**Exhibit 10.1**

 
|  

  | **Amendment  to Credit Agreement** |
|----------------|------------------------------------|

 

This agreement isdated as of September 26, 2008, by and between Supreme Corporation (the “Borrower”)and JPMorgan Chase Bank, N.A. (the “Bank”), and its successors and assigns. The provisions of this agreement are effective onthe date that this agreement has been executed by all of the signers anddelivered to the Bank (the “Effective Date”).

 

**WHEREAS**,the Borrower and the Bank entered into a credit agreement dated January 5,2004, as amended (if applicable) (the “Credit Agreement”); and

 

**WHEREAS**,the Borrower has requested and the Bank has agreed to amend the CreditAgreement as set forth below;

 

**NOW,THEREFORE**, in mutual consideration of the agreementscontained herein and for other good and valuable consideration, the partiesagree as follows:

 

**1.****             DEFINED TERMS**.Capitalized terms not defined herein shall have the meaning ascribed in theCredit Agreement.

 

**2.****             MODIFICATION OFCREDIT AGREEMENT**. The Credit Agreement is hereby amended as follows:

 

**2.1****         **From and after the Effective Date, Section 1.2of the Credit Agreement captioned**“Facility  (Line of Credit ).”**is herebyamended and restated to read as follows:

 

**1.2****  Facility A (Line of Credit).** The Bank has approved a credit facility to theBorrower in the principal sum not to exceed $40,000,000.00 in the aggregate atany one time outstanding (“**Facility A**”).Credit under Facility A shall be repayable as set forth in a Line of CreditNote executed concurrently with this agreement, and any renewals,modifications, extensions, rearrangements, restatements thereof andreplacements or substitutions therefor.

 

**Non Usage Fee.** The Borrower shall pay to the Bank anon-usage fee (the “Non-usage Fee”) on the average daily unused portion ofFacility A at a rate per annum set forth below opposite the applicable FundedDebt to EBITDA Ratio, payable in arrears within fifteen (15) days of the end ofeach fiscal quarter for which the fee is owing.

 
| **Funded Debt to EBITDA Ratio**                            | ** ** | **Non Usage Fee** | ** ** |
|--------------------------------------------------------------------------------|------------|-----------------------------|------------|
| Greater than 4.00 to 1.00                                                      |       | 0.40                        | %          |
| Greater than or equal to 3.51  to 1.00 but less than or equal to 4.00  to 1.00 |       | 0.35                        | %          |
| Greater than or equal to 3.01  to 1.00 but less than or equal to 3.50  to 1.00 |       | 0.30                        | %          |
| Greater than or equal to 2.51  to 1.00 but less than or equal to 3.00  to 1.00 |       | 0.25                        | %          |
| Less than or equal to 2.50 to  1.00                                            |       | 0.20                        | %          |

 

**Borrowing Base.** Theaggregate principal amount of advances outstanding at any one time under theLine of Credit Note (and any and all renewals, modifications, extensions,rearrangements, restatements thereof and replacements or substitutionstherefor) evidencing Facility A (the “**AggregateOutstanding Amount**”) shall not exceed the Borrowing Base or themaximum principal amount then available under Facility A, whichever is less(the “**Maximum Available Amount**”).If at any time the Aggregate Outstanding Amount exceeds the Maximum AvailableAmount, the Borrower shall immediately pay the Bank an amount equal to suchexcess. “**Borrowing Base**” means theaggregate of:

 

**A.****   **80% of the book value ofall Eligible Accounts; plus

 

**B.****   **50% of the lower of cost(determined using the first-in, first-out method of inventory accounting) orwholesale market value, as determined by the Bank, of all raw material andfinished goods Eligible Inventory.

 

**2.2****         **From and after theEffective Date, the following Definitions are hereby added to Section 2 ofthe Credit Agreement;

 

