Document:

Exhibit 10(a)

 

STEPHEN E. ROTH

DIRECT LINE: 202.383.0158

E-mail: steve.roth@sutherland.com

 

September 16, 2011

 

Board of Directors

Protective Life and Annuity Insurance Company

2801 Highway 201 South

Birmingham, Alabama 35223

 

Directors:

 

We hereby consent to the reference to our name under the caption “Legal Matters” in the statement of additional information filed as part of post-effective amendment number 7 to the registration statement on Form N-4 (File No. 333-146506) filed by Protective Life and Annuity Insurance Company and Variable Annuity Account A of Protective Life with the Securities and Exchange Commission.  In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933.

 

	
 
    	
Sincerely,
    
	
 
    	
 
    
	
 
    	
SUTHERLAND   ASBILL & BRENNAN LLP
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Stephen E. Roth
    
	
 
    	
 
    	
Stephen   E. RothExhibit 10.(b)

 

Consent of Independent Registered Public Accounting Firm

 

We hereby consent to the use in this Registration Statement on Form N-4 (File No. 333-146506) of our report dated April 22, 2011, relating to the statutory financial statements of Protective Life and Annuity Insurance Company, which appears in such Registration Statement. We also consent to the use in this Registration Statement on Form N-4 (File No. 333-146506) of our report dated April 25, 2011, relating to the financial statements of Variable Annuity Account A of Protective Life, which appears in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

 

 

 

PricewaterhouseCoopers LLP

Birmingham, Alabama

September 16, 2011Exhibit 10(a)

 

STEPHEN E. ROTH

DIRECT LINE: 202.383.0158

E-mail: steve.roth@sutherland.com

 

September 16, 2011

 

Board of Directors

Protective Life Insurance Company

2801 Highway 201 South

Birmingham, Alabama 35223

 

Directors:

 

We hereby consent to the reference to our name under the caption “Legal Matters” in the statement of additional information filed as part of post-effective amendment number 10 to the registration statement on Form N-4 (File No. 333-145621) filed by Protective Life Insurance Company and Protective Variable Annuity Separate Account with the Securities and Exchange Commission.  In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933.

 

	
 
    	
Sincerely,
    
	
 
    	
 
    
	
 
    	
SUTHERLAND   ASBILL & BRENNAN LLP
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Stephen E. Roth
    
	
 
    	
 
    	
Stephen   E. RothExhibit 10.(b)

 

Consent of Independent Registered Public Accounting Firm

 

We hereby consent to the use in this Registration Statement on Form N-4 (File No. 333-145621) of our report dated March 30, 2011, relating to the consolidated financial statements and financial statement schedules of Protective Life Insurance Company and subsidiaries, which appears in such Registration Statement. We also consent to the use in this Registration Statement on Form N-4 (File No. 333-145621) of our report dated April 25, 2011, relating to the financial statements of Protective Variable Annuity Separate Account, which appears in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

 

 

PricewaterhouseCoopers LLP

Birmingham, Alabama

September 16, 2011Exhibit 10.1

 

EXECUTION VERSION

 

 

CREDIT AGREEMENT

 

 

by and among

 

SUPREME INDUSTRIES, INC.

 

as Parent,

 

SUPREME INDIANA OPERATIONS, INC.

and certain of its Subsidiaries that are signatories hereto

 

as Borrowers,

 

THE LENDERS THAT ARE SIGNATORIES HERETO

 

as the Lenders,

 

and

 

WELLS FARGO CAPITAL FINANCE, LLC

 

as the Agent

 

 

Dated as of September 14, 2011

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
DEFINITIONS   AND CONSTRUCTION
    	
1
    
	
 
    	
 
    	
 
    
	
 
    	
1.1
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.2
    	
Accounting   Terms
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.3
    	
Code
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.4
    	
Construction
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.5
    	
Schedules   and Exhibits
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
2.
    	
LOANS   AND TERMS OF PAYMENT
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.1
    	
Revolver   Advances
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.2
    	
[Intentionally   omitted]
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.3
    	
Borrowing   Procedures and Settlements
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.4
    	
Payments;   Reductions of Commitments; Prepayments
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.5
    	
Overadvances
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.6
    	
Interest   Rates and Letter of Credit Fee: Rates, Payments, and Calculations
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.7
    	
Crediting   Payments
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.8
    	
Designated   Account
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.9
    	
Maintenance   of Loan Account; Statements of Obligations
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.10
    	
Fees
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.11
    	
Letters   of Credit
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.12
    	
LIBOR   Option
    	
18
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.13
    	
Capital   Requirements
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.14
    	
Joint   and Several Liability of Borrowers
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
3.
    	
CONDITIONS;   TERM OF AGREEMENT
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.1
    	
Conditions   Precedent to the Initial Extension of Credit
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.2
    	
Conditions   Precedent to all Extensions of Credit
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.3
    	
Maturity
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.4
    	
Effect   of Maturity
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.5
    	
Early   Termination by Borrowers
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
4.
    	
REPRESENTATIONS   AND WARRANTIES
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.1
    	
Due   Organization and Qualification; Subsidiaries
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.2
    	
Due   Authorization; No Conflict
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.3
    	
Governmental   Consents
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.4
    	
Binding   Obligations; Perfected Liens
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.5
    	
Title   to Assets; No Encumbrances
    	
25
    

 

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
4.6
    	
Jurisdiction   of Organization; Location of Chief Executive Office; Organizational   Identification Number; Commercial Tort Claims
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.7
    	
Litigation
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.8
    	
Compliance   with Laws
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.9
    	
No   Material Adverse Change
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.10
    	
Fraudulent   Transfer
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.11
    	
Employee   Benefits
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.12
    	
Environmental   Condition
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.13
    	
Intellectual   Property
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.14
    	
Leases
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.15
    	
Deposit   Accounts and Securities Accounts
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.16
    	
Complete   Disclosure
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.17
    	
Material   Contracts
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.18
    	
Patriot   Act
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.19
    	
Indebtedness
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.20
    	
Payment   of Taxes
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.21
    	
Margin   Stock
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.22
    	
Governmental   Regulation
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.23
    	
OFAC
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.24
    	
Employee   and Labor Matters
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.25
    	
Parent   as a Holding Company
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.26
    	
Eligible   Accounts
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.27
    	
Eligible   Inventory
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.28
    	
Locations   of Inventory and Equipment
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.29
    	
Inventory   Records
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
5.
    	
AFFIRMATIVE   COVENANTS
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.1
    	
Financial   Statements, Reports, Certificates
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.2
    	
Collateral   Reporting
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.3
    	
Existence
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.4
    	
Maintenance   of Properties
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.5
    	
Taxes
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.6
    	
Insurance
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.7
    	
Inspection
    	
31
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.8
    	
Compliance   with Laws
    	
31
    

 

2

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
5.9
    	
Environmental
    	
31
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.10
    	
Disclosure   Updates
    	
31
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.11
    	
Formation   of Subsidiaries
    	
32
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.12
    	
Further   Assurances
    	
32
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.13
    	
Lender   Meetings
    	
32
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.14
    	
Material   Contracts
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.15
    	
Location   of Inventory and Equipment
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.16
    	
Assignable   Material Contracts
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.17
    	
Depository   Accounts
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.18
    	
Blocked   Accounts and Securities Accounts
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.19
    	
Pool   Units
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.20
    	
Dissolution
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.21
    	
Inventory   Reporting
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.22
    	
Pennsylvania   Status Certificate
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
6.
    	
NEGATIVE   COVENANTS
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.1
    	
Indebtedness
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.2
    	
Liens
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.3
    	
Restrictions   on Fundamental Changes
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.4
    	
Disposal   of Assets
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.5
    	
Change   Name
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.6
    	
Nature   of Business
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.7
    	
Prepayments   and Amendments
    	
36
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.8
    	
Change   of Control
    	
36
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.9
    	
Restricted   Junior Payments
    	
36
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.10
    	
Accounting   Methods
    	
36
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.11
    	
Investments;   Controlled Investments
    	
36
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.12
    	
Transactions   with Affiliates
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.13
    	
Use   of Proceeds
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.14
    	
Limitation   on Issuance of Stock
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.15
    	
Parent   as Holding Company
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.16
    	
Consignments
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.17
    	
Inventory   and Equipment with Bailees
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.18
    	
Winding   Down Subsidiaries
    	
38
    

 

3

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
6.19
    	
Captive   Insurance Company
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.20
    	
Demonstration   Units
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.21
    	
California   Real Estate
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
7.
    	
FINANCIAL   COVENANTS
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.1
    	
Fixed   Charge Coverage Ratio
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.2
    	
Capital   Expenditures
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
8.
    	
EVENTS   OF DEFAULT
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
9.
    	
RIGHTS   AND REMEDIES
    	
41
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.1
    	
Rights   and Remedies
    	
41
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.2
    	
Remedies   Cumulative
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
10.
    	
WAIVERS;   INDEMNIFICATION
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.1
    	
Demand;   Protest; etc.
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.2
    	
The   Lender Group’s Liability for Collateral
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.3
    	
Indemnification
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
11.
    	
NOTICES
    	
43
    
	
 
    	
 
    	
 
    	
 
    
	
12.
    	
CHOICE   OF LAW AND VENUE; JURY TRIAL WAIVER
    	
44
    
	
 
    	
 
    	
 
    	
 
    
	
13.
    	
ASSIGNMENTS   AND PARTICIPATIONS; SUCCESSORS
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
13.1
    	
Assignments   and Participations
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
13.2
    	
Successors
    	
47
    
	
 
    	
 
    	
 
    	
 
    
	
14.
    	
AMENDMENTS;   WAIVERS
    	
47
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
14.1
    	
Amendments   and Waivers
    	
47
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
14.2
    	
Replacement   of Certain Lenders
    	
48
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
14.3
    	
No   Waivers; Cumulative Remedies
    	
49
    
	
 
    	
 
    	
 
    	
 
    
	
15.
    	
AGENT;   THE LENDER GROUP
    	
49
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.1
    	
Appointment   and Authorization of Agent
    	
49
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.2
    	
Delegation   of Duties
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.3
    	
Liability   of Agent
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.4
    	
Reliance   by Agent
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.5
    	
Notice   of Default or Event of Default
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.6
    	
Credit   Decision
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.7
    	
Costs   and Expenses; Indemnification
    	
52
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.8
    	
Agent   in Individual Capacity
    	
52
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.9
    	
Successor   Agent
    	
52
    

 

4

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
15.10
    	
Lender   in Individual Capacity
    	
53
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.11
    	
Collateral   Matters
    	
53
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.12
    	
Restrictions   on Actions by Lenders; Sharing of Payments
    	
54
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.13
    	
Agency   for Perfection
    	
55
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.14
    	
Payments   by Agent to the Lenders
    	
55
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.15
    	
Concerning   the Collateral and Related Loan Documents
    	
55
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.16
    	
Audits   and Examination Reports; Confidentiality; Disclaimers by Lenders; Other   Reports and Information
    	
55
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
15.17
    	
Several   Obligations; No Liability
    	
56
    
	
 
    	
 
    	
 
    	
 
    
	
16.
    	
WITHHOLDING   TAXES
    	
56
    
	
 
    	
 
    	
 
    	
 
    
	
17.
    	
