Exhibit 10.13


 


	
  

  	
   

  



 


Credit
Agreement


 


This
agreement dated as of December 23, 2008 is between JPMorgan Chase Bank,
N.A. (together with its successors and assigns, the “Bank”).
whose address is 121 W. Franklin St., Elkhart, IN 46516, and Supreme
Corporation (individually, the “Borrower” and
if more than one, collectively, the “Borrowers”),  whose
address is 2581 Kercher Road, Goshen, IN 46528.


 


1.                                      Credit Facilities.


 


1.1                               Scope. This agreement governs Facility A, and, unless
otherwise agreed to in writing by  the Bank and the Borrower or
prohibited by any Legal  Requirement (as  hereafter
defined), governs the  Credit Facilities as  defined
below. This agreement amends and restates that certain Credit Agreement dated
as of January 5, 2004.
Advances under any Credit Facilities shall be subject to the procedures
established from time to time by the Bank. Any procedures agreed to by the Bank
with respect to obtaining advances, including automatic loan sweeps, shall not
vary the terms or conditions of this agreement or the other Related Documents
regarding the Credit Facilities.


 


1.2                               Facility A (Line of Credit). The Bank has approved a credit facility to
the Borrower in the principal sum not to exceed S33,000,000.00 in the aggregate
at any one time outstanding and subject to being reduced as set forth in a Line
of Credit Note executed concurrently with this agreement (“Facility
A”).  Credit under
Facility A shall be repayable as set forth in a Line of Credit Note executed
concurrently with this agreement, and any renewals, modifications, extensions,
rearrangements, restatements thereof and replacements or substitutions
therefor.


 


Non Usage Fee. The Borrower shall pay to the Bank a
non-usage fee (the “Non-usage Fee”) on the average daily unused portion of
Facility A at a rate per annum set forth below opposite the applicable Funded
Debt to EBITDA Ratio, payable in arrears within fifteen (15) days of the end of
each fiscal quarter for which the fee is owing. Funded Debt to EBITDA Ratio is
defined as Supreme Industries, Inc. and its subsidiaries’ ratio of (a) total
liabilities excluding (i) accounts arising from the purchase of goods and
services in the ordinary course of business, (ii) accrued expenses or
losses, (iii) deferred revenues or gains, and (iv) controlled
disbursements, to (b) net income, plus amortization expense, depreciation
expense, interest expense and income tax expense.


 


	
  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

  	
  %

  



 


1.3                               Borrowing Base. The aggregate principal amount of advances
outstanding at any one time under the Line of Credit Note (and any and all
renewals, modifications, extensions, rearrangements, restatements thereof and replacements  or  substitutions
therefor) evidencing Facility A (the “Aggregate Outstanding
Amount”) shall not exceed the Borrowing Base or the maximum
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 Available Amount, the Borrower shall
immediately pay the Bank an amount equal to such excess. “Borrowing Base” means the aggregate of:


 


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


 


B.            50% of the lower of cost (determined using the first-in,
first-out method of inventory accounting) or wholesale market value, as
determined by the Bank, of all Eligible Inventory.


 


For purposes of determining
the Borrowing Base, the assets of Supreme Corporation and each of its
Subsidiaries shall be deemed to be assets of the Borrower.


 


2.                                      Definitions and Interpretations.


 


2.1                               Definitions. As used in this agreement, the following
terms have the following respective meanings:


 

















 


A.            “Account” means a trade account, account receivable, other receivable, or other
right to payment for goods sold or leased or services rendered.


 


B.            “Account Debtor” means the Person obligated on an Account.


 


C.            “Affiliate” means any Person which, directly or indirectly Controls or is
Controlled by or under common Control with, another Person, and any director or
officer thereof. The Bank is under no circumstances to be deemed an Affiliate
of the Borrower or any of its Subsidiaries.


 


D.            “Authorizing Documents” means certificates of authority to transact
business, certificates of good standing, borrowing resolutions, appointments,
officer’s certificates, certificates of incumbency, and other documents which
empower and authorize or evidence the power and authority of all Persons (other
than the Bank) executing any Related Document or their representatives to
execute and deliver the Related Documents and perform the Person’s obligations
thereunder.


 


E.             “Capital Expenditures” means any expenditure or the incurrence of any obligation or liability for any asset which is classified as a
capital asset under GAAP.


 


F.             “Collateral” means all Property, now or in the future subject to any Lien in favor
of the Bank, securing or intending to secure, any of the Liabilities.


 


G.            “Control” as used  with respect to any Person,
means the power to direct or cause the direction of, the management and
policies of that Person, directly or indirectly, whether through the ownership
of Equity Interests, by contract, or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.


 


H.            “Credit Facilities” means all extensions of credit from the Bank
to the Borrower, whether now existing or hereafter arising, including but not
limited to those described in Section 1, if any, and those extended
contemporaneously with this agreement.


 


I.              “Distributions” means all dividends
and other  distributions made to any Equity Owners, other
than salary, bonuses, and other compensation for services expended in the
current accounting period.