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**2.7****         **“**Eligible Accounts**” means, at any time, allof the Borrower’s Accounts in which the Bank has a first priority continuingperfected Lien and which are earned and invoiced within thirty (30) days ofbeing earned and which contain selling terms and conditions satisfactory to theBank, are payable on ordinary trade terms, and are not evidenced by apromissory note, other instrument or chattel paper. The net amount of any EligibleAccount against which the Borrower may borrow shall exclude all returns,discounts, credits, and offsets of any nature. Unless otherwise agreed to bythe Bank in writing, Eligible Accounts do not include Accounts: (1) whichare not owned by the Borrower free and clear of all Liens, constructive trust,statutory priorities not in favor of the Bank, and claims of Persons other than the Bank; (2) withrespect to which the Account Debtor is an Affiliate of the Borrower orotherwise affiliated with or related to the Borrower, including withoutlimitation, any employee, officer, director, Equity Owner or agent of theBorrower; (3) with respect to which goods are placed on consignment,guaranteed sale, bill-and-hold, sale-and-return, sale on approval, cash-on-deliveryor other terms by reason of which the payment by the Account Debtor may beconditional; (4) with respect to which the Account Debtor is not aresident of the United States, except to the extent such Accounts are otherwiseEligible Accounts and are supported by insurance, bonds or other assurancessatisfactory to the Bank; (5) subject to the U.S. Office of Foreign AssetControl Special Designated Nationals and Blocked Person’s List, or with respectto which the Account Debtor is otherwise a Person with whom the Borrower or theBank is prohibited from doing business by any applicable Legal Requirement; (6) whichare not payable in U.S. Dollars; (7) with respect to which the Borrower isor may become liable to the Account Debtor for goods sold or services renderedby the Account Debtor to the Borrower; (8) which are subject to dispute,counterclaim, deduction, withholding, defense, or setoff; (9) with respectto which the goods have not been shipped or delivered, or the services have notbeen rendered, to the Account Debtor, or which otherwise constitute pre-billedAccounts; (10) which constitute retainage, or are bonded Accounts; (11)with respect to which the Bank determines the creditworthiness, financial orbusiness condition of the Account Debtor to be unsatisfactory; (12) of anyAccount Debtor who is the subject of anystate or federal bankruptcy, insolvency, or debtor-in-relief acts, or who hashad appointed a trustee, custodian, or receiver for the assets of such AccountDebtor, or who has made an assignment for the benefit of creditors or hasbecome insolvent or fails generally to pay its debts (including its payrolls)as such debts become due; (13) with respect to which the Account Debtor is theUnited States government or any department or agency of the United States; (14)otherwise determined to be ineligible by the Bank and (15) which have not beenpaid in full within ninety (90) days from the invoice date. In no event willthe balance of any Account of any single Account Debtor be eligible wheneverthe portion of the Accounts of such Account Debtor which have not been paidwithin ninety (90) days from the invoice date is in excess of 25% of the totalamount outstanding on all Accounts of such Account Debtor.

 

**2.8****         **“**Eligible Inventory**” means, at any time, allof the Borrower’s Inventory in which the Bank has a first priority continuingperfected Lien except Inventory which is: (1) not owned by it free andclear of all Liens except in favor of the Bank, and claims of Persons other than theBank; (2) slow moving, obsolete, unsalable, damaged, defective,perishable, or unfit for further processing; (3) work in process; (4) subjectto consignment or otherwise in the possession of another Person, unlessotherwise agreed to by the Bank in writing; (5) in transit or locatedoutside of the United States; (6) identified to be purchased under acontract under which it has received, or is entitled to receive, an advancepayment; (7) determined by the Bank to be ineligible due to licensing,intellectual property, or any Legal Requirements that would make it difficultto sell, lease or use such Inventory; (8) comprised of samples, returns,rejected items, re-work items, non-standard items, odd-lots, or repossessedgoods; (9) produced in violation of applicable Legal Requirements,including the Fair Labor Standards Act and the regulations and orders of theDepartment of Labor; or (10) otherwise determined ineligible by the Bank;provided, however, that transportation and storage charges shall be excludedfrom amounts otherwise included in Eligible Inventory.

 

**2.9****         **“**Inventory**” means raw materials, work inprocess, finished goods, merchandise, parts and supplies, of every kind andgoods held for sale or lease or furnished under contracts of service and alldocuments of title, warehouse receipts, bills of lading, and all otherdocuments of every type covering all or any part of the foregoing.

 

**2.10****        Intangible Assets**” means theaggregate amount of: (1) all assets classified as intangible assets underGAAP, including, without limitation, goodwill, trademarks, patents, copyrights,organization expenses, franchises, licenses, trade names, brand names, mailinglists, catalogs, excess of cost over book value of assets acquired, and bonddiscount and underwriting expenses; and (2) loans or advances to,investments in, or receivables from (i) any Affiliate, officer, director,employee, Equity Owner or agent of the Borrower or 

 

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(ii) any Person if such loan, advance, investmentor receivable is outside the Borrower’s ordinary course of business.