GENERAL   PROVISIONS
    	
59
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.1
    	
Effectiveness
    	
59
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.2
    	
Section Headings
    	
59
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.3
    	
Interpretation
    	
59
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.4
    	
Severability   of Provisions
    	
59
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.5
    	
Bank   Product Providers
    	
59
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.6
    	
Debtor-Creditor   Relationship
    	
60
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.7
    	
Counterparts;   Electronic Execution
    	
60
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.8
    	
Revival   and Reinstatement of Obligations
    	
60
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.9
    	
Confidentiality
    	
60
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.10
    	
Lender   Group Expenses
    	
61
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.11
    	
Survival
    	
61
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.12
    	
Patriot   Act
    	
61
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.13
    	
Integration
    	
62
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.14
    	
Supreme   Indiana as Agent for Borrowers
    	
62
    

 

5

 

EXHIBITS AND SCHEDULES

 

	
Exhibit A-1
    	
 
    	
Form of   Assignment and Acceptance
    
	
Exhibit B-1
    	
 
    	
Form of   Borrowing Base Certificate
    
	
Exhibit C-1
    	
 
    	
Form of   Compliance Certificate
    
	
Exhibit G-1
    	
 
    	
Form of   Guaranty
    
	
Exhibit L-1
    	
 
    	
Form of   LIBOR Notice
    
	
 
    	
 
    	
 
    
	
Schedule   A-1
    	
 
    	
Agent’s   Account
    
	
Schedule   A-2
    	
 
    	
Authorized   Persons
    
	
Schedule   C-1
    	
 
    	
Revolver   Commitments
    
	
Schedule   D-1
    	
 
    	
Designated   Account
    
	
Schedule   E-1
    	
 
    	
Eligible   Inventory Locations
    
	
Schedule   P-1
    	
 
    	
Permitted   Investments
    
	
Schedule   P-2
    	
 
    	
Permitted   Liens
    
	
Schedule   R-1
    	
 
    	
Real   Property Collateral
    
	
Schedule   R-2
    	
 
    	
Real   Property Held for Sale
    
	
Schedule   1.1
    	
 
    	
Definitions
    
	
Schedule   3.1
    	
 
    	
Conditions   Precedent
    
	
Schedule   4.1(b)
    	
 
    	
Capitalization   of Borrowers
    
	
Schedule   4.1(c)
    	
 
    	
Capitalization   of Borrowers’ Subsidiaries
    
	
Schedule   4.6(a)
    	
 
    	
States   of Organization
    
	
Schedule   4.6(b)
    	
 
    	
Chief   Executive Offices
    
	
Schedule   4.6(c)
    	
 
    	
Organizational   Identification Numbers
    
	
Schedule   4.6(d)
    	
 
    	
Commercial   Tort Claims
    
	
Schedule   4.7
    	
 
    	
Litigation
    
	
Schedule   4.12
    	
 
    	
Environmental   Matters
    
	
Schedule   4.13
    	
 
    	
Intellectual   Property
    
	
Schedule   4.15
    	
 
    	
Deposit   Accounts and Securities Accounts
    
	
Schedule   4.17
    	
 
    	
Material   Contracts
    
	
Schedule   4.19
    	
 
    	
Permitted   Indebtedness
    
	
Schedule   4.28
    	
 
    	
Locations   of Inventory and Equipment
    
	
Schedule   5.1
    	
 
    	
Financial   Statements, Reports, Certificates
    
	
Schedule   5.2
    	
 
    	
Collateral   Reporting
    
	
Schedule   6.6
    	
 
    	
Nature   of Business
    
	
Schedule   6.16
    	
 
    	
Consignments
    

 

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT (this “Agreement”), is entered into as of September 14, 2011, by and among the lenders identified on the signature pages hereof (each of such lenders, together with its respective successors and permitted assigns, is referred to hereinafter as a “Lender”, as that term is hereinafter further defined), WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”), SUPREME INDUSTRIES, INC., a Delaware corporation (“Parent”), SUPREME INDIANA OPERATIONS, INC., a Delaware corporation (“Supreme Indiana”) and certain of its Subsidiaries identified on the signature pages hereof (such Subsidiaries, together with Supreme Indiana, are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as the “Borrowers”).

 

The parties agree as follows:

 

1.                                       DEFINITIONS AND CONSTRUCTION.

 

1.1                                 Definitions.  Capitalized terms used in this Agreement shall have the meanings specified therefor on Schedule 1.1.

 

1.2                                 Accounting Terms.  All accounting terms not specifically defined herein shall be construed in accordance with GAAP; provided, however, that if Administrative Borrower notifies Agent that Borrowers request an amendment to any provision hereof to eliminate the effect of any Accounting Change occurring after the Closing Date or in the application thereof on the operation of such provision (or if Agent notifies Administrative Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such Accounting Change or in the application thereof, then Agent and Borrowers agree that they will negotiate in good faith amendments to the provisions of this Agreement that are directly affected by such Accounting Change with the intent of having the respective positions of the Lenders and Borrowers after such Accounting Change conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon and agreed to by the Required Lenders, the provisions in this Agreement shall be calculated as if no such Accounting Change had occurred.  When used herein, the term “financial statements” shall include the notes and schedules thereto.  Whenever the term “Parent” is used in respect of a financial covenant or a related definition, it shall be understood to mean Parent and its Subsidiaries on a consolidated basis, unless the context clearly requires otherwise.

 

1.3                                 Code.  Any terms used in this Agreement that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein; provided, however, that to the extent that the Code is used to define any term herein and such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern.

 

1.4                                 Construction.  Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be.  Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified.  Any reference in this Agreement or in any other Loan Document to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and

 

 

thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein).  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.  Any reference herein or in any other Loan Document to the satisfaction, repayment, or payment in full of the Obligations shall mean the repayment in full in cash or immediately available funds (or (a) in the case of contingent reimbursement obligations with respect to Letters of Credit, providing Letter of Credit Collateralization, and (b) in the case of obligations with respect to Bank Products (other than Hedge Obligations), providing Bank Product Collateralization) of all of the Obligations (including the payment of any Lender Group Expenses that have accrued irrespective of whether demand has been made therefor and the payment of any termination amount then applicable (or which would or could become applicable as a result of the repayment of the other Obligations) under Hedge Agreements provided by Hedge Providers) other than (i) unasserted contingent indemnification Obligations, (ii) any Bank Product Obligations (other than Hedge Obligations) that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding without being required to be repaid or cash collateralized, and (iii) any Hedge Obligations that, at such time, are allowed by the applicable Hedge Provider to remain outstanding without being required to be repaid.  Any reference herein to any Person shall be construed to include such Person’s successors and assigns.  Any requirement of a writing contained herein or in any other Loan Document shall be satisfied by the transmission of a Record.

 

1.5                                 Schedules and Exhibits.  All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.

 

2.                                       LOANS AND TERMS OF PAYMENT.

 

2.1                                 Revolver Advances.

 

(a)                                  Subject to the terms and conditions of this Agreement, and during the term of this Agreement, each Lender with a Revolver Commitment agrees (severally, not jointly or jointly and severally) to make revolving loans (“Advances”) to Borrowers in an amount at any one time outstanding not to exceed the lesser of:

 

(i)                                     such Lender’s Revolver Commitment, or

 

(ii)                                  such Lender’s Pro Rata Share of an amount equal to the lesser of:

 

(A)                              the Maximum Revolver Amount less the sum of (1) the Letter of Credit Usage at such time, plus (2) the principal amount of Swing Loans outstanding at such time, and

 

(B)                                the Borrowing Base at such time less the sum of (1) the Letter of Credit Usage at such time, plus (2) the principal amount of Swing Loans outstanding at such time.

 

(b)                                 Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement.  The outstanding principal amount of the Advances, together with interest accrued and unpaid thereon, shall be due and payable on the Maturity Date or, if earlier, on the date on which they are declared due and payable pursuant to the terms of this Agreement.

 

(c)                                  Anything to the contrary in this Section 2.1 notwithstanding, Agent shall have the right (but not the obligation) to establish, increase, reduce, eliminate, or otherwise adjust reserves from time to time against the Borrowing Base and/or the Maximum Revolver Amount in such amounts, and with respect to such matters, as Agent in its Permitted Discretion shall deem necessary or appropriate, including (i) reserves in an amount equal to the Bank Product Reserve Amount, and (ii) reserves with respect to (A) sums that Parent is, or any of its Subsidiaries are, required to pay under this Agreement or any other Loan Document (such as

 

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taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay when due, and (B) amounts owing by Parent or any Subsidiary of Parent to any Person to the extent secured by a Lien on, or trust over, any of the Collateral (other than a Permitted Lien which is a permitted purchase money Lien or the interest of a lessor under a Capital Lease), which Lien or trust, in the Permitted Discretion of Agent, likely would have a priority superior to Agent’s Liens (such as Liens or trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes where given priority under applicable law) in and to such item of the Collateral.

 

2.2                                 [Intentionally omitted].

 

2.3                                 Borrowing Procedures and Settlements.

 

(a)                                  Procedure for Borrowing.  Each Borrowing shall be made by a written request by an Authorized Person delivered to Agent.  Unless Swing Lender is not obligated to make a Swing Loan pursuant to Section 2.3(b) below, such notice must be received by Agent no later than 12:00 p.m. (Chicago time) on the Business Day that is the requested Funding Date specifying (i) the amount of such Borrowing, and (ii) the requested Funding Date, which shall be a Business Day; provided, however, that if Swing Lender is not obligated to make a Swing Loan as to a requested Borrowing, such notice must be received by Agent no later than 12:00 p.m. (Chicago time) on the Business Day prior to the date that is the requested Funding Date.  At Agent’s election, in lieu of delivering the above-described written request, any Authorized Person may give Agent telephonic notice of such request by the required time.  In such circumstances, each Borrower agrees that any such telephonic notice will be confirmed in writing within 24 hours of the giving of such telephonic notice, but the failure to provide such written confirmation shall not affect the validity of the request.

 

(b)                                 Making of Swing Loans.  In the case of a request for an Advance and so long as either (i) the aggregate amount of Swing Loans made since the last Settlement Date, minus the amount of Collections or payments applied to Swing Loans since the last Settlement Date, plus the amount of the requested Advance does not exceed $9,000,000, or (ii) Swing Lender, in its sole discretion, shall agree to make a Swing Loan notwithstanding the foregoing limitation, Swing Lender shall make an Advance in the amount of such requested Borrowing (any such Advance made solely by Swing Lender pursuant to this Section 2.3(b) being referred to as a “Swing Loan” and such Advances being referred to as “Swing Loans”) available to Borrowers on the Funding Date applicable thereto by transferring immediately available funds to the Designated Account.  Anything contained herein to the contrary notwithstanding, the Swing Lender may, but shall not be obligated to, make Swing Loans at any time that one or more of the Lenders is a Defaulting Lender.  Each Swing Loan shall be deemed to be an Advance hereunder and shall be subject to all the terms and conditions (including Section 3) applicable to other Advances, except that all payments on any Swing Loan shall be payable to Swing Lender solely for its own account.  Subject to the provisions of Section 2.3(d)(ii), Swing Lender shall not make and shall not be obligated to make any Swing Loan if Swing Lender has actual knowledge that (i) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing, or (ii) the requested Borrowing would exceed the Availability on such Funding Date.  Swing Lender shall not otherwise be required to determine whether the applicable conditions precedent set forth in Section 3 have been satisfied on the Funding Date applicable thereto prior to making any Swing Loan.  The Swing Loans shall be secured by Agent’s Liens, constitute Advances and Obligations hereunder, and bear interest at the rate applicable from time to time to Advances that are Base Rate Loans.

 

(c)                                  Making of Loans.

 

(i)                                     In the event that Swing Lender is not obligated to make a Swing Loan, then promptly after receipt of a request for a Borrowing pursuant to Section 2.3(a), Agent shall notify the Lenders, not later than 3:00 p.m. (Chicago time) on the Business Day immediately preceding the Funding Date applicable thereto, by telecopy, telephone, or other similar form of transmission, of the requested Borrowing.

 

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Each Lender shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available to Agent in immediately available funds, to Agent’s Account, not later than 12:00 p.m. (Chicago time) on the Funding Date applicable thereto.  After Agent’s receipt of the proceeds of such Advances, Agent shall make the proceeds thereof available to Borrowers on the applicable Funding Date by transferring immediately available funds equal to such proceeds received by Agent to the Designated Account; provided, however, that, subject to the provisions of Section 2.3(d)(ii), Agent shall not request any Lender to make any Advance if it has knowledge that, and no Lender shall have the obligation to make any Advance, if (A) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing unless such condition has (or such conditions have) been waived, or (B) the requested Borrowing would exceed the Availability on such Funding Date.

 

(ii)                                  Unless Agent receives notice from a Lender prior to 11:00 a.m. (Chicago time) on the date of a Borrowing that such Lender will not make available as and when required hereunder to Agent for the account of Borrowers the amount of that Lender’s Pro Rata Share of the Borrowing, Agent may assume that each Lender has made or will make such amount available to Agent in immediately available funds on the Funding Date and Agent may (but shall not be so required), in reliance upon such assumption, make available to Borrowers on such date a corresponding amount.  If any Lender shall not have made its full amount available to Agent in immediately available funds and if Agent in such circumstances has made available to Borrowers such amount, that Lender shall on the Business Day following such Funding Date make such amount available to Agent, together with interest at the Defaulting Lender Rate for each day during such period.  A notice submitted by Agent to any Lender with respect to amounts owing under this Section 2.3(c)(ii) shall be conclusive, absent manifest error.  If such amount is so made available, such payment to Agent shall constitute such Lender’s Advance on the date of Borrowing for all purposes of this Agreement.  If such amount is not made available to Agent on the Business Day following the Funding Date, Agent will notify Borrowers of such failure to fund and, upon demand by Agent, Borrowers shall pay such amount to Agent for Agent’s account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Advances composing such Borrowing.

