

4

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Commitment and the STBCalifornia Revolving Commitment, as each such commitment
may be reduced from time to time pursuant to Section 2.08.

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. 
“Controlling” and “Controlled” have meanings correlative thereto.

 

“Credit Exposure” means the sum of (a) the Revolving Exposure at such time, plus
(b) an amount equal to the aggregate principal amount of Protective Advances
outstanding at such time.

 

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

 

“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.

 

“Document” has the meaning assigned to such term in the Security Agreements.

 

“Dollars” or “$” refers to lawful money of the United States of America.

 

“DOS Agreement” means Contract No. SAQMMA07D0037 between the United States
Department of State and SCTexas, as successor by merger to Supreme SCT
Operations, LP, as it may be amended, modified or renewed from time to time.

 

“EBITDA” means, for any period, Net Income for such period plus (a) without
duplication and to the extent deducted in determining Net Income for such
period, the sum of (i) Interest Expense for such period, (ii) income tax expense
for such period, (iii) all amounts attributable to depreciation and amortization
expense for such period, (iv) any extraordinary charges for such period, and
(v) any other non-cash charges for such period (but excluding any non-cash
charge in respect of an item that was included in Net Income in a prior period),
minus (b) without duplication and to the extent included in Net Income, any
extraordinary gains and any non-cash items of income for such period, all
calculated for SIndustries and its Subsidiaries on a consolidated basis in
accordance with GAAP.

 

“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 8.02).

 

“Eligible Accounts” means, at any time and with respect to any Borrower, the
Accounts of such Borrower which the Lender determines in its Permitted
Discretion are eligible as the basis for the extension of Revolving Loans under
this Agreement.  Without limiting the Lender’s discretion provided herein,
Eligible Accounts shall not include any Account:

 

(a)           which is not subject to a first priority perfected security
interest in favor of the Lender;

 

(b)           which is subject to any Lien other than (i) a Lien in favor of the
Lender and (ii) a Permitted Encumbrance which does not have priority over the
Lien in favor of the Lender;

 

(c)           with respect to which is unpaid more than 90 days after the date
of the original invoice therefor or more than 60 days after the original due
date, or which has been written off the books of such Borrower or otherwise
designated as uncollectible;

 

5

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(d)           which is owed by an Account Debtor or any of its Affiliates for
which more than 25% of the Accounts owed from such Account Debtor and its
Affiliates are ineligible pursuant to clause (c) above;

 

(e)           which is owed by an Account Debtor (other than the government of
the U.S., or any department, agency, public corporation, or instrumentality
thereof) or any of its Affiliates to such Borrower to the extent the aggregate
amount of Accounts owed by such Account Debtor and its Affiliates to such
Borrower at the time of determination of Eligible Accounts exceeds 15% of the
aggregate Eligible Accounts at such time;

 

(f)            with respect to which any covenant, representation, or warranty
contained in this Agreement or in the Security Agreements has been breached or
is not true in any material respect;

 

(g)           which (i) does not arise from the sale of goods or performance of
services in the ordinary course of business, (ii) is not evidenced by an invoice
or other documentation satisfactory to the Lender in its Permitted Discretion
which has been sent to the Account Debtor, (iii) represents a progress billing,
(iv) is contingent upon such Borrower’s completion of any further performance,
(v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale
on approval, consignment, cash-on-delivery or any other repurchase or return
basis, or (vi) relates to payments of interest;

 

(h)           (i) for which the goods giving rise to such Account have not been
shipped to the Account Debtor or for which the services giving rise to such
Account have not been performed by such Borrower or if such Account was invoiced
more than once;

 

(i)            with respect to which any check or other instrument of payment
has been returned uncollected for any reason;

 

(j)            which is owed by an Account Debtor which has (i) applied for,
suffered, or consented to the appointment of any receiver, custodian, trustee,
or liquidator of its assets, (ii) has had possession of all or a material part
of its property taken by any receiver, custodian, trustee or liquidator,
(iii) filed, or had filed against it, any request or petition for liquidation,
reorganization, arrangement, adjustment of debts, adjudication as bankrupt,
winding-up, or voluntary or involuntary case under any state or federal
bankruptcy laws, (iv) has admitted in writing its inability, or is generally
unable to, pay its debts as they become due, (v) become insolvent, or
(vi) ceased operation of its business;

 

(k)           which is owed by any Account Debtor which has sold all or a
substantially all of its assets;

 

(l)            which is owed by an Account Debtor which (i) does not maintain
its chief executive office in the U.S. or Canada or (ii) is not organized under
applicable law of the U.S., any state of the U.S., Canada, or any province of
Canada unless, in either case, such Account is backed by a letter of credit
acceptable to the Lender which is in the possession of, has been assigned to and
is directly drawable by the Lender;

 

(m)          which is owed in any currency other than U.S. dollars;

 

(n)           which is owed by (i) the government (or any department, agency,
public corporation, or instrumentality thereof) of any country other than the
U.S. unless such Account is backed by a letter of credit acceptable to the
Lender which is in the possession of the Lender, or (ii) the government of the
U.S., or any department, agency, public corporation, or instrumentality thereof,
unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. §
3727 et seq. and 41

 

6

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U.S.C. § 15 et seq.), and any steps necessary to perfect the Lien of the Lender
in such Account have been complied with to the Lender’s satisfaction;

 

(o)           which is owed by any Affiliate, employee, officer, director, agent
or stockholder of any Loan Party;

 

(p)           which, for any Account Debtor, exceeds a credit limit determined
by the Lender in its Permitted Discretion, to the extent of such excess;

 

(q)           which is owed by an Account Debtor or any Affiliate of such
Account Debtor to which any Loan Party is indebted, but only to the extent of
such indebtedness or is subject to any security, deposit, progress payment,
retainage or other similar advance made by or for the benefit of an Account
Debtor, in each case to the extent thereof;

 

(r)            which is subject to any counterclaim, deduction, defense, setoff,
dispute or which is owed by an Account Debtor to which there are any outstanding
checks or other instruments for payment but only to the extent of any such
counterclaim, deduction, defense, setoff, dispute, check or instrument;

 

(s)           which is evidenced by any promissory note, chattel paper, or
instrument;

 

(t)            with respect to which such Borrower has made any agreement with
the Account Debtor for any reduction thereof, other than discounts and
adjustments given in the ordinary course of business, or any Account which was
partially paid and such Borrower created a new receivable for the unpaid portion
of such Account;

 

(u)           which does not comply in all material respects with the
requirements of all applicable laws and regulations, whether Federal, state or
local, including without limitation the Federal Consumer Credit Protection Act,
the Federal Truth in Lending Act and Regulation Z of the Board;

 

(v)           which is for goods that have been sold under a purchase order or
pursuant to the terms of a contract or other agreement or understanding (written
or oral) that indicates or purports that any Person other than such Borrower has
or has had an ownership interest in such goods, or which indicates any party
other than such Borrower as payee or remittance party;

 

(w)          which was created on cash on delivery terms;

 

(x)            which is not specifically described in the aging report for such
Borrower’s Accounts most recently delivered by such Borrower to the Lender
pursuant to Section 5.01(h) of this Agreement, including any Account designated
by such Borrower as a “miscellaneous” or “other”; or

 

(y)           which the Lender determines may not be paid by reason of the
Account Debtor’s inability to pay or which the Lender in its Permitted
Discretion otherwise determines is unacceptable.

 

In the event that an Account which was previously an Eligible Account ceases to
be an Eligible Account hereunder, the Borrowers shall notify the Lender thereof
on and at the time of submission to the Lender of the next Borrowing Base
Certificate.  In determining the amount of an Eligible Account, the face amount
of an Account may, in the Lender’s Permitted Discretion, be reduced by, without
duplication, to the extent not reflected in such face amount, (i) the amount of
all accrued and actual discounts, claims, credits or credits pending,
promotional program allowances, price adjustments, finance charges or other
allowances (including any amount that the Borrowers may be obligated to rebate
to an Account Debtor

 

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pursuant to the terms of any agreement or understanding (written or oral)) and
(ii) the aggregate amount of all cash received in respect of such Account but
not yet applied by the Borrowers to reduce the amount of such Account.

 

“Eligible Finished Goods Inventory” means, at any time and with respect to any
Borrower, the Finished Goods Inventory of such Borrower which the Lender
determines in its Permitted Discretion are eligible as the basis for the
extension of Revolving Loans and which satisfy all of the requirements for
Eligible Inventory.

 

“Eligible Government Accounts” means, at any time and with respect to any
Borrower, the Governmental Accounts of such Borrower which the Lender determines
in its Permitted Discretion are eligible as the basis for the extension of
Revolving Loans and which satisfy all of the requirements for an Eligible
Account except for the provisions of subsection (n) of the definition of
“Eligible Accounts.”

 

“Eligible Inventory” means, at any time and with respect to any Borrower, the
Inventory of such Borrower which the Lender determines in its Permitted
Discretion is eligible as the basis for the extension of Revolving Loans
hereunder.  Without limiting the Lender’s discretion provided herein, Eligible
Inventory shall not include any Inventory:

 

(a)           which is not subject to a first priority perfected Lien in favor
of the Lender;

 

(b)           which is subject to any Lien other than (i) a Lien in favor of the
Lender and (ii) a Permitted Encumbrance which does not have priority over the
Lien in favor of the Lender;

 

(c)           which Lender determines in its Permitted Discretion is slow
moving, obsolete, unmerchantable, defective, unfit for sale, not salable in the
ordinary course of business at prices approximating at least the cost of such
Inventory (or if such Inventory has been marked to market for such Borrower’s
financial accounting, not salable in the ordinary course of business at prices
approximating at least such market value), or unacceptable due to age, type,
category and/or quantity;

 

(d)           with respect to which any covenant, representation, or warranty
contained in this Agreement or the Security Agreements has been breached or is
not true and which does not conform to all standards imposed by any Governmental
Authority;

 

(e)           in which any Person other than such Borrower shall (i) have
ownership, interest or title to such Inventory or (ii) be indicated on any
purchase order or invoice with respect to such Inventory as having or purporting
to have an interest therein;

 

(f)            which is not finished goods or raw material or which constitutes
work-in-process, spare or replacement parts, subassemblies, packaging and
shipping material, manufacturing supplies, samples, prototypes, displays or
display items, bill-and-hold goods, goods that are returned or marked for
return, repossessed goods, defective or damaged goods, goods held on
consignment, or goods which are not of a type held for sale in the ordinary
course of such Borrower’s business;

 

(g)           which is not located in the U.S. or is in transit;

 

(h)           which is located in any location leased by such Borrower unless
the lessor has delivered to the Lender a Collateral Access Agreement;

 

(i)            which is located in any third party warehouse or is in the
possession of a bailee (other than a third party processor) and is not evidenced
by a Document, unless such warehouseman

 

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or bailee has delivered to the Lender a Collateral Access Agreement and such
other documentation as the Lender may require in its Permitted Discretion;

 

(j)            which is being processed offsite at the location of a third party
processor;

 

(k)           which is in transit to or from any third party location or outside
processor;

 

(l)            which is a discontinued product or component thereof;

 

(m)          which is the subject of a consignment by such Borrower as
consignor;

 

(n)           which is perishable;

 

(o)           which contains or bears any intellectual property rights licensed
to such Borrower unless the Lender is satisfied that it may sell or otherwise
dispose of such Inventory without (i) infringing the rights of such licensor,
(ii) violating any contract with such licensor, or (iii) incurring any liability
with respect to payment of royalties other than royalties incurred pursuant to
sale of such Inventory under the current licensing agreement;

 

(p)           for which reclamation rights have been asserted by the seller; or

 

(q)           which the Lender in its Permitted Discretion otherwise determines
is unacceptable for any reason whatsoever.

 

In the event that Inventory which was previously Eligible Inventory ceases to be
Eligible Inventory hereunder, the Borrowers shall notify the Lender thereof on
and at the time of submission to the Lender of the next Borrowing Base
Certificate.

 

“Eligible Raw Material Inventory” means Raw Material Inventory that satisfies
the requirements of Eligible Inventory.

 

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

 

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

 

“Equipment” has the meaning assigned to such term in the Security Agreements.

 

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with any Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by any Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by any Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by any Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from any Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

 

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

 

“Event of Default” has the meaning assigned to such term in Article VII.

 

“Excluded Shareholder” means either of William Barrett or Herb Gardner,
individually.

 

“Excluded Taxes” means, with respect to the Lender, or any other recipient of
any payment to be made by or on account of any obligation of any Borrower
hereunder, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America, or by the jurisdiction under the laws of
which such recipient is organized or in which its principal office is located
or, in the case of the Lender, in which its applicable lending office is
located, and (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which any
Borrower is located.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Lender from three Federal funds brokers of recognized standing
selected by it.

 

“Financial Officer” means, with respect to any Borrower, the chief financial
officer, principal accounting officer, treasurer or controller of such Borrower.

 

“Finished Goods Inventory” means, at any time and with respect to any Borrower,
the Inventory of such Borrower constituting finished goods.  No item of
Inventory shall constitute “Finished Goods Inventory” unless Borrower shall have
completed all processing, manufacturing, and assembly of

 

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such item of Inventory and such item of Inventory is held for resale in the
ordinary course of business of such Borrower.

 

“Fiscal Month” means, with respect to SIndustries and its Subsidiaries, one of
the 12 fiscal accounting periods in each Fiscal Year of SIndustries and its
Subsidiaries.

 

“Fiscal Quarter” means, with respect to SIndustries and its Subsidiaries, one of
the four fiscal accounting periods in such Fiscal Year of SIndustries and its
Subsidiaries.

 

“Fiscal Year” means, with respect to SIndustries and its Subsidiaries, a 52-53
week tax year ending on the last Saturday of December each year.

 

“Fixtures” has the meaning assigned to such term in the Security Agreements.

 

“FMCC” means Ford Motor Credit Company LLC, a Delaware limited liability
company, and its successors and assigns.

 

“Former Credit Agreement” means the Credit Agreement, dated as of December 23,
2008, executed by Supreme Corporation, a Texas corporation (which has since
merged into Supreme Indiana Operations, Inc.), and the Lender, as amended prior
to the Effective Date.

 

“Funded Debt” means, with respect to SIndustries and its Subsidiaries, as of the
date any determination thereof is to be made, all Indebtedness of SIndustries
and its Subsidiaries (including all Subordinated Indebtedness) with respect to
which there is an Interest Expense, computed on a consolidated basis and
determined in accordance with GAAP.

 

“Funded Debt to EBITDA Ratio” means (a) as of the close of the Fiscal Quarter of
SIndustries closing on September 25, 2010, the ratio of Funded Debt as of the
close of such fiscal to Annualized EBITDA for the two successive Fiscal Quarters
closing on such date, (b) as of the close of the Fiscal Quarter of SIndustries
closing on December 25, 2010, the ratio of Funded Debt as of the close of such
Fiscal Quarter to Annualized EBITDA for the successive three Fiscal Quarters
closing on such date, and (c) as of the close of each Fiscal Quarter of
SIndustries closing after December 25, 2010, the ratio of Funded Debt as of the
close of such Fiscal Quarter to EBITDA for the four (4) successive Fiscal
Quarters of SIndustries ending on the close of such of Fiscal Quarter.

 

“Funding Account” has the meaning assigned to such term in Section 4.01(h).

 

“GAAP” means generally accepted accounting principles in the United States of
America.

 

“GMAC” means GMAC and GMAC Bank, collectively, and their respective successors
and assigns.

 

“GMAC Availability Block” means an amount equal $5,000,000.

 

“Governmental Accounts” means, at any time and with respect to SCTexas, the
Accounts of SCTexas arising from the sale of armored vehicles and owing from the
government of the U.S., or any department, agency, public corporation, or
instrumentality thereof, including without limitation, the Accounts of SCTexas
owing from the United States Department of State pursuant to the DOS Agreement.

 

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

 

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“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

 

“Guaranteed Obligations” has the meaning assigned to such term in Section 9.01.

 

“Hazardous Materials”  means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (j) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances, (k) obligations
under any liquidated earn-out and (l) obligations of such Person to purchase
securities or other property arising out of or in connection with the sale of
the same or substantially similar securities or property or any other
Off-Balance Sheet Liability.  The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Intercreditor Agreement” means an intercreditor agreement executed by a Chassis
Inventory Lender and the Lender, that is in form and substance acceptable to the
Lender in all respects and in its sole discretion, and which provides, without
limitation, that (a) the Lender has a first priority security interest and Lien
in all assets of the Borrowers except for any purchase money Lien of such
Chassis Inventory Lender in Inventory the purchase of which is specifically
financed by such Chassis Inventory Lender and the proceeds of such financed
Inventory, and (b) with respect to each item of such financed Inventory, upon
payment to such Chassis Inventory Lender of an amount equal to the amount
advanced by such Chassis Inventory Lender for the purchase of such item of
Inventory plus accrued, unpaid interest on the balance of such advance and other
fees and charges related to such advance, such Chassis Inventory Lender shall
release such financed item of Inventory and the proceeds of such financed item
of Inventory from all Liens held by it.

 

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“Interest Election Request” means a request by a Borrower to convert or continue
a Revolving Borrowing in accordance with Section 2.07.

 

“Interest Expense” means, with reference to any period, the interest expense
(including that attributable to Capital Lease Obligations) of SIndustries and
its Subsidiaries for such period with respect to all outstanding Indebtedness of
SIndustries and its Subsidiaries (including all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers’ acceptance
financing and net costs under Swap Agreements in respect of interest rates to
the extent such net costs are allocable to such period in accordance with GAAP),
calculated on a consolidated basis for SIndustries and its Subsidiaries for such
period in accordance with GAAP.

 

“Interest Payment Date” means (a) with respect to any CBFR Loan, the first
Business Day of each calendar month and the Maturity Date, (b) with respect to
any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months’ duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest Period, and the Maturity
Date.

 

“Interest Period” means (a) with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the applicable Borrower may elect; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurodollar Borrowing only, such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period.  For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and,
in the case of a Revolving Borrowing, thereafter shall be the effective date of
the most recent conversion or continuation of such Borrowing.

 

“Inventory” has the meaning assigned to such term in the Security Agreements.

 

“Inventory Appraisal” means an appraisal of the Inventory of a Borrower from an
appraiser selected and engaged by the Lender, and prepared on a basis
satisfactory to the Lender, such appraisals and updates to include, without
limitation, information required by applicable law and regulations, as the same
may be updated from time to time and at any time.

 

“Joinder Agreement” has the meaning assigned to such term in Section 5.13.

 

“LC Collateral Account” has the meaning assigned to such term in
Section 2.05(e).

 

“LC Disbursement” means a payment made by the Lender pursuant to the Workers
Comp Letter of Credit.

 

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
the Workers Comp Letter of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrowers at such time.

 

“LC Reimbursement Agreement” has the meaning assigned to such term in
Section 2.05.

 

“Lender” means JPMorgan Chase Bank, N.A., its successors and assigns, and is
generally referred to in this Agreement as the “the Lender.”

 

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“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor
or substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page of such service, as determined by the Lender from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate for
dollar deposits with a maturity comparable to such Interest Period.  In the
event that such rate is not available at such time for any reason, then the
“LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period
shall be the rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office of
the Lender in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

 

“Loan Documents” means this Agreement, any promissory notes issued pursuant to
the Agreement, the Collateral Documents, the Loan Guaranty, the Workers Comp LC
Guaranty and all other agreements, instruments, documents and certificates
identified in Section 4.01 executed and delivered to, or in favor of, the Lender
and including all other pledges, powers of attorney, consents, assignments,
contracts, notices, letter of credit agreements and all other written matter
whether heretofore, now or hereafter executed by or on behalf of any Loan Party,
or any employee of any Loan Party, and delivered to the Lender in connection
with the Agreement or the transactions contemplated thereby.  Any reference in
the Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to the Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.

 

“Loan Guarantor” means, individually, each Borrower, Supreme/Murphy Truck
Bodies, Inc., a North Carolina corporation, Supreme Properties East, Inc., a
Delaware corporation, Supreme Properties West, Inc., a Delaware corporation,
Supreme Properties North, Inc., a Delaware corporation, Supreme Properties
South, Inc., a Delaware corporation, Supreme Indiana Management, Inc., a
Delaware corporation, SC Tower Structural Laminating, Inc., a Texas corporation,
Silver Crown, LLC, a Delaware limited liability company, and Supreme STB, LLC, a
California limited liability company.

