Exhibit
10.1


 




 


 








 


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.


 




 





 

















 


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

  



 


i

















 


	
  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

  



 


ii

















 


	
  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

  	
   

  



 


iii






 












 


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

  	
  %

  



 


1

















 


“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.


 


2

















 


“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.


 


3

















 


“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

















 


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

















 


(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

















 


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


 


7

















 


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


 


8

















 


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.


 


9
















 


“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


 


10

















 


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.


 


11

















 


“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.


 


12

















 


“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.”


 


13

















 


“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.


 


14

















 


“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


 


15

















 


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;


 


16

















 


(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.


 


17

















 


“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.


 


18

















 


“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.


 


19
















 


“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).


 


20

















 


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,


 


21

















 


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.


 


22

















 


“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.


 


23

















 


(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


 


24

















 


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


 


25

















 


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


 


26

















 


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


 


27

















 


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);


 


28
















 


(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


 


29

















 


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


 


30

















 


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


 


32

















 


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


 


33

















 


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


 


34

















 


(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.


 


35

















 


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


 


36

















 


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,


 


37

















 


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.


 


38
















 


(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.


 


39

















 


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.


 


40

















 


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 


 


41

















 


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 


 


42

















 


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).


 


43

















 


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;


 


44

















 


(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, 


 


45

















 


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


 


46

















 


(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, 


 


47

















 


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 


 


48

















 


(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.


 


49
















 


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


 


50

















 


(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.


 


51

















 


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:


 


52

















 


(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 


 


53

















 


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 


 


54

















 


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 


 


55

















 


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 


 


56

















 


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 


 


57

















 


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


 


58
















 


(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 


 


59

















 


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 


 


60

















 


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.


 


61

















 


(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 


 


62

















 


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



 


63

















 


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 


 


64

















 


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 


 


65

















 


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 


 


66

















 


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 


 


67

















 


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.


 


68






 












 


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

  



 


69

















 


	
  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

  	
   

  	
   

  



 


70