 


J.             “Eligible Accounts” means, at any time, all of the Borrower’s
Accounts in which the Bank has a first priority continuing perfected Lien and
which are earned and invoiced within thirty (30) days of being earned and which
contain selling terms and conditions satisfactory to the Bank, are payable on
ordinary trade terms, and are not evidenced by a promissory note, other
instrument or chattel paper. The net amount of any Eligible Account against
which the Borrower may borrow shall exclude all returns, discounts, credits,
and offsets of any nature. Unless otherwise agreed to by the Bank in writing,
Eligible Accounts do not include Accounts: (1) which are 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) with
respect to which the Account  Debtor is an Affiliate of the
Borrower or otherwise affiliated with or related to the Borrower, including
without limitation, any employee, officer, director, Equity Owner or agent of
the Borrower; (3) with respect to which goods are placed on consignment,
guaranteed sale, bill-and-hold, sale-and-return, sale on approval,
cash-on-delivery or other terms by reason of which the payment by the Account
Debtor may be conditional; (4) with respect to which the Account Debtor is
not a resident of the United States, except to the extent such Accounts are
otherwise Eligible Accounts and are supported by  insurance,
bonds or other assurances satisfactory to the Bank; (5) subject to the U.S. Office of Foreign Asset
Control Special Designated Nationals and Blocked Person’s List, or with respect
to which the Account Debtor is otherwise a Person with whom the Borrower or the
Bank is prohibited from doing business by any applicable Legal Requirement; (6) which
are not payable in U.S. Dollars; (7) with respect to which the Borrower is
or may become liable to the Account Debtor for goods sold or services rendered
by the Account Debtor to the Borrower; (8) which are subject to dispute,
counterclaim, deduction, withholding, defense, or setoff; (9) with respect
to which the goods have not been shipped or delivered, or the services have not
been rendered, to the Account Debtor, or which otherwise constitute pre-billed
Accounts; (10) which constitute retainage,
or are bonded Accounts; (11) with respect to which the Bank determines the
creditworthiness, financial or business condition of the Account Debtor to be
unsatisfactory; (12) of any Account Debtor who is the subject of any state or
federal bankruptcy, insolvency, or debtor-in-relief acts, or who has had appointed
a trustee, custodian, or receiver for the assets of such Account Debtor, or who
has made an assignment for the benefit of creditors or has become 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 the United 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  been
paid in full within ninety (90) days from the invoice date. In no


 


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event will the balance of any
Account of any single Account Debtor be eligible whenever the portion of the
Accounts of such Account Debtor which have not been paid within ninety (90)
days from the invoice date is in excess of 25% of the total amount outstanding
on all Accounts of such Account Debtor.


 


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


 


L.            “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.


 


M.           “Equity  Owner” means a
shareholder, partner, member, holder of a beneficial interest in a trust or
other owner of any Equity Interests.


 


N.            “GAAP” means
generally accepted accounting principles in effect from time to time in the
United States of America, consistently applied.


 


O.            “Inventory” means raw materials, work in process,
finished goods, merchandise, parts and supplies, of every kind and goods held
for sale or lease or furnished under contracts of service and all documents of
title, warehouse receipts, bills of lading, and all other documents of every
type covering all or any part of the foregoing,


 


P.            “Intangible Assets” means the aggregate amount of: (1) all
assets classified as intangible assets under GAAP, including, without limitation,
goodwill, trademarks, patents, copyrights, organization expenses, franchises,
licenses, trade names, brand names, mailing lists, catalogs, excess of cost
over book value of assets acquired, and bond discount 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 (ii) any Person if such loan, advance, investment or
receivable is outside the Borrower’s ordinary course of business.


 


Q.            “Legal Requirement” means any law, ordinance, decree, requirement,
order, judgment, rule, regulation (or interpretation of any of the foregoing) of any foreign governmental authority, the
United States of America, any state thereof, any political subdivision of any
of the foregoing or any agency, department, commission, board, bureau, court or
other tribunal having jurisdiction over the Bank, any Pledgor or any Obligor or
any of its Subsidiaries or their respective Properties or any agreement by which
any of them is bound.


 


R.            “Liabilities” means all indebtedness, liabilities and obligations of every kind and
character of the Borrower to the Bank, whether the obligations, indebtedness
and liabilities are individual, joint and several, contingent or otherwise, now
or hereafter existing, including, without limitation, all liabilities,
interest, costs and fees, arising under or from any note, open account,
overdraft, credit card, lease, Rate Management Transaction, letter of credit
application, endorsement, surety agreement, guaranty, acceptance, foreign
exchange contract or depository service contract, whether payable to the Bank
or to a third party and subsequently acquired by the Bank, any monetary
obligations (including interest) incurred or accrued during the pendency of any
bankruptcy, insolvency, receivership or other similar proceedings, regardless
of whether allowed or allowable in such proceeding, and all renewals,
extensions, modifications, consolidations, rearrangements, restatements, replacements
or substitutions of any of the foregoing.


 


S.            “Lien” means any mortgage, deed of trust, pledge, charge, encumbrance,
security interest, collateral assignment or other lien or restriction of any
kind.


 


T.            “Notes” means all promissory notes, instruments
and/or contracts now or hereafter evidencing the Credit Facilities.


 


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U.            “Obligor” means any Borrower, guarantor, surety,
co-signer, endorser, general partner or other Person who  may now or in the
future be obligated to pay any of the Liabilities.


 


V.            “Organizational Documents” means, with respect to any Person,
certificates of existence or formation, documents establishing or governing the
Person or evidencing or certifying that the Person is duly organized and
validly existing in accordance with all applicable Legal Requirements,
including all amendments, restatements, supplements or modifications to such
certificates and documents as of the date of the Related Document referring to
the Organizational Document and any and all future modifications thereto
approved by the Bank.


 


W.           “Permitted Investments” means (1) readily marketable direct
obligations of the United States of America or any agency thereof with
maturities of one year or less from the date of acquisition; (2) fully
insured (if issued by a bank other than the Bank) certificates of deposit with
maturities of one year or less from the date of acquisition issued by any
commercial bank operating in the United States of America having capital and
surplus in excess of $500,000,000.00; and (3) commercial paper of a
domestic issuer if at the time of purchase such paper is rated in one of the
two highest rating categories of Standard and Poor’s Corporation or Moody’s
Investors Service.