 

(d)                                 Protective Advances and Optional Overadvances.

 

(i)                                     Any contrary provision of this Agreement or any other Loan Document notwithstanding, but subject to Section 2.3(d)(iv), Agent hereby is authorized by Borrowers and the Lenders, from time to time in Agent’s sole discretion, (A) after the occurrence and during the continuance of a Default or an Event of Default, or (B) at any time that any of the other applicable conditions precedent set forth in Section 3 are not satisfied, to make Advances to, or for the benefit of, Borrowers on behalf of the Lenders (in an aggregate amount for all such Advances taken together not exceeding $9,000,000 outstanding at any one time) that Agent, in its Permitted Discretion, deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of the Obligations (other than the Bank Product Obligations) (any of the Advances described in this Section 2.3(d)(i) shall be referred to as “Protective Advances”).

 

(ii)                                  Any contrary provision of this Agreement or any other Loan Document notwithstanding, but subject to Section 2.3(d)(iv), the Lenders hereby authorize Agent or Swing Lender, as applicable, and either Agent or Swing Lender, as applicable, may, but is not obligated to, knowingly and intentionally, continue to make Advances (including Swing Loans) to Borrowers notwithstanding that an Overadvance exists or would be created thereby, so long as (A) after giving effect to such Advances, the outstanding Revolver Usage does not exceed the Borrowing Base by more than $9,000,000, and (B) after giving effect to such Advances, the outstanding Revolver Usage (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) does not exceed the Maximum Revolver Amount.  In the event Agent obtains actual knowledge that the Revolver Usage exceeds the amounts permitted by the immediately foregoing provisions, regardless of the amount of, or reason for, such excess, Agent shall notify the Lenders as soon as practicable (and prior to making any (or any additional) intentional Overadvances (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender

 

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Group Expenses) unless Agent determines that prior notice would result in imminent harm to the Collateral or its value, in which case Agent may make such Overadvances and provide notice as promptly as practicable thereafter), and the Lenders with Revolver Commitments thereupon shall, together with Agent, jointly determine the terms of arrangements that shall be implemented with Borrowers intended to reduce, within a reasonable time, the outstanding principal amount of the Advances to Borrowers to an amount permitted by the preceding sentence.  In such circumstances, if any Lender with a Revolver Commitment objects to the proposed terms of reduction or repayment of any Overadvance, the terms of reduction or repayment thereof shall be implemented according to the determination of the Required Lenders.  The foregoing provisions are meant for the benefit of the Lenders and Agent and are not meant for the benefit of Borrowers, which shall continue to be bound by the provisions of Section 2.5.  Each Lender with a Revolver Commitment shall be obligated to settle with Agent as provided in Section 2.3(e) (or Section 2.3(g), as applicable) for the amount of such Lender’s Pro Rata Share of any unintentional Overadvances by Agent reported to such Lender, any intentional Overadvances made as permitted under this Section 2.3(d)(ii), and any Overadvances resulting from the charging to the Loan Account of interest, fees, or Lender Group Expenses.

 

(iii)                               Each Protective Advance and each Overadvance shall be deemed to be an Advance hereunder, except that no Protective Advance or Overadvance shall be eligible to be a LIBOR Rate Loan and, prior to Settlement therefor, all payments on the Protective Advances shall be payable to Agent solely for its own account.  The Protective Advances and Overadvances shall be repayable on demand, secured by Agent’s Liens, constitute Obligations hereunder, and bear interest at the rate applicable from time to time to Advances that are Base Rate Loans.  The ability of Agent to make Protective Advances is separate and distinct from its ability to make Overadvances and its ability to make Overadvances is separate and distinct from its ability to make Protective Advances.  For the avoidance of doubt, the limitations on Agent’s ability to make Protective Advances do not apply to Overadvances and the limitations on Agent’s ability to make Overadvances do not apply to Protective Advances.  The provisions of this Section 2.3(d) are for the exclusive benefit of Agent, Swing Lender, and the Lenders and are not intended to benefit Borrowers in any way.

 

(iv)                              Notwithstanding anything contained in this Agreement or any other Loan Document to the contrary: (A) no Overadvance or Protective Advance may be made by Agent if such Advance would cause the aggregate principal amount of Overadvances and Protective Advances outstanding to exceed an amount equal to twenty percent (20%) of the Maximum Revolver Amount; and (B) to the extent any Protective Advance causes the aggregate Revolver Usage to exceed the Maximum Revolver Amount, such portion of such Protective Advance shall be for Agent’s sole and separate account and not for the account of any Lender and shall be entitled to priority in repayment in accordance with Section 2.4(b).

 

(e)                                  Settlement.  It is agreed that each Lender’s funded portion of the Advances is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share of the outstanding Advances.  Such agreement notwithstanding, Agent, Swing Lender, and the other Lenders agree (which agreement shall not be for the benefit of Borrowers) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among the Lenders as to the Advances, the Swing Loans, and the Protective Advances shall take place on a periodic basis in accordance with the following provisions:

 

(i)                                     Agent shall request settlement (“Settlement”) with the Lenders on a weekly basis, or on a more frequent basis if so determined by Agent, (A) on behalf of Swing Lender, with respect to the outstanding Swing Loans, (B) for itself, with respect to the outstanding Protective Advances or Overadvances, and (C) with respect to Loan Parties’ or their Subsidiaries’ Collections or payments received, as to each by notifying the Lenders by telecopy, telephone, or other similar form of transmission, of such requested Settlement, no later than 4:00 p.m. (Chicago time) on the Business Day immediately prior to the date of such requested Settlement (the date of such requested Settlement being the “Settlement Date”).  Such notice of a Settlement Date shall include a summary statement of the amount of outstanding Advances, Swing Loans, Overadvances and Protective Advances for the period since the prior Settlement Date.  Subject to the terms and conditions contained herein (including Section 2.3(g)):  (1) if the amount of the Advances (including Swing Loans, Overadvances, and Protective Advances) made by a Lender that is not a Defaulting Lender

 

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exceeds such Lender’s Pro Rata Share of the Advances (including Swing Loans, Overadvances, and Protective Advances) as of a Settlement Date, then Agent shall, by no later than 2:00 p.m. (Chicago time) on the Settlement Date, transfer in immediately available funds to a Deposit Account of such Lender (as such Lender may designate), an amount such that each such Lender shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata Share of the Advances (including Swing Loans, Overadvances and Protective Advances), and (2) if the amount of the Advances (including Swing Loans, Overadvances, and Protective Advances) made by a Lender is less than such Lender’s Pro Rata Share of the Advances (including Swing Loans, Overadvances, and Protective Advances) as of a Settlement Date, such Lender shall no later than 2:00 p.m. (Chicago time) on the Settlement Date transfer in immediately available funds to Agent’s Account, an amount such that each such Lender shall, upon transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the Advances (including Swing Loans, Overadvances, and Protective Advances).  Such amounts made available to Agent under clause (2) of the immediately preceding sentence shall be applied against the amounts of the applicable Swing Loans, Overadvances, or Protective Advances and, together with the portion of such Swing Loans, Overadvances, or Protective Advances representing Swing Lender’s Pro Rata Share thereof, shall constitute Advances of such Lenders.  If any such amount is not made available to Agent by any Lender on the Settlement Date applicable thereto to the extent required by the terms hereof, Agent shall be entitled to recover for its account such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate.

 

(ii)                                  In determining whether a Lender’s balance of the Advances, Swing Loans, Overadvances, and Protective Advances is less than, equal to, or greater than such Lender’s Pro Rata Share of the Advances, Swing Loans, Overadvances, and Protective Advances as of a Settlement Date, Agent shall, as part of the relevant Settlement, apply to such balance the portion of payments actually received in good funds by Agent with respect to principal, interest, fees payable by Borrowers and allocable to the Lenders hereunder, and proceeds of Collateral.

 

(iii)                               Between Settlement Dates, Agent, to the extent Protective Advances, Overadvances, or Swing Loans are outstanding, may pay over to Agent or Swing Lender, as applicable, any Collections or payments received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Advances, for application to the Protective Advances, Overadvances, or Swing Loans.  Between Settlement Dates, Agent, to the extent no Protective Advances, Overadvances, or Swing Loans are outstanding, may pay over to Swing Lender any Collections or payments received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Advances, for application to Swing Lender’s Pro Rata Share of the Advances.  If, as of any Settlement Date, Collections or payments of Parent or its Subsidiaries received since the then immediately preceding Settlement Date have been applied to Swing Lender’s Pro Rata Share of the Advances other than to Swing Loans, as provided for in the previous sentence, Swing Lender shall pay to Agent for the accounts of the Lenders, and Agent shall pay to the Lenders (other than a Defaulting Lender if Agent has implemented the provisions of Section 2.3(g)), to be applied to the outstanding Advances of such Lenders, an amount such that each such Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro Rata Share of the Advances.  During the period between Settlement Dates, Swing Lender with respect to Swing Loans, Agent with respect to Protective Advances and Overadvances, and each Lender with respect to the Advances other than Swing Loans, Overadvances, and Protective Advances, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the daily amount of funds employed by Swing Lender, Agent, or the Lenders, as applicable.

 

(iv)                              Anything in this Section 2.3(e) to the contrary notwithstanding, in the event that a Lender is a Defaulting Lender, Agent shall be entitled to refrain from remitting settlement amounts to the Defaulting Lender and, instead, shall be entitled to elect to implement the provisions set forth in Section 2.3(g).

 

(f)                                    Notation.  Agent, as a non-fiduciary agent for Borrowers, shall maintain a register showing the principal amount of the Advances owing to each Lender, including the Swing Loans owing to

 

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Swing Lender, and Protective Advances and Overadvances owing to Agent, and the interests therein of each Lender, from time to time, and such register shall, absent manifest error, conclusively be presumed to be correct and accurate.

 

(g)                                 Defaulting Lenders.  Agent shall not be obligated to transfer to a Defaulting Lender any payments made by any Borrower to Agent for the Defaulting Lender’s benefit or any Collections or proceeds of Collateral that would otherwise be remitted hereunder to the Defaulting Lender, and, in the absence of such transfer to the Defaulting Lender, Agent shall transfer any such payments (i) first, to Swing Lender to the extent of any Swing Loans that were made by Swing Lender and that were required to be, but were not, paid by the Defaulting Lender, (ii) second, to the Issuing Lender, to the extent of the portion of a Letter of Credit Disbursement that was required to be, but was not, paid by the Defaulting Lender, (iii) third, to each non-Defaulting Lender ratably in accordance with their Revolver Commitments (but, in each case, only to the extent that such Defaulting Lender’s portion of an Advance (or other funding obligation) was funded by such other non-Defaulting Lender), (iv) to a suspense account maintained by Agent, the proceeds of which shall be retained by Agent and may be made available to be re-advanced to or for the benefit of Borrowers as if such Defaulting Lender had made its portion of Advances (or other funding obligations) hereunder, and (v) from and after the date on which all other Obligations have been paid in full, to such Defaulting Lender in accordance with tier (L) of Section 2.4(b)(ii).  Subject to the foregoing, Agent may hold and, in its discretion, re-lend to Borrowers for the account of such Defaulting Lender the amount of all such payments received and retained by Agent for the account of such Defaulting Lender.  Solely for the purposes of voting or consenting to matters with respect to the Loan Documents (including the calculation of Pro Rata Share in connection therewith) and for the purpose of calculating the fee payable under Section 2.10(b), such Defaulting Lender shall be deemed not to be a “Lender” and such Lender’s Revolver Commitment shall be deemed to be zero; provided, however, that the foregoing shall not apply to any of the matters governed by Section 14.1(a)(i) through (iii).  The provisions of this Section 2.3(g) shall remain effective with respect to such Defaulting Lender until the earlier of (A) the date on which all of the non-Defaulting Lenders, Agent, Issuing Lender, and Borrowers shall have waived, in writing, the application of this Section 2.3(g) to such Defaulting Lender and (B) the date on which such Defaulting Lender makes payment of all amounts that it was obligated to fund hereunder, pays to Agent all amounts owing by Defaulting Lender in respect of the amounts that it was obligated to fund hereunder, and, if requested by Agent, provides adequate assurance of its ability to perform its future obligations hereunder.  The operation of this Section 2.3(g) shall not be construed to increase or otherwise affect the Revolver Commitment of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by Borrowers of their duties and obligations hereunder to Agent, to Issuing Lender, or to the Lenders other than such Defaulting Lender.  Any failure by a Defaulting Lender to fund amounts that it was obligated to fund hereunder shall constitute a material breach by such Defaulting Lender of this Agreement and shall entitle Borrowers, at their option, upon written notice to Agent, to arrange for a substitute Lender to assume the Revolver Commitment of such Defaulting Lender, such substitute Lender to be reasonably acceptable to Agent.  In connection with the arrangement of such a substitute Lender, the Defaulting Lender shall have no right to refuse to be replaced hereunder and agrees to execute and deliver a completed form of Assignment and Acceptance in favor of the substitute Lender (and agrees that it shall be deemed to have executed and delivered such document if it fails to do so) subject only to being paid its share of the outstanding Obligations (other than Bank Product Obligations, but including (1) all interest, fees, and other amounts that may be due and payable in respect thereof and (2) an assumption of its Pro Rata Share of its participation in the Letters of Credit); provided, however, that any such assumption of the Revolver Commitment of such Defaulting Lender shall not be deemed to constitute a waiver of any of the Lender Group’s or any Borrower’s rights or remedies against any such Defaulting Lender arising out of or in relation to such failure to fund.  In the event of a direct conflict between the priority provisions of this Section 2.3(g) and any other provision contained in this Agreement or any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other.  In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.3(g) shall control and govern.