 

**2.3****         **From and after the Effective Date, Section 5.2 ofthe Credit Agreement captioned **“K. Debt Service CoverageRatio” and “L. Funded Debt to EBITDA Ratio”** are hereby deleted intheir entirety.

 

**3.****            ****RATIFICATION**. The Borrower ratifies andreaffirms the Credit Agreement and the Credit Agreement shall remain in fullforce and effect as modified herein.

 

**4.****             BORROWERREPRESENTATIONS AND WARRANTIES**. The Borrower represents and warrants that (a) therepresentations and warranties contained in the Credit Agreement are true andcorrect in all material respects as of the date of this agreement, (b) nocondition, act or event which could constitute an event of default under theCredit Agreement or any promissory note or credit facility executed inreference to the Credit Agreement exists, and (c) no condition, event, actor omission has occurred, which, with the giving of notice or passage of time,would constitute an event of default under the Credit Agreement or anypromissory note or credit facility executed in reference to the CreditAgreement.

 

**5.****             FEES AND EXPENSES**.The Borrower agrees to pay all fees and out-of-pocket disbursements incurred bythe Bank in connection with this agreement, including legal fees incurred bythe Bank in the preparation, consummation, administration and enforcement ofthis agreement.

 

**6.****             EXECUTION ANDDELIVERY**. This agreement shall become effective only after it is fullyexecuted by the Borrower and the Bank.

 

**7.****             ACKNOWLEDGEMENTS OFBORROWER.** The Borrower acknowledges that as of the date of this agreementit has no offsets with respect to all amounts owed by the Borrower to the Bankarising under or related to the Credit Agreement on or prior to the date ofthis agreement. The Borrower fully, finally and forever releases and dischargesthe Bank and its successors, assigns, directors, officers, employees, agentsand representatives from any and all claims, causes of action, debts andliabilities, of whatever kind or nature, in law or in equity, of the Borrower,whether now known or unknown to the Borrower, which may have arisen inconnection with the Credit Agreement or the actions or omissions of the Bankrelated to the Credit Agreement on or prior to the date hereof. The Borroweracknowledges and agrees that this agreement is limited to the terms outlinedabove, and shall not be construed as an agreement to change any other terms orprovisions of the Credit Agreement. This agreement shall not establish a courseof dealing or be construed as evidence of any willingness on the Bank’s part togrant other or future agreements, should any be requested.

 

**(THEREMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)**

 

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**8.****             NOT A NOVATION**.This agreement is a modification only and not a novation. Except for theabove-quoted modification(s), the Credit Agreement, any loan agreements, creditagreements, reimbursement agreements, security agreements, mortgages, deeds oftrust, pledge agreements, assignments, guaranties, instruments or documentsexecuted in connection with the Credit Agreement, and all the terms andconditions thereof, shall be and remain in full force and effect with thechanges herein deemed to be incorporated therein. This agreement is to beconsidered attached to the Credit Agreement and made a part thereof. Thisagreement shall not release or affect the liability of any guarantor of anypromissory note or credit facility executed in reference to the CreditAgreement or release any owner of collateral granted as security for the CreditAgreement. The validity, priority and enforceability of the Credit Agreementshall not be impaired hereby. To the extent that any provision of thisagreement conflicts with any term or condition set forth in the CreditAgreement, or any document executed in conjunction therewith, the provisions ofthis agreement shall supersede and control. The Bank expressly reserves allrights against all parties to the Credit Agreement.

 

 
| ** ** | **Borrower:**              |
|------------|----------------------------|
|       |
|       | Supreme  Corporation       |
|       |                       |
|       | By:                        |   |
|       |                       |   |
|       |                       |   |
|       |                       | Robert W. Wilson | President   |
|       |                       | Printed Name | Title   |
|       |
|       | Date Signed:               | 9-26-2008 |
| ** ** |
| ** ** |
| ** ** | **Bank:**                  |
|       |
|       | JPMorgan Chase  Bank, N.A. |
|       |
|       | By:                        |   |
|       |
|       |                       |   |   |
|       |                       | Authorized Signer |   |
|       |
|       | Date Signed:               | 9-26-2008 |
|            |                            |  |  |  |  |  |  |  |

 

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