 

“Loan Guaranty” means Article IX of this Agreement and each separate Guarantee,
in form and substance satisfactory to the Lender, delivered by any Loan
Guarantor in favor of the Lender, as it may be amended or modified and in effect
from time to time; provided, however, the term Loan Guaranty does not include
any Workers Comp LC Guaranty delivered by any Loan Party from time to time.

 

“Loan Parties” means, collectively, each Borrower, each Loan Guarantor and each
other Person who becomes a party to this Agreement pursuant to a Joinder
Agreement and their successors and assigns.

 

“Loan Party” means any of the Loan Parties, individually.

 

“Loans” means the loans and advances made by the Lender pursuant to this
Agreement, including Protective Advances.

 

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“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, prospects or condition, financial or otherwise, of any
Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan
Party to perform any of its obligations deemed by the Lender to be material
under the Loan Documents to which it is a party, (c) the Collateral, taken as a
whole, or the Lender’s Liens on the Collateral or the priority of such Liens, or
(d) the rights of or benefits available to the Lender thereunder.

 

“Material Indebtedness” means Indebtedness (other than the Loans and the Workers
Comp Letter of Credit), or obligations in respect of one or more Swap
Agreements, of any one or more of the Borrowers and its Subsidiaries in an
aggregate principal amount exceeding $500,000.  For purposes of determining
Material Indebtedness, the “obligations” of any Borrower or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that such Borrower or such Subsidiary
would be required to pay if such Swap Agreement were terminated at such time.

 

“Maturity Date” means December 31, 2011, or any earlier date on which the
Commitment is reduced to zero or otherwise terminated pursuant to the terms of
this Agreement.

 

“Maximum Liability” has the meaning assigned to such term in Section 9.10.

 

“Minimum Required EBITDA” means, with respect to each Test Period, the amount
set forth in the table on the Minimum Required EBITDA Schedule under the column
entitled “Minimum Required EBITDA” that corresponds to such Test Period.

 

“Merger Transaction” has the meaning assigned to such term in Section 3.20.

 

“Multiemployer Plan” means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

 

“Net Income” means, for any period, the consolidated net income (or loss) of
SIndustries and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP; provided that there shall be excluded (a) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with SIndustries or any of its Subsidiaries, (b) the
income (or deficit) of any Person (other than a Subsidiary) in which SIndustries
or any of its Subsidiaries has an ownership interest, except to the extent that
any such income is actually received by SIndustries or such Subsidiary in the
form of dividends or similar distributions and (c) the undistributed earnings of
any Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the
terms of any contractual obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary.

 

“Net Orderly Liquidation Value” means, with respect to Inventory of any Person,
the orderly liquidation value thereof as determined in a manner acceptable to
the Lender in its Permitted Discretion by an appraiser acceptable to the Lender,
net of all costs of liquidation thereof.

 

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received
in respect of such event including (i) any cash received in respect of any
non-cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but excluding any interest payments),
but only as and when received, (ii) in the case of a casualty, insurance
proceeds and (iii) in the case of a condemnation or similar event, condemnation
awards and similar payments, net of (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a sale and leaseback transaction
or a casualty or a condemnation or similar proceeding), the amount of all
payments required to be made as a

 

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result of such event to repay Indebtedness (other than Loans) secured by such
asset or otherwise subject to mandatory prepayment as a result of such event and
(iii) the amount of all taxes paid (or reasonably estimated to be payable) and
the amount of any reserves established to fund contingent liabilities reasonably
estimated to be payable, in each case during the year that such event occurred
or the next succeeding year and that are directly attributable to such event (as
determined reasonably and in good faith by a Financial Officer).

 

“Non-Complying Borrowing Request” has the meaning assigned to such term in
Section 2.03.

 

“Non-Paying Guarantor” has the meaning assigned to such term in Section 9.11.

 

“Obligated Party” has the meaning assigned to such term in Section 9.02.

 

“Obligations” means, with respect to the Borrowers collectively, all unpaid
principal of and accrued and unpaid interest on the Loans, all LC Exposure, all
accrued and unpaid fees and all expenses, reimbursements, indemnities and other
obligations of the Loan Parties to the Lender or any indemnified party arising
under the Loan Documents and all Banking Services Obligations; and all Swap
Obligations owing to the Lender or its Affiliates from the Loan Parties
collectively.  When used with respect to any single Borrower, “Obligations”
means all unpaid principal of and accrued and unpaid interest on the Loans made
to such Borrower, such Borrower’s Allocable Share of the LC Exposure, all
accrued and unpaid fees and all expenses, reimbursements, indemnities and other
obligations of such Borrower to the Lender or any indemnified party arising
under the Loan Document, and all Banking Services Obligations of such Borrower;
and (ii) all Swap Obligations owing to the Lender or its Affiliates from such
Borrower.

 

“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any indebtedness, liability or obligation under any sale and
leaseback transaction which is not a Capital Lease Obligation, (c) any
indebtedness, liability or obligation under any so-called “synthetic lease”
transaction entered into by such Person, or (d) any indebtedness, liability or
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person (other than operating leases).

 

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.

 

“Participant” has the meaning set forth in Section 8.04.

 

“Paying Guarantor” has the meaning assigned to such term in Section 9.11.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

 

“Permitted Discretion” means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment.

 

“Permitted Encumbrances” means:

 

(a)           Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;

 

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(b)           carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;

 

(c)           pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social
security laws or regulations;

 

(d)           deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;

 

(e)           judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII; and

 

(f)            easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of any Borrower or any Subsidiary;

 

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

 

“Permitted Investments” means:

 

(a)           direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;

 

(b)           investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody’s;

 

(c)           investments in certificates of deposit, banker’s acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;

 

(d)           fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above;
and

 

(e)           money market funds that (i) comply with the criteria set forth in
Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of
1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio
assets of at least $5,000,000,000.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which any Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

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“Prepayment Event” means:

 

(a)           any sale, transfer or other disposition (including pursuant to a
sale and leaseback transaction) of any property or asset of any Loan Party,
other than dispositions described in Section 6.05(a); or

 

(b)           any casualty or other insured damage to, or any taking under power
of eminent domain or by condemnation or similar proceeding of, any property or
asset of any Loan Party with a fair value immediately prior to such event equal
to or greater than $1,000,000; or

 

(c)           the issuance by SIndustries or any of its Subsidiaries of any
Equity Interests to any Person other than a Borrower, or the receipt by
SIndustries or any of its Subsidiaries of any capital contribution from a Person
other than a Borrower; or

 

(d)           the incurrence by any Loan Party of any Indebtedness, other than
Indebtedness permitted under Section 6.01.

 

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by the Lender as its prime rate; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

 

“Projections” has the meaning assigned to such term in Section 5.01(f).

 

“Protective Advance” has the meaning assigned to such term in Section 2.04.

 

“Raw Material Inventory” means Inventory of the types designated on
Schedule 1.01 as Raw Material Inventory.  The Lender may from time to time in
its Permitted Discretion (a) designate types of Inventory other than those
designated on Schedule 1.01 as Raw Material Inventory, or (b) remove such
designation from a type of Inventory listed on Schedule 1.01.

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees and agents of such
Person and such Person’s Affiliates.

 

“Reorganization Transactions” means the following transactions:  (a) the
formation of Supreme Indiana Operations, L.P. and Supreme Indiana Management,
L.L.C. in December of 2001; (b) the transaction or series of transactions in
2002 that resulted in Supreme Corporation being the general partner and owning
99% of the partnership interests of Supreme Indiana Operations, L.P. and Supreme
Indiana Management, L.L.C. being a limited partner and owning 1% of the
partnership interests of Supreme Indiana Operations, L.P.; (c) the transfer in
2002 by Supreme Corporation of substantially all of its assets to Supreme
Indiana Operations, L.P., which then did business under the assumed business
name of Supreme Corporation; (d) the conversion in 2004 of Supreme Indiana
Operations, L.P. into a corporation with a legal name of Supreme Indiana
Operations, Inc.; and (e) any and all transactions entered into in connection
with any of the transactions described in clauses (a) through (d).

 

“Report” means reports prepared by the Lender or another Person showing the
results of appraisals, field examinations or audits pertaining to any Borrower’s
assets from information furnished by or on behalf of any Borrower, after the
Lender has exercised its rights of inspection pursuant to this Agreement.

 

“Requirement of Law” means, as to any Person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

 

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“Requesting Borrower” has the meaning assigned to such term in Section 2.02(b).

 

“Reserves” means any and all reserves which the Lender deems necessary, in its
Permitted Discretion, to maintain (including, without limitation, an
availability reserve, reserves for accrued and unpaid interest on the Secured
Obligations, Banking Services Reserves, volatility reserves, reserves for rent
at locations leased by any Loan Party and for consignee’s, warehousemen’s and
bailee’s charges, reserves for dilution of Accounts, reserves for Inventory
shrinkage, reserves for customs charges and shipping charges related to any
Inventory in transit, reserves for Swap Obligations, reserves for contingent
liabilities of any Loan Party, reserves for uninsured losses of any Loan Party,
reserves for uninsured, underinsured, unindemnified or under indemnified
liabilities or potential liabilities with respect to any litigation and reserves
for taxes, fees, assessments, and other governmental charges) with respect to
the Collateral or any Loan Party.

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in
SIndustries or any Subsidiary, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such Equity Interests in SIndustries or any option, warrant or other
right to acquire any such Equity Interests in SIndustries.

 

“Revolving Commitment” means the commitment of the Lender to make Revolving
Loans, as such commitment may be reduced from time to time pursuant to
Section 2.08.  The initial amount of the Lender’s Revolving Commitment is
$30,000,000 minus, until the Borrowers fully satisfy the requirements of
Section 4.03(a) of this Agreement, the GMAC Availability Block.

 

“Revolving Exposure” means, at any time, the sum of the outstanding principal
amount of (a) Revolving Loans, plus (b) LC Exposure at such time.

 

“Revolving Loan” means a Loan made pursuant to Section 2.01.

 

“SCTexas” means Supreme Corporation of Texas, a Texas corporation.

 

“SCTexas Borrowing Base” means, at any time, the Borrowing Base of SCTexas at
such time.

 

“SCTexas Revolving Commitment” means the commitment of the Lender to make
Revolving Loans pursuant to Section 2.01(c) of this Agreement, as such
commitment may be reduced from time to time pursuant to Section 2.08.  The
initial amount of the Lender’s SCTexas Revolving Commitment is $6,000,000.

 

“SCTexas Revolving Exposure” means, at any time, the sum of the outstanding
principal amount of (a) Revolving Loans to SCTexas, plus (b) SCTexas’s Allocable
Share of LC Exposure.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.

 

“Secured Obligations” means, with respect to the Borrowers collectively, all
Obligations, together with all (i) Banking Services Obligations,
(ii) obligations, payments, liabilities, rents and fees now or hereafter owing
by all or any of the Loan Parties to the Lender or its Affiliates with respect
to leases, and (iii) Swap Obligations owing to the Lender or its Affiliates. 
When used with respect to any single Borrower, the term “Secured Obligations”
means all Obligations of such Borrower, together with all (i) Banking Services
Obligations of such Borrower, (ii) obligations, payments, liabilities, rents and
fees now or hereafter owing by such Borrower to the Lender or its Affiliates
with respect to leases, and (iii) Swap Obligations of such Borrower owing to the
Lender or its Affiliates.

 

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“Security Agreement” means a Pledge and Security Agreement, dated as of the date
hereof, between a Loan Party and the Lender, and any other pledge or security
agreement entered into, after the date of this Agreement by any other Loan Party
(as required by this Agreement or any other Loan Document), or any other Person,
as the same may be amended, restated or otherwise modified from time to time.

 

“SIndustries” means Supreme Industries, Inc., a Delaware corporation.

 

“SIO Borrowing Base” means, at any time, the Borrowing Base of SIOperations at
such time.

 

“SIO Revolving Commitment” means the commitment of the Lender to make Revolving
Loans pursuant to Section 2.01(b) of this Agreement, as such commitment may be
reduced from time to time pursuant to Section 2.08.  The initial amount of the
Lender’s SIOperations Revolving Commitment is $30,000,000.

 

“SIO Revolving Exposure” means, at any time, the sum of the outstanding
principal amount of (a) Revolving Loans to SIOperations, plus (b) SIOperations’
Allocable Share of LC Exposure.

 

“SIOperations” means Supreme Indiana Operations, Inc., a Delaware corporation,
and successor by merger to Supreme Corporation.

 

“SMid-Atlantic” means Supreme Mid-Atlantic Corporation, a Texas corporation.

 

“SMid-Atlantic Borrowing Base” means, at any time, the Borrowing Base of
SMid-Atlantic at such time.

 

“SMid-Atlantic Revolving Commitment” means the commitment of the Lender to make
Revolving Loans pursuant to Section 2.01(d) of this Agreement, as such
commitment may be reduced from time to time pursuant to Section 2.08.  The
initial amount of the Lender’s SMid-Atlantic Revolving Commitment is $6,000,000.

 

“SMid-Atlantic Revolving Exposure” means, at any time, the sum of the
outstanding principal amount of (a) Revolving Loans to SMid-Atlantic, plus
(b) SMid-Atlantic’s Allocable Share of LC Exposure.

 

“SNorthwest” means Supreme Northwest, L.L.C., a Texas limited liability company.

 

“SNorthwest Borrowing Base” means, at any time, the Borrowing Base of SNorthwest
at such time.

 

“SNorthwest Revolving Commitment” means the commitment of the Lender to make
Revolving Loans pursuant to Section 2.01(e) of this Agreement, as such
commitment may be reduced from time to time pursuant to Section 2.08.  The
initial amount of the Lender’s SNorthwest Revolving Commitment is $2,500,000.

 

“SNorthwest Revolving Exposure” means, at any time, the sum of the outstanding
principal amount of (a) Revolving Loans to SNorthwest, plus (b) SNorthwest’s
Allocable Share of LC Exposure.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Lender is subject with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board).

 

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Such reserve percentages shall include those imposed pursuant to such Regulation
D.  Eurodollar Loans shall be deemed to constitute eurocurrency funding and to
be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to the
Lender under such Regulation D or any comparable regulation.  The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.

 

“STBCalifornia” means Supreme Truck Bodies of California, Inc., a California
corporation.

 

“STBCalifornia Borrowing Base” means, at any time, the Borrowing Base of
STBCalifornia at such time.

 

“STBCalifornia Revolving Commitment” means the commitment of the Lender to make
Revolving Loans pursuant to Section 2.01(f) of this Agreement, as such
commitment may be reduced from time to time pursuant to Section 2.08.  The
initial amount of the Lender’s STBCalifornia Revolving Commitment is $3,500,000.

 

“STBCalifornia Revolving Exposure” means, at any time, the sum of the
outstanding principal amount of (a) Revolving Loans to STBCalifornia, plus
(b) STBCalifornia’s Allocable Share of LC Exposure.

 

“Subordinated Indebtedness” of a Person means any Indebtedness of such Person
the payment of which is subordinated to payment of the Secured Obligations to
the written satisfaction of the Lender in its Permitted Discretion.

 

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

 

“Subsidiary” means any direct or indirect subsidiary of SIndustries or any other
Loan Party, as applicable.

 

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrowers or the
Subsidiaries shall be a Swap Agreement.

 

“Swap Obligations” of a Person means any and all obligations of such Person,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all Swap Agreements, and
(b) any and all cancellations, buy backs, reversals, terminations or assignments
of any Swap Agreement transaction.

 

“Tangible Net Worth” means the consolidated stockholders’ equity of SIndustries
and its Subsidiaries, less any allowance which is included in such stockholders’
equity for goodwill, patents,

 

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trademarks, trade secrets, and any other assets which are classified as
intangible assets under GAAP, and less the deferred tax asset arising from the
recognition of any net operating loss carry forward, all determined on a
consolidated basis for SIndustries and its Subsidiaries in accordance with GAAP.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

 

“Test Period” means a two Fiscal Month period identified under the column
captioned “Test Period” on the table set forth on the Minimum Required EBITDA
Schedule.

 

“Total Indebtedness” means, at any date, the aggregate principal amount of all
Indebtedness of SIndustries and its Subsidiaries at such date, determined on a
consolidated basis in accordance with GAAP.

 

“Transactions” means the execution, delivery and performance by the Borrowers of
this Agreement, the borrowing of Loans and other credit extensions, and the use
of the proceeds thereof.

 

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the CB Floating Rate.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of Indiana or any other state the laws of which are required to be applied
in connection with the issue of perfection of security interests.

 

“Unliquidated Obligations” means, at any time, any Secured Obligations (or
portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (i) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (ii) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (iii) an obligation to provide collateral to secure any of the foregoing
types of obligations.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

“Workers Comp Deductible Liability” means liability or payment obligations in
connection with or by reason of deductibles, retained liability or insured
claims for workers compensation claims made pursuant to one or more workers
compensation insurance policies maintained by SIndustries with The Travelers
Insurance Company.

 

“Workers Comp Deductible Indemnity Agreement” means an indemnity agreement
executed in favor of SIndustries by a direct or indirect subsidiary of
SIndustries that has Workers Comp Deductible Liability, which agreement shall
(i) indemnify SIndustries for such Subsidiaries Allocable Share of the Workers
Comp Deductible Liability, (ii) expressly provide that the Lender is a third
party beneficiary of such agreement and entitled to enforce the rights of
SIndustries under such agreement, and (iii) is otherwise in form and substance
acceptable to the Lender in its Permitted Discretion.

 

“Workers Comp Letter of Credit” means letter of credit no. 00344043 issued by
Chase, as issuer, at the request of SIndustries, as applicant, for the benefit
of The Travelers Indemnity Company, as beneficiary, with an amount available to
draw of $3,500,000, as the same may be amended, restated or otherwise modified
from time to time.  The Workers Comp Letter of Credit secures payment to The
Travelers Indemnity Company of deductibles of SIndustries and its subsidiaries
with respect to Workers Comp Deductible Liability.

 

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“Worker’s Comp LC Guaranty” means a Continuing Guaranty, dated as of the date
hereof, executed by a direct or indirect subsidiary of SIndustries that has
Workers Comp Deductible Liability, which shall guaranty the LC Exposure and all
other indebtedness, obligations and liabilities of SIndustries to the Lender
with respect to the Workers Comp Letter of Credit and with each such guaranty to
be limited to an amount equal to such Subsidiaries Allocable Share of the
Workers Comp Deductible Liability, as the same may be amended, restated or
otherwise modified from time to time.

 

SECTION 1.02.  Classification of Loans and Borrowings.  For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a
“Eurodollar Revolving Loan”).  Borrowings also may be classified and referred to
by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar
Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

 

SECTION 1.03.  Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word
“will” shall be construed to have the same meaning and effect as the word
“shall”.  Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.

 

SECTION 1.04.  Accounting Terms; GAAP.  Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrowers notify the Lender that the Borrowers request an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
(or if the Lender notifies the Borrowers that the Lender request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until  such
notice shall have been withdrawn or such provision  amended in accordance
herewith.

 

ARTICLE II

 

The Credits

 

SECTION 2.01.  Commitment.  Subject to the terms and conditions set forth
herein, the Lender agrees to make Revolving Loans as follows:

 

(a)           Subject to the limitations set forth in Sections 2.01(b) through
(e) of this Agreement, the Lender agrees to make Revolving Loans to each
Borrower from time to time during the Availability Period in an aggregate
principal amount that will not result in the Revolving Exposure exceeding the
Revolving Commitment, subject to the Lender’s authority, in its sole discretion,
to make Protective Advances pursuant to the terms of Section 2.04.

 

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(b)           Subject to the limitations set forth in Section 2.01(a), the
Lender agrees to make Revolving Loans to SIOperations from time to time during
the Availability Period in an aggregate principal amount that will not result in
the SIO Revolving Exposure exceeding the lesser of (i) the SIO Revolving
Commitment or (ii) the SIO Borrowing Base, subject to the Lender’s authority, in
its sole discretion, to make Protective Advances pursuant to the terms of
Section 2.04.  The unpaid principal amount of the Facility A (as such term was
defined in the Former Credit Agreement) immediately prior to the effectiveness
of this Agreement shall continue as Revolving Loans in an equivalent amount to
SIOperations under this Agreement and all unpaid, accrued interest on Facilitate
A (as such term was defined in the Former Credit Agreement) immediately prior to
the effectiveness of this Agreement shall be accrued, unpaid interest on the
Revolving Loans to SIOperations.