 


X.            “Person” means any individual, corporation,
partnership, limited liability company, joint venture, joint stock association,
association, bank, business trust, trust, unincorporated organization, any
foreign governmental authority, the United States of America, any state of the
United States and any political subdivision of any of the foregoing or any
other form of entity.


 


Y.            “Pledgor” means any Person providing Collateral.


 


Z.            “Property” means any interest in any kind of property or asset, whether real,
personal or mixed, tangible or intangible.


 


AA.         “Rate Management Transaction” means any transaction (including an agreement
with respect thereto) that is a rate
swap, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap,
equity or equity index option, bond
option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option, derivative transaction or any other similar transaction (including any
option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.


 


BB.         “Related  Documents” means this
agreement, the Notes, applications for letters of credit, all loan agreements,
credit agreements. reimbursement agreements, security agreements, mortgages,
deeds of trust, pledge agreements, assignments, guaranties, and any other
instrument or document executed in connection with this agreement or with any
of the Liabilities. The related documents include without limitation, the
limited guaranty’d and continuing security agreements, of previously executed
and devivered by the Borrower’s Subsidiaries to the Bank, all of which continue
in full force and effect.


 


CC.         “Subsidiary” means, as to any particular Person (the “parent”), a Person 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 the date of determination, as well as any other
Person of which fifty percent (50%) or more of the Equity Interests is at the
time of determination directly or indirectly owned, Controlled or held, by the
parent or by any Person or Persons Controlled by the parent, either alone or
together with the parent.


 


DD.         “Tangible Net Worth” means total assets less the sum of Intangible
Assets and total liabilities.


 


2.2                               Interpretations. Whenever possible, each provision of the
Related Documents shall be interpreted in such manner as to be effective and
valid under applicable Legal Requirements. If any provision of this agreement
cannot be enforced, the remaining portions of this agreement shall continue in
effect. In the event of any conflict or inconsistency between this agreement
and the provisions of any other Related Documents, the provisions of this
agreement shall control. Use of the term “including” does not imply any
limitation on (but may expand) the antecedent
reference. Any reference to a particular
document includes all modifications, supplements, replacements, renewals or
extensions of that document, but this rule of construction does not authorize
amendment of any document without the Bank’s consent. Section headings are
for convenience of reference only and do not affect the interpretation of this
agreement. Except as otherwise
expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP. Whenever the Bank’s
determination, consent, approval or satisfaction is required under this
agreement or the other Related Documents or whenever the Bank may at its option
take or refrain from taking any action under this agreement or the other
Related Documents, the


 


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decision as to whether or not the Bank makes the
determination, consents, approves, is satisfied or takes or refrains from
taking any action, shall be in the sole and exclusive discretion of the Bank,
and the Bank’s decision shall be final and conclusive.


 


3.                                      Conditions Precedent to
Extensions of Credit.


 


3.1                               Conditions Precedent to Initial
Extension of Credit under each of the Credit Facilities. Before the first extension of credit governed by this agreement
and any initial advance under any of the Credit Facilities, whether by
disbursement of a loan, issuance of a letter of credit, or otherwise, the
Borrower shall deliver to the Bank, in form and substance satisfactory to the
Bank:


 


A.            Loan Documents. The Notes, and as applicable, the letter of credit applications,
reimbursement agreements, the security agreements, the pledge agreements,
financing statements, mortgages or deeds of trust, the guaranties, the
subordination agreements, and any other documents which the Bank may reasonably
require to give effect to the transactions described in this agreement or the
other Related Documents;


 


B.            Organizational and Authorizing Documents. The Organizational Documents and Authorizing
Documents of the Borrower and any other Persons (other than the Bank) executing
the Related Documents in form and substance satisfactory to the Bank that at a
minimum: (i) document the due organization, valid existence and good
standing of the Borrower and every other Person (other than the Bank) that is a
party to this agreement or any other Related Document; (ii) evidence that
each Person (other than the Bank) which is a party to this agreement or any
other Related Document has the power and authority to enter into the
transactions described therein; and (iii) evidence that the Person signing
on behalf of each Person that is a party to the Related Documents (other than
the Bank) is duly authorized to do so; and


 


C.            Liens. The termination, assignment or subordination, as
determined by the Bank, of all Liens on the Collateral in favor of any secured
party (other than the Bank).


 


3.2                               Conditions Precedent to Each
Extension of Credit. Before
any extension of credit governed by this agreement, whether by disbursement of
a loan, issuance of a letter of credit or otherwise, the following conditions
must be satisfied:


 


A.            Representations. The representations of the Borrower and any
other parties, other than the Bank, in the Related Documents are true on and as
of the date of the request for and funding of the extension of credit;


 


B.            No Event of Default. No default, event of default or event that
would constitute a default or event of default but for the giving of notice,
the lapse of time or both, has occurred in any provision of this agreement, the
Notes or any other Related Documents and is continuing or would result from the
extension of credit;


 


C.            Additional Approvals, Opinions, and
Documents. The Bank  has received any other approvals, opinions and
documents as it may reasonably request; and


 


D.            No Prohibition or Onerous Conditions. The making of the extension of credit is not
prohibited by and does not subject the Bank, any Obligor, or any Subsidiary of
the Borrower to any penalty or onerous condition under, any Legal Requirement.