 

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(h)                                 Independent Obligations.  All Advances (other than Swing Loans, Overadvances, and Protective Advances) shall be made by the Lenders contemporaneously and in accordance with their Pro Rata Shares.  It is understood that (i) no Lender shall be responsible for any failure by any other Lender to perform its obligation to make any Advance (or other extension of credit) hereunder, nor shall any Revolver Commitment of any Lender be increased or decreased as a result of any failure by any other Lender to perform its obligations hereunder, and (ii) no failure by any Lender to perform its obligations hereunder shall excuse any other Lender from its obligations hereunder.

 

2.4                                 Payments; Reductions of Commitments; Prepayments.

 

(a)                                  Payments by Borrowers.

 

(i)                                     Except as otherwise expressly provided herein, all payments by any Borrower shall be made to Agent’s Account for the account of the Lender Group and shall be made in immediately available funds, no later than 1:00 p.m. (Chicago time) on the date specified herein.  Any payment received by Agent later than 1:00 p.m. (Chicago time) shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.

 

(ii)                                  Unless Agent receives notice from Administrative Borrower prior to the date on which any payment is due to the Lenders that Borrowers will not make such payment in full as and when required, Agent may assume that Borrowers have made (or will make) such payment in full to Agent on such date in immediately available funds and Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender.  If and to the extent Borrowers do not make such payment in full to Agent on the date when due, each Lender severally shall repay to Agent on demand such amount distributed to such Lender, together with interest thereon at the Defaulting Lender Rate for each day from the date such amount is distributed to such Lender until the date repaid.

 

(b)                                 Apportionment and Application.

 

(i)                                     So long as no Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, all principal and interest payments received by Agent shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations to which such payments relate held by each Lender) and all payments of fees and expenses received by Agent (other than fees or expenses that are for Agent’s separate account or for the separate account of the Issuing Lender) shall be apportioned ratably among the Lenders having a Pro Rata Share of the type of Revolver Commitment or Obligation to which a particular fee or expense relates.  All payments to be made hereunder by Borrowers shall be remitted to Agent and all (subject to Section 2.4(b)(iv) and Section 2.4(e)) such payments, and all proceeds of Collateral received by Agent, shall be applied, so long as no Application Event has occurred and is continuing, to reduce the balance of the Advances outstanding and, thereafter, to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.

 

(ii)                                  At any time that an Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, all payments remitted to Agent and all proceeds of Collateral received by Agent shall be applied as follows:

 

(A)                              first, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to Agent under the Loan Documents until paid in full,

 

(B)                                second, to pay any fees or premiums then due to Agent under the Loan Documents until paid in full,

 

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(C)                                third, to pay interest due in respect of all Protective Advances until paid in full,

 

(D)                               fourth, to pay the principal of all Protective Advances until paid in full,

 

(E)                                 fifth, ratably, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to any of the Lenders under the Loan Documents until paid in full,

 

(F)                                 sixth, ratably, to pay any fees or premiums then due to any of the Lenders under the Loan Documents until paid in full,

 

(G)                                seventh, to pay interest accrued in respect of the Swing Loans until paid in full,

 

(H)                               eighth, to pay the principal of all Swing Loans until paid in full,

 

(I)                                    ninth, ratably, to pay interest accrued in respect of the Advances (other than Protective Advances) until paid in full,

 

(J)                                   tenth, ratably (1) to pay the principal of all Advances until paid in full, (2) to Agent, to be held by Agent, for the benefit of Issuing Lender (and for the ratable benefit of each of the Lenders that have an obligation to pay to Agent, for the account of the Issuing Lender, a share of each Letter of Credit Disbursement), as cash collateral in an amount up to 105% of the Letter of Credit Usage (to the extent permitted by applicable law, such cash collateral shall be applied to the reimbursement of any Letter of Credit Disbursement as and when such disbursement occurs and, if a Letter of Credit expires undrawn, the cash collateral held by Agent in respect of such Letter of Credit shall, to the extent permitted by applicable law, be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (A) hereof), and (3) ratably, to the Bank Product Providers based upon amounts then certified by the applicable Bank Product Provider to Agent (in form and substance satisfactory to Agent) to be due and payable to such Bank Product Providers on account of Bank Product Obligations,

 

(K)                               eleventh, to pay any other Obligations other than Obligations owed to Defaulting Lenders (including being paid, ratably, to the Bank Product Providers on account of all amounts then due and payable in respect of Bank Product Obligations, with any balance to be paid to Agent, to be held by Agent, for the ratable benefit of the Bank Product Providers, as cash collateral (which cash collateral may be released by Agent to the applicable Bank Product Provider and applied by such Bank Product Provider to the payment or reimbursement of any amounts due and payable with respect to Bank Product Obligations owed to the applicable Bank Product Provider as and when such amounts first become due and payable and, if and at such time as all such Bank Product Obligations are paid or otherwise satisfied in full, the cash collateral held by Agent in respect of such Bank Product Obligations shall be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (A) hereof)),

 

(L)                                 twelfth, ratably to pay any Obligations owed to Defaulting Lenders; and

 

(M)                            thirteenth, to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.

 

(iii)                               Agent promptly shall distribute to each Lender, pursuant to the applicable wire instructions received from each Lender in writing, such funds as it may be entitled to receive, subject to a Settlement delay as provided in Section 2.3(e).

 

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(iv)                              In each instance, so long as no Application Event has occurred and is continuing, Section 2.4(b)(i) shall not apply to any payment made by any Borrower to Agent and specified by such Borrower to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of this Agreement or any other Loan Document.

 

(v)                                 For purposes of Section 2.4(b)(ii), “paid in full” of a type of Obligation means payment in cash or immediately available funds of all amounts owing on account of such type of Obligation, including interest accrued after the commencement of any Insolvency Proceeding, default interest, interest on interest, and expense reimbursements, irrespective of whether any of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.

 

(vi)                              In the event of a direct conflict between the priority provisions of this Section 2.4 and any other provision contained in this Agreement or any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other.  In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, if the conflict relates to the provisions of Section 2.3(g) and this Section 2.4, then the provisions of Section 2.3(g) shall control and govern, and if otherwise, then the terms and provisions of this Section 2.4 shall control and govern.

 

(c)                                  Reduction of Commitments.  The Revolver Commitments shall terminate on the Maturity Date.  Borrowers may reduce the Revolver Commitments, without premium or penalty, to an amount (which may be zero) not less than the sum of (i) the Revolver Usage as of such date, plus (ii) the principal amount of all Advances not yet made as to which a request has been given by Borrowers under Section 2.3(a), plus (iii) the amount of all Letters of Credit not yet issued as to which a request has been given by Borrowers pursuant to Section 2.11(a).  Each such reduction shall be in an amount which is not less than $2,500,000 (unless the Revolver Commitments are being reduced to zero and the aggregate amount of the Revolver Commitments in effect immediately prior to such reduction is less than $30,000,000), shall be made by providing not less than 10 Business Days’ prior written notice to Agent and shall be irrevocable.  Once reduced, the Revolver Commitments may not be increased.  Each such reduction of the Revolver Commitments shall reduce the Revolver Commitments of each Lender proportionately in accordance with its ratable share thereof.

 

(d)                                 Optional Prepayments.  Borrowers may prepay the principal of any Advance at any time in whole or in part without premium or penalty.

 

(e)                                  Mandatory Prepayments.

 

(i)                                     Borrowing Base.  If, at any time, (A) the Revolver Usage on such date exceeds (B) the Borrowing Base (such excess being referred to as the “Borrowing Base Excess”), then Borrowers shall immediately prepay the Obligations in accordance with Section 2.4(f)(i) in an aggregate amount equal to the Borrowing Base Excess.

 

(ii)                                  Dispositions; Casualty Events.  Within 5 Business Days of the date of receipt by Parent or any of its Subsidiaries of the Net Cash Proceeds of any voluntary or involuntary sale or disposition by any Loan Party of assets (excluding sales or dispositions which qualify as Permitted Dispositions under clauses (a), (b), (c), (d), (e), (i), (k), (l), or (m) of the definition of Permitted Dispositions) or of any Casualty Event (including insurance proceeds and awards of condemnation in connection with any Casualty Event), Borrowers shall prepay the outstanding principal amount of the Obligations in accordance with Section 2.4(f)(ii) in an amount equal to 100% of such Net Cash Proceeds (including condemnation awards and payments in lieu thereof) received by such Person in connection with such sales or dispositions or such Casualty Event; provided that, so long as (A) no Default or Event of Default shall have occurred and is continuing or would result therefrom, and (B) within such five (5) Business Day period, Borrowers shall have given Agent prior written notice of Borrowers’ intention to apply such monies to the costs of replacement of

 

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the properties or assets that are the subject of such sale, disposition or Casualty Event or the cost of purchase or construction of other assets useful in the business of Parent or its Subsidiaries, then Borrowers shall be permitted to use such Net Cash Proceeds from such sales or dispositions for such purposes in accordance with the terms of this Section 2.4(e)(ii) so long as Borrowers remit such Net Cash Proceeds from such sales or dispositions to Agent for application to the outstanding amount of the Advances, without a corresponding permanent reduction in the Maximum Revolver Amount, and Agent shall establish a reserve against the Borrowing Base and/or the Maximum Revolver Amount in an aggregate amount equal to 100% of such Net Cash Proceeds (a “Reinvestment Reserve”).  So long as Borrowers or their Subsidiaries, as applicable, complete such replacement, purchase, or construction within 180 days after the initial receipt of such monies, Borrowers shall have the option to request an Advance in an aggregate amount up to the amount of such monies for further application to the costs of replacement of the properties or assets that are the subject of such sale, disposition or Casualty Event and/or to the purchase or construction of assets useful in the business of Parent or its Subsidiaries unless and to the extent that such applicable period shall have expired without such replacement, purchase, or construction being made or completed, in which case, Borrowers shall be deemed to have directed the Agent to apply all such monies not so utilized in accordance with Section 2.4(f)(ii).  Following the application of all such monies in accordance with this Section 2.4(e)(ii) and Section 2.4(f)(ii), as applicable, Agent shall release the applicable Reinvestment Reserve(s) against the Borrowing Base and/or the Maximum Revolver Amount, as applicable, established in accordance with this Section 2.4(e)(ii).  Notwithstanding the foregoing, (i) Parent and its Subsidiaries shall not have the right to use such Net Cash Proceeds to make such replacements, purchases, or construction in excess of $10,000,000 in any given Fiscal Year and (ii) if at the time of any Permitted Disposition of any Real Property listed on Schedule R-2 and/or any Equipment situated thereon (each, an “Excess Asset Disposition”) the Fixed Charge Coverage Ratio (computed in accordance with Section 7.1 hereof) is less than 1.1:1.0, Agent shall be entitled to establish and maintain, at the sole discretion of Agent, a reserve against the Borrowing Base and/or the Maximum Revolver Amount in an amount not to exceed 50% of the Net Cash Proceeds of such Excess Asset Disposition (which reserve shall be established in a manner to avoid any duplication of any applicable Reinvestment Reserve which may be in effect but which reserve shall not automatically terminate upon the release of any Reinvestment Reserve).  Nothing contained in this Section 2.4(e)(ii) shall permit Parent or any of its Subsidiaries to sell or otherwise dispose of any assets other than in accordance with Section 6.4.