 

(c)           Subject to the limitations set forth in Section 2.01(a), the
Lender agrees to make Revolving Loans to SCTexas from time to time during the
Availability Period in an aggregate principal amount that will not result in the
SCTexas Revolving Exposure exceeding the lesser of (i) the SCTexas Revolving
Commitment or (ii) the SCTexas Borrowing Base, subject to the Lender’s
authority, in its sole discretion, to make Protective Advances pursuant to the
terms of Section 2.04.

 

(d)           Subject to the limitations set forth in Section 2.01(a), the
Lender agrees to make Revolving Loans to SMid-Atlantic from time to time during
the Availability Period in an aggregate principal amount that will not result in
the SMid-Atlantic Revolving Exposure exceeding the lesser of (i) the
SMid-Atlantic Revolving Commitment or (ii) the SMid-Atlantic Borrowing Base,
subject to the Lender’s authority, in its sole discretion, to make Protective
Advances pursuant to the terms of Section 2.04.

 

(e)           Subject to the limitations set forth in Section 2.01(a), the
Lender agrees to make Revolving Loans to SNorthwest from time to time during the
Availability Period in an aggregate principal amount that will not result in the
SNorthwest Revolving Exposure exceeding the lesser of (i) the SNorthwest
Revolving Commitment or (ii) the SNorthwest Borrowing Base, subject to the
Lender’s authority, in its sole discretion, to make Protective Advances pursuant
to the terms of Section 2.04.

 

(f)            Subject to the limitations set forth in Section 2.01(a), the
Lender agrees to make Revolving Loans to STBCalifornia from time to time during
the Availability Period in an aggregate principal amount that will not result in
the STBCalifornia Revolving Exposure exceeding the lesser of (i) the
STBCalifornia Revolving Commitment or (ii) the STBCalifornia Borrowing Base,
subject to the Lender’s authority, in its sole discretion, to make Protective
Advances pursuant to the terms of Section 2.04.

 

(g)           Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrowers may borrow, prepay and re-borrow
Revolving Loans.

 

SECTION 2.02.  Loans and Borrowings.

 

(a)           Each Revolving Loan shall be made as part of a Borrowing
consisting of Loans of the same Class and Type.  Any Protective Advance shall be
made in accordance with the procedures set forth in Section 2.04.

 

(b)           Subject to Section 2.13, each Revolving Borrowing shall be
comprised entirely of CBFR Loans or Eurodollar Loans as the Borrower requesting
to make such Revolving Borrowing (the “Requesting Borrower”) may request in
accordance herewith, provided that all Borrowings made on the Effective Date
must be made as CBFR Borrowings.  The Lender at its option may make any
Eurodollar Loan

 

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by causing any domestic or foreign branch or Affiliate of the Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrowers to repay such Loan in accordance with the terms of
this Agreement.

 

(c)           At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $500,000.  CBFR Revolving
Borrowings may be in any amount.  Borrowings of more than one Type and Class may
be outstanding at the same time; provided that there shall not at any time be
more than a total of five Eurodollar Revolving Borrowings outstanding.

 

(d)           Notwithstanding any other provision of this Agreement, a
Requesting Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date.

 

SECTION 2.03.  Borrowing Procedures; Requests for Revolving Borrowings.

 

(a)           Notices by the Borrowers to the Lender of requests for Revolving
Loans.  To request a Revolving Borrowing, the Requesting Borrower shall notify
the Lender of such request by telephone (a) in the case of a Eurodollar
Borrowing, not later than 10:00 a.m., Indianapolis time, three Business Days
before the date of the proposed Borrowing or (b) in the case of a CBFR
Borrowing, not later than noon, Indianapolis time, on the date of the proposed
Borrowing; provided that any such notice of a CBFR Revolving Borrowing to
finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(e) may be given not later than 9:00 a.m., Indianapolis time, on the
date of the proposed Borrowing.  Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or facsimile to the
Lender of a written Borrowing Request in a form approved by the Lender and
signed by the Requesting Borrower.  Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.01:

 

(i)            the aggregate amount of the requested Borrowing, and if more than
one Requesting Borrower is making such Borrowing Request, the amount of
Borrowing requested by each Requesting Borrower;

 

(ii)           the date of such Borrowing, which shall be a Business Day;

 

(iii)          whether such Borrowing is to be a CBFR Borrowing or a Eurodollar
Borrowing; and

 

(iv)          in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the definition
of the term “Interest Period.”

 

If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be a CBFR Borrowing.  If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Requesting Borrower shall be deemed to have selected an Interest Period of
one month’s duration.

 

(b)           Procedures For Inadequate Availability.  If any Borrowing Request
is made and such Borrowing Request requests Revolving Loans in excess of the
amounts permitted in Section 2.01 of this Agreement (a “Non-Complying Borrowing
Request”), then the Lender may reject such Borrowing Request with respect to any
or all of the Requesting Borrowers.  Lender has no obligation to make any of the
Revolving Loans requested pursuant to a Non-Complying Borrowing Request unless
and until such

 

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Requesting Borrowers submit a new Borrowing Request in which the requested
Revolving Loans do not exceed the amounts permitted in Section 2.01 of this
Agreement (subject to all other terms and conditions of this Agreement).

 

SECTION 2.04.  Protective Advances.  Subject to the limitations set forth below,
the Lender is authorized by each Borrower, from time to time in the Lender’s
Permitted Discretion (but shall have absolutely no obligation to), to make Loans
to such Borrower, which the Lender, in its Permitted Discretion, deems necessary
or desirable (i) to preserve or protect the Collateral of such Borrower, or any
portion thereof, or (ii) to pay any other amount chargeable to or required to be
paid by such Borrower pursuant to the terms of this Agreement, including
payments of principal, interest, LC Disbursements, fees, premiums, reimbursable
expenses (including costs, fees, and expenses as described in Section 8.03) and
other sums payable under the Loan Documents (any of such Loans are herein
referred to as “Protective Advances”); provided that, the aggregate amount of
Protective Advances outstanding at any time with respect to such Borrower shall
not exceed $1,000,000; provided further that, the aggregate amount of
outstanding Protective Advances plus the Revolving Exposure shall not exceed the
aggregate Revolving Commitment.  Protective Advances may be made even if the
conditions precedent set forth in Section 4.02 have not been satisfied.  The
Lender shall provide such Borrower with notice of any Protective Advances
advanced by the Lender as soon as practicable.  The Protective Advances
constitute Obligations hereunder.  All Protective Advances shall be CBFR
Borrowings.

 

SECTION 2.05.  Workers Comp Letter of Credit.

 

(a)           General.  The Lender issued the Worker Comp Letter of Credit for
the account of SIndustries pursuant to an Application and Agreement For
Irrevocable Standby Letter of Credit dated as of September 23, 2003 (as the same
has been or may be amended from time to time, the “LC Reimbursement
Agreement”).  The Workers Comp Letter of Credit is security to The Travelers
Indemnity Company for Workers Comp Deductible Liability incurred under a large
deductible workers compensation insurance policy maintained by SIndustries to
cover workers’ compensation claims against the other Borrowers.  Each such
Borrower has, prior to or simultaneously with the execution of this Agreement,
executed a Workers Comp Deductible Indemnity Agreement in favor of SIndustries
pursuant to which such Borrower agrees to indemnify SIndustries for such
Borrower’s Allocable Share of Workers Comp Deductible Liability.  Each such
Borrower derives direct and substantial benefit from the Workers Comp Letter of
Credit, and accordingly each such Borrower (a) shall be directly liable to the
Lender for such Borrower’s Allocable Share of each LC Disbursement from the
Workers Comp Letter of Credit, and (b) is, simultaneously with the execution of
this Agreement, executing a Workers Comp LC Guaranty in favor of the Lender,
pursuant to which such Borrower guaranties the payment to Lender of such
Borrower’s Allocable Share of the LC Exposure.  The Borrowers represent that
Schedule 2.05 of this Agreement sets forth the good faith determination of the
Allocable Share of Workers Comp Deductible Liability of each such Borrower and
an explanation of how such allocation was made by the Borrowers.  For the
avoidance of doubt, the Lender is not making any commitment in this Agreement to
the Borrowers with respect to any renewal or extension of the Workers Comp
Letter of Credit.  In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of the LC
Reimbursement Agreement, the terms and conditions of the LC Reimbursement
Agreement shall control.

 

(b)           Reimbursement.  If the Lender shall make any LC Disbursement,
SIndustries shall reimburse such LC Disbursement pursuant to the requirements of
the LC Reimbursement Agreement; provided that each of the Borrowers may, subject
to the conditions to borrowing set forth herein, request in accordance with
Section 2.03 or 2.04 that such payment be financed with a CBFR Revolving
Borrowing in an equivalent amount to such Borrower’s Allocable Share of the LC
Disbursement and, to the extent so financed, SIndustries’ obligation to make
such payment shall be discharged and replaced by the resulting CBFR Revolving
Borrowings.  If SIndustries or the Borrowers fail to reimburse LC Disbursements
within the time periods required by the LC Reimbursement Agreement, each
Borrower shall be deemed to have

 

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elected that reimbursement of the LC Disbursement be financed with a CBFR
Revolving Borrowing in an equivalent amount to such Borrower’s Allocable Share
of such LC Disbursement and, to the extent so financed, SIndustries’ obligation
to make such payment shall be discharged and replaced by the resulting CBFR
Revolving Borrowings.  Such CBFR Revolving Borrowings shall be made as of the
date the LC Disbursement is required to be reimbursed by the LC Reimbursement
Agreement, automatically, without notice and without any requirement to satisfy
the conditions precedent otherwise applicable to a Revolving Loan.

 

(c)           Obligations Absolute.  Each Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (b) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of the Workers Comp
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under the Workers Comp Letter of Credit
proving to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect, (iii) payment by the Lender
under the Workers Comp Letter of Credit against presentation of a draft or other
document that does not comply with the terms of the Workers Comp Letter of
Credit, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of, or provide a right of
setoff against, the Borrowers’ obligations hereunder.  Neither the Lender nor
any of its Related Parties, shall have any liability or responsibility by reason
of or in connection with the issuance or transfer of the Workers Comp Letter of
Credit or any payment or failure to make any payment thereunder (irrespective of
any of the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to the Workers Comp Letter of
Credit (including any document required to make a drawing thereunder), any error
in interpretation of technical terms or any consequence arising from causes
beyond the control of the Lender; provided that the foregoing shall not be
construed to excuse the Lender from liability to the Borrowers to the extent of
any direct damages (as opposed to consequential damages, claims in respect of
which are hereby waived by the Borrowers to the extent permitted by applicable
law) suffered by any Borrower that are caused by the Lender’s failure to
exercise care when determining whether drafts and other documents presented
under the Workers Comp Letter of Credit comply with the terms thereof.  The
parties hereto expressly agree that, in the absence of gross negligence or
willful misconduct on the part of the Lender (as finally determined by a court
of competent jurisdiction), the Lender shall be deemed to have exercised care in
each such determination.  In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial compliance with the
terms of the Workers Comp Letter of Credit, the Lender may, in its Permitted
Discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of the
Workers Comp Letter of Credit.

 

(d)           Interim Interest.  If the Lender shall make any LC Disbursement,
then, unless the Borrowers shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrowers reimburse such LC Disbursement, at
the rate per annum then applicable to CBFR Revolving Loans; provided that, if
the Borrowers fail to reimburse such LC Disbursement when due pursuant to
paragraph (b) of this Section, then Section 2.12(d) shall apply.  Interest
accrued pursuant to this paragraph shall be for the account of the Lender.

 

(e)           Cash Collateralization.  If any Default shall occur and be
continuing, then on the Business Day that the Borrowers receive notice from the
Lender demanding the deposit of cash collateral pursuant to this paragraph, each
Borrower shall deposit in an account with the Lender, in the name and for the
benefit of the Lender (the “LC Collateral Account”), an amount in cash equal to
105% of such Borrower’s

 

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Allocable Share of the LC Exposure as of such date plus accrued and unpaid
interest thereon; provided that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to any Borrower described in clause (h) or
(i) of Article VII.  Such deposit shall be held by the Lender as collateral for
the payment and performance of the Secured Obligations.  The Lender shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account and each Borrower hereby grant the Lender a security interest
in the LC Collateral Account.  Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole
discretion of the Lender and at the Borrowers’ risk and expense, such deposits
shall not bear interest.  Interest or profits, if any, on such investments shall
accumulate in the LC Collateral Account.  Moneys in the LC Collateral Account
shall be applied by the Lender for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrowers for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated, be applied to
satisfy other Secured Obligations of such Borrower.  If any Borrower is required
to provide an amount of cash collateral hereunder as a result of the occurrence
of a Default, such amount (to the extent not applied as aforesaid) shall be
returned to such Borrower within three Business Days after all Defaults have
been cured or waived by the Lender in writing.

 

SECTION 2.06.  Funding of Borrowings.  The Lender shall make each Loan to be
made by it hereunder on the proposed date thereof available to the Borrowers by
promptly crediting the amounts in immediately available funds, to the Funding
Account; provided that CBFR Revolving Loans made to finance the reimbursement of
an LC Disbursement as provided in Section 2.05(e) or a Protective Advance shall
be retained by the Lender.

 

SECTION 2.07.  Interest Elections.

 

(a)           Each Revolving Borrowing initially shall be of the Type specified
in the applicable Borrowing Request and, in the case of a Eurodollar Revolving
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request.  Thereafter, the Requesting Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Revolving Borrowing, may elect Interest Periods therefor, all as
provided in this Section.  The Requesting Borrower may elect different options
with respect to different portions of the affected Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing.  This
Section shall not apply to Protective Advances, which may not be converted or
continued.

 

(b)           To make an election pursuant to this Section, the Requesting
Borrower shall notify the Lender of such election by telephone by the time that
a Borrowing Request would be required under Section 2.03 if the Requesting
Borrower were requesting a Revolving Borrowing of the Type resulting from such
election to be made on the effective date of such election.  Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or facsimile to the Lender of a written Interest
Election Request in a form approved by the Lender and signed by the Requesting
Borrower.

 

(c)           Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:

 

(i)            the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and
(iv) below shall be specified for each resulting Borrowing);

 

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(ii)           the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

 

(iii)          whether the resulting Borrowing is to be a CBFR Borrowing or a
Eurodollar Borrowing; and

 

(iv)          if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.

 

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Requesting Borrower shall be deemed to
have selected an Interest Period of one month’s duration.

 

(d)           If the Requesting Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Revolving Borrowing prior to the
end of the Interest Period applicable thereto, then, unless such Borrowing is
repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to a CBFR Borrowing.  Notwithstanding any contrary provision
hereof, if a Default has occurred and is continuing and the Lender so notifies
the Borrowers, then, so long as a Default is continuing (i) no outstanding
Revolving Borrowing may be converted to or continued as a Eurodollar Borrowing
and (ii) unless repaid, each Eurodollar Revolving Borrowing shall be converted
to a CBFR Borrowing at the end of the Interest Period applicable thereto.

 

SECTION 2.08.  Termination of Commitment.

 

(a)           Unless previously terminated, all Commitments shall terminate on
the Maturity Date.

 

(b)           The Borrowers may at any time terminate the Revolving Commitment
upon (i) the payment in full of all outstanding Loans, together with accrued and
unpaid interest thereon and the Workers Comp Letter of Credit, (ii) the
cancellation and return of the Workers Comp Letter of Credit (or alternatively,
with respect to the Workers Comp Letter of Credit, the furnishing to the Lender
of a cash deposit in an amount equal to 105% of the LC Exposure at the time of
termination), (iii) the payment in full of the accrued and unpaid fees, and
(iv) the payment in full of all reimbursable expenses and other Obligations
together with accrued and unpaid interest thereon.

 

(c)           The Borrowers may from time to time reduce the Revolving
Commitment; provided that (i) each reduction of the Revolving Commitment shall
be in an amount that is an integral multiple of $250,000 and not less than
$250,000 and (ii) the Borrowers shall not reduce the Revolving Commitment if,
after giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.09, the Revolving Exposure would exceed the reduced
Revolving Commitment.

 

(i)            SIOperations may from time to time reduce the SIO Revolving
Commitment; provided that (A) each reduction of the SIO Revolving Commitment
shall be in an amount that is an integral multiple of $250,000 and not less than
$250,000 and (B) SIO shall not reduce the SIO Revolving Commitment if, after
giving effect to any concurrent prepayment of the Revolving Loans to
SIOperations in accordance with Section 2.09, the SIO Revolving Exposure would
exceed the reduced SIO Revolving Commitment.  Each reduction in the Revolving
Commitment shall simultaneously reduce the SIO Revolving Commitment by an
equivalent amount, and each reduction in the SIO Revolving

 

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Commitment shall simultaneously reduce the Revolving Commitment by an equivalent
amount.

 

(ii)           SCTexas may from time to time reduce the SCTexas Revolving
Commitment; provided that (A) each reduction of the SCTexas Revolving Commitment
shall be in an amount that is an integral multiple of $100,000 and not less than
$100,000 and (B) SCTexas shall not reduce the SCTexas Revolving Commitment if,
after giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.09, the SCTexas Revolving Exposure would exceed the
reduced SCTexas Revolving Commitment.

 

(iii)          SMid-Atlantic may from time to time reduce the SMid-Atlantic
Revolving Commitment; provided that (A) each reduction of the SMid-Atlantic
Revolving Commitment shall be in an amount that is an integral multiple of
$100,000 and not less than $100,000 and (ii) SMid-Atlantic shall not reduce the
SMid-Atlantic Revolving Commitment if, after giving effect to any concurrent
prepayment of the Revolving Loans in accordance with Section 2.09, the
SMid-Atlantic Revolving Exposure would exceed the reduced SMid-Atlantic
Revolving Commitment.

 

(iv)          SNorthwest may from time to time reduce the SNorthwest Revolving
Commitment; provided that (A) each reduction of the SNorthwest Revolving
Commitment shall be in an amount that is an integral multiple of $100,000 and
not less than $100,000 and (B) SNorthwest shall not reduce the SNorthwest
Revolving Commitment if, after giving effect to any concurrent prepayment of the
Revolving Loans in accordance with Section 2.09, the SNorthwest Revolving
Exposures would exceed the reduced SNorthwest Revolving Commitment.

 

(v)           STBCalifornia may from time to time reduce the STBCalifornia
Revolving Commitment; provided that (A) each reduction of the STBCalifornia
Revolving Commitment shall be in an amount that is an integral multiple of
$100,000 and not less than $100,000 and (B) the STBCalifornia shall not reduce
the STBCalifornia Revolving Commitment if, after giving effect to any concurrent
prepayment of the Revolving Loans in accordance with Section 2.09, the
STBCalifornia Revolving Exposure would exceed the reduced STBCalifornia
Revolving Commitment.

 

(d)           The Borrowers shall notify the Lender of any election to terminate
or reduce the Commitment under paragraph (b) of this Section at least five
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof.  Each notice delivered
by the Borrowers pursuant to this Section shall be irrevocable; provided that a
notice of termination of the Commitment delivered by the Borrowers may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrowers (by notice
to the Lender on or prior to the specified effective date) if such condition is
not satisfied.  Any termination or reduction of the Commitment shall be
permanent.

 

SECTION 2.09.  Repayment of Loans; Evidence of Debt.

 

(a)           Each Borrower hereby unconditionally promises to pay (i) to the
Lender for its account the then unpaid principal amount of each Revolving Loan
made to such Borrower on the Maturity Date, and (ii) to the Lender the then
unpaid amount of each Protective Advance made to such Borrower on the earlier of
the Maturity Date and demand by the Lender.

 

(b)           The Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrowers to the Lender
resulting from each Loan made by the

 

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Lender, including the amounts of principal and interest payable and paid to the
Lender from time to time hereunder.

 

(c)           The Lender shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Class and Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrowers to the Lender
hereunder and (iii) the amount of any sum received by the Lender hereunder.

 

(d)           The entries made in the accounts maintained pursuant to paragraph
(c) or (d) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of the
Lender to maintain such accounts or any error therein shall not in any manner
affect the obligation of the Borrowers to repay the Loans in accordance with the
terms of this Agreement.