 


4.                                      Affirmative Covenants. The Borrower agrees to do, and cause each of
its Subsidiaries to do, each of the following:


 


4.1                               Insurance. Maintain insurance with financially sound and
reputable insurers, with such insurance and insurers to be satisfactory to the
Bank, covering its Property and business against those casualties and
contingencies and in the types and amounts as are in accordance with sound
business and industry practices, and furnish to the Bank, upon request of the
Bank, reports on each existing insurance policy showing such information as the
Bank may reasonably request.


 


4.2                               Existence. Maintain its existence and business
operations as presently in effect in accordance with all applicable Legal
Requirements, pay its debts and obligations when due under normal terms, and
pay on or before their due date, all taxes, assessments, fees and other
governmental monetary obligations, except as they may be contested in good
faith if they have been properly reflected on its books and, at the Bank’s
request, adequate funds or security has been pledged or reserved to insure
payment.


 


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4.3                               Financial Records. Maintain proper books and records of account,
in accordance with GAAP,  and consistent with financial
statements previously submitted to the Bank.


 


4.4                               Inspection. Permit the Bank, its agents and designees to;
(a) inspect and photograph its Property, to examine and copy files, books
and records, and to discuss its business, operations, prospects, assets,
affairs and financial condition with  the Borrower’s or its Subsidiaries’
officers and accountants, at times and intervals as the Bank reasonably
determines; (b) perform audits or other inspections of the Collateral,
including the records and documents related to the Collateral; and (c) confirm
with any Person any obligations and
liabilities of the Person to the Borrower or  its Subsidiaries.
The Borrower will, and will cause its Subsidiaries to cooperate with any
inspection or audit. The Borrower will pay the Bank the reasonable costs and
expenses of any audit or inspection of the Collateral (including fees and
expenses charged internally by the Bank for asset reviews) promptly after
receiving the invoice.


 


4.5                               Financial Reports. Furnish to the Bank whatever information, statements,
books and records the Bank may from time
to time reasonably request, including at a minimum:


 


A.            Within forty-five (45)  days after
each monthly period, the consolidated
financial statements of the Borrower and its Subsidiaries prepared and
presented in accordance with GAAP, including
a balance sheet as of the end of that period, and income statement for that
period, and, if requested at any time by the Sank, statements of cash flow and
retained earnings for that period, all certified as correct by one of its authorized agents.


 


B.            Within
ninety (90) days after and as of the end of each of its fiscal years, the
consolidated financial statements of the Borrower and its Subsidiaries prepared
and presented in accordance with GAAP, including a balance sheet and statements
of income, cash flow and retained earnings, such financial statements to be
audited by an independent certified public accountant of recognized standing
satisfactory to the Bank.


 


C.            Within  thirty (30) days after and as of the end of each calendar month, a
summary total page of Accounts, aged from date of invoice and certified as
correct by one of its authorized agents.


 


D.            Within thirty (30) days after and as of the
end of each calendar month, a borrowing base certificate, in form and detail
satisfactory to the Bank, along with such supporting documentation as the Bank
may request.


 


E.             Via
either the EDGAR System or its Home Page,
within ninety
(90) days after the filing of
its Annual Report on Form 10-K for
the fiscal year then ended with the Securities and Exchange Commission,
but no event later than ninety (90) days after the end of such fiscal year, the
financial statements for such fiscal year as contained in such Annual Report on Form 10-K and, as soon as
it shall become available, the annual report to its shareholders for the fiscal
year then ended.


 


F.             Via either the EDGAR System or its Home Page,
within forty-five (45) days after the filing of its Quarterly Report on Form l0-Q
for the fiscal quarter then ended with the Securities and Exchange Commission,
but no event later than forty-five (45) days after the end of such fiscal
quarter, copies of the financial statements for such fiscal quarter as
contained in such Quarterly Report on Form l0-Q, and, as soon as it shall
become available, a quarterly report to its shareholders for the fiscal quarter
then ended.


 


G.            Via
either the EDGAR System or its Home Page, promptly after the same become
publicly available, copies of all periodic and other reports, proxy statements
and other materials filed by it with
the Securities and Exchange Commission or any governmental authority succeeding
to any or all of the functions of said Commission.


 


If
for any reason either the EDGAR System or its Home Page is not available
to it as is required for making available the financial statements or reports
referred to above, it shall then furnish a copy of such financial statements or
reports to the Bank.


 


For
the purposes of this section, “EDGAR System” means the Electronic Data Gathering Analysis and
Retrieval System owned and operated by the United States Securities and
Exchange Commission or any replacement system, and “Home Page” means its corporate home page on the World Wide Web accessible
through the Internet via the universal resource locator (URL) identified as “                                              “
or such other universal resource locator that it shall designate in writing
to the Bank as its corporate home page on the World Wide Web.


 


4.6                               Notices of Claims,
Litigation, Defaults, etc. Promptly inform the Bank in writing of: (1) all existing and all
threatened litigation, claims,
investigations, administrative proceedings and similar actions or
changes in Legal Requirements affecting it which could materially affect its
business, assets, affairs, prospects or financial condition;


 


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(2) the occurrence of any event which gives rise
to the Bank’s option to terminate the Credit Facilities; (3) the
institution of steps by it to withdraw from, or the institution of any steps to
terminate, any employee benefit plan as to which it may have liability; (4) any
reportable event or any prohibited transaction in connection with any employee
benefit plan; (5) any additions to or changes in the locations of its
businesses; and (6) any alleged breach by the Bank of any provision of
this agreement or of any other Related Document.


 


4.7                               Other Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between it and any other Person.