 

(iii)                               Extraordinary Receipts.  Within 5 Business Days of the date of receipt by Parent or any of its Subsidiaries of any Extraordinary Receipts, Borrowers shall prepay the outstanding principal amount of the Obligations in accordance with Section 2.4(f)(ii) in an amount equal to 100% of such Extraordinary Receipts, net of any reasonable expenses incurred in collecting such Extraordinary Receipts.

 

(iv)                              Indebtedness.  Within 5 Business Days of the date of issuance or incurrence by Parent or any of its Subsidiaries of any Indebtedness (other than Permitted Indebtedness), Borrowers shall prepay the outstanding principal amount of the Obligations in accordance with Section 2.4(f)(ii) in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection with such issuance or incurrence.  The provisions of this Section 2.4(e)(iv) shall not be deemed to be implied consent to any such issuance or incurrence otherwise prohibited by the terms and conditions of this Agreement.

 

(v)                                 Equity.  Within 5 Business Days of the date of the issuance by Parent or any of its Subsidiaries of any shares of its or their Stock (other than (A) in the event that Parent or any of its Subsidiaries forms any Subsidiary in accordance with the terms hereof, the issuance by such Subsidiary of Stock to Parent or any of its Subsidiaries, as applicable and (B) the issuance of Stock of Parent or any of its Subsidiaries to directors, officers and employees of Parent and/or such Subsidiaries, as applicable, pursuant to employee stock option plans (or other employee incentive plans or other compensation arrangements) approved by the Board of Directors), Borrowers shall prepay the outstanding principal amount of the Obligations in accordance with Section 2.4(f)(ii) in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection with such issuance.  The provisions of this Section 2.4(e)(v) shall not be

 

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deemed to be implied consent to any such issuance otherwise prohibited by the terms and conditions of this Agreement.

 

(f)                                    Application of Payments.

 

(i)                                     Each prepayment pursuant to Section 2.4(e)(i) shall (A) so long as no Application Event shall have occurred and be continuing, be applied, first, to the outstanding principal amount of the Advances until paid in full and second, to cash collateralize the Letters of Credit in an amount equal to 105% of the then extant Letter of Credit Usage, and (B) if an Application Event shall have occurred and be continuing, be applied in the manner set forth in Section 2.4(b)(ii).

 

(ii)                                  Each prepayment pursuant to Section 2.4(e)(ii), 2.4(e)(iii), 2.4(e)(iv), or 2.4(e)(v) shall (A) so long as no Application Event shall have occurred and be continuing, be applied, first, subject to Parent’s and its Subsidiaries’ right to make replacements, purchases, or construction under Section 2.4(e)(ii), to the outstanding principal amount of the Advances (with no corresponding permanent reduction in the Maximum Revolver Amount), until paid in full and second, to cash collateralize the Letters of Credit in an amount equal to 105% of the then extant Letter of Credit Usage (with no corresponding permanent reduction in the Maximum Revolver Amount), and (B) if an Application Event shall have occurred and be continuing, be applied in the manner set forth in Section 2.4(b)(ii).

 

2.5                                 Overadvances.  If, at any time or for any reason, the amount of Obligations owed by Borrowers to the Lender Group pursuant to Section 2.1 or Section 2.11 is greater than any of the limitations set forth in Section 2.1 or Section 2.11, as applicable (an “Overadvance”), Borrowers shall immediately pay to Agent, in cash, the amount of such excess, which amount shall be used by Agent to reduce the Obligations in accordance with the priorities set forth in Section 2.4(b).  Borrowers promise to pay the Obligations (including principal, interest, fees, costs, and expenses) in full on the Maturity Date or, if earlier, on the date on which the Obligations (other than the Bank Product Obligations) become due and payable pursuant to the terms of this Agreement.

 

2.6                                 Interest Rates and Letter of Credit Fee:  Rates, Payments, and Calculations.

 

(a)                                  Interest Rates.  Except as provided in Section 2.6(c), all Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest on the Daily Balance thereof as follows:

 

(i)                                     if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate plus the LIBOR Rate Margin, and

 

(ii)                                  otherwise, at a per annum rate equal to the Base Rate plus the Base Rate Margin.

 

(b)                                 Letter of Credit Fee.  Borrowers shall pay Agent (for the ratable benefit of the Lenders with a Revolver Commitment), a Letter of Credit fee (in addition to the charges, commissions, fees, and costs set forth in Section 2.11(f)) which shall accrue at a per annum rate equal to the LIBOR Rate Margin times the Daily Balance of the undrawn amount of all outstanding Letters of Credit.

 

(c)                                  Default Rate.  Upon the occurrence and during the continuation of an Event of Default and at the written election of the Required Lenders,

 

(i)                                     all Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest on the Daily Balance thereof at a per annum rate equal to 2 percentage points above the per annum rate otherwise applicable thereunder, and

 

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(ii)                                  the Letter of Credit fee provided for in Section 2.6(b) shall be increased to 2 percentage points above the per annum rate otherwise applicable hereunder.

 

(d)                                 Payment.  Except to the extent provided to the contrary in Section 2.10 or Section 2.12(a), all interest, all Letter of Credit fees, all other fees payable hereunder or under any of the other Loan Documents, all costs and expenses payable hereunder or under any of the other Loan Documents, and all Lender Group Expenses shall be due and payable, in arrears, on the first day of each month at any time that Obligations or Revolver Commitments are outstanding.  Each Borrower hereby authorizes Agent, from time to time without prior notice to such Borrower, to charge all interest, Letter of Credit fees, and all other fees payable hereunder or under any of the other Loan Documents (in each case, as and when due and payable), all costs and expenses payable hereunder or under any of the other Loan Documents (in each case, as and when accrued or incurred), and all Lender Group Expenses (as and when accrued or incurred), all charges, commissions, fees, and costs provided for in Section 2.11(f) (as and when accrued or incurred), all fees and costs provided for in Section 2.10 (as and when accrued or incurred), and all other payment obligations as and when due and payable under any Loan Document or any Bank Product Agreement (including any amounts due and payable to the Bank Product Providers in respect of Bank Products) to the Loan Account, which amounts thereafter shall constitute Advances hereunder and, initially, shall accrue interest at the rate then applicable to Advances that are Base Rate Loans.  Any interest, fees, costs, expenses, Lender Group Expenses, or other amounts payable hereunder or under any other Loan Document or under any Bank Product Agreement that are charged to the Loan Account shall thereupon constitute Advances hereunder and shall initially accrue interest at the rate then applicable to Advances that are Base Rate Loans (unless and until converted into LIBOR Rate Loans in accordance with the terms of this Agreement).

 

(e)                                  Computation.  All interest and fees chargeable under the Loan Documents shall be computed on the basis of a 360 day year, in each case, for the actual number of days elapsed in the period during which the interest or fees accrue.  In the event the Base Rate is changed from time to time hereafter, the rates of interest hereunder based upon the Base Rate automatically and immediately shall be increased or decreased by an amount equal to such change in the Base Rate.

 

(f)                                    Intent to Limit Charges to Maximum Lawful Rate.  In no event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable.  Each Borrower and the Lender Group, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, however, that, anything contained herein to the contrary notwithstanding, if such rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement, Borrowers are and shall be liable only for the payment of such maximum amount as is allowed by law, and payment received from Borrowers in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess.

 

2.7                                 Crediting Payments.  The receipt of any payment item by Agent shall not be considered a payment on account unless such payment item is a wire transfer of immediately available federal funds made to Agent’s Account or unless and until such payment item is honored when presented for payment.  Should any payment item not be honored when presented for payment, then Borrowers shall be deemed not to have made such payment and interest shall be calculated accordingly.  Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by Agent only if it is received into Agent’s Account on a Business Day on or before 1:00 p.m. (Chicago time).  If any payment item is received into Agent’s Account on a non-Business Day or after 1:00 p.m. (Chicago time) on a Business Day, it shall be deemed to have been received by Agent as of the opening of business on the immediately following Business Day.

 

2.8                                 Designated Account.  Agent is authorized to make the Advances, and Issuing Lender is authorized to issue the Letters of Credit, under this Agreement based upon telephonic or other instructions

 

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received from anyone purporting to be an Authorized Person or, without instructions, if pursuant to Section 2.6(d).  Borrowers agree to establish and maintain the Designated Account with the Designated Account Bank for the purpose of receiving the proceeds of the Advances requested by Borrowers and made by Agent or the Lenders hereunder.  Unless otherwise agreed by Agent and Borrowers, any Advance or Swing Loan requested by Borrowers and made by Agent or the Lenders hereunder shall be made to the Designated Account.

 

2.9                                 Maintenance of Loan Account; Statements of Obligations.  Agent shall maintain an account on its books in the name of Borrowers (the “Loan Account”) on which Borrowers will be charged with all Advances (including Protective Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders to Borrowers or for any Borrower’s account, with the Letters of Credit issued or arranged by Issuing Lender for any Borrower’s account, and with all other payment Obligations hereunder or under the other Loan Documents, including accrued interest, fees and expenses, and Lender Group Expenses.  In accordance with Section 2.7, the Loan Account will be credited with all payments received by Agent from Borrowers or for any Borrower’s account.  Agent shall render monthly statements regarding the Loan Account to Borrowers, including principal, interest, and fees, and including an itemization of all charges and expenses constituting Lender Group Expenses owing, and such statements, absent manifest error, shall be conclusively presumed to be correct and accurate and constitute an account stated between Borrowers and the Lender Group unless, within 30 days after receipt thereof by Borrowers, Borrowers shall deliver to Agent written objection thereto describing the error or errors contained in any such statements.

 

2.10                           Fees.  Borrowers shall pay to Agent,

 

(a)                                  for the account of Agent, as and when due and payable under the terms of the Fee Letter, the fees set forth in the Fee Letter.

 

(b)                                 for the ratable account of those Lenders with Revolver Commitments, on the first day of each month from and after the Closing Date up to the first day of the month prior to the Payoff Date and on the Payoff Date, an unused line fee in an amount equal to the applicable Unused Revolver Fee Margin multiplied by an amount equal to (i) the aggregate amount of the Revolver Commitments, less (ii) the average Daily Balance of the Revolver Usage during the immediately preceding month (or portion thereof).

 

(c)                                  audit, appraisal, and valuation fees and charges, as and when incurred or chargeable, as follows: (i) a fee of $1,000 per day, per auditor, plus reasonable out-of-pocket expenses for each financial audit of Borrowers performed by personnel employed by Agent, (ii) if implemented, a fee of $1,000 per day, per applicable individual, plus reasonable out-of-pocket expenses for the establishment of electronic collateral reporting systems, and (iii) the actual charges paid or incurred by Agent if it elects to employ the services of one or more third Persons to perform financial audits or quality of earnings analyses of Borrowers or their Subsidiaries, to establish electronic collateral reporting systems, to appraise the Collateral, or any portion thereof, or to assess Borrowers’ or their Subsidiaries’ business valuation.

 

2.11                           Letters of Credit.

 

(a)                                  Subject to the terms and conditions of this Agreement, upon the request of the Administrative Borrower made in accordance herewith, the Issuing Lender agrees to issue, or to cause an Underlying Issuer (including as Issuing Lender’s agent) to issue, a requested Letter of Credit.  If Issuing Lender, at its option, elects to cause an Underlying Issuer to issue a requested Letter of Credit, then Issuing Lender agrees that it will enter into arrangements relative to the reimbursement of such Underlying Issuer (which may include, among other means, by becoming an applicant with respect to such Letter of Credit or entering into undertakings which provide for reimbursements of such Underlying Issuer with respect to such Letter of Credit; each such obligation or undertaking, irrespective of whether in writing, a “Reimbursement Undertaking”) with respect to Letters of Credit issued by such Underlying Issuer.  By submitting a request to Issuing Lender for the issuance of a Letter of Credit, Borrowers shall be deemed to have requested that Issuing Lender issue or that an Underlying Issuer issue the requested Letter of Credit and to have requested Issuing

 

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Lender to issue a Reimbursement Undertaking with respect to such requested Letter of Credit if it is to be issued by an Underlying Issuer (it being expressly acknowledged and agreed by each Borrower that Borrowers are and shall be deemed to be applicants (within the meaning of Section 5-102(a)(2) of the Code) with respect to each Underlying Letter of Credit).  Each request for the issuance of a Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be made in writing by an Authorized Person and delivered to the Issuing Lender via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the requested date of issuance, amendment, renewal, or extension.  Each such request shall be in form and substance reasonably satisfactory to the Issuing Lender and shall specify (i) the amount of such Letter of Credit, (ii) the date of issuance, amendment, renewal, or extension of such Letter of Credit, (iii) the proposed expiration date of such Letter of Credit, (iv) the name and address of the beneficiary of the Letter of Credit, and (v) such other information (including the conditions of drawing, and, in the case of an amendment, renewal, or extension, identification of the Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such Letter of Credit.  Anything contained herein to the contrary notwithstanding, the Issuing Lender may, but shall not be obligated to, issue or cause the issuance of a Letter of Credit or to issue a Reimbursement Undertaking in respect of an Underlying Letter of Credit, in either case, that supports the obligations of Parent or its Subsidiaries at any time that one or more of the Lenders is a Defaulting Lender.  The Issuing Lender shall have no obligation to issue a Letter of Credit or a Reimbursement Undertaking in respect of an Underlying Letter of Credit, in either case, if any of the following would result after giving effect to the requested issuance:

 

(i)                                     the Letter of Credit Usage would exceed the Borrowing Base less the outstanding amount of Advances (inclusive of Swing Loans), or

 

(ii)                                  the Letter of Credit Usage would exceed the Maximum Letter of Credit Amount, or

 

(iii)                               the Letter of Credit Usage would exceed the Maximum Revolver Amount less the outstanding amount of Advances (including Swing Loans).