 

(e)           The Lender may request that Loans made by it be evidenced by a
promissory note.  In such event, each Borrower shall execute and deliver to the
Lender a promissory note payable to the order of the Lender (or, if requested by
the Lender, to the Lender and its registered assigns) and in a form approved by
the Lender.  The Lender shall have no obligation to make advances of Revolving
Loans until the promissory note has been approved by the Lender and executed and
delivered by each Borrower.  Thereafter, the Loans evidenced by such promissory
notes and interest thereon shall at all times (including after assignment
pursuant to Section 8.04) be represented by one or more promissory notes in such
form payable to the order of the payee named therein (or, if such promissory
note is a registered note, to such payee and its registered assigns).

 

SECTION 2.10.  Prepayment of Loans.

 

(a)           The Borrowers shall have the right at any time and from time to
time to prepay any Borrowing in whole or in part without penalty or premium
except as set forth in Section 2.15.

 

(b)           In the event and on such occasion that the Revolving Exposure
exceeds the Revolving Commitment, one or more of the Borrowers shall prepay the
Revolving Loans made to such Borrower and such Borrower’s Allocable Share of the
LC Exposure, with the aggregate amount of such prepayment by the Borrowers to be
equal to the amount by which the Revolving Exposure exceeds the Revolving
Commitment.  In addition, the Borrowers shall make the following prepayments
with respect to the Commitments:

 

(i)            In the event and on such occasion that the SIO Revolving Exposure
exceeds the lesser of (A) the SIO Revolving Commitment or (B) the SIO Borrowing
Base, SIOperations shall prepay the Revolving Loans made to SIOperations and
SIOperations’ Allocable Share of LC Exposure in an aggregate amount equal to
such excess.

 

(ii)           In the event and on such occasion that the SCTexas Revolving
Exposure exceeds the lesser of (A) the SCTexas Revolving Commitment or (B) the
SCTexas Borrowing Base, SCTexas shall prepay the Revolving Loans made to SCTexas
and SCTexas’ Allocable Share of LC Exposure in an aggregate amount equal to such
excess.

 

(iii)          In the event and on such occasion that the SMid-Atlantic
Revolving Exposure exceeds the lesser of (A) the SMid-Atlantic Revolving
Commitment or (B) the SMid-Atlantic Borrowing Base, SMid-Atlantic shall prepay
the Revolving Loans made to SMid-Atlantic and SMid-Atlantic’s Allocable Share of
LC Exposure in an aggregate amount equal to such excess.

 

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(iv)          In the event and on such occasion that the SNorthwest Revolving
Exposure exceeds the lesser of (A) the SNorthwest Revolving Commitment or
(B) the SNorthwest Borrowing Base, SNorthwest shall prepay the Revolving Loans
made to SNorthwest and SNorthwest ‘s Allocable Share of LC Exposure in an
aggregate amount equal to such excess.

 

(v)           In the event and on such occasion that the STBCalifornia Revolving
Exposure exceeds the lesser of (A) the STBCalifornia Revolving Commitment or
(B) the STBCalifornia Borrowing Base, STBCalifornia shall prepay the Revolving
Loans made to STBCalifornia and STBCalifornia’s Allocable Share of LC Exposure
in an aggregate amount equal to such excess.

 

(c)           In the event and on each occasion that any Net Proceeds are
received by or on behalf of any Borrower in respect of any Prepayment Event,
such Borrower shall, immediately after such Net Proceeds are received by such
Borrower, prepay the Obligations of such Borrower as set forth in this
Section 2.10(c) below in an aggregate amount equal to 100% of such Net Proceeds,
provided that, in the case of any event described in clause (a) or (b) of the
definition of the term “Prepayment Event”, if such Borrower delivers to the
Lender a certificate of a Financial Officer to the effect that such Borrower
intends to apply the Net Proceeds from such event (or a portion thereof
specified in such certificate), within 120 days after receipt of such Net
Proceeds, to acquire (or replace or rebuild) real property, equipment or other
tangible assets (excluding inventory) to be used in the business of such
Borrower, and certifying that no Default has occurred and is continuing, then no
prepayment shall be required pursuant to this paragraph in respect of the Net
Proceeds specified in such certificate; provided that to the extent of any such
Net Proceeds therefrom that have not been so applied by the end of such 120-day
period, at which time a prepayment shall be required in an amount equal to such
Net Proceeds that have not been so applied.

 

All such amounts paid by a Borrower pursuant this Section 2.10(c) shall be
applied as follows:

 

(i)            All such amounts paid by a Borrower pursuant this
Section 2.10(c) (as to any proceeds from insurance, condemnation, sale, transfer
or other disposition, to the extent they arise from casualties, losses, sales,
transfers, or other dispositions of Equipment, Fixtures and real property) shall
be applied, first to prepay any Protective Advances made to such Borrower that
may be outstanding, pro rata, second to prepay the outstanding Revolving Loans
made to such Borrower with a corresponding reduction in the Revolving Commitment
and such Borrower’s individual Commitment (e.g. the SIO Revolving Commitment,
the SCTexas Revolving Commitment, the SMid-Atlantic Revolving Commitment, the
SNorthwest Revolving Commitment, and the STBCalifornia Revolving Commitment),
third, to cash collateralize such Borrower’s Allocable Share of the outstanding
LC Exposure and fourth to cash collateralize the Guaranteed Obligations of such
Borrower.  If the precise amount of insurance or condemnation proceeds allocable
to Inventory as compared to Equipment, Fixtures and real property is not
otherwise determined, the allocation and application of those proceeds shall be
determined by the Lender, in its Permitted Discretion.

 

(ii)           All such amounts paid by a Borrower pursuant to this
Section 2.10(c) (as to any proceeds from insurance, condemnation, sale, transfer
or other disposition, to the extent they arise from casualties, losses, sales,
transfers, or other dispositions of cash or Inventory) shall be applied, first
to prepay any Protective Advances of such Borrower that may be outstanding, pro
rata, second to prepay the outstanding Revolving Loans made to such Borrower
(but without a reduction in any Commitment), third, to cash collateralize such
Borrower’s Allocable Share of the outstanding LC Exposure and fourth to cash
collateralize the Guaranteed Obligations of such Borrower.  If the precise
amount of insurance or

 

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condemnation proceeds allocable to Inventory as compared to Equipment, Fixtures
and real property is not otherwise determined, the allocation and application of
those proceeds shall be determined by the Lender, in its Permitted Discretion.

 

(iii)          All such amounts paid by a Borrower pursuant this
Section 2.10(c) (as to any proceeds from an event described in clause (c) or
(d) of the definition of the term “Prepayment Event”) shall be applied, first to
prepay any Protective Advances made to such Borrower that may be outstanding,
pro rata, second to prepay the outstanding Revolving Loans made to such Borrower
with a corresponding reduction in the Revolving Commitment and such Borrower’s
individual Commitment (e.g. the SIO Revolving Commitment, the SCTexas Revolving
Commitment, the SMid-Atlantic Revolving Commitment, the SNorthwest Revolving
Commitment, and the STBCalifornia Revolving Commitment), third, to cash
collateralize such Borrower’s Allocable Share of the outstanding LC Exposure and
fourth to cash collateralize the Guaranteed Obligations of such Borrower.

 

(d)           In the event and on each occasion that any Net Proceeds are
received by or on behalf of any Loan Party (other than a Borrower) in respect of
any Prepayment Event, such Loan Party shall, immediately after such Net Proceeds
are received by such Loan Party, prepay the Obligations of the Borrowers as set
forth in this Section 2.10(d) below in an aggregate amount equal to 100% of such
Net Proceeds, provided that, in the case of any event described in clause (a) or
(b) of the definition of the term “Prepayment Event”, if such Loan Party
delivers to the Lender a certificate of a Financial Officer to the effect that
such Loan Party intends to apply the Net Proceeds from such event (or a portion
thereof specified in such certificate), within 120 days after receipt of such
Net Proceeds, to acquire (or replace or rebuild) real property, equipment or
other tangible assets (excluding inventory) to be used in the business of such
Loan Party, and certifying that no Default has occurred and is continuing, then
no prepayment shall be required pursuant to this paragraph in respect of the Net
Proceeds specified in such certificate; provided that to the extent of any such
Net Proceeds therefrom that have not been so applied by the end of such 120-day
period, at which time a prepayment shall be required in an amount equal to such
Net Proceeds that have not been so applied. All such amounts paid by a Loan
Party pursuant this Section 2.10(d) shall be applied first to prepay any
Protective Advances of each Borrower that may be outstanding, pro rata, second
to prepay the outstanding Revolving Loans made to each Borrower, pro rata (but
without a reduction in any Commitment), and third to cash collateralize the
Guaranteed Obligations of such Loan Party.

 

(e)           The Borrowers shall notify the Lender by telephone (confirmed by
facsimile) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Revolving Borrowing, not later than 10:00 a.m., Indianapolis time,
three Business Days before the date of prepayment, (ii) in the case of
prepayment of a CBFR Revolving Borrowing, not later than
10:00 a.m., Indianapolis time, on the date of prepayment.  Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid; provided that, if a
notice of prepayment is given in connection with a conditional notice of
termination of the Commitment as contemplated by Section 2.08, then such notice
of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.08.  Each partial prepayment of any Revolving
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same Type as provided in Section 2.02. 
Prepayments shall be accompanied by accrued interest to the extent required by
Section 2.12.

 

SECTION 2.11.  Fees.

 

(a)           SIndustries agrees to pay to the Lender a commitment fee, which
shall accrue at the Applicable Rate on the average daily amount of the Available
Revolving Commitment of the Lender during the period from and including the
Effective Date to but excluding the date on which the Lender’s Revolving
Commitment terminates.  Accrued commitment fees shall be payable in arrears on
the first Business Day of each calendar quarter and on the date on which the
Revolving Commitment terminates, commencing on the

 

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first such date to occur after the date hereof.  All commitment fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed.

 

(b)           SIndustries agrees to pay to the Lender a closing fee in an
aggregate amount equal to $33,500.  The entire closing fee is fully earned by
the Lender and shall be due and payable in full on the Effective Date.

 

(c)           All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Lender.  Fees paid shall not be refundable
under any circumstances.

 

SECTION 2.12.  Interest.

 

(a)           The Loans comprising each CBFR Borrowing shall bear interest at
the CB Floating Rate plus the Applicable Rate.

 

(b)           The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.

 

(c)           Each Protective Advance shall bear interest at the CB Floating
Rate plus the Applicable Rate plus 3% per annum.

 

(d)           Notwithstanding the foregoing, during the occurrence and
continuance of a Default, the Lender may, at its option, by notice to the
Borrowers, declare that (i) all Loans shall bear interest at 3% per annum plus
the rate otherwise applicable to such Loans as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amount outstanding
hereunder, such amount shall accrue at 3% per annum plus the rate applicable to
such fee or other obligation as provided hereunder.

 

(e)           Accrued interest on each Loan (for CBFR Loans, accrued through the
last day of the prior calendar month) shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitment;
provided that (i) interest accrued pursuant to paragraph (d) of this
Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of a CBFR Revolving Loan prior
to the end of the Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment
and (iii) in the event of any conversion of any Eurodollar Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

 

(f)            All interest (i) on CBFR Loans shall (A) during any time the
applicable interest rate for CBFR Loans is calculated using the Prime Rate, be
computed on the basis of a year of 365 days (or 366 days in a leap year) and
shall be payable for the actual number of days elapsed, and (B) at all other
times, be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed; and (ii) on Eurodollar Loans shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed.  The applicable CB Floating Rate, Adjusted LIBO Rate or
LIBO Rate shall be determined by the Lender, and such determination shall be
conclusive absent manifest error.

 

SECTION 2.13.  Alternate Rate of Interest.  If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

 

(a)           the Lender determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such
Interest Period; or

 

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(b)           the Lender determines the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period will not adequately and fairly reflect the
cost to the Lender of making or maintaining their Loans (or its Loan) included
in such Borrowing for such Interest Period;

 

then the Lender shall give notice thereof to the Borrowers by telephone or
facsimile as promptly as practicable thereafter and, until the Lender notifies
the Borrowers that the circumstances giving rise to such notice no longer exist,
(i) any Interest Election Request that requests the conversion of any Revolving
Borrowing to, or continuation of any Revolving Borrowing as, a Eurodollar
Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a
Eurodollar Revolving Borrowing, such Borrowing shall be made as a CBFR
Borrowing.

 

SECTION 2.14.  Increased Costs.

 

(a)           If any Change in Law shall:

 

(i)            impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, the Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate); or

 

(ii)           impose on the Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
the Workers Comp Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to the Lender of
maintaining the Workers Comp Letter of Credit or to reduce the amount of any sum
received or receivable by the Lender hereunder (whether of principal, interest
or otherwise), then the Borrowers will pay to the Lender upon receipt of a
certification from Lender, as provided in (c) below, such additional amount or
amounts as will compensate the Lender for such additional costs incurred or
reduction suffered.

 

(b)           If the Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on the
Lender’s capital or on the capital of the Lender’s holding company, as a
consequence of this Agreement or the Loans made by the Lender or the Workers
Comp Letter of Credit to a level below that which the Lender or the Lender’s
holding company could have achieved but for such Change in Law (taking into
consideration the Lender’s policies and the policies of the Lender’s holding
company with respect to capital adequacy), then from time to time the Borrowers
will pay to the Lender such additional amount or amounts upon receipt of a
certification from Lender, as provided in (c) below, as will compensate the
Lender or the Lender’s holding company for any such reduction suffered.

 

(c)           A certificate of the Lender setting forth the amount or amounts
necessary to compensate the Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrowers and shall be conclusive absent manifest error.  The Borrowers shall
pay the Lender the amount shown as due on any such certificate within 10 days
after receipt thereof.

 

(d)           Failure or delay on the part of the Lender to demand compensation
pursuant to this Section shall not constitute a waiver of the Lender’s right to
demand such compensation; provided that the Borrowers shall not be required to
compensate the Lender pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that the Lender
notifies the Borrowers of the Change in Law giving rise to such increased costs
or reductions and of the Lender’s intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 270-day period referred to above shall be
extended to include the period of retroactive effect thereof.

 

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SECTION 2.15.  Break Funding Payments.  In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto or (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.08(c) and is revoked in accordance therewith), then, in any such
event, the Borrowers shall compensate the Lender for the loss, cost and expense
attributable to such event.  In the case of a Eurodollar Loan, such loss, cost
or expense to the Lender shall be deemed to include an amount determined by the
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which the Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market.  A certificate of the Lender
setting forth any amount or amounts that the Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrowers and shall be
conclusive absent manifest error.  The Borrowers shall pay the Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.

 

SECTION 2.16.  [This Section Reserved].

 

SECTION 2.17.  Payments Generally; Allocation of Proceeds; Sharing of Set-offs.

 

(a)           Each Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.14, 2.15 or 2.16, or
otherwise) prior to 2:00 p.m., Indianapolis time, on the date when due, in
immediately available funds, without set-off or counterclaim.  Any amounts
received after such time on any date may, in the discretion of the Lender, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon.  All such payments shall be made to the Lender at
its offices at 121 West Franklin St., Elkhart, Indiana 46516, If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension.  All payments hereunder shall be made in dollars.

 

(b)           Any proceeds of Collateral received by the Lender (i) not
constituting either (A) a specific payment of principal, interest, fees or other
sum payable under the Loan Documents (which shall be applied as specified by the
applicable Borrower), or (B) a mandatory prepayment (which shall be applied in
accordance with Section 2.10), or (ii) after an Event of Default has occurred
and is continuing and the Lender so elects such funds shall be applied ratably
first, to pay any fees, indemnities, or expense reimbursements including amounts
then due to the Lender from such Borrower, second, to pay interest due in
respect of the Protective Advances for the account of such Borrower, third, to
pay the principal of the Protective Advances for the account of such Borrower,
fourth, to pay interest then due and payable on the Loans made to such Borrower
(other than the Protective Advances), fifth, to prepay principal on the Loans
made to such Borrower (other than the Protective Advances) and unreimbursed LC
Disbursements owed by such Borrower or for which such Borrower is a Loan
Guarantor, sixth, to pay an amount to the Lender equal to one hundred percent
(100%) of the aggregate undrawn face amount of the Workers Comp Letter of Credit
and the aggregate amount of unpaid LC Disbursements, to be held as cash
collateral for such Obligations, seventh, to payment of any amounts owing with
respect to Banking Services and Swap Obligations of such Borrower, eighth, to
the payment of any other Secured Obligation due to the Lender by such Borrower,
and ninth, to cash collateralize the Guaranteed Obligations of such Borrower. 
Notwithstanding anything to the contrary contained in this Agreement, unless so
directed by the Borrowers, or unless a Default is in existence, the

 

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Lender shall not apply any payment which it receives to any Eurodollar Loan of a
Class, except (a) on the expiration date of the Interest Period applicable to
any such Eurodollar Loan or (b) in the event, and only to the extent, that there
are no outstanding CBFR Loans of the same Class and, in any such event, the
Borrower shall pay the break funding payment required in accordance with
Section 2.15.  The Lender shall have the continuing and exclusive right to apply
and reverse and reapply any and all such proceeds and payments to any portion of
the Secured Obligations.

 

(c)           At the election of the Lender, all payments of principal,
interest, LC Disbursements, fees, premiums, reimbursable expenses (including,
without limitation, all reimbursement for fees and expenses pursuant to
Section 8.03), and other sums payable under the Loan Documents, may be paid from
the proceeds of Borrowings made hereunder whether made following a request by a
Borrower pursuant to Section 2.03 or a deemed request as provided in this
Section or may be deducted from any deposit account of the Borrowers maintained
with the Lender.  As soon as practical, the Lender shall provide written or
verbal notice to the Borrowers of any payments made in accordance with the
preceding sentence other than interest payments; provided, however, that Lender
shall have no liability and the Borrowers shall have no claim by reason of the
inadvertent failure of Lender to timely give such notification.  Each Borrower
hereby irrevocably authorizes (i) the Lender to make a Borrowing for the purpose
of paying each payment of principal, interest and fees as it becomes due
hereunder or any other amount due under the Loan Documents and agrees that all
such amounts charged shall constitute Loans (but such a Borrowing may only
constitute a Protective Advance if it is to reimburse costs, fees and expenses
as described in Section 8.03) and that all such Borrowings shall be deemed to
have been requested pursuant to Sections 2.03 or 2.04, as applicable and
(ii) the Lender to charge any deposit account of the Borrowers maintained with
the Lender for each payment of principal, interest and fees as it becomes due
hereunder or any other amount due under the Loan Documents.

 

SECTION 2.18.  Indemnity for Returned Payments.  If after receipt of any payment
which is applied to the payment of all or any part of the Obligations, the
Lender is for any reason compelled to surrender such payment or proceeds to any
Person because such payment or application of proceeds is invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference,
impermissible setoff, or a diversion of trust funds, or for any other reason,
then the Obligations or part thereof intended to be satisfied shall be revived
and continued and this Agreement shall continue in full force as if such payment
or proceeds had not been received by the Lender.  The provisions of this
Section 2.18 shall be and remain effective notwithstanding any contrary action
which may have been taken by the Lender in reliance upon such payment or
application of proceeds.  The provisions of this Section 2.18 shall survive the
termination of this Agreement.

 

ARTICLE III

 

Representations and Warranties

 

Each Loan Party represents and warrants to the Lender that:

 

SECTION 3.01.  Organization; Powers.  Each of the Loan Parties and each of its
Subsidiaries is duly organized, validly existing, and, if applicable, in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and is
qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required.

 

SECTION 3.02.  Authorization; Enforceability.  The Transactions are within each
Loan Party’s organizational powers and have been duly authorized by all
necessary organizational actions and, if required, actions by equity holders. 
The Loan Documents to which each Loan Party is a party have been duly executed
and delivered by such Loan Party and constitute a legal, valid and binding
obligation of such Loan Party, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency,

 

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reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.