 


4.8                               Title to Assets and Property. Maintain good and marketable title to all of
its Properties, and defend them against all claims and demands of all Persons
at any time claiming any interest in them,


 


4.9                               Additional Assurances. Promptly make, execute and deliver any and all
agreements, documents, instruments and other records that the Bank may request
to evidence any of the Credit Facilities, cure any defect in the execution and
delivery of any of the Related Documents, perfect any Lien, comply with any
Legal Requirement applicable to the Bank or the Credit Facilities or describe
more fully particular aspects of the agreements set forth or intended to be set
forth in any of the Related Documents.


 


4.10                        Employee Benefit Plans. Maintain each employee benefit plan as to
which it may have any liability, in compliance with all Legal Requirements.


 


4.11                        Banking Relationship. Establish and maintain its primary banking
depository and disbursement relationship with the Bank.


 


4.12                        Additional Documentation. Borrower shall promptly execute and deliver,
and cause Supreme Industries, Inc. and its subsidiaries to promptly
execute and deliver such guarantys, security agreements and other loan
documents as the Bank may reasonably from time to time request.


 


5.                                      Negative Covenants.


 


5.1                               Unless otherwise noted, the financial
requirements set forth in this section will be computed in accordance with GAAP
applied on a basis consistent with financial statements previously submitted by
the Borrower to the Bank.


 


5.2                               Without the written consent of the Bank, the
Borrower will not and no Subsidiary of the Borrower will:


 


A.            Distributions. Redeem, retire, purchase or otherwise acquire, directly or indirectly,
any of its Equity Interests, return any contribution to an Equity Owner or,
other than stock dividends and dividends paid to the Borrower, declare or pay
any Distributions; provided, however, that if there is no existing default
under this agreement or any other Related Document and to do so will not cause
a default under any of such agreements the Borrower may pay Distributions to
its Equity Owners sufficient in amount to pay their income tax obligations
attributable to the Borrower’s taxable income if the Borrower is a sub S
corporation, limited liability company or partnership.


 


B.            Sale of Equity Interests. Issue, sell or otherwise dispose of its
Equity Interests.


 


C.            Debt. Incur, contract for, assume, or permit to remain outstanding,
indebtedness for borrowed money, installment obligations, or obligations under
capital leases or operating leases, other than (1) unsecured trade debt
incurred in the ordinary course of business, (2) indebtedness owing to the
Bank, (3) indebtedness reflected in its latest financial statement
furnished to the Bank prior to execution of this agreement and that is not to
be paid with proceeds of borrowings under the Credit Facilities, (4) indebtedness
outstanding as of the date hereof that has been disclosed to the Bank in writing
and that is not to be paid with proceeds of borrowings under the Credit
Facilities, and (5) indebtedness
owed from time to time by any Subsidiary of the Borrower.


 


D.            Guaranties. Guarantee or otherwise become or remain secondarily liable on the undertaking
of another, except for endorsement of drafts for deposit and collection in the
ordinary course of business.


 


E.             Liens. Create or permit to exist any Lien on any of its Property except:
existing Liens known to and approved by the Bank; Liens to the Bank; Liens
incurred in the ordinary course of business securing current non-delinquent
liabilities for taxes, worker’s compensation, unemployment insurance, social
security and pension liabilities, and liens securing indebtedness incurred by Section 5.2
C (5) above.


 


7

















 


F.             Use of Proceeds. Use, or permit any proceeds of the Credit
Facilities to be used, directly or indirectly, for the purpose of “purchasing
or carrying any margin stock” within the meaning of Federal Reserve Board
Regulation U. At the Bank’s request, it Will furnish a completed Federal
Reserve Board Form U-I.


 


G.            Continuity of Operations. (1) Engage in any business activities
substantially different from those in which it is presently engaged; (2) cease
operations, liquidate, merge, transfer, acquire or consolidate with any other
Person, change its name, dissolve, or sell any assets out of the ordinary
course of business; or (3) enter into any arrangement with any Person
providing for the leasing by it of Property which has been sold or transferred
by it to such Person.


 


H.            Limitation on Negative Pledge Clauses. Enter into any agreement with any Person
other than the Rank which prohibits or limits its ability to create or permit
to exist any Lien on any of its Property, whether now owned or hereafter
acquired.


 


I.              Conflicting Agreements. Enter into any agreement containing any
provision which would be violated or breached by the performance of its
obligations under this agreement or any of the other Related Documents.


 


J.             Transfer of Ownership. Permit any pledge of any Equity Interest in
it or any sale or other transfer of any Equity Interest in it.


 


K.            Limitation on Loans, Advances to and Investments in
Others and Receivables from Others. Purchase, hold or acquire any Equity Interest or evidence of
indebtedness of, make or permit to exist any loans or advances to, permit to
exist any receivable from, or make or permit to exist any investment or acquire
any interest whatsoever in, any Person, except: (1) extensions of trade
credit to customers in the ordinary course of business on ordinary terms; (2) Permitted
Investments; and (3) loans, advances, investments and receivables existing
as of the date of this agreement that have been disclosed to and approved by
the Bank in writing and that are not to be paid with proceeds of borrowings
under the Credit Facilities.


 


L.            Organizational Documents. Alter, amend or modify any of its
Organizational Documents.


 


M.           Tangible Net Worth. Permit at any time, its Tangible Net Worth to
be less than $68,000,000.00.


 


N.            Capital Expenditures. Acquire, whether by purchase or capital
lease, fixed assets, if the aggregate purchase price of such assets to the
Borrower, and all Subsidiaries if any, shall exceed $2,000,000.00 in the
aggregate in any one fiscal year.