 

Each Letter of Credit shall be in form and substance reasonably acceptable to the Issuing Lender, including the requirement that the amounts payable thereunder must be payable in Dollars.  If Issuing Lender makes a payment under a Letter of Credit or an Underlying Issuer makes a payment under an Underlying Letter of Credit, Borrowers shall pay to Agent an amount equal to the applicable Letter of Credit Disbursement on the date such Letter of Credit Disbursement is made and, in the absence of such payment, the amount of the Letter of Credit Disbursement immediately and automatically shall be deemed to be an Advance hereunder and, initially, shall bear interest at the rate then applicable to Advances that are Base Rate Loans. If a Letter of Credit Disbursement is deemed to be an Advance hereunder (notwithstanding any failure to satisfy any condition precedent set forth in Section 3), Borrowers’ obligation to pay the amount of such Letter of Credit Disbursement to Issuing Lender shall be automatically converted into an obligation to pay the resulting Advance.  Promptly following receipt by Agent of any payment from Borrowers pursuant to this paragraph, Agent shall distribute such payment to the Issuing Lender or, to the extent that Lenders have made payments pursuant to Section 2.11(b) to reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as their interests may appear.

 

(b)                                 Promptly following receipt of a notice of a Letter of Credit Disbursement pursuant to Section 2.11(a), each Lender with a Revolver Commitment agrees to fund its Pro Rata Share of any Advance deemed made pursuant to Section 2.11(a) on the same terms and conditions as if Borrowers had requested the amount thereof as an Advance and Agent shall promptly pay to Issuing Lender the amounts so received by it from the Lenders.  By the issuance of a Letter of Credit or a Reimbursement Undertaking (or an amendment, renewal, or extension of a Letter of Credit or a Reimbursement Undertaking) and without any further action on the part of the Issuing Lender or the Lenders with Revolver Commitments, the Issuing Lender shall be deemed to have granted to each Lender with a Revolver Commitment, and each Lender with a Revolver Commitment shall be deemed to have purchased, a participation in each Letter of Credit issued by Issuing Lender and each

 

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Reimbursement Undertaking, in an amount equal to its Pro Rata Share of such Letter of Credit or Reimbursement Undertaking, and each such Lender agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of any Letter of Credit Disbursement made by Issuing Lender or an Underlying Issuer under the applicable Letter of Credit.  In consideration and in furtherance of the foregoing, each Lender with a Revolver Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of each Letter of Credit Disbursement made by Issuing Lender or an Underlying Issuer and not reimbursed by Borrowers on the date due as provided in Section 2.11(a), or of any reimbursement payment required to be refunded (or that Agent or Issuing Lender elects, based upon the advice of counsel, to refund) to Borrowers for any reason.  Each Lender with a Revolver Commitment acknowledges and agrees that its obligation to deliver to Agent, for the account of the Issuing Lender, an amount equal to its respective Pro Rata Share of each Letter of Credit Disbursement pursuant to this Section 2.11(b) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3.  If any such Lender fails to make available to Agent the amount of such Lender’s Pro Rata Share of a Letter of Credit Disbursement as provided in this Section, such Lender shall be deemed to be a Defaulting Lender and Agent (for the account of the Issuing Lender) shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate until paid in full.

 

(c)                                  Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group and each Underlying Issuer harmless from any damage, loss, cost, expense, or liability (other than Taxes, which shall be governed by Section 16), and reasonable attorneys’ fees incurred by Issuing Lender, any other member of the Lender Group, or any Underlying Issuer arising out of or in connection with any Reimbursement Undertaking or any Letter of Credit; provided, however, that no Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of the Issuing Lender, any other member of the Lender Group, or any Underlying Issuer.  Each Borrower agrees to be bound by the Underlying Issuer’s regulations and interpretations of any Letter of Credit or by Issuing Lender’s interpretations of any Reimbursement Undertaking even though this interpretation may be different from such Borrower’s own, and each Borrower understands and agrees that none of the Issuing Lender, any other member of the Lender Group, or any Underlying Issuer shall be liable for any error, negligence, or mistake, whether of omission or commission, in following any Borrower’s instructions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto.  Each Borrower understands that the Reimbursement Undertakings may require Issuing Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by a Borrower against such Underlying Issuer.  Each Borrower hereby agrees to indemnify, save, defend, and hold Issuing Lender and the other members of the Lender Group harmless with respect to any loss, cost, expense (including reasonable attorneys’ fees), or liability (other than Taxes, which shall be governed by Section 16) incurred by them as a result of the Issuing Lender’s indemnification of an Underlying Issuer; provided, however, that no Borrower shall be obligated hereunder to indemnify for any such loss, cost, expense, or liability to the extent that it is caused by the gross negligence or willful misconduct of the Issuing Lender or any other member of the Lender Group.  Each Borrower hereby acknowledges and agrees that none of the Issuing Lender, any other member of the Lender Group, or any Underlying Issuer shall be responsible for delays, errors, or omissions resulting from the malfunction of equipment in connection with any Letter of Credit.

 

(d)                                 The obligation of each Borrower to reimburse the Issuing Lender for each drawing under each Letter of Credit shall be absolute, unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

 

(i)                                     any lack of validity or enforceability of such Letter of Credit, this Agreement, or another Loan Document,

 

(ii)                                  the existence of any claim, counterclaim, setoff, defense or other right that Parent or any of its Subsidiaries may have at any time against any beneficiary or any transferee of such Letter

 

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of Credit (or any Person for whom any such beneficiary or any such transferee maybe acting), the Issuing Lender or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction,

 

(iii)                               any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect, or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit,

 

(iv)                              any payment by the Issuing Lender under such Letter of Credit against presentation of a draft or certificate that does not substantially or strictly comply with the terms of such Letter of Credit (including, without limitation, any requirement that presentation be made at a particular place or by a particular time of day), or any payment made by the Issuing Lender under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit,

 

(v)                                 any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or discharge of, any Borrower or any of its Subsidiaries, or

 

(vi)                              the fact that any Event of Default shall have occurred and be continuing.

 

(e)                                  Each Borrower hereby authorizes and directs any Underlying Issuer to deliver to the Issuing Lender all instruments, documents, and other writings and property received by such Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon the Issuing Lender’s instructions with respect to all matters arising in connection with such Underlying Letter of Credit and the related application.

 

(f)                                    Each Borrower acknowledges and agrees that any and all issuance charges, usage charges, commissions, fees, and costs incurred by the Issuing Lender relating to Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and shall be reimbursable immediately by Borrowers to Agent for the account of the Issuing Lender; it being acknowledged and agreed by Borrowers that, as of the Closing Date, the usage charge imposed by the Underlying Issuer is .825% per annum times the undrawn amount of each Underlying Letter of Credit, that such usage charge may be changed from time to time, and that the Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals.

 

(g)                                 If by reason of (i) any change after the Closing Date in any applicable law, treaty, rule, or regulation or any change in the interpretation or application thereof by any Governmental Authority, or (ii) compliance by the Issuing Lender, any other member of the Lender Group, or Underlying Issuer with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including Regulation D of the Federal Reserve Board as from time to time in effect (and any successor thereto):

 

(A)                              any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any Letter of Credit issued or caused to be issued hereunder or hereby, or

 

(B)                                there shall be imposed on the Issuing Lender, any other member of the Lender Group, or Underlying Issuer any other condition regarding any Letter of Credit or Reimbursement Undertaking,

 

and the result of the foregoing is to increase, directly or indirectly, the cost to the Issuing Lender, any other member of the Lender Group, or an Underlying Issuer of issuing, making, participating in, or maintaining any Reimbursement Undertaking or Letter of Credit or to reduce the amount receivable in respect thereof, then,

 

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and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Administrative Borrower, and Borrowers shall pay within 30 days after demand therefor, such amounts as Agent may specify to be necessary to compensate the Issuing Lender, any other member of the Lender Group, or an Underlying Issuer for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Base Rate Loans hereunder; provided, however, that no Borrower shall be required to provide any compensation pursuant to this Section 2.11(g) for any such amounts incurred more than 180 days prior to the date on which the demand for payment of such amounts is first made to Borrowers; provided  further, however, that if an event or circumstance giving rise to such amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.  The determination by Agent of any amount due pursuant to this Section 2.11(g), as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.

 

2.12                           LIBOR Option.

 

(a)                                  Interest and Interest Payment Dates.  In lieu of having interest charged at the rate based upon the Base Rate, Borrowers shall have the option, subject to Section 2.12(b) below, (the “LIBOR Option”) to have interest on all or a portion of the Advances be charged (whether at the time when made (unless otherwise provided herein), upon conversion from a Base Rate Loan to a LIBOR Rate Loan, or upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of interest based upon the LIBOR Rate.  Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the Interest Period applicable thereto; (ii) the date on which all or any portion of the Obligations are accelerated pursuant to the terms hereof, or (iii) the date on which this Agreement is terminated pursuant to the terms hereof.  On the last day of each applicable Interest Period, unless Borrowers properly have exercised the LIBOR Option with respect thereto, the interest rate applicable to such LIBOR Rate Loan automatically shall convert to the rate of interest then applicable to Base Rate Loans of the same type hereunder.  At any time that an Event of Default has occurred and is continuing, Borrowers no longer shall have the option to request that Advances bear interest at a rate based upon the LIBOR Rate.

 

(b)                                 LIBOR Election.

 

(i)                                     Borrowers may, at any time and from time to time, so long as no Event of Default has occurred and is continuing, elect to exercise the LIBOR Option by notifying Agent prior to 1:00 p.m. (Chicago time) at least 3 Business Days prior to the commencement of the proposed Interest Period (the “LIBOR Deadline”).  Notice of Borrowers’ election of the LIBOR Option for a permitted portion of the Advances and an Interest Period pursuant to this Section shall be made by delivery to Agent of a LIBOR Notice received by Agent before the LIBOR Deadline, or by telephonic notice received by Agent before the LIBOR Deadline (to be confirmed by delivery to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m. (Chicago time) on the same day).  Promptly upon its receipt of each such LIBOR Notice, Agent shall provide a copy thereof to each of the affected Lenders.

 

(ii)                                  Each LIBOR Notice shall be irrevocable and binding on each Borrower.  In connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and hold Agent and the Lenders harmless against any loss, cost, or expense actually incurred by Agent or any Lender as a result of (A) the payment of any principal of any LIBOR Rate 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 LIBOR Rate Loan other than on the last day of the Interest Period applicable thereto, or (C) the failure to borrow, convert, continue or prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered pursuant hereto (such losses, costs, or expenses, “Funding Losses”).  A certificate of Agent or a Lender delivered to the Administrative Borrower setting forth any amount or amounts, and setting forth in reasonable detail the calculation of such amount and the assumptions on which such calculation was based, that Agent or such Lender is entitled to receive pursuant to this Section 2.12 shall be conclusive absent manifest error.  Borrowers

 

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shall pay such amount to Agent or the Lender, as applicable, within 30 days of the date of the Administrative Borrower’s receipt of such certificate.  If a payment of a LIBOR Rate Loan on a day other than the last day of the applicable Interest Period would result in a Funding Loss, Agent may, in its sole discretion at the request of Borrowers, hold the amount of such payment as cash collateral in support of the Obligations until the last day of such Interest Period and apply such amounts to the payment of the applicable LIBOR Rate Loan on such last day, it being agreed that Agent has no obligation to so defer the application of payments to any LIBOR Rate Loan and that, in the event that Agent does not defer such application, Borrowers shall be obligated to pay any resulting Funding Losses.