 

SECTION 3.03.  Governmental Approvals; No Conflicts.  The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect and except for filings necessary to
perfect Liens created pursuant to the Loan Documents, (b) will not violate any
Requirement of Law applicable to any Loan Party or any of its Subsidiaries,
(c) will not violate or result in a default under any indenture, agreement or
other instrument binding upon any Loan Party or any of its Subsidiaries or its
assets, or give rise to a right thereunder to require any payment to be made by
any Loan Party or any of its Subsidiaries, and (d) will not result in the
creation or imposition of any Lien on any asset of any Loan Party or any of its
Subsidiaries, except Liens created pursuant to the Loan Documents.

 

SECTION 3.04.  Financial Condition; No Material Adverse Change.

 

(a)           SIndustries has heretofore furnished to the Lender its
consolidated balance sheet and statements of income, stockholders equity and
cash flows (i) as of and for the Fiscal Year ended December 26, 2009, reported
on by Crowe Horwath LLP, independent public accountants, and (ii) as of and for
the Fiscal Month and portion of the Fiscal Year ended August 21, 2010, certified
by its chief financial officer.  Such financial statements present fairly, in
all material respects, the financial position and results of operations and cash
flows of SIndustries and its consolidated Subsidiaries as of such dates and for
such periods in accordance with GAAP, subject to year-end audit adjustments and
the absence of footnotes in the case of the statements referred to in clause
(ii) above.

 

(b)           No event, change or condition has occurred that has had, or could
reasonably be expected to have, a Material Adverse Effect, since December 26,
2009.

 

SECTION 3.05.  Properties.

 

(a)           As of the date of this Agreement, Schedule 3.05 sets forth the
address of each parcel of real property that is owned or leased by each Loan
Party.  Each of such leases and subleases is valid and enforceable in accordance
with its terms subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law and is in full force and effect, and, except as set forth on
Schedule 3.05, no default by any party to any such lease or sublease exists. 
Each of the Loan Parties and its Subsidiaries has good and indefeasible title
to, or valid leasehold interests in, all its real and personal property, free of
all Liens other than those permitted by Section 6.02.

 

(b)           Each Loan Party and its Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
necessary to its business as currently conducted, as of the date of this
Agreement and the use thereof by the Loan Parties and its Subsidiaries does not
infringe in any material respect upon the rights of any other Person, and the
Loan Parties’ rights thereto are not subject to any licensing agreement or
similar arrangement.

 

SECTION 3.06.  Litigation and Environmental Matters.

 

(a)           There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of any
Loan Party, threatened against or affecting the Loan Parties or any of their
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other
than the Disclosed Matters) or (ii) that involve this Agreement or the
Transactions.

 

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(b)                                 Except for the Disclosed Matters (i) no Loan
Party nor any of its Subsidiaries has received notice of any claim with respect
to any Environmental Liability or knows of any basis for any Environmental
Liability and (ii) and except with respect to any other matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, no Loan Party nor any of its Subsidiaries (1) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law
or (2) has become subject to any Environmental Liability.

 

(c)                                  Since the date of this Agreement, there has
been no change in the status of the Disclosed Matters that, individually or in
the aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.

 

SECTION 3.07.  Compliance with Laws and Agreements.  Each Loan Party and its
Subsidiaries is in compliance with all Requirements of Law applicable to it or
its property and all indentures, agreements and other instruments binding upon
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.  No Default has occurred and is continuing.

 

SECTION 3.08.  Investment Company Status.  No Loan Party nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.

 

SECTION 3.09.  Taxes.  Each Loan Party and its Subsidiaries has timely filed or
caused to be filed all Tax returns and reports required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
Taxes that are being contested in good faith by appropriate proceedings and for
which such Loan Party or such Subsidiary, as applicable, has set aside on its
books adequate reserves.  No tax liens have been filed and no claims are being
asserted with respect to any such taxes.

 

SECTION 3.10.  ERISA.  No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.  The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $500,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $500,000 the fair market value of
the assets of all such underfunded Plans.

 

SECTION 3.11.  Disclosure.  The Borrowers have disclosed to the Lender all
agreements, instruments and corporate or other restrictions to which it or any
Subsidiary is subject, and all other matters known to it, that, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect.  None of the other reports, financial statements, certificates or other
information furnished by or on behalf of any Loan Party to the Lender in
connection with the negotiation of this Agreement or any other Loan Document (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Borrowers represent only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time
delivered and, if such projected financial information was delivered prior to
the Effective Date, as of the Effective Date.

 

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SECTION 3.12.  Material Agreements.  No Loan Party is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any material agreement to which it is a party or
(ii) any agreement or instrument evidencing or governing Indebtedness.

 

SECTION 3.13.  Solvency.  Immediately after the consummation of the Transactions
to occur on the Effective Date, (i) the fair value of the assets of each Loan
Party, at a fair valuation, will exceed its debts and liabilities, subordinated,
contingent or otherwise, (ii) the present fair saleable value of the property of
each Loan Party will be greater than the amount that will be required to pay the
probable liability of its debts and other liabilities, subordinated, contingent
or otherwise, as such debts and other liabilities become absolute and matured;
(iii) each Loan Party will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, and (iv) each Loan Party will not have unreasonably small
capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted after the Effective
Date.

 

SECTION 3.14.  Insurance.  Schedule 3.14 sets forth a description of all
insurance maintained by or on behalf of the Loan Parties and the Subsidiaries as
of the Effective Date.  As of the Effective Date, all premiums in respect of
such insurance have been paid.  The Borrowers believe that the insurance
maintained by or on behalf of the Borrowers and the Subsidiaries is adequate.

 

SECTION 3.15.  Subsidiaries.  Schedule 3.15 sets forth (a) a correct and
complete list of the name and relationship to SIndustries of each and all of its
Subsidiaries, and (b) the type of entity of the SIndustries and each of its
Subsidiaries.  All of the issued and outstanding Equity Interests owned by any
Loan Party has been (to the extent such concepts are relevant with respect to
such ownership interests) duly authorized and issued and is fully paid and
non-assessable.

 

SECTION 3.16.  Security Interest in Collateral.  The provisions of this
Agreement and the other Loan Documents create legal and valid Liens on all the
Collateral in favor of the Lender, and such Liens constitute perfected and
continuing Liens on the Collateral, securing the Obligations, enforceable
against the applicable Loan Party and all third parties, and having priority
over all other Liens on the Collateral except in the case of (a) Permitted
Encumbrances, to the extent any such Permitted Encumbrances would have priority
over the Liens in favor of the Lender pursuant to any applicable law or
agreement and (b) Liens perfected only by possession (including possession of
any certificate of title) to the extent the Lender has not obtained or does not
maintain possession of such Collateral.

 

SECTION 3.17.  Employment Matters.  As of the Effective Date, there are no
strikes, lockouts or slowdowns against any Loan Party or any Subsidiary pending
or, to the knowledge of the Borrowers, threatened.  The hours worked by and
payments made to employees of the Loan Parties and the Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters.  All payments
due from any Loan Party or any Subsidiary, or for which any claim may be made
against any Loan Party or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of the Loan Party or such Subsidiary.

 

SECTION 3.18.  Affiliate Transactions.  Except as set forth on Schedule 3.18, as
of the date of this Agreement, there are no existing or proposed agreements,
arrangements, understandings, or transactions between any Loan Party and any of
the officers, members, managers, directors, stockholders, parents, other
interest holders, employees, or Affiliates (other than Subsidiaries) of any Loan
Party or any members of their respective immediate families, and none of the
foregoing Persons are directly or indirectly indebted to or have any direct or
indirect ownership, partnership, or voting interest in any Affiliate of any Loan
Party or any Person with which any Loan Party has a business relationship or
which competes with any Loan Party.

 

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SECTION 3.19.  Common Enterprise.  The successful operation and condition of
each of the Loan Parties is dependent on the continued successful performance of
the functions of the group of the Loan Parties as a whole and the successful
operation of each of the Loan Parties is dependent on the successful performance
and operation of each other Loan Party.  Each Loan Party expects to derive
benefit (and its board of directors or other governing body has determined that
it may reasonably be expected to derive benefit), directly and indirectly, from
(i) successful operations of each of the other Loan Parties and (ii) the credit
extended by the Lender to the Borrowers hereunder, both in their separate
capacities and as members of the group of companies.  Each Loan Party has
determined that execution, delivery, and performance of this Agreement and any
other Loan Documents to be executed by such Loan Party is within its purpose,
will be of direct and indirect benefit to such Loan Party, and is in its best
interest.

 

SECTION 3.20.  Reorganization Transactions.  As a result of the Reorganization
Transactions, Supreme Corporation, a Texas corporation, was the primary obligor
to the Lender with respect to all credit and loans extended by the Lender, and
Supreme Indiana Operations, Inc., a Delaware corporation, was liable as a
guarantor with respect to all such credit and loans (which guaranty obligation
replaced the primary obligation of Supreme Indiana Operations, Inc. to the
Lender that Supreme Indiana Operations, Inc. assumed in 2002).  Supreme Indiana
Operations, Inc., a Delaware corporation and Supreme Corporation, a Texas
corporation, merged on September 28, 2010 with Supreme Indiana Operations, Inc.,
a Delaware corporation being the surviving entity (the “Merger Transaction”). 
Accordingly, all Liabilities (as such term is defined in the Former Credit
Agreement) are, as of the Effective Date, the Obligations of Supreme Indiana
Operations, Inc., a Delaware corporation (referred to in this Agreement as
SIOperations).

 

ARTICLE IV

 

Conditions

 

SECTION 4.01.  Effective Date.  The obligations of the Lender to make Loans
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 8.02):

 

(a)                                  Credit Agreement and Loan Documents.  The
Lender (or its counsel) shall have received (i) from each party hereto either
(A) a counterpart of this Agreement signed on behalf of such party or
(B) written evidence satisfactory to the Lender (which may include facsimile
transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement and (ii) duly executed copies of the Loan
Documents and such other certificates, documents, instruments and agreements as
the Lender shall reasonably request in connection with the transactions
contemplated by this Agreement and the other Loan Documents, including a written
opinion of the Loan Parties’ counsel, addressed to the Lender.

 

(b)                                 Financial Statements and Projections.  The
Lender shall have received (i) audited consolidated financial statements of
SIndustries for the 2009 Fiscal Year, (ii) unaudited interim consolidated
financial statements of SIndustries for each Fiscal Month and Fiscal Quarter
ended after the date of the latest applicable financial statements delivered
pursuant to clause (i) of this paragraph as to which such financial statements
are available, and such financial statements shall not, in the reasonable
judgment of the Lender, reflect any material adverse change in the consolidated
financial condition of SIndustries as reflected in the financial statements or
any projections furnished to Lender and (iii) satisfactory monthly projections
through Fiscal Year 2011.

 

(c)                                  Closing Certificates; Certified Certificate
of Incorporation; Good Standing Certificates.  The Lender shall have received
(i) a certificate of each Loan Party, dated the Effective Date and executed by
its Secretary or Assistant Secretary, which shall (A) certify the resolutions of
its Board of Directors, members or other body authorizing the execution,
delivery and performance of the Loan Documents to which it is a party,
(B) identify by name and title and bear the signatures

 

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of the Financial Officers and any other officers of such Loan Party authorized
to sign the Loan Documents to which it is a party, and (C) contain appropriate
attachments, including the certificate or articles of incorporation or
organization of each Loan Party certified by the relevant authority of the
jurisdiction of organization of such Loan Party and a true and correct copy of
its by-laws or operating, management or partnership agreement, and (ii) a
certificate of existence/good standing for each Loan Party from its jurisdiction
of organization.

 

(d)                                 No Default Certificate.  The Lender shall
have received a certificate, signed by the chief financial officer of
SIndustries, on the initial Borrowing date (i) stating that no Default has
occurred and is continuing, (ii) stating that the representations and warranties
contained in Article III are true and correct as of such date, and
(iii) certifying any other factual matters as may be reasonably requested by the
Lender.

 

(e)                                  Fees.  The Lender shall have received all
fees required to be paid, and all expenses for which invoices have been
presented (including the reasonable fees and expenses of legal counsel), on or
before the Effective Date.  All such amounts will be paid with proceeds of Loans
made on the Effective Date and will be reflected in the funding instructions
given by the Borrowers to the Lender on or before the Effective Date.

 

(f)                                    Lien Searches.  The Lender shall have
received the results of a recent lien search in each of the jurisdictions where
assets of the Loan Parties are located, and such search shall reveal no liens on
any of the assets of the Loan Parties except for liens permitted by Section 6.02
or discharged on or prior to the Effective Date pursuant to a pay-off letter or
other documentation satisfactory to the Lender.

 

(g)                                 Pay-Off Letter.  The Lender shall have
received satisfactory pay-off letters for all existing Indebtedness to be repaid
from the proceeds the initial Borrowing, confirming that all Liens upon any of
the property of the Loan Parties constituting Collateral will be terminated
concurrently with such payment and all letters of credit issued or guaranteed as
part of such Indebtedness shall have been cash collateralized.

 

(h)                                 Funding Account.  The Lender shall have
received a notice setting forth the deposit account of each Borrower (the
“Funding Account”) to which the Lender is authorized by each Borrower to
transfer the proceeds of any Borrowings requested or authorized pursuant to this
Agreement.

 

(i)                                     Collateral Access and Control
Agreements.  The Lender shall have received each (i) Collateral Access Agreement
required to be provided pursuant to Section 4.13 of the Security Agreements and
(ii) Deposit Account Control Agreement required to be provided pursuant to
Section 4.14 of the Security Agreements.

 

(j)                                     Solvency.  The Lender shall have
received a solvency certificate from a Financial Officer.

 

(k)                                  Borrowing Base Certificate.  The Lender
shall have received a Borrowing Base Certificate which calculates the Borrowing
Base of each Borrower as of August 21, 2010.

 

(l)                                     Pledged Stock; Stock Powers; Pledged
Notes.  The Lender shall have received (i) the certificates representing the
shares of Capital Stock pledged pursuant to the Security Agreements, together
with an undated stock power for each such certificate executed in blank by a
duly authorized officer of the pledgor thereof and (ii) each promissory note (if
any) pledged to the Lender

 

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pursuant to the Security Agreements endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank) by the pledgor thereof.

 

(m)                               Filings, Registrations and Recordings.  Each
document (including any Uniform Commercial Code financing statement) required by
the Collateral Documents or under law or reasonably requested by the Lender to
be filed, registered or recorded in order to create in favor of the Lender, a
perfected Lien on the Collateral described therein, prior and superior in right
to any other Person (other than with respect to Liens expressly permitted by
Section 6.02), shall be in proper form for filing, registration or recordation.

 

(n)                                 Insurance.  The Lender shall have received
evidence of insurance coverage in form, scope, and substance reasonably
satisfactory to the Lender and otherwise in compliance with the terms of
Section 5.09 and Section 4.12 of the Security Agreements.

 

(o)                                 Approvals.  The Borrowers shall have
obtained, on satisfactory terms to Lender, all governmental and third party
approvals necessary in connection with the Transactions contemplated hereby and
the continuing operations of the Borrowers and their Subsidiaries (including
shareholder approvals, if any).

 

(p)                                 Workers Comp Deductible Indemnity.  The
Lender shall have received a fully executed copy of the Workers Comp Deductible
Indemnity from each direct or indirect subsidiary of SIndustries that has
Workers Comp Deductible Liability.

 

(q)                                 Leases.  The Lender shall have received a
fully executed copy of each lease of real property to which a Loan Party is a
party as of the date of this Agreement.

 

(r)                                    Subordination Agreements.  Each Loan
Party shall have duly executed and delivered a Subordination Agreement to the
Lender, which Subordination Agreement (a) shall provide that all of the
liability of each other Loan Party owing to such Loan Party (the “Intercompany
Liabilities”) are fully subordinated to the payment of the Secured Obligations,
(b) provides the Intercompany Liabilities shall be unsecured, (c) prohibits the
payment of the Intercompany Liabilities after an Event of Default, and (d) is
otherwise in form and substance acceptable to the Lender.

 

(s)                                  Ratification Resolutions.  The Lender shall
have received certified resolutions of the Board of Directors of SIndustries,
Supreme Corporation and SIOperations ratifying the Reorganization Transactions.

 

(t)                                    Merger Documents.  The Lender shall have
received copies of all resolutions, merger documents, and filings in connection
with the merger of Supreme Indiana Operations, Inc., a Delaware corporation, and
Supreme Corporation, a Texas corporation.

 

(u)                                 Transfer of Supreme Insurance Company, Inc. 
Copies of all resolutions and documents in connection with the transfer of the
ownership of the outstanding capital stock of Supreme Insurance Company, Inc. to
SIndustries.

 

(v)                                 Other Documents.  The Lender shall have
received such other documents as the Lender or its counsel may have reasonably
requested.

 

The Lender shall notify the Borrowers of the Effective Date, and such notice
shall be conclusive and binding.  Notwithstanding the foregoing, the obligations
of the Lender to make Loans hereunder shall not become effective unless each of
the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or
prior to 2:00 p.m., Indianapolis time, on October 18, 2010 (and, in the event
such conditions are not so satisfied or waived, the Commitment shall terminate
at such time).

 

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SECTION 4.02.  Each Credit Event.  The obligation of the Lender to make a Loan
on the occasion of any Borrowing is subject to the satisfaction of the following
conditions:

 

(a)                                  The representations and warranties of each
of the Loan Parties set forth in this Agreement shall be true and correct on and
as of the date of such Borrowing.

 

(b)                                 At the time of and immediately after giving
effect to such Borrowing, no Default shall have occurred and be continuing.

 

(c)                                  No Material Adverse Effect shall have
occurred and be continuing.

 

(d)                                 After giving effect to any Borrowing, the
Borrowers are in compliance with the requirements of Article II of this
Agreement.

 

Each Borrowing shall be deemed to constitute a representation and warranty by
the Requesting Borrower on the date thereof as to the matters specified in
paragraphs (a), (b), (c), and (d) of this Section.

 

SECTION 4.03.  Post-closing Conditions.  The obligation of the Lender to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions prior to the dates set forth below for their satisfaction:

 

(a)                                  Intercreditor Agreement.  Within 60 days of
the Effective Date, the Lender shall have received either (i) a duly executed
Intercreditor Agreement from GMAC, or (ii) copies of duly filed and recorded UCC
financing statement amendments terminating the following UCC financing
statements:  UCC financing statement no. 030013227199, filed on January 8, 2001
with the Texas Secretary of State naming Supreme Corporation as debtor; and UCC
financing statement no. 8800239558, filed on October 17, 1988 with the Texas
Secretary of State naming Supreme Corporation as debtor.