 


O.            Adjusted  EBITDA. Permit its net
income plus interest expense, plus depreciation expense, plus amortization
expense, plus income tax expense, plus non-cash non-recurring expense, minus
non-cash non-recurring income, and minus extraordinary gains, collectively, “Adjusted
EBITDA”, all computed for the Test Period, to be less than eighty-five percent
(85%) of Borrower’s projected Adjusted EBITDA, based on Borrower’s projections
delivered to the Bank in which are summarized on Schedule One. As used in this
subsection, the term “Test Period” means each period of two
consecutive months.


 


P.            Government Regulation. (1) Be or become subject at any time to
any Legal Requirement or list of any government agency (including, without
limitation, the U.S. Office of Foreign Asset Control list) that prohibits or
limits the Bank from making any advance or extension of credit to it or from
otherwise conducting business with it,  or (2) fail to provide
documentary and other evidence of its identity as may be requested by the Bank
at any time to enable the Bank to verify its identity or to comply with any
applicable Legal Requirement, including, without limitation, Section 326
of the USA Patriot Act of 2001,31 U.S.C. Section 5318.


 


Q.            Subsidiaries. Form, create or acquire any Subsidiary.


 


5.3                               Financial
Statement Calculations.  The financial covenant(s) set forth in
the Section entitled “Negative Covenants” or in any subsection thereof
shall, except as may be otherwise expressly provided with respect to any
particular financial covenant, be calculated on the basis of the Borrower’s
financial statements prepared on a consolidated basis with its Subsidiaries in
accordance with GAAP. Except as may be otherwise expressly provided with
respect to any particular financial covenant, if any financial covenant states
that it is to be tested with respect to any particular period of time (which
may be referred to therein as a “Test Period”) ending on any test date (e.g., a
fiscal month end, fiscal quarter end, or fiscal year end), then compliance with
that covenant shall be required commencing with the


 


8

















 


period of time ending on the first test date that
occurs after the date of this agreement (or,
if applicable, of the amendment to this agreement which added or amended
such financial covenant).


 


6.                                      Representations.


 


6.1                               Representations and Warranties by
the Borrower. To induce the
Bank to enter into this agreement and to extend credit or other financial accommodations
under the Credit Facilities, the Borrower represents and warrants as of the
date of this agreement and as of the date of each request for credit under the
Credit Facilities that each of the following statements is and shall remain
true and correct throughout the term of this agreement and until all Credit
Facilities and all Liabilities under the Notes and other Related Documents are
paid in full: (a) the execution and delivery of this agreement and the
other Related Documents to which it is a party, and the performance of the
obligations they impose, do not violate any Legal Requirement, conflict with
any agreement by which it is bound, or require the consent or approval of any
other Person, (b) this agreement and the other Related Documents have been
duly authorized, executed and delivered by all parties thereto (other than the
Bank) and are valid and binding agreements of those Persons, enforceable
according to their terms, except as may be limited by bankruptcy, insolvency or
other laws affecting the enforcement of creditors’ rights generally and by
general principles of equity, (c) all balance sheets, profit and loss
statements, and other financial statements and other information furnished to
the Bank in connection with the Liabilities are accurate and fairly reflect the
financial condition of the Persons to which they apply on their effective
dates, including contingent liabilities of every type, which financial
condition has not changed materially and adversely since those dates, (d) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) is pending or threatened against it, and no
other event has occurred which may in any one case or in the aggregate
materially adversely affect it or any of its Subsidiaries’ financial condition,
properties, business, affairs, or operations other than litigation, claims, or
other events, if any, that have been disclosed to and acknowledged by the Bank
in writing, (e) all of its tax returns and reports that are or were
required to be filed, have been filed, and all taxes, assessments and other
governmental charges have been paid in full, except those presently being
contested by it in good faith and for which adequate reserves have been
provided, (f) it is not an “investment company” or a company “controlled”
by an “investment company”, within the meaning of the investment Company Act of
1940, as amended, (g) it is not a “holding company”, or a “subsidiary
company” of a “holding company” or an “affiliate” of a “holding company” or of
a “subsidiary company” of a “holding company” within the meaning of the Public
Utility Holding Company Act of 1935, as amended, (h) there are no defenses
or counterclaims, offsets or adverse claims, demands or actions of any kind,
personal or otherwise, that it could assert with respect to this agreement or
the Credit Facilities, (i) it owns, or is licensed to use, all trademarks,
trade names, copyrights, technology, know-how and processes necessary for the
conduct of its business as currently conducted, and (j) no part of the
proceeds of the Credit Facilities will be used for “purchasing” or “carrying”
any “margin stock” within the respective meanings of each of the quoted terms
under Regulation U of the Board of Governors of the Federal Reserve System of
the United States (the “Board”) as now and from time to time hereafter in effect or
for any purpose which violates the provisions of any regulations of the Board
or any other Legal Requirement. The Borrower, other than a natural Person,
further represents that: (a) it is duly organized and validly existing
under the laws of the state where it is organized and is in good standing in
its state of organization and each state where it is doing business, and (b) the
execution and delivery of this agreement and the other Related Documents to
which it is a party and the performance of the obligations they impose (i) are
within its powers, (ii) have been duly authorized by all necessary action
of its governing body, and (iii) do not contravene the terms of its
Organizational Documents or other agreement or document governing its affairs.