 

(iii)                               Borrowers shall have not more than 7 LIBOR Rate Loans in effect at any given time.  Borrowers only may exercise the LIBOR Option for proposed LIBOR Rate Loans of at least $500,000.

 

(c)                                  Conversion.  Borrowers may convert LIBOR Rate Loans to Base Rate Loans at any time; provided, however, that in the event that LIBOR Rate Loans are converted or prepaid on any date that is not the last day of the Interest Period applicable thereto, including as a result of any automatic prepayment through the required application by Agent of proceeds of Loan Parties’ and their Subsidiaries’ Collections in accordance with Section 2.4(b) or for any other reason, including early termination of the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold Agent and the Lenders and their Participants harmless against any and all Funding Losses in accordance with Section 2.12 (b)(ii).

 

(d)                                 Special Provisions Applicable to LIBOR Rate.

 

(i)                                     The LIBOR Rate may be adjusted by Agent with respect to any Lender on a prospective basis to take into account any additional or increased costs to such Lender of maintaining or obtaining any eurodollar deposits or increased costs, in each case, due to changes in applicable law (other than changes in laws relative to Taxes, which shall be governed by Section 16) occurring subsequent to the commencement of the then applicable Interest Period, including changes in tax laws (except changes of general applicability in corporate income tax laws) and changes in the reserve requirements imposed by the Board of Governors of the Federal Reserve System (or any successor), which additional or increased costs would increase the cost of funding or maintaining loans bearing interest at the LIBOR Rate.  In any such event, the affected Lender shall give Borrowers and Agent notice of such a determination and adjustment and Agent promptly shall transmit the notice to each other Lender and, upon its receipt of the notice from the affected Lender, Borrowers may, by notice to such affected Lender (y) require such Lender to furnish to Borrowers a statement setting forth the basis for adjusting such LIBOR Rate and the method for determining the amount of such adjustment or (z) repay the LIBOR Rate Loans with respect to which such adjustment is made (together with any amounts due under Section 2.12(b)(ii)).

 

(ii)                                  In the event that any change in market conditions or any law, regulation, treaty, or directive, or any change therein or in the interpretation or application thereof, shall at any time after the date hereof, in the reasonable opinion of any Lender, make it unlawful or impractical for such Lender to fund or maintain LIBOR Rate Loans or to continue such funding or maintaining, or to determine or charge interest rates at the LIBOR Rate, such Lender shall give notice of such changed circumstances to Agent and Borrowers and Agent promptly shall transmit the notice to each other Lender and (y) in the case of any LIBOR Rate Loans of such Lender that are outstanding, the date specified in such Lender’s notice shall be deemed to be the last day of the Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of such Lender thereafter shall accrue interest at the rate then applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to elect the LIBOR Option until such Lender determines that it would no longer be unlawful or impractical to do so.

 

(e)                                  No Requirement of Matched Funding.  Anything to the contrary contained herein notwithstanding, neither Agent, nor any Lender, nor any of their Participants, is required actually to acquire

 

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eurodollar deposits to fund or otherwise match fund any Obligation as to which interest accrues at the LIBOR Rate.

 

2.13                           Capital Requirements.

 

(a)                                  If, after the date hereof, any Lender determines that (i) the adoption of or change in any law, rule, regulation or guideline regarding capital or reserve requirements for banks or bank holding companies, or any change in the interpretation, implementation, or application thereof by any Governmental Authority charged with the administration thereof, or (ii) compliance by such Lender or its parent bank holding company with any guideline, request or directive of any such entity regarding capital adequacy (whether or not having the force of law) has the effect of reducing the return on such Lender’s or such holding company’s capital as a consequence of such Lender’s Revolver Commitments hereunder to a level below that which such Lender or such holding company could have achieved but for such adoption, change, or compliance (taking into consideration such Lender’s or such holding company’s then existing policies with respect to capital adequacy and assuming the full utilization of such entity’s capital) by any amount deemed by such Lender to be material, then such Lender may notify Administrative Borrower and Agent thereof.  Following receipt of such notice, Borrowers agree to pay such Lender on demand the amount of such reduction of return of capital as and when such reduction is determined, payable within 30 days after presentation by such Lender of a statement in the amount and setting forth in reasonable detail such Lender’s calculation thereof and the assumptions upon which such calculation was based (which statement shall be deemed true and correct absent manifest error).  In determining such amount, such Lender may use any reasonable averaging and attribution methods.  Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that no Borrower shall be required to compensate a Lender pursuant to this Section for any reductions in return incurred more than 180 days prior to the date that such Lender notifies Administrative Borrower of such law, rule, regulation or guideline giving rise to such reductions and of such Lender’s intention to claim compensation therefor; provided  further that if such claim arises by reason of the adoption of or change in any law, rule, regulation or guideline that is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

(b)                                 If any Lender requests additional or increased costs referred to in Section 2.12(d)(i) or amounts under Section 2.13(a) or sends a notice under Section 2.12(d)(ii) relative to changed circumstances (any such Lender, an “Affected Lender”), then such Affected Lender shall use reasonable efforts to promptly designate a different one of its lending offices or to assign its rights and obligations hereunder to another of its offices or branches, if (i) in the reasonable judgment of such Affected Lender, such designation or assignment would eliminate or reduce amounts payable pursuant to Section 2.12(d)(i) or Section 2.13(a), as applicable, or would eliminate the illegality or impracticality of funding or maintaining LIBOR Rate Loans and (ii) in the reasonable judgment of such Affected Lender, such designation or assignment would not subject it to any material unreimbursed cost or expense and would not otherwise be materially disadvantageous to it.  Borrowers agree to pay all reasonable out-of-pocket costs and expenses incurred by such Affected Lender in connection with any such designation or assignment.  If, after such reasonable efforts, such Affected Lender does not so designate a different one of its lending offices or assign its rights to another of its offices or branches so as to eliminate Borrowers’ obligation to pay any future amounts to such Affected Lender pursuant to Section 2.12(d)(i) or Section 2.13(a), as applicable, or to enable Borrowers to obtain LIBOR Rate Loans, then Borrowers (without prejudice to any amounts then due to such Affected Lender under Section 2.12(d)(i) or Section 2.13(a), as applicable) may, unless prior to the effective date of any such assignment the Affected Lender withdraws its request for such additional amounts under Section 2.12(d)(i) or Section 2.13(a), as applicable, or indicates that it is no longer unlawful or impractical to fund or maintain LIBOR Rate Loans, seek a substitute Lender reasonably acceptable to Agent to purchase the Obligations owed to such Affected Lender and such Affected Lender’s Revolver Commitments hereunder (a “Replacement Lender”), and if such Replacement Lender agrees to such purchase, such Affected Lender shall assign to the Replacement Lender its Obligations and Revolver Commitments, pursuant to an Assignment and Acceptance Agreement, and upon such purchase by the Replacement Lender, such Replacement Lender shall be deemed to be a “Lender” for

 

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purposes of this Agreement and such Affected Lender shall cease to be a “Lender” for purposes of this Agreement.

 

2.14                           Joint and Several Liability of Borrowers.

 

(a)                                  Each Borrower is accepting joint and several liabilities hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by the Lender Group under this Agreement, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Obligations.

 

(b)                                 Each Borrower, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers with respect to the payment and performance of all of the Obligations (including any Obligations arising under this Section 2.14), it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each Borrower without preferences or distinction among them.

 

(c)                                  If and to the extent that any Borrower shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event the other Borrowers will make such payment with respect to, or perform, such Obligation until such time as all of the Obligations are paid in full.

 

(d)                                 The Obligations of each Borrower under the provisions of this Section 2.14 constitute the absolute and unconditional, full recourse Obligations of each Borrower enforceable against each Borrower to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of the provisions of this Agreement (other than this Section 2.14(d)) or any other circumstances whatsoever.

 

(e)                                  Except as otherwise expressly provided in this Agreement, each Borrower hereby waives notice of acceptance of its joint and several liability, notice of any Advances or Letters of Credit issued under or pursuant to this Agreement, notice of the occurrence of any Default, Event of Default, or of any demand for any payment under this Agreement, notice of any action at any time taken or omitted by Agent or Lenders under or in respect of any of the Obligations, any requirement of diligence or to mitigate damages and, generally, to the extent permitted by applicable law, all demands, notices and other formalities of every kind in connection with this Agreement (except as otherwise provided in this Agreement).  Each Borrower hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by Agent or Lenders at any time or times in respect of any default by any Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by Agent or Lenders in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or in part, of any Borrower.  Without limiting the generality of the foregoing, each Borrower assents to any other action or delay in acting or failure to act on the part of Agent or any Lender with respect to the failure by any Borrower to comply with any of its respective Obligations, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws or regulations thereunder, which might, but for the provisions of this Section 2.14 afford grounds for terminating, discharging or relieving any Borrower, in whole or in part, from any of its Obligations under this Section 2.14, it being the intention of each Borrower that, so long as any of the Obligations hereunder remain unsatisfied, the Obligations of each Borrower under this Section 2.14 shall not be discharged except by performance and then only to the extent of such performance.  The Obligations of each Borrower under this Section 2.14 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any other Borrower or Agent or any Lender.

 

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(f)                                    Each Borrower represents and warrants to Agent and Lenders that such Borrower is currently informed of the financial condition of Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations.  Each Borrower further represents and warrants to Agent and Lenders that such Borrower has read and understands the terms and conditions of the Loan Documents.  Each Borrower hereby covenants that such Borrower will continue to keep informed of Borrowers’ financial condition and of all other circumstances which bear upon the risk of nonpayment or nonperformance of the Obligations.

 

(g)                                 The provisions of this Section 2.14 are made for the benefit of Agent, each member of the Lender Group, each Bank Product Provider, and their respective successors and assigns, and may be enforced by it or them from time to time against any or all Borrowers as often as occasion therefor may arise and without requirement on the part of Agent, any member of the Lender Group, any Bank Product Provider, or any of their successors or assigns first to marshal any of its or their claims or to exercise any of its or their rights against any Borrower or to exhaust any remedies available to it or them against any Borrower or to resort to any other source or means of obtaining payment of any of the Obligations hereunder or to elect any other remedy.  The provisions of this Section 2.14 shall remain in effect until all of the Obligations shall have been paid in full or otherwise fully satisfied.  If at any time, any payment, or any part thereof, made in respect of any of the Obligations is rescinded or must otherwise be restored or returned by Agent or any Lender upon the insolvency, bankruptcy or reorganization of any Borrower, or otherwise, the provisions of this Section 2.14 will forthwith be reinstated in effect, as though such payment had not been made.

 

(h)                                 Each Borrower hereby agrees that it will not enforce any of its rights of contribution or subrogation against any other Borrower with respect to any liability incurred by it hereunder or under any of the other Loan Documents, any payments made by it to Agent or Lenders with respect to any of the Obligations or any collateral security therefor until such time as all of the Obligations have been paid in full in cash.  Any claim which any Borrower may have against any other Borrower with respect to any payments to Agent or any member of the Lender Group hereunder or under any of the Bank Product Agreements are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior payment in full in cash of the Obligations and, in the event of any insolvency, bankruptcy, receivership, liquidation, reorganization or other similar proceeding under the laws of any jurisdiction relating to any Borrower, its debts or its assets, whether voluntary or involuntary, all such Obligations shall be paid in full in cash before any payment or distribution of any character, whether in cash, securities or other property, shall be made to any other Borrower therefor.

 

(i)                                     Each Borrower hereby agrees that after the occurrence and during the continuance of any Default or Event of Default, such Borrower will not demand, sue for or otherwise attempt to collect any indebtedness of any other Borrower owing to such Borrower until the Obligations shall have been paid in full in cash.  If, notwithstanding the foregoing sentence, such Borrower shall collect, enforce or receive any amounts in respect of such indebtedness, such amounts shall be collected, enforced and received by such Borrower as trustee for Agent, and such Borrower shall deliver any such amounts to Agent for application to the Obligations in accordance with Section 2.4(b).

 

3.                                       CONDITIONS; TERM OF AGREEMENT.

 

3.1                                 Conditions Precedent to the Initial Extension of Credit.  The obligation of each Lender to make its initial extension of credit provided for hereunder is subject to the fulfillment, to the satisfaction of Agent and each Lender, of each of the conditions precedent set forth on Schedule 3.1 (the making of such initial extension of credit by a Lender being conclusively deemed to be its satisfaction or waiver of the conditions precedent).

 

3.2                                 Conditions Precedent to all Extensions of Credit.  The obligation of the Lender Group (or any member thereof) to make any Advances hereunder (or to extend any other credit hereunder) at any time shall be subject to the following conditions precedent:

 

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(a)                                  the representations and warranties of Parent or its Subsidiaries contained in this Agreement or in the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date); and

 

(b)                                 no Default or Event of Default shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof.