 

ARTICLE V

 

Affirmative Covenants

 

Until the Commitment has expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and the Workers Comp Letter of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, each Loan Party executing this
Agreement covenants and agrees, jointly and severally with all of the Loan
Parties, with the Lender that:

 

SECTION 5.01.  Financial Statements; Borrowing Base and Other Information.  The
Borrowers will furnish to the Lender:

 

(a)                                  within 90 days after the end of each Fiscal
Year of SIndustries, its audited consolidated and consolidating balance sheet
and related statements of operations, stockholders’ equity and cash flows as of
the end of and for such year, setting forth in each case in comparative form the
figures for the previous Fiscal Year, all reported on by independent public
accountants of recognized national standing acceptable to the Lender (without a
“going concern” or like qualification or exception and without any qualification
or exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of SIndustries and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, accompanied by any management letter prepared by said accountants;

 

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(b)                                 within 45 days after the end of each Fiscal
Month of SIndustries, its consolidated and consolidating balance sheet and
related statements of operations, stockholders’ equity and cash flows as of the
end of and for such Fiscal Month and the then elapsed portion of the Fiscal
Year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous Fiscal Year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of SIndustries and its consolidated Subsidiaries on a
consolidated basis consistent with SIndustries’ prior practices and in
accordance with GAAP in all material respects consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;

 

(c)                                  concurrently with any delivery of financial
statements under clause (a) or (b) above, a certificate of a Financial Officer
of SIndustries in substantially the form of Exhibit C (i) certifying, in the
case of the financial statements delivered under clause (b), as presenting
fairly in all material respects the financial condition and results of
operations of SIndustries and its consolidated Subsidiaries on a consolidated
basis consistent with SIndustries’ prior practices and in accordance with GAAP
in all material respects consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes, (ii) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto,
(iii) setting forth reasonably detailed calculations demonstrating compliance
with Section 6.12 and (iv) stating whether any change in GAAP or in the
application thereof has occurred since the date of the audited financial
statements referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate;

 

(d)                                 concurrently with any delivery of financial
statements under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained knowledge
during the course of their examination of such financial statements of any
Default (which certificate may be limited to the extent required by accounting
rules or guidelines);

 

(e)                                  as soon as available, but in any event not
more than 90 days prior to the end of each Fiscal Year of SIndustries, but not
less than 30 days prior to the end of such Fiscal Year, a copy of the plan and
forecast (including a projected consolidated and consolidating balance sheet,
income statement, and funds flow statement) of SIndustries for each Fiscal Month
of such Fiscal Year (the “Projections”) in form reasonably satisfactory to the
Lender;

 

(f)                                    as soon as available but in any event
within 30 days of the end of each calendar month, and at such other times as may
be requested by the Lender, as of the period then ended, a Borrowing Base
Certificate setting forth the Borrowing Base for each of SIOperations, SCTexas,
SMid-Atlantic, SNorthwest, and STBCalifornia and supporting information in
connection therewith, together with any additional reports with respect to such
Borrowing Bases as the Lender may reasonably request;

 

(g)                                 as soon as available but in any event within
30 days of the end of each calendar month and at such other times as may be
requested by the Lender, as of the period then ended, all delivered
electronically in a text formatted file acceptable to the Lender:

 

(i)                                     a detailed aging of each Borrower’s
Accounts (1) including all invoices aged by invoice date and due date (with an
explanation of the terms offered) and (2) reconciled to the Borrowing Base
Certificate delivered as of such date prepared in a manner reasonably acceptable
to the Lender, together with a summary specifying the balance due for each
Account Debtor, and for the summary due in January of each year, specifying the
name,

 

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mailing address and place of business, phone number and contact person of each
Account Debtor;

 

(ii)                                  a schedule detailing each Borrower’s
Inventory, in form satisfactory to the Lender, (1) by location (showing
Inventory in transit, any Inventory located with a third party under any
consignment, bailee arrangement, or warehouse agreement), by class (raw
material, work-in-process and finished goods), by product type, and by volume on
hand, which Inventory shall be valued at the lower of cost (determined on a
first-in, first-out basis) or market and adjusted for Reserves as the Lender has
previously indicated to the Borrowers are deemed by the Lender to be
appropriate, (2) including a report of any variances or other results of
Inventory counts performed by the Borrowers since the last Inventory schedule
(including information regarding sales or other reductions, additions, returns,
credits issued by the Borrowers and complaints and claims made against the
Borrowers), and (3) reconciled to the Borrowing Base Certificate delivered as of
such date;

 

(iii)                               a worksheet of calculations prepared by each
Borrower to determine Eligible Accounts and Eligible Inventory, such worksheets
detailing the Accounts and Inventory excluded from Eligible Accounts and
Eligible Inventory and the reason for such exclusion; and

 

(iv)                              a reconciliation of each Borrower’s Accounts
and Inventory between the amounts shown in such Borrower’s general ledger and
financial statements and the reports delivered pursuant to clauses (i) and
(ii) above;

 

(h)                                 promptly upon the Lender’s request:

 

(i)                                     as of the close of the most recent
calendar month, a schedule and aging of each Borrower’s accounts payable, each
delivered electronically in a text formatted file acceptable to the Lender;

 

(ii)                                  copies of all tax returns filed by any
Loan Party with the U.S. Internal Revenue Service;

 

(iii)                               copies of invoices in connection with the
invoices issued by each Borrower in connection with any Accounts, credit memos,
shipping and delivery documents, and other information related thereto;

 

(iv)                              copies of purchase orders, invoices, and
shipping and delivery documents in connection with any Inventory or Equipment
purchased by any Loan Party;

 

(v)                                 a schedule detailing the balance of all
intercompany accounts of the Loan Parties; and

 

(vi)                              each Borrower’s sales journal, cash receipts
journal (identifying trade and non-trade cash receipts) and debit memo/credit
memo journal;

 

(i)                                     promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and other
materials filed by SIndustries or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or all of
the functions of said Commission, or with any national securities exchange, or
distributed by SIndustries to its shareholders generally, as the case may be;
and

 

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(j)                                     promptly following any request therefor,
such other information regarding the operations, business affairs and financial
condition of SIndustries or any Subsidiary, or compliance with the terms of this
Agreement, as the Lender may reasonably request.

 

SECTION 5.02.  Notices of Material Events.  The Borrowers will furnish to the
Lender prompt written notice of the following:

 

(a)                                  the occurrence of any Default;

 

(b)                                 receipt of any notice of any governmental
investigation or any litigation commenced or threatened against any Loan Party
that (i) seeks damages in excess of $1,000,000, (ii) seeks injunctive relief,
(iii) is asserted or instituted against any Plan, its fiduciaries or its assets,
(iv) alleges criminal misconduct by any Loan Party, (v) alleges the violation of
any law regarding, or seeks remedies in connection with, any Environmental Laws;
(vi) contests any tax, fee, assessment, or other governmental charge in excess
of $1,000,000, or (vii) involves any product recall;

 

(c)                                  any Lien (other than Permitted
Encumbrances) or claim made or asserted against any of the Collateral;

 

(d)                                 any loss, damage, or destruction to the
Collateral in the amount of $1,000,000 or more, whether or not covered by
insurance;

 

(e)                                  any and all default notices received under
or with respect to any leased location or public warehouse where Collateral is
located (which shall be delivered within five Business Days after receipt
thereof);

 

(f)                                    the fact that a Loan Party has entered
into a Swap Agreement or an amendment to a Swap Agreement, together with copies
of all agreements evidencing such Swap Agreement or amendments thereto (which
shall be delivered within two Business Days);

 

(g)                                 the occurrence of any ERISA Event that,
alone or together with any other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrowers and their
Subsidiaries in an aggregate amount exceeding $1,000,000; and

 

(h)                                 any other development that results in, or
could reasonably be expected to result in, a Material Adverse Effect.

 

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the applicable Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.

 

SECTION 5.03.  Existence; Conduct of Business.  Except to the extent that such
failure will not result in a Material Adverse Effect, each Loan Party will, and
will cause each Subsidiary to, (a) do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights, qualifications, licenses, permits, franchises, governmental
authorizations, intellectual property rights, licenses and permits material to
the conduct of its business, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted; provided that
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03 and (b) carry on and conduct its
business in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted.

 

SECTION 5.04.  Payment of Obligations.  Each Loan Party will, and will cause
each Subsidiary to, pay or discharge all Material Indebtedness and all other
material liabilities and obligations,

 

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including Taxes, before the same shall become delinquent or in default, except
where (a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) such Loan Party or such Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP and
(c) the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.

 

SECTION 5.05.  Maintenance of Properties.  Each Loan Party will, and will cause
each Subsidiary to, keep and maintain all property material to the conduct of
its business in good working order and condition, ordinary wear and tear and
insured casualty loss excepted.

 

SECTION 5.06.  Books and Records; Inspection Rights.  Each Loan Party will, and
will cause each Subsidiary to, (i) keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities and (ii) permit any representatives
designated by the Lender (including employees of the Lender, or any consultants,
accountants, lawyers and appraisers retained by the Lender, upon reasonable
prior notice, to visit and inspect its properties, to examine and make extracts
from its books and records, including environmental assessment reports and Phase
I or Phase II studies, and to discuss its affairs, finances and condition with
its officers and independent accountants, all at such reasonable times and as
often as reasonably requested.  The Loan Parties acknowledge that the Lender,
after exercising its rights of inspection, may prepare certain Reports
pertaining to the Loan Parties’ assets for internal use by the Lender.  Each
Loan Party will permit the Lender to conduct field audit examinations of the
Loan Party’s assets, liabilities, books and records at a frequency not less than
two times per Fiscal Year; provided that the Lender may conduct any additional
field audit examinations of the Loan Party’s assets, liabilities, books and
records that the Lender deems necessary or appropriate in its Permitted
Discretion; and provided further that the Loan Party will permit the Lender to
conduct such examinations at any time and with any reasonable frequency after a
Default.  In connection with such field audits, the Loan Party will permit the
Lender to make test verifications of the Accounts with the Loan Party’s
customers.

 

SECTION 5.07.  Compliance with Laws.  Each Loan Party will, and will cause each
Subsidiary to, comply with all Requirements of Law applicable to it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 5.08.  Use of Proceeds.  The proceeds of the Loans shall be used by each
Borrower (A) for such Borrower’s general corporate and working capital purposes
and, in the case of SIOperations, to refinance its indebtedness to the Lender as
of the Effective Date.  No part of the proceeds of any Loan will be used,
whether directly or indirectly, (i) for any purpose that entails a violation of
any of the Regulations of the Board, including Regulations T, U and X, or
(ii) to make any Acquisition.

 

SECTION 5.09.  Insurance.  Except as Lender may otherwise consent in writing,
each Loan Party will, and will cause each Subsidiary to, maintain with
financially sound and reputable carriers having a financial strength rating of
at least A+ by A.M. Best Company (a) insurance in such amounts (with no greater
risk retention) and against such risks (including (i) loss or damage by fire and
loss in transit; (ii) theft, burglary, pilferage, larceny, embezzlement, and
other criminal activities; (iii) business interruption; (iv) general liability
and (v) and such other hazards, as is customarily maintained by companies of
established repute engaged in the same or similar businesses operating in the
same or similar locations, and (b) all insurance required pursuant to the
Collateral Documents.  The Borrowers will furnish to the Lender, information in
reasonable detail as to the insurance so maintained.

 

SECTION 5.10.  Casualty and Condemnation.  Each Loan Party (a) will furnish to
the Lender prompt written notice of any casualty or other insured damage to any
material portion of the Collateral or the commencement of any action or
proceeding for the taking of any material portion of the Collateral or interest
therein under power of eminent domain or by condemnation or similar proceeding
and

 

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(b) will ensure that the Net Proceeds of any such event (whether in the form of
insurance proceeds, condemnation awards or otherwise) are collected and applied
in accordance with the applicable provisions of this Agreement and the
Collateral Documents.

 

SECTION 5.11.  Appraisals.  At any time that the Lender requests, the Loan
Parties will provide the Lender with Inventory Appraisals or updates thereof.

 

SECTION 5.12.  Depository Banks.  Each Loan Party shall maintain the Lender as
its principal depository bank, including for the maintenance of operating,
administrative, cash management and other deposit accounts for the conduct of
its business.  At the request of the Lender, each Loan Party shall promptly
execute control agreements acceptable to the Lender for any depository accounts
of such Loan Party maintained at a depository institution other than the Lender.

 

SECTION 5.13.  Additional Collateral; Further Assurances.

 

(a)                                  Subject to applicable law, each Borrower
and each Subsidiary that is a Loan Party shall, unless the Lender otherwise
consents, cause each of its Subsidiaries formed or acquired after the date of
this Agreement in accordance with the terms of this Agreement to become a Loan
Party by executing the Joinder Agreement set forth as Exhibit C hereto (the
“Joinder Agreement”).  Upon execution and delivery thereof, each such Person
(i) shall automatically become a Loan Guarantor hereunder and thereupon shall
have all of the rights, benefits, duties, and obligations in such capacity under
the Loan Documents and (ii) will grant Liens to the Lender, in any property of
such Loan Party which constitutes Collateral, but excluding any parcel of real
property located in the U.S. owned by any Loan Party.

 

(b)                                 Each Borrower and each Subsidiary that is a
Loan Party will cause (i) 100% of the issued and outstanding Equity Interests of
each of its domestic Subsidiaries and (ii) 65% (or such greater percentage that,
due to a change in applicable law after the date hereof, (1) could not
reasonably be expected to cause the undistributed earnings of such foreign
Subsidiary as determined for U.S. federal income tax purposes to be treated as a
deemed dividend to such foreign Subsidiary’s U.S. parent and (2) could not
reasonably be expected to cause any material adverse tax consequences) of the
issued and outstanding Equity Interests entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity
Interests not entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2) in each foreign Subsidiary directly owned by any Borrower
or any domestic Subsidiary to be subject at all times to a first priority,
perfected Lien in favor of the Lender pursuant to the terms and conditions of
the Loan Documents or other security documents as the Lender shall reasonably
request.

 

(c)                                  Without limiting the foregoing, each Loan
Party will, and will cause each Subsidiary to, execute and deliver, or cause to
be executed and delivered, to the Lender such documents, agreements and
instruments, and will take or cause to be taken such further actions (including
the filing and recording of financing statements, fixture filings, mortgages,
deeds of trust and other documents and such other actions or deliveries of the
type required by Section 4.01, as applicable), which may be required by law or
which the Lender may, from time to time, reasonably request to carry out the
terms and conditions of this Agreement and the other Loan Documents and to
ensure perfection and priority of the Liens created or intended to be created by
the Collateral Documents, all at the expense of the Loan Parties. 
Notwithstanding the foregoing, at any time after a Default has occurred, each
Loan Party will, upon the request of the Lender, cause each Foreign Subsidiary
to become a Loan Party and a Loan Guarantor and to grant Liens to the Lender on
its assets and have the balance of its stock pledged to the Lender.

 

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ARTICLE VI

 

Negative Covenants

 

Until the Commitment has expired or terminated and the principal of and interest
on each Loan and all fees, expenses and other amounts payable under any Loan
Document have been paid in full and the Workers Comp Letter of Credit has
expired or terminated and all LC Disbursements shall have been reimbursed, the
Loan Parties covenant and agree, jointly and severally, with the Lender that:

 

SECTION 6.01.  Indebtedness.  No Loan Party will, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:

 

(a)                                  the Secured Obligations;

 

(b)                                 Indebtedness existing on the date hereof and
set forth in Schedule 6.01 and extensions, renewals and replacements of any such
Indebtedness in accordance with clause (d) hereof;

 

(c)                                  Indebtedness of any Borrower or any
Subsidiary incurred to finance the acquisition, construction or improvement of
any fixed or capital assets (whether or not constituting purchase money
Indebtedness), including Capital Lease Obligations and any Indebtedness assumed
in connection with the acquisition of any such assets or secured by a Lien on
any such assets prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness in accordance with clause (d) hereof;
provided that (i) such Indebtedness is incurred prior to or within 90 days after
such acquisition or the completion of such construction or improvement and
(ii) the aggregate principal amount of Indebtedness permitted by this clause
(e) shall not exceed $500,000 at any time outstanding;

 

(d)                                 Indebtedness which represents an extension,
refinancing, or renewal of any of the Indebtedness described in clauses (b) and
(c) hereof; provided that, (i) the principal amount or interest rate of such
Indebtedness is not increased, (ii) any Liens securing such Indebtedness are not
extended to any additional property of any Loan Party, (iii) no Loan Party that
is not originally obligated with respect to repayment of such Indebtedness is
required to become obligated with respect thereto, (iv) such extension,
refinancing or renewal does not result in a shortening of the average weighted
maturity of the Indebtedness so extended, refinanced or renewed, (v) the terms
of any such extension, refinancing, or renewal are not less favorable to the
obligor thereunder than the original terms of such Indebtedness and (iv) if the
Indebtedness that is refinanced, renewed, or extended was subordinated in right
of payment to the Secured Obligations, then the terms and conditions of the
refinancing, renewal, or extension Indebtedness must include subordination terms
and conditions that are at least as favorable to the Lender as those that were
applicable to the refinanced, renewed, or extended Indebtedness; and

 

(e)                                  Indebtedness of any Loan Party to any other
Loan Party, provided that such Indebtedness shall be subordinated to the Secured
Obligations on terms reasonably satisfactory to the Lender;

 

(f)                                    Guarantees by any Loan Party of
Indebtedness of any other Loan Party, provided that (i) the Indebtedness so
Guaranteed is permitted by this Section 6.01, and (ii) Guarantees permitted
under this clause (f) shall be subordinated to the Secured Obligations of the
applicable Subsidiary on the same terms as the Indebtedness so Guaranteed is
subordinated to the Secured Obligations; and

 

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(g)                                 Other unsecured Indebtedness in an aggregate
principal amount not exceeding $500,000 at any time outstanding.

 

SECTION 6.02.  Liens.  No Loan Party will, nor will it permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now
owned or hereafter acquired by it or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:

 

(a)                                  Liens created pursuant to any Loan
Document;

 

(b)                                 Permitted Encumbrances;

 

(c)                                  any Lien on any property or asset of any
Borrowers or any Subsidiary existing on the date hereof and set forth in
Schedule 6.02; provided that (i) such Lien shall not apply to any other property
or asset of such Borrower or Subsidiary and (ii) such Lien shall secure only
those obligations which it secures on the date hereof;

 

(d)                                 Liens on fixed or capital assets acquired,
constructed or improved by any Borrower or any Subsidiary; provided that
(i) such security interests secure Indebtedness permitted by clause (d) of
Section 6.01, (ii) such security interests and the Indebtedness secured thereby
are incurred prior to or within 90 days after such acquisition or the completion
of such construction or improvement, (iii) the Indebtedness secured thereby does
not exceed 100% of the cost of acquiring, constructing or improving such fixed
or capital assets and (iv) such security interests shall not apply to any other
property or assets of such Borrower or Subsidiary;

 

(e)                                  any Lien existing on any property or asset
(other than Accounts and Inventory) prior to the acquisition thereof by any
Borrower or any Subsidiary or existing on any property or asset (other than
Accounts and Inventory) of any Person that becomes a Loan Party after the date
hereof prior to the time such Person becomes a Loan Party; provided that
(i) such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Loan Party, as the case may be, (ii) such
Lien shall not apply to any other property or assets of the Loan Party and
(iii) such Lien shall secure only those obligations which it secures on the date
of such acquisition or the date such Person becomes a Loan Party, as the case
may be and extensions, renewals, and replacements thereof that do not increase
the outstanding principal amount thereof;

 

(f)                                    Liens of a collecting bank arising in the
ordinary course of business under Section 4-208 of the Uniform Commercial Code
in effect in the relevant jurisdiction covering only the items being collected
upon;

 

(g)                                 Liens arising out of sale and leaseback
transactions permitted by Section 6.06; and

 

(h)                                 Liens granted by a Subsidiary that is not a
Loan Party in favor of any Loan Party in respect of Indebtedness owed by such
Subsidiary.

 

Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to any Loan Party’s (1) Accounts, other than
those permitted under clause (a) of the definition of Permitted Encumbrance and
clause (a) above and (2) Inventory, other than those permitted under clauses
(a) and (b) of the definition of Permitted Encumbrance and clause (a) above. 
For the avoidance of doubt, no Lien, other than a Permitted Encumbrance, is
permitted on any real property owned by any Loan Party without the written
consent of the Lender.

 

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SECTION 6.03.  Fundamental Changes.

 

(a)                                  No Loan Party will, nor will it permit any
Subsidiary to, merge into or consolidate with any other Person, or permit any
other Person to merge into or consolidate with it, or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto
no Event of Default shall have occurred and be continuing (i) any Subsidiary of
any Borrower may merge into such Borrower in a transaction in which such
Borrower is the surviving corporation, (ii) any Loan Party (other than a
Borrower) may merge into any Loan Party in a transaction in which the surviving
entity is a Loan Party and (iii) any Subsidiary that is not a Loan Party may
liquidate or dissolve if the Borrowers determines in good faith that such
liquidation or dissolution is in the best interests of the Borrowers and is not
materially disadvantageous to the Lender; provided that any such merger
involving a Person that is not a wholly owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 6.04. 
Notwithstanding the foregoing, the Lender acknowledges, consents to and approves
(i) the Merger Transaction and (ii) the transfer by SIOperations of ownership of
the capital stock of Supreme Insurance Company, Inc., a Nevada corporation, to
SIndustries.

 

(b)                                 No Loan Party will, nor will it permit any
of its Subsidiaries to, engage in any business other than businesses of the type
conducted by the Borrowers and their Subsidiaries on the date of execution of
this Agreement and businesses reasonably related thereto.