 


6.2                               Representations and Warranties
Regarding Assets. To induce the Bank to enter into this
agreement and to extend credit or other financial accommodations under the
Credit Facilities, the Borrower represents and warrants as of the date of this
agreement and as of the date of each request for credit under the Credit
Facilities that each of the following statements is and shall remain true and correct
throughout the term of this agreement and until all Credit Facilities and all
Liabilities owing under the Notes and other Related Documents are paid in full.
With respect to any asset utilized in the calculation of’ the Borrowing Base
the Borrower represents and warrants to the Bank that: (1) each asset
represented by the Borrower to be eligible for Borrowing Base purposes conforms
to the eligibility requirements set forth in this agreement; (2) all asset
values delivered to the Bank will be true and correct, subject to immaterial variance, and
be determined on a consistent accounting basis; (3) except as agreed to the
contrary by the Bank in writing, each asset is now and at all times hereafter
will be in the Borrower’s physical possession and shall not be held by others
on consignment, sale or approval, or sale or return; (4) except as
reflected in schedules delivered to the
Bank, each asset is now and at all times hereafter will be of good and merchantable quality, free from defects; (5) each
asset is not now and will not at any time hereafter be stored with a bailee,
warehouseman, or similar Person without the Rank’s prior written consent, and
in such event, the Borrower will concurrently at the time of bailment cause any
such bailee, warehouseman, or similar Person to issue and deliver
to the Bank, warehouseman receipts in the Bank’s name evidencing the storage of
the assets; and (6) the Bank, its assigns, or agents shall have the right
at any time and at the Borrower’s expense to inspect, examine and audit the
Borrower’s


 


9

















 


records, and if Accounts are
included in the calculation of Borrowing Base, confirm with Account Debtors the
accuracy of such Accounts, and inspect and examine the assets and to check and
test the same as to quality, quantity, value, and condition.


 


7.                                      Default/Remedies. If any of the Credit Facilities is not paid
at maturity, whether by acceleration or otherwise, or if a default by anyone
occurs under the terms of this agreement, the Notes or any other Related
Documents, then the Bank shall have all of the rights and remedies provided by
any law, equity or agreement.


 


8.                                      Miscellaneous.


 


8.1                               Notice. Any notices and demands under or related to
this agreement shall be in writing and delivered to the intended party at its
address stated in this agreement, and if to the Bank, at its main office if no
other address of the Bank is specified in this agreement, by one of the
following means: (a) by hand; (b) by a nationally recognized
overnight courier service; or (c) by certified mail, postage prepaid, with
return receipt requested. Notice shall be deemed given: (a) upon receipt
if delivered by hand (b) on the Delivery Day after the day of deposit with
a nationally recognized courier service; or (c) on the third Delivery Day
after the notice is deposited in the mail. “Delivery Day”
means a day other than a Saturday, a Sunday or any other day on which national
banking associations are authorized to be closed. Any party may change its
address for purposes of the receipt of notices and demands by giving notice of
the change in the manner provided in this provision.


 


8.2                               No Waiver. No delay on the part of the Bank in the
exercise of any right or remedy waives that right or remedy. No single or
partial exercise by the Bank of any right or remedy precludes any other future
exercise of it or the exercise of any other right or remedy. The making of an
advance during the existence of any default or subsequent to the occurrence of
a default or when all conditions precedent have not been met shall not
constitute a waiver of the default or condition precedent. No waiver or
indulgence by the Bank of any default is effective unless it is in writing and
signed by the Bank, nor shall a waiver on one occasion bar or waive that right
on any future occasion.


 


8.3                               Integration. This agreement, the Notes, and the other
Related Documents embody the entire agreement and understanding between the
Borrower and the Bank and supersede all prior agreements and understandings
relating to their subject matter. If any one or more of the obligations of the
Borrower under this agreement or the Notes is invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Borrower shall not in any way be affected or impaired, and
the invalidity, illegality or unenforceability in one jurisdiction shall not
affect the validity, legality or enforceability of the obligations of the
Borrower under this agreement, the Notes and the other Related Documents in any
other jurisdiction.


 


8.4                               Joint and Several Liability. Each party executing this agreement as the
Borrower is individually, jointly and severally liable under this agreement.


 


8.5                               Governing Law and Venue. This agreement shall be governed by and
construed in accordance with the laws of the State of Indiana (without giving
effect to its laws of conflicts). The Borrower agrees that any legal action or
proceeding with respect to any of its obligations under this agreement may be
brought by the Bank in any state or federal court located in the State of
Indiana, as the Bank in its sole discretion may elect. By the execution and
delivery of this agreement, the Borrower submits to and accepts, for itself and
in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of those courts. The Borrower waives any claim that the State of
Indiana is not a convenient forum or the proper venue for any such Suit, action or proceeding.


 


8.6                               Survival
of
Representations and Warranties. The Borrower understands and agrees that in
extending the Credit Facilities, the Bank is relying on all representations,
warranties, and covenants made by the Borrower in this agreement or in any
certificate or other instrument delivered by the Borrower to the Bank under
this agreement or in any of the other Related Documents. The Borrower further
agrees that regardless of any investigation made by the Bank, all such
representations, warranties and covenants will survive the making of the
Credit Facilities and delivery to the Bank of this agreement, shall be continuing
in nature, and shall remain in full force and effect until such time as the
Liabilities shall be paid in full.


 


10

















 


8.7                               Non-Liability of the Bank. The relationship between the Borrower and the
Bank created by this agreement is strictly a debtor and creditor relationship
and not fiduciary in nature, nor is the relationship to be construed as
creating any partnership or joint venture between the Bank and the Borrower.
The Borrower is exercising its own judgment with respect to its business. All information supplied to the Bank
is for the Bank’s protection only and
no other party is entitled to rely on such information. There is no duty for Bank to review, inspect,
supervise or inform the Borrower of any
matter with respect to the
Borrower’s business. The Bank and the Borrower intend that the Bank may reasonably rely on all
information supplied by the Borrower to the Bank, together with all representations
and warranties given by the Borrower to
the Bank, without investigation or confirmation by the Bank and that any investigation
or failure to investigate will not diminish the Bank’s right to so rely.