 

SECTION 6.04.  Investments, Loans, Advances, Guarantees and Acquisitions.  No
Loan Party will, nor will it permit any Subsidiary to, purchase, hold or acquire
(including pursuant to any merger with any Person that was not a Loan Party and
a wholly owned Subsidiary prior to such merger) any capital stock, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) all or substantially
all assets of any Person, any assets of any other Person constituting a business
unit (whether through purchase of assets or Equity Interests, merger or
otherwise), except:

 

(a)                                  Permitted Investments, subject to control
agreements in favor of the Lender or otherwise subject to a perfected security
interest in favor of the Lender;

 

(b)                                 investments in existence on the date of this
Agreement and described in Schedule 6.04;

 

(c)                                  investments in the form of Swap Agreements
permitted by Section 6.07;

 

(d)                                 investments received in connection with the
dispositions of assets permitted by Section 6.05;

 

(e)                                  investments constituting deposits described
in clauses (c) and (d) of the definition of the term “Permitted Encumbrances;”
and

 

(f)                                    loans or advances made by any Loan Party
to any Borrower.

 

SECTION 6.05.  Asset Sales.  No Loan Party will, nor will it permit any
Subsidiary to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it, nor will any Borrower permit any
Subsidiary to issue any additional Equity Interest in such Subsidiary (other
than to a Borrower or another Subsidiary in compliance with Section 6.04),
except:

 

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(a)                                  sales, transfers and dispositions of
(i) inventory in the ordinary course of business; and (ii) used, obsolete, worn
out or surplus equipment or property in the ordinary course of business;

 

(b)                                 sales, transfers and dispositions to any
Borrower or any Subsidiary;

 

(c)                                  sales, transfers and dispositions of
accounts receivable in connection with the compromise, settlement or collection
thereof;

 

(d)                                 sales, transfers and dispositions of
investments permitted by clauses (e) and (g) of Section 6.04;

 

(e)                                  sale and leaseback transactions permitted
by Section 6.06;

 

(f)                                    dispositions resulting from any casualty
or other insured damage to, or any taking under power of eminent domain or by
condemnation or similar proceeding of, any property or asset of any Borrower or
any Subsidiary;  and

 

(g)                                 sales, transfers and other dispositions of
assets (other than Equity Interests in a Subsidiary unless all Equity Interests
in such Subsidiary are sold) that are not permitted by any other paragraph of
this Section, provided that the aggregate fair market value of all assets sold,
transferred or otherwise disposed of in reliance upon this paragraph (g) shall
not exceed $250,000 during any Fiscal Year of SIndustries;

 

provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by paragraphs (b) and (f) above) shall be
made for fair value and for 100% cash consideration.  For the avoidance of
doubt, this Section 6.05 does not prohibit SIndustries from issuing any
additional Equity Interests subject only to SIndustries making any mandatory
prepayment required by Section 2.10 of this Agreement.

 

SECTION 6.06.  Sale and Leaseback Transactions.  No Loan Party will, nor will it
permit any Subsidiary to, enter into any arrangement, directly or indirectly,
whereby it shall sell or transfer any property, real or personal, used or useful
in its business, whether now owned or hereafter acquired, and thereafter rent or
lease such property or other property that it intends to use for substantially
the same purpose or purposes as the property sold or transferred, except for any
such sale of any fixed or capital assets by any Borrower or any Subsidiary that
is made for cash consideration in an amount not less than the fair value of such
fixed or capital asset and is consummated within 90 days after such Borrower or
such Subsidiary acquires or completes the construction of such fixed or capital
asset.

 

SECTION 6.07.  Swap Agreements.  No Loan Party will, nor will it permit any
Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered
into to hedge or mitigate risks to which any Borrower or any Subsidiary has
actual exposure (other than those in respect of Equity Interests of SIndustries
or any of its Subsidiaries), and (b) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with
respect to any interest-bearing liability or investment of any Borrower or any
Subsidiary.

 

SECTION 6.08.  Restricted Payments; Certain Payments of Indebtedness.

 

(a)                                  No Loan Party will, nor will it permit any
Subsidiary to, declare or make, or agree to pay or make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to do
so, except (i) SIndustries may declare and pay dividends with respect to its
common stock payable solely in additional shares of its common stock, and, with
respect to its preferred stock, if any, payable solely in additional shares of
such preferred stock or in shares of its common stock, or (ii) Subsidiaries may
declare and pay dividends ratably with respect to their Equity Interests.  If
SIndustries and its Subsidiaries, on a

 

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consolidated basis in accordance with GAAP, achieve positive Net Income for its
Fiscal Year ending December 25, 2010, the Lender will, at the request of
SIndustries, consider permitting SIndustries to pay cash dividends in Fiscal
Year 2011 with respect to its Equity Interests in an amount not to exceed 10% of
such 2010 Fiscal Year Net Income so long as, at the time SIndustries pays such
dividend (i) no Default exists, and (ii) the Projections, in the reasonable
judgment of the Lender, demonstrate that SIndustries will not have insufficient
cash for its operations after making such dividend.

 

(b)                                 No Loan Party will, nor will it permit any
Subsidiary to, make or agree to pay or make, directly or indirectly, any payment
or other distribution (whether in cash, securities or other property) of or in
respect of principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:

 

(i)                                     payment of Indebtedness created under
the Loan Documents;

 

(ii)                                  payment of regularly scheduled interest
and principal payments as and when due in respect of any Indebtedness, other
than payments in respect of the Subordinated Indebtedness prohibited by the
subordination provisions thereof;

 

(iii)                               refinancings of Indebtedness to the extent
permitted by Section 6.01; and

 

(iv)                              payment of secured Indebtedness that becomes
due as a result of the voluntary sale or transfer of the property or assets
securing such Indebtedness.

 

SECTION 6.09.  Transactions with Affiliates.  No Loan Party will, nor will it
permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions that (i) are in the ordinary course of business and
(ii) are at prices and on terms and conditions not less favorable to such Loan
Party than could be obtained on an arm’s-length basis from unrelated third
parties, (b) transactions between or among Loan Parties and not involving any
Affiliate that is not a Loan Party, (c) any investment permitted by Sections
6.04(c) or 6.04(d), (d) any Indebtedness permitted under Section 6.01(c),
(e) any Restricted Payment permitted by Section 6.08, (f) loans or advances to
employees permitted under Section 6.04, (g) the payment of reasonable fees to
directors of SIndustries or any Subsidiary who are not employees of SIndustries
or any Subsidiary, and compensation and employee benefit arrangements paid to,
and indemnities provided for the benefit of, directors, officers or employees of
SIndustries or its Subsidiaries in the ordinary course of business and (h) any
issuances of securities or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment agreements, stock
options and stock ownership plans approved by SIndustries’ board of directors.

 

SECTION 6.10.  Restrictive Agreements.  No Loan Party will, nor will it permit
any Subsidiary to, directly or indirectly, enter into, incur or permit to exist
any agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of such Loan Party or any of its Subsidiaries to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to the Borrowers or any other Subsidiary or to Guarantee Indebtedness of the
Borrowers or any other Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by any Loan Document,
(ii) the foregoing shall not apply to restrictions and conditions existing on
the date hereof identified on Schedule 6.10 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not

 

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apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.

 

SECTION 6.11.  Amendment of Material Documents.  No Loan Party will, nor will it
permit any Subsidiary to, amend, modify or waive any of its rights under (a) any
agreement relating to any Subordinated Indebtedness, (b) its certificate of
incorporation, by-laws, operating, management or partnership agreement or other
organizational documents or (c) any other material agreement, to the extent any
such amendment, modification or waiver would be adverse to the Lender or result
in a Material Adverse Effect.

 

SECTION 6.12.  Financial Covenants.

 

(a)                                  Minimum EBITDA.  Beginning with the Test
Period ending on August 21, 2010, and thereafter as of the close of each
successive Test Period, permit the EBITDA of SIndustries. and its Subsidiaries
for any Test Period to be less than the Minimum Required EBITDA for such Test
Period.

 

(b)                                 Tangible Net Worth.  Beginning on the
Effective Date, and at all times thereafter, permit the Tangible Net Worth of
SIndustries and its Subsidiaries to be less than $57,500,000.

 

SECTION 6.13.  Accounting Policies/Change of Business.  SIndustries shall not
change its Fiscal Year, change its inventory accounting policy from
first-in-first-out, or change any of its other significant accounting policies
without the written consent of the Lender, which consent shall not be
unreasonably withheld.

 

ARTICLE VII

 

Events of Default

 

If any of the following events (“Events of Default”) shall occur:

 

(a)                                  any Borrower shall fail to pay any
principal of any Loan made to such Borrower or any reimbursement obligation in
respect of any LC Disbursement when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment
thereof or otherwise;

 

(b)                                 any Borrower shall fail to pay any interest
on any Loan made to such Borrower or any fee or any other amount (other than an
amount referred to in clause (a) of this Article) payable by such Borrower under
this Agreement, within 5 days of when the same shall become due and payable;

 

(c)                                  any representation or warranty made or
deemed made by or on behalf of any Loan Party or any Subsidiary in or in
connection with this Agreement or any Loan Document or any amendment or
modification thereof or waiver thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with this Agreement or any Loan Document or any amendment or modification
thereof or waiver thereunder, shall prove to have been materially incorrect when
made or deemed made;

 

(d)                                 (i) any Loan Party shall fail to observe or
perform any covenant, condition or agreement contained in Section 5.02(a), 5.03
(with respect to a Loan Party’s existence) or 5.08 or in Article VI (other than
Section 6.12(b)), or (ii) any Loan Party shall fail to observe or perform the

 

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covenant in Section 6.12(b) and such failure shall continue unremedied for a
period of 30 days after the date such failure occurred;

 

(e)                                  any Loan Party shall fail to observe or
perform any covenant, condition or agreement contained in this Agreement (other
than those which constitute a default under another Section of this Article),
and such failure shall continue unremedied for a period of (i) 5 days after the
earlier of knowledge of such breach or notice thereof from the Lender if such
breach relates to terms or provisions of Section 5.01, 5.02 (other than
Section 5.02(a)), 5.03 through 5.07, 5.09, 5.10 or 5.12 of this Agreement or
(ii) 15 days after the earlier of knowledge of such breach or notice thereof
from the Lender if such breach relates to terms or provisions of any other
Section of this Agreement;

 

(f)                                    any Loan Party or any Subsidiary of any
Loan Party shall fail to make any payment (whether of principal or interest and
regardless of amount) in respect of any Material Indebtedness, when and as the
same shall become due and payable;

 

(g)                                 any event or condition occurs that results
in any Material Indebtedness becoming due prior to its scheduled maturity or
that enables or permits (with or without the giving of notice, the lapse of time
or both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become due,
or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this clause (g) shall not apply
to secured Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;

 

(h)                                 an involuntary proceeding shall be commenced
or an involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of a Loan Party or any Subsidiary of
any Loan Party or its debts, or of a substantial part of its assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Loan Party or
any Subsidiary of any Loan Party or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;

 

(i)                                     any Loan Party or any Subsidiary of any
Loan Party shall (i) voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) of this
Article, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for such Loan Party or
Subsidiary of any Loan Party or for a substantial part of its assets, (iv) file
an answer admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the foregoing;

 

(j)                                     any Loan Party or any Subsidiary of any
Loan Party shall become unable, admit in writing its inability or fail generally
to pay its debts as they become due;

 

(k)                                  one or more judgments for the payment of
money in an aggregate amount in excess of $500,000 shall be rendered against any
Loan Party, any Subsidiary of any Loan Party or any combination thereof and the
same shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to attach or levy upon any assets of any Loan Party or
any Subsidiary of any Loan Party to enforce any such judgment or any Loan Party
or any Subsidiary of any Loan Party shall fail within 30 days to discharge one
or more non-monetary judgments or orders which, individually or in

 

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the aggregate, could reasonably be expected to have a Material Adverse Effect,
which judgments or orders, in any such case, are not stayed on appeal or
otherwise being appropriately contested in good faith by proper proceedings
diligently pursued;

 

(l)                                     an ERISA Event shall have occurred that,
in the opinion of the Lender, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in a Material Adverse
Effect;

 

(m)                               a Change in Control shall occur;

 

(n)                                 the occurrence of any “default” or “event of
default”, as defined in any Loan Document (other than this Agreement) or the
breach of any of the terms or provisions of any Loan Document (other than this
Agreement), which default or breach continues beyond any period of grace therein
provided;

 

(o)                                 the Loan Guaranty shall fail to remain in
full force or effect with respect to any Loan Guarantor party thereto or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Loan Guaranty, or any Loan Guarantor shall fail to
comply with any of the terms or provisions of the Loan Guaranty to which it is a
party, or any Loan Guarantor shall deny that it has any further liability under
the Loan Guaranty to which it is a party, or shall give notice to such effect;

 

(p)                                 through no fault, action or inaction of
Lender, any Collateral Document shall for any reason fail to create a valid and
perfected first priority security interest in any Collateral purported to be
covered thereby, except as permitted by the terms of any Collateral Document, or
any Collateral Document shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document, or any Loan Party shall fail to
comply with any of the terms or provisions of any Collateral Document;

 

(q)                                 through no fault, action or inaction of
Lender, any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (or any Loan Party
shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms);

 

(r)                                    the occurrence of any “default” or “event
of default” under or with respect to (a) the Reimbursement and Pledge Agreement,
dated as of April 10, 1996, between STBCalifornia and the Lender (as successor
to NBD Bank, N.A.), as the same has been or may be amended from time to time, or
(b) a Reimbursement and Pledge Agreement, dated as of October 11, 2000, between
Supreme/Murphy Truck Bodies, Inc. and the Lender (as successor to Bank
One, Indiana, N.A.), as the same has been or may be amended from time to time;
or

 

(s)                                  any Loan Party is criminally indicted or
convicted under any law that may reasonably be expected to lead to a forfeiture
of any property of such Loan Party having a fair market value in excess of
$50,000 or a complaint for forfeiture is filed against any Loan Party involving
any property of such Loan Party having a fair market value in excess of $50,000;

 

then, and in every such event (other than an event with respect to any Loan
Party described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Lender may, by notice to
the Borrowers, take either or both of the following actions, at the same or
different times:  (i) terminate the Commitment, and thereupon the Commitment
shall terminate immediately, and (ii) declare the Loans then outstanding to be
due and payable in whole (or in part, in which case any principal not so
declared to be due

 

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and payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers; and in case of any event with respect to any Loan Party described
in clause (h) or (i) of this Article, the Commitment shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers.  Upon the occurrence and the continuance of an Event of Default,
the Lender may increase the rate of interest applicable to the Loans and other
Obligations as set forth in this Agreement and exercise any rights and remedies
provided to the Lender under the Loan Documents or at law or equity, including
all remedies provided under the UCC.

 

ARTICLE VIII

 

Miscellaneous

 

SECTION 8.01.  Notices.

 

(a)                                  Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile, as follows:

 

(i)                                     if to any Loan Party, to SIndustries at:

 

2581 Kercher Road

Goshen, Indiana  46528

Attention: Jeff Mowery, Chief Financial Officer

Facsimile No:  574.642.1003

 

with a copy to:

 

Haynes and Boone, LLP

201 Main Street, Suite 2200

Fort Worth, TX 76102-3126

Attention:  Rice M. Tilley, Jr.

Facsimile No: (817) 348-2384

 

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(ii)           if to the Lender, to JPMorgan Chase Bank, N.A. at:

 

JPMorgan Chase Bank, N.A.

121 West Franklin Street

Elkhart, Indiana 46516

Attention: Jeffrey W. Parker

Facsimile No: (574) 524-3033

 

with a copy to:

 

Baker & Daniels LLP

300 North Meridian Street

Suite 2700

Indianapolis, Indiana 46204

Attention:  Stephen A. Claffey, Esq.

Facsimile No. (317) 569-4800

 

All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received or (ii) sent by facsimile shall be deemed to have been given
when sent, provided that if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the
next Business Day for the recipient.

 

(b)           Notices and other communications to the Lender hereunder may be
delivered or furnished by electronic communications (including e-mail and
internet or intranet websites) pursuant to procedures approved by the Lender;
provided that the foregoing shall not apply to notices pursuant to Article II or
to compliance and no Event of Default certificates delivered pursuant to
Section 5.01(d) unless otherwise agreed by the Lender.  The Lender or the
Borrowers (on behalf of the Loan Parties) may, in their discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by them; provided that approval
of such procedures may be limited to particular notices or communications. All
such notices and other communications (i) sent to an e-mail address shall be
deemed received upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement), provided that if not
given during the normal business hours of the recipient, such notice or
communication shall be deemed to have been given at the opening of business on
the next Business Day for the recipient, and (ii) posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause
(b)(i) of notification that such notice or communication is available and
identifying the website address therefor.

 

(c)           Any party hereto may change its address or facsimile number for
notices and other communications hereunder by notice to the other parties
hereto.

 

SECTION 8.02.  Waivers; Amendments.

 

(a)           No failure or delay by the Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  The rights and remedies of the Lender hereunder and under any
other Loan Document are cumulative and are not exclusive of any rights or
remedies that they would otherwise have.  No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the

 

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same shall be permitted by paragraph (b) of this Section, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given.  Without limiting the generality of the foregoing, the making
of a Loan shall not be construed as a waiver of any Event of Default, regardless
of whether the Lender may have had notice or knowledge of such Event of Default
at the time.

 

(b)           Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except (i) in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrowers and the Lender, or (ii) in the case of any other
Loan Document, pursuant to an agreement or agreements in writing entered into by
the Lender and the Loan Party or Loan Parties that are parties thereto.

 

SECTION 8.03.  Expenses; Indemnity; Damage Waiver.

 

(a)           The Borrowers shall pay (i) all reasonable out-of-pocket expenses
incurred by the Lender and its Affiliates, including the reasonable fees,
charges and disbursements of counsel for the Lender (whether outside counsel or
the allocated costs of its internal legal department), in connection with the
credit facilities provided for herein, the preparation and administration of the
Loan Documents or any amendments, modifications or waivers of the provisions of
the Loan Documents (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Lender in connection with the issuance, amendment, renewal or
extension of the Workers Comp Letter of Credit or any demand for payment
thereunder and (iii) all out-of-pocket expenses incurred by the Lender, 
including the fees, charges and disbursements of any counsel for the Lender
(whether outside counsel or the allocated costs of its internal legal
department), in connection with the enforcement, collection or protection of its
rights in connection with the Loan Documents, including its rights under this
Section, or in connection with the Loans or Workers Comp Letter of Credit,
including all such out-of-pocket expenses incurred during  any workout,
restructuring or negotiations in respect of such Loans or the Workers Comp
Letter of Credit. Expense being reimbursed by the Borrowers under this
Section include, without limiting the generality of the foregoing, costs and
expenses incurred in connection with:

 

(i)            appraisals and insurance reviews;

 

(ii)           field examinations and the preparation of Reports based on the
fees charged by a third party retained by the Lender or the internally allocated
fees for each Person employed by the Lender with respect to each field
examination;

 

(iii)          taxes, fees and other charges for filing financing statements and
continuations, and other actions to perfect, protect, and continue the Lender’s
Liens;

 

(iv)          sums paid or incurred to take any action required of any Loan
Party under the Loan Documents that such Loan Party fails to pay or take; and

 

(v)           costs and expenses of preserving and protecting the Collateral.

 

All of the foregoing costs and expenses may be charged to the Borrowers as
Revolving Loans or to another deposit account, all as described in
Section 2.17(c).

 

(b)           The Borrowers, jointly and severally, shall indemnify the Lender,
and each Related Party of the Lender (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, penalties, incremental taxes, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or

 

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delivery of the Loan Documents or any agreement or instrument contemplated
thereby, the performance by the parties hereto of their respective obligations
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Lender to honor a demand for
payment under the Workers Comp Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of the Workers
Comp Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by any Borrower or
any of its Subsidiaries, or any Environmental Liability related in any way to
any Borrower or any of Subsidiaries, or (iv) the failure of any Borrower to
deliver to the Lender the required receipts or other required documentary
evidence with respect to a payment made by such Borrower for Taxes pursuant to
Section 2.16, or (v) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, penalties, liabilities or related
expenses are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.

 

(c)           The relationship between any Loan Party on the one hand and the
Lender on the other hand shall be solely that of debtor and creditor.  The
Lender (i) shall not have any fiduciary responsibilities to any Loan Party or
(ii) does not undertake any responsibility to any Loan Party to review or inform
such Loan Party of any matter in connection with any phase of any Loan Party’s
business or operations.  To the extent permitted by applicable law, no Loan
Party shall assert, and each hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.

 

(d)           All amounts due under this Section shall be payable promptly after
written demand therefor.

 

SECTION 8.04.  Successors and Assigns.

 

(a)           The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrowers may not assign or otherwise transfer
any of their rights or obligations hereunder without the prior written consent
of the Lender (and any attempted assignment or transfer by any Borrower without
such consent shall be null and void).  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Related Parties of each of the Lender)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.

 

(b)           The Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it) all without the consent of
any Loan Party.  Subject to notification of an assignment, the assignee shall be
a party hereto and, to the extent of the interest assigned, have the rights and
obligations of the Lender under this Agreement, and the Lender shall, to the
extent of the interest assigned, be released from its obligations under this
Agreement (and, in the case of an assignment covering all of the Lender’s rights
and obligations under this Agreement, the Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.15,
2.16 and 8.03).  The Loan Parties each hereby agree to execute any amendment
and/or any other document that may be necessary to effectuate such an
assignment, including an amendment to this Agreement to provide for multiple
lenders and an administrative agent to act on behalf of such lenders.

 

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(c)           The Lender may, without the consent of any Loan Party, sell
participations to one or more banks or other entities (a “Participant”) in all
or a portion of the Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) the Lender’s obligations under this Agreement shall remain
unchanged, (ii) the Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrowers shall
continue to deal solely and directly with the Lender in connection with the
Lender’s rights and obligations under this Agreement.  Subject to paragraph
(d) of this Section, each of the Loan Parties agree that each Participant shall
be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same extent
as if it were the Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section.

 

(d)           A Participant shall not be entitled to receive any greater payment
under Section 2.14 or 2.15 than the Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the prior written consent of
the Loan Parties.

 

(e)           The Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
the Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Lender, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release the Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for the Lender as a party
hereto.

 

SECTION 8.05.  Survival.  All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments  delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Lender may have had notice or knowledge of any Event of Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or the Workers Comp Letter of
Credit is outstanding and so long as the Commitment has not expired or
terminated.  The provisions of Sections 2.14, 2.15, 2.16 and Article VIII shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Workers Comp Letter of Credit and the Commitment or the
termination of this Agreement or any provision hereof.

 

SECTION 8.06.  Counterparts; Integration; Effectiveness.  This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Lender constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof, provided
that all UCC financing statements existing on the Effective Date and relating to
the subject matter of hereof are not superseded and shall remain in full force
and effect.  Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Lender and when the Lender
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  Delivery of an executed counterpart of a signature
page of this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement.

 

SECTION 8.07.  Severability.  Any provision of any Loan Document held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such

 

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invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions thereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

 

SECTION 8.08.  Right of Setoff.  If an Event of Default shall have occurred and
be continuing, the Lender and each of its Affiliates are hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by the Lender or Affiliate to or for the credit or the account of any Borrower
or any Loan Guarantor against any of and all the Secured Obligations held by the
Lender, irrespective of whether or not the Lender shall have made any demand
under the Loan Documents and although such obligations may be unmatured.  The
rights of the Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which the Lender may have.

 

SECTION 8.09.  Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)           The Loan Documents (other than those containing a contrary express
choice of law provision) shall be governed by and construed in accordance with
the laws of the State of Indiana, but giving effect to federal laws applicable
to national banks.

 

(b)           Each Loan Party hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any U.S.
Federal or Indiana State court sitting in Indianapolis, Indiana in any action or
proceeding arising out of or relating to any Loan Documents, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such Indiana State or, to
the extent permitted by law, in such Federal court.  Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  Nothing in this Agreement or any other
Loan Document shall affect any right that the Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document
against any Loan Party or its properties in the courts of any jurisdiction.

 

(c)           Each Loan Party hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section.  Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

(d)           Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.01.  Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.

 

SECTION 8.10.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER

 

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PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 8.11.  Headings.  Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

 

SECTION 8.12.  Confidentiality.  The Lender agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Loan Parties and their obligations,
(g) with the consent of the Borrowers or (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to the Lender on a non-confidential basis from
a source other than the Borrowers.  For the purposes of this Section,
“Information” means all information received from the Borrowers relating to the
Borrowers or their business, other than any such information that is available
to the Lender on a non-confidential basis prior to disclosure by the Borrowers;
provided that, in the case of information received from the Borrowers after the
date hereof, such information is clearly identified at the time of delivery as
confidential.  Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

 

SECTION 8.13.  Nonreliance; Violation of Law.  The Lender hereby represents that
it is not relying on or looking to any margin stock for the repayment of the
Borrowings provided for herein.  Anything contained in this Agreement to the
contrary notwithstanding, the Lender shall not be obligated to extend credit to
any Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.

 

SECTION 8.14.  USA PATRIOT Act.  The Lender is subject to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”) and hereby notifies the Borrowers that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies the Borrowers, which information includes the name and address
of the Borrowers and other information that will allow the Lender to identify
the Borrowers in accordance with the Act.

 

SECTION 8.15.  Disclosure.  Each Loan Party hereby acknowledges and agrees that
the Lender and/or its Affiliates from time to time may hold investments in, make
other loans to or have other relationships with any of the Loan Parties and
their respective Affiliates.

 

SECTION 8.16.  Interest Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of

 

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such Loan but were not payable as a result of the operation of this
Section shall be cumulated and the interest and Charges payable to the Lender in
respect of other Loans or periods shall be increased (but not above the Maximum
Rate therefor) until such cumulated amount, together with interest thereon at
the Federal Funds Effective Rate to the date of repayment, shall have been
received by the Lender.

 

SECTION 8.17.  Amendment and Restatement of Former Credit Agreement.  This
Agreement amends and, as amended, restates the Former Credit agreement in its
entirety.

 

ARTICLE IX

 

Loan Guaranty

 

SECTION 9.01.  Guaranty.  Each Loan Guarantor (other than those that have
delivered a separate Guaranty) hereby agrees that it is jointly and severally
liable for, and, as primary obligor and not merely as surety, absolutely and
unconditionally guarantees to the Lender the prompt payment when due, whether at
stated maturity, upon acceleration or otherwise, and at all times thereafter, of
the Secured Obligations and all costs and expenses including, without
limitation, all court costs and reasonable attorneys’ and paralegals’ fees
(including allocated costs of in-house counsel and paralegals) and expenses paid
or incurred by the Lender in endeavoring to collect all or any part of the
Secured Obligations from, or in prosecuting any action against, any Borrower,
any Loan Guarantor or any other guarantor of all or any part of the Secured
Obligations (such costs and expenses, together with the Secured Obligations,
collectively the “Guaranteed Obligations”).  When used or interpreted with
respect to a Loan Guarantor that is also a Borrower, the term “Guaranteed
Obligations” shall exclude the Secured Obligations of such Borrower.  Each Loan
Guarantor further agrees that the Guaranteed Obligations may be extended or
renewed in whole or in part without notice to or further assent from it, and
that it remains bound upon its guarantee notwithstanding any such extension or
renewal.  All terms of this Loan Guaranty apply to and may be enforced by or on
behalf of any domestic or foreign branch or Affiliate of the Lender that
extended any portion of the Guaranteed Obligations.

 

SECTION 9.02.  Guaranty of Payment.  This Loan Guaranty is a guaranty of payment
and not of collection.  Each Loan Guarantor waives any right to require the
Lender to sue any Borrower, any Loan Guarantor, any other guarantor, or any
other person obligated for all or any part of the Guaranteed Obligations (each,
an “Obligated Party”), or otherwise to enforce its payment against any
collateral securing all or any part of the Guaranteed Obligations.

 

SECTION 9.03.  No Discharge or Diminishment of Loan Guaranty.

 

(a)           Except as otherwise provided for herein, the obligations of each
Loan Guarantor hereunder are unconditional and absolute and not subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Guaranteed Obligations), including: 
(i) any claim of waiver, release, extension, renewal, settlement, surrender,
alteration, or compromise of any of the Guaranteed Obligations, by operation of
law or otherwise; (ii) any change in the corporate existence, structure or
ownership of any Borrower or any other guarantor of or other person liable for
any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Obligated Party, or
their assets or any resulting release or discharge of any obligation of any
Obligated Party; or (iv) the existence of any claim, setoff or other rights
which any Loan Guarantor may have at any time against any Obligated Party,
Lender, or any other person, whether in connection herewith or in any unrelated
transactions.

 

(b)           The obligations of each Loan Guarantor hereunder are not subject
to any defense or setoff, counterclaim, recoupment, or termination whatsoever by
reason of the invalidity, illegality, or unenforceability of any of the
Guaranteed Obligations or otherwise, or any provision of applicable law or

 

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regulation purporting to prohibit payment by any Obligated Party, of the
Guaranteed Obligations or any part thereof.

 

(c)           Further, the obligations of any Loan Guarantor hereunder are not
discharged or impaired or otherwise affected by: (i) the failure of the Lender
to assert any claim or demand or to enforce any remedy with respect to all or
any part of the Guaranteed Obligations; (ii) any waiver or modification of or
supplement to any provision of any agreement relating to the Guaranteed
Obligations; (iii) any release, non-perfection, or invalidity of any indirect or
direct security for the obligations of any Borrower for all or any part of the
Guaranteed Obligations or any obligations of any other guarantor of or other
person liable for any of the Guaranteed Obligations; (iv) any action or failure
to act by the Lender with respect to any collateral securing any part of the
Guaranteed Obligations; or (v) any default, failure or delay, willful or
otherwise, in the payment or performance of any of the Guaranteed Obligations,
or any other circumstance, act, omission or delay that might in any manner or to
any extent vary the risk of such Loan Guarantor or that would otherwise operate
as a discharge of any Loan Guarantor as a matter of law or equity (other than
the indefeasible payment in full in cash of the Guaranteed Obligations).

 

SECTION 9.04.  Defenses Waived.  To the fullest extent permitted by applicable
law, each Loan Guarantor hereby waives any defense based on or arising out of
any defense of any Borrower or any Loan Guarantor or the unenforceability of all
or any part of the Guaranteed Obligations from any cause, or the cessation from
any cause of the liability of any Borrower or any Loan Guarantor, other than the
indefeasible payment in full in cash of the Guaranteed Obligations. Without
limiting the generality of the foregoing, each Loan Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as any requirement
that at any time any action be taken by any person against any Obligated Party,
or any other person.  The Lender may, at its election, foreclose on any
Collateral held by it by one or more judicial or nonjudicial sales, accept an
assignment of any such Collateral in lieu of foreclosure or otherwise act or
fail to act with respect to any collateral securing all or a part of the
Guaranteed Obligations, compromise or adjust any part of the Guaranteed
Obligations, make any other accommodation with any Obligated Party or exercise
any other right or remedy available to it against any Obligated Party, without
affecting or impairing in any way the liability of such Loan Guarantor under
this Loan Guaranty except to the extent the Guaranteed Obligations have been
fully and indefeasibly paid in cash.  To the fullest extent permitted by
applicable law, each Loan Guarantor waives any defense arising out of any such
election even though that election may operate, pursuant to applicable law, to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of any Loan Guarantor against any Obligated Party or any security.

 

SECTION 9.05.  Rights of Subrogation.  No Loan Guarantor will assert any right,
claim or cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification that it has against any Obligated Party, or any
collateral, until the Loan Parties and the Loan Guarantors have fully performed
all their obligations to the Lender.

 

SECTION 9.06.  Reinstatement; Stay of Acceleration.  If at any time any payment
of any portion of the Guaranteed Obligations is rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, or reorganization of any
Borrower or otherwise, each Loan Guarantor’s obligations under this Loan
Guaranty with respect to that payment shall be reinstated at such time as though
the payment had not been made and whether or not the Lender is in possession of
this Loan Guaranty.  If acceleration of the time for payment of any of the
Guaranteed Obligations is stayed upon the insolvency, bankruptcy or
reorganization of any Borrower, all such amounts otherwise subject to
acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Loan Guarantors forthwith on
demand by the Lender.

 

SECTION 9.07.  Information.  Each Loan Guarantor assumes all responsibility for
being and keeping itself informed of each Borrower’s financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the

 

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risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and
agrees that the Lender shall not have any duty to advise any Loan Guarantor of
information known to it regarding those circumstances or risks.

 

SECTION 9.08.  Termination.  The Lender may continue to make loans or extend
credit to the Borrowers based on this Loan Guaranty until five days after it
receives written notice of termination from any Loan Guarantor.  Notwithstanding
receipt of any such notice, each Loan Guarantor will continue to be liable to
the Lender for any Guaranteed Obligations created, assumed or committed to prior
to the fifth day after receipt of the notice, and all subsequent renewals,
extensions, modifications and amendments with respect to, or substitutions for,
all or any part of that Guaranteed Obligations.

 

SECTION 9.09.  Taxes.  All payments of the Guaranteed Obligations will be made
by each Loan Guarantor free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if any Loan Guarantor shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Loan Guarantor shall make
such deductions and (iii) such Loan Guarantor shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.

 

SECTION 9.10.  Maximum Liability.  The provisions of this Loan Guaranty are
severable, and in any action or proceeding involving any state corporate law, or
any state, federal or foreign bankruptcy, insolvency, reorganization or other
law affecting the rights of creditors generally, if the obligations of any Loan
Guarantor under this Loan Guaranty would otherwise be held or determined to be
avoidable, invalid or unenforceable on account of the amount of such Loan
Guarantor’s liability under this Loan Guaranty, then, notwithstanding any other
provision of this Loan Guaranty to the contrary, the amount of such liability
shall, without any further action by the Loan Guarantors or the Lender, be
automatically limited and reduced to the highest amount that is valid and
enforceable as determined in such action or proceeding (such highest amount
determined hereunder being the relevant Loan Guarantor’s “Maximum Liability”. 
This Section with respect to the Maximum Liability of each Loan Guarantor is
intended solely to preserve the rights of the Lender to the maximum extent not
subject to avoidance under applicable law, and no Loan Guarantor nor any other
person or entity shall have any right or claim under this Section with respect
to such Maximum Liability, except to the extent necessary so that the
obligations of any Loan Guarantor hereunder shall not be rendered voidable under
applicable law. Each Loan Guarantor agrees that the Guaranteed Obligations may
at any time and from time to time exceed the Maximum Liability of each Loan
Guarantor without impairing this Loan Guaranty or affecting the rights and
remedies of the Lender hereunder, provided that, nothing in this sentence shall
be construed to increase any Loan Guarantor’s obligations hereunder beyond its
Maximum Liability.

 

SECTION 9.11.  Contribution.  In the event any Loan Guarantor (a “Paying
Guarantor”) shall make any payment or payments under this Loan Guaranty or shall
suffer any loss as a result of any realization upon any collateral granted by it
to secure its obligations under this Loan Guaranty, each other Loan Guarantor
(each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an
amount equal to such Non-Paying Guarantor’s “Applicable Percentage” of such
payment or payments made, or losses suffered, by such Paying Guarantor.  For
purposes of this Article IX, each Non-Paying Guarantor’s “Applicable Percentage”
with respect to any such payment or loss by a Paying Guarantor shall be
determined as of the date on which such payment or loss was made by reference to
the ratio of (i) such Non-Paying Guarantor’s Maximum Liability as of such date
(without giving effect to any right to receive, or obligation to make, any
contribution hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has
not been determined, the aggregate amount of all monies received by such
Non-Paying Guarantor from the Borrowers after the date hereof (whether by loan,
capital infusion or by other means) to (ii) the aggregate Maximum Liability of
all Loan Guarantors hereunder (including such Paying Guarantor) as of such date
(without giving effect to any right to receive, or obligation to make, any
contribution hereunder), or to the extent that a

 

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Maximum Liability has not been determined for any Loan Guarantor, the aggregate
amount of all monies received by such Loan Guarantors from the Borrowers after
the date hereof (whether by loan, capital infusion or by other means).  Nothing
in this provision shall affect any Loan Guarantor’s several liability for the
entire amount of the Guaranteed Obligations (up to such Loan Guarantor’s Maximum
Liability).  Each of the Loan Guarantors covenants and agrees that its right to
receive any contribution under this Loan Guaranty from a Non-Paying Guarantor
shall be subordinate and junior in right of payment to the payment in full in
cash of the Guaranteed Obligations.  This provision is for the benefit of the
Lender and the Loan Guarantors and may be enforced by any one, or more, or all
of them in accordance with the terms hereof.

 

SECTION 9.12.  Liability Cumulative.  The liability of each Loan Party as a Loan
Guarantor under this Article IX is in addition to and shall be cumulative with
all liabilities of each Loan Party to the Lender under this Agreement and the
other Loan Documents to which such Loan Party is a party or in respect of any
obligations or liabilities of the other Loan Parties, without any limitation as
to amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary.

 

SECTION 9.13.  Amendment and Restatement.  This Article IX amends and, as
amended, restates, consolidates and continues the guaranty agreements identified
on Schedule 9.13 of this Agreement in their entirety.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

SUPREME INDUSTRIES, INC.

 

SUPREME INDIANA OPERATIONS, INC.

As a Borrower, Loan Guarantor and a Loan Party

 

As a Borrower, Loan Guarantor and a Loan Party

 

 

 

 

 

 

By:

/s/ Robert W. Wilson

 

By:

/s/ Robert W. Wilson

 

Robert W. Wilson, President

 

 

Robert W. Wilson, President

 

 

 

 

 

 

 

 

SUPREME MID-ATLANTIC CORPORATION

 

SUPREME TRUCK BODIES OF CALIFORNIA, INC.

As a Borrower, Loan Guarantor and a Loan Party

 

As a Borrower, Loan Guarantor and a Loan Party

 

 

 

 

 

 

By:

/s/ Robert W. Wilson

 

By:

/s/ Robert W. Wilson

 

Robert W. Wilson, President

 

 

Robert W. Wilson, President

 

 

 

 

 

 

SUPREME CORPORATION OF TEXAS

 

SUPREME NORTHWEST, L.L.C.

As a Borrower, Loan Guarantor and a Loan Party

 

As a Borrower, Loan Guarantor and a Loan Party

 

 

 

 

 

 

By:

/s/ Robert W. Wilson

 

By:

/s/ Robert W. Wilson

 

Robert W. Wilson, President

 

 

Robert W. Wilson, President

 

 

 

 

 

 

SUPREME INDIANA MANAGEMENT, INC.

 

SC TOWER STRUCTURAL LAMINATING, INC.

As a Loan Guarantor and a Loan Party

 

As a Loan Guarantor and a Loan Party

 

 

 

 

 

 

By:

/s/ Robert W. Wilson

 

By:

/s/ Robert W. Wilson

 

Robert W. Wilson, President

 

 

Robert W. Wilson, President

 

 

 

 

 

 

SUPREME MURPHY TRUCK BODIES, INC.

 

SILVER CROWN, LLC

As a Loan Guarantor and a Loan Party

 

As a Loan Guarantor and a Loan Party

 

 

 

 

 

 

By:

/s/ Robert W. Wilson

 

By:

/s/ Robert W. Wilson

 

Robert W. Wilson, President

 

 

Robert W. Wilson, President

 

 

 

 

 

 

SUPREME STB, LLC

 

SUPREME PROPERTIES NORTH, INC.

As a Loan Guarantor and a Loan Party

 

As a Loan Guarantor and a Loan Party

 

 

 

 

 

 

By:

/s/ Herbert M. Gardner

 

By:

/s/ Robert W. Wilson

 

Herbert M. Gardner, Chairman

 

 

Robert W. Wilson, President

 

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SUPREME PROPERTIES EAST, INC.

 

SUPREME PROPERTIES SOUTH, INC.

As a Loan Guarantor and a Loan Party

 

As a Loan Guarantor and a Loan Party

 

 

 

 

 

 

By:

/s/ Robert W. Wilson

 

By:

/s/ Robert W. Wilson

 

Robert W. Wilson, President

 

 

Robert W. Wilson, President

 

 

 

 

 

 

 

 

 

 

SUPREME PROPERTIES WEST, INC.

 

 

As a Loan Guarantor and a Loan Party

 

 

 

 

 

 

 

 

By:

/s/ Robert W. Wilson

 

 

 

Robert W. Wilson, President

 

 

 

 

 

 

 

 

JPMORGAN CHASE BANK, N.A.

 

 

As the Lender

 

 

 

 

 

 

 

 

By:

/s/ H. Robert Hill

 

 

 

H. Robert Hill, Vice President

 

 

 

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