 


8.8                               Indemnification of the Bank. The Borrower agrees to indemnify, defend and
hold the Bank, its parent companies, Subsidiaries, Affiliates, their respective
successors and assigns and each of their respective shareholders, directors.
officers, employees and agents
(collectively, the “Indemnified
Persons”) harmless from any and
against any and all loss,
liability, obligation, damage, penalty, judgment, claim, deficiency, expense,
interest, penalties, attorneys’ fees (including the fees and expenses of any
attorneys engaged by the Indemnified Person) and amounts paid in settlement (“Claims”)
to which any Indemnified Person may become subject arising out of or
relating to the Credit Facilities, the Liabilities under this agreement or any other Related Documents or the
Collateral, except to the limited
extent that the Claims are proximately caused by the Indemnified Person’s gross
negligence or willful misconduct. The indemnification provided for in this
paragraph shall survive the termination of this agreement and shall not be
affected by the presence, absence or amount of or the payment or nonpayment of
any claim under, any insurance.


 


8.9                               Counterparts. This agreement may be executed in multiple
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts, taken together, shall constitute one and the same
agreement.


 


8.10                        Advice of Counsel. The Borrower acknowledges that it has been
advised by counsel, or had the opportunity to be advised by counsel, in the
negotiation, execution and delivery of this agreement and any other Related
Documents.


 


8.11                        Recovery of Additional Costs. If the imposition of or any change in any
Legal Requirement, or the interpretation or application of any thereof by any
court or administrative or governmental authority (including any request or
policy not having the force of law) shall impose, modify, or make applicable
any taxes (except federal, state, or local income or franchise taxes imposed on
the Bank), reserve requirements, capital adequacy requirements, Federal Deposit
Insurance Corporation (FDIC) deposit insurance premiums or assessments, or
other obligations which would (A) increase the cost to the Bank for
extending, maintaining or funding the Credit Facilities, (B) reduce the
amounts payable to the Bank under the Credit Facilities, or (C) reduce the
rate of return on the Bank’s capital as a consequence of the Bank’s obligations
with respect to the Credit Facilities, then the Borrower agrees to pay the Bank such additional amounts
as will compensate the Bank herefore, within five (5) days after the Bank’s
written demand for such payment.
The Bank’s demand shall be accompanied by an explanation of such imposition or
charge and a calculation in reasonable detail of the additional amounts payable by the Borrower, which explanation and
calculations shall be conclusive in the absence of manifest error.


 


8.12                        Expenses. The Borrower agrees to pay or reimburse the
Bank for all its out-of-pocket costs and expenses and reasonable attorneys’
fees (including the fees of in-house counsel) incurred in connection with the
development, preparation and execution of, and in connection with the
enforcement or preservation of any rights under, this agreement, any amendment,
supplement, or modification thereto, and any other Related Documents. These costs
and expenses include without
limitation any costs or expenses
incurred by the Bank in any bankruptcy,
reorganization, insolvency or other similar proceeding.


 


9.                                      USA PATRIOT ACT NOTIFICATION. The following
notification is provided to the Borrower pursuant to Section 326 of the
USA Patriot Act of 2001, 31 U.S.C. Section 5318:


 


IMPORTANT
INFORMATION ABOUT PROCEDURES FOR OPENENG A NEW ACCOUNT. To help the government fight the
funding of terrorism and money
laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each Person that opens
an account, including any deposit
account, treasury management
account, loan, other extension of credit, or other financial services product. What this means for the Borrower:


 


11

















 


When
the Borrower opens an account, if it is an individual the Bank will ask
for its name, taxpayer identification
number, residential address, date of birth, and other information that
will allow the Bank to identify it,
and, if it is not an individual
the Bank will ask for its name,
taxpayer identification number, business address, and other information that
will allow the Bank to identify it. The Bank may also ask, if the
Borrower is an individual, to see
its driver’s license or other identifying
documents, and if it is not an individual, to see its Organizational Documents or other identifying documents.


 


10.                               WAIVER OF SPECIAL DAMAGES. THE BORROWER
WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT THE UNDERSIGNED MAY HAVE
TO CLAIM OR RECOVER FROM THE BANK IN ANY LEGAL ACTION OR PROCEEDING ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.


 


11.                               JURY WAIVER. THE BORROWER AND THE BANK HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT, OR
OTHERWISE) BETWEEN THE BORROWER AND THE BANK ARISING OUT OF OR IN ANY WAY
RELATED TO THIS AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE FINANCING DESCRIBED HEREIN.


 


 


	
  Address(es)  for
  Notices:

  	
  Borrower:

  
	
   

  	
   

  
	
  2581
  Kercher Road

  	
  Supreme
  Corporation

  
	
  Goshen, IN 46528

  	
   

  
	
  Attn:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Robert
  W. Wilson 

  	
  President  

  
	
   

  	
   

  	
  Printed
  Name 

  	
  Title

  
	
   

  	
   

  
	
   

  	
  Date
  Signed: 

  	
   12-23-2008

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address
  for Notices:

  	
  Bank:

  
	
   

  	
   

  
	
  121
  W. FranklinSt.

  	
  JPMorgan Chase Bank, N.A.

  
	
  Elkhart, IN 46516

  	
   

  
	
  Attn:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed
  Name 

  	
  Title

  
	
   

  	
   

  
	
   

  	
  Date
  Signed: 

  	
   12-23-2008

  
								



 


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