 

3.3                                 Maturity.  This Agreement shall continue in full force and effect for a term ending on September 14, 2015 (the “Maturity Date”).  The foregoing notwithstanding, the Lender Group, upon the election of the Required Lenders, shall have the right to terminate its obligations under this Agreement immediately and without notice upon the occurrence and during the continuation of an Event of Default.

 

3.4                                 Effect of Maturity.  On the Maturity Date, all commitments of the Lender Group to provide additional credit hereunder shall automatically be terminated and all of the Obligations immediately shall become due and payable without notice or demand and Borrowers shall be required to repay all of the Obligations in full.  No termination of the obligations of the Lender Group (other than payment in full of the Obligations and termination of the Revolver Commitments) shall relieve or discharge any Loan Party of its duties, obligations, or covenants hereunder or under any other Loan Document and Agent’s Liens in the Collateral shall continue to secure the Obligations and shall remain in effect until all Obligations have been paid in full and the Revolver Commitments have been terminated.  When all of the Obligations have been paid in full and the Lender Group’s obligations to provide additional credit under the Loan Documents have been terminated irrevocably, Agent will, at Borrowers’ sole expense, execute and deliver any termination statements, lien releases, discharges of security interests, and other similar discharge or release documents (and, if applicable, in recordable form) as are reasonably necessary to release, as of record, Agent’s Liens and all notices of security interests and liens previously filed by Agent.

 

3.5                                 Early Termination by Borrowers.  Borrowers have the option, at any time upon 10 Business Days’ prior written notice to Agent, to terminate this Agreement and terminate the Revolver Commitments hereunder by repaying to Agent all of the Obligations in full.

 

4.                                       REPRESENTATIONS AND WARRANTIES.

 

In order to induce the Lender Group to enter into this Agreement, each of Parent and each Borrower makes the following representations and warranties to the Lender Group which shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing Date, and shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the date of the making of each Advance (or other extension of credit) made thereafter, as though made on and as of the date of such Advance (or other extension of credit) (except to the extent that such representations and warranties relate solely to an earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement:

 

4.1                                 Due Organization and Qualification; Subsidiaries.

 

(a)                                  Each Loan Party (i) is duly organized and existing and in good standing under the laws of the jurisdiction of its organization, (ii) is qualified to do business in any state where the failure to be so qualified could reasonably be expected to result in a Material Adverse Change, and (iii) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to

 

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be conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby.

 

(b)                                 Set forth on Schedule 4.1(b) is a complete and accurate description of the authorized capital Stock of each Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding.  Other than as described on Schedule 4.1(b), there are no subscriptions, options, warrants, or calls relating to any shares of any Borrower’s capital Stock, including any right of conversion or exchange under any outstanding security or other instrument.  No Borrower is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock.

 

(c)                                  Set forth on Schedule 4.1(c) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement) is a complete and accurate list of the Loan Parties’ direct and indirect Subsidiaries, showing: (i) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries and (ii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by such Loan Party.  All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable.

 

(d)                                 Except as set forth on Schedule 4.1(c), there are no subscriptions, options, warrants, or calls relating to any shares of Parent’s or its Subsidiaries’ capital Stock, including any right of conversion or exchange under any outstanding security or other instrument.  Neither Parent nor any of its Subsidiaries are subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of Parent’s or its Subsidiaries’ capital Stock or any security convertible into or exchangeable for any such capital Stock.

 

4.2                                 Due Authorization; No Conflict.

 

(a)                                  As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party have been duly authorized by all necessary action on the part of such Loan Party.

 

(b)                                 As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party do not and will not (i) violate any material provision of federal, state, or local law or regulation applicable to any Loan Party or its Subsidiaries, the Governing Documents of any Loan Party or its Subsidiaries, or any order, judgment, or decree of any court or other Governmental Authority binding on any Loan Party or its Subsidiaries, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of any Loan Party or its Subsidiaries except to the extent that any such conflict, breach or default could not individually or in the aggregate reasonably be expected to have a Material Adverse Change, (iii) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of any Loan Party, other than Permitted Liens, or (iv) require any approval of any Loan Party’s interest holders or any approval or consent of any Person under any Material Contract of any Loan Party, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of Material Contracts, for consents or approvals, for which the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Change.

 

4.3                                 Governmental Consents.  The execution, delivery, and performance by each Loan Party of the Loan Documents to which such Loan Party is a party and the consummation of the transactions contemplated by the Loan Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than registrations, consents, approvals, notices, or other actions that have been obtained and that are still in force and effect and except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to Agent for filing or recordation, as of the Closing Date.

 

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4.4                                 Binding Obligations; Perfected Liens.

 

(a)                                  Each Loan Document has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

 

(b)                                 Agent’s Liens are validly created, perfected (other than (i) in respect of motor vehicles that are subject to a certificate of title and as to which Agent has not caused its Lien to be noted on the applicable certificate of title and (ii) any Deposit Accounts and Securities Accounts not subject to a Control Agreement as permitted by Section 6.11, and subject only to the filing of financing statements and the recordation of the Mortgages, in each case, in the appropriate filing offices), and first priority Liens, subject only to Permitted Liens which are either related to the Georgia Real Estate, the North Carolina Real Estate, any permitted purchase money Liens or the interests of lessors under Capital Leases.

 

4.5                                 Title to Assets; No Encumbrances.  Each of the Loan Parties and its Subsidiaries has (a) good, sufficient and legal title to (in the case of fee interests in Real Property), (b) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (c) good and marketable title to (in the case of all other personal property) all of their respective assets reflected in their most recent financial statements delivered pursuant to Section 5.1, in each case except for assets disposed of since the date of such financial statements to the extent permitted hereby.  All of such assets are free and clear of Liens except for Permitted Liens.

 

4.6                                 Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification Number; Commercial Tort Claims.

 

(a)                                  The name (within the meaning of Section 9-503 of the Code) of and jurisdiction of organization of each Loan Party and each of its Subsidiaries is set forth on Schedule 4.6(a) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).

 

(b)                                 The chief executive office of each Loan Party and each of its Subsidiaries is located at the address indicated on Schedule 4.6(b) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).

 

(c)                                  Each Loan Party’s and each of its Subsidiaries’ tax identification numbers and organizational identification numbers, if any, are identified on Schedule 4.6(c) (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement).

 

(d)                                 As of the Closing Date, no Loan Party and no Subsidiary of a Loan Party holds any commercial tort claims that exceed $500,000 in amount, except as set forth on Schedule 4.6(d).

 

4.7                                 Litigation.

 

(a)                                  Except as set forth on Schedule 4.7, there are no actions, suits, or proceedings pending or, to the knowledge of Borrowers, after due inquiry, threatened in writing against a Loan Party or any of its Subsidiaries that either individually or in the aggregate could reasonably be expected to result in a Material Adverse Change.

 

(b)                                 Schedule 4.7 sets forth a complete and accurate description, with respect to each of the actions, suits, or proceedings with asserted liabilities in excess of, or that could reasonably be expected to result in liabilities in excess of, $500,000 that, as of the Closing Date, is pending or, to the knowledge of

 

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Borrowers, after due inquiry, threatened against a Loan Party or any of its Subsidiaries, of (i) the parties to such actions, suits, or proceedings, (ii) the nature of the dispute that is the subject of such actions, suits, or proceedings, (iii) the status, as of the Closing Date, with respect to such actions, suits, or proceedings, and (iv) whether any liability of the Loan Parties’ and their Subsidiaries in connection with such actions, suits, or proceedings is covered by insurance.

 

4.8                                 Compliance with Laws.  No Loan Party nor any of its Subsidiaries (a) is in violation of any applicable laws, rules, regulations, executive orders, or codes (including Environmental Laws) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Change or (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Change.

 

4.9                                 No Material Adverse Change.  All historical financial statements relating to the Loan Parties and their Subsidiaries that have been delivered by any of the Borrowers to Agent have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and present fairly in all material respects, the Loan Parties’ and their Subsidiaries’ consolidated financial condition as of the date thereof and results of operations for the period then ended.  Since December 25, 2010, no event, circumstance, or change has occurred that has or could reasonably be expected to result in a Material Adverse Change with respect to the Loan Parties and their Subsidiaries.

 

4.10                           Fraudulent Transfer.

 

(a)                                  Each Loan Party is Solvent.

 

(b)                                 No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan Party.

 

4.11                           Employee Benefits.  No Loan Party, none of their Subsidiaries, nor any of their ERISA Affiliates maintains or contributes to any Benefit Plan.

 

4.12                           Environmental Condition.  Except as set forth on Schedule 4.12, (a) to Borrowers’ knowledge, no Loan Party’s nor any of its Subsidiaries’ properties or assets have ever been used by a Loan Party, its Subsidiaries, or by previous owners or operators in the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous Materials, where such disposal, production, storage, handling, treatment, release or transport was in violation, in any material respect, of any applicable Environmental Law, (b) to Borrowers’ knowledge, no Loan Party’s nor any of its Subsidiaries’ properties or assets have ever been designated or identified in any manner pursuant to any environmental protection statute as a Hazardous Materials disposal site, (c) no Loan Party nor any of its Subsidiaries has received written notice that a Lien arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by a Loan Party or its Subsidiaries, and (d) no Loan Party nor any of its Subsidiaries nor any of their respective facilities or operations is subject to any outstanding written order, consent decree, or settlement agreement with any Person relating to any Environmental Law or Environmental Liability that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Change.

 

4.13                           Intellectual Property.  Each Loan Party and its Subsidiaries own, or hold licenses in, all trademarks, trade names, copyrights, patents, and licenses that are necessary to the conduct of their business as currently conducted, and attached hereto as Schedule 4.13 (as updated from time to time) is a true, correct, and complete listing of all material trademarks, trade names, copyrights, patents, and licenses as to which Parent or

 

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one of its Subsidiaries is the owner or is an exclusive licensee; provided, however, that the Administrative Borrower may amend Schedule 4.13 to add additional intellectual property so long as such amendment occurs by written notice to Agent not less than 30 days after the date on which the applicable Loan Party or its Subsidiary acquires any such property after the Closing Date at the time that the Administrative Borrower provides its Compliance Certificate pursuant to Section 5.1.

 

4.14                           Leases.  Each Loan Party and its Subsidiaries enjoy peaceful and undisturbed possession under all leases material to their business and to which they are parties or under which they are operating, and, subject to Permitted Protests, all of such material leases are valid and subsisting and no material default by the applicable Loan Party or its Subsidiaries exists under any of them.

 

4.15                           Deposit Accounts and Securities Accounts.  Set forth on Schedule 4.15 (as updated pursuant to the provisions of Section 5.18 hereof from time to time) is a listing of all of the Loan Parties’ and their Subsidiaries’ Deposit Accounts and Securities Accounts which describes for each such Deposit Account and Securities Account (a) the name and address of such each bank or securities intermediary, (b) the account numbers of the Deposit Accounts or Securities Accounts maintained with such bank or securities intermediary and (c) whether such Deposit Account or Securities Account is required to be subject to a Blocked Account Agreement or other Control Agreement or constitutes a Local Account or an Exempt Account.

 

4.16                           Complete Disclosure.  All factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about Borrowers’ industry) furnished by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender (including all information contained in the Schedules hereto or in the other Loan Documents) for purposes of or in connection with this Agreement or the other Loan Documents is, and all other such factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about Borrowers’ industry) hereafter furnished by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender will be, true and accurate, in all material respects, on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided.  The Projections delivered to Agent on August 17, 2011 represent, and as of the date on which any other Projections are delivered to Agent, such additional Projections represent, Borrowers’ good faith estimate, on the date such Projections are delivered, of the Loan Parties’ and their Subsidiaries’ future performance for the periods covered thereby based upon assumptions believed by Borrowers to be reasonable at the time of the delivery thereof to Agent (it being understood that such Projections are subject to uncertainties and contingencies, many of which are beyond the control of the Loan Parties and their Subsidiaries, that no assurances can be given that such Projections will be realized, and that actual results may differ in a material manner from such Projections).

 

4.17                           Material Contracts.  Set forth on Schedule 4.17 (as such Schedule may be updated from time to time in accordance herewith) is a reasonably detailed description of the Material Contracts of each Loan Party and its Subsidiaries as of the most recent date on which the Administrative Borrower provided its Compliance Certificate pursuant to Section 5.1; provided, however, that the Administrative Borrower may amend Schedule 4.17 to add additional Material Contracts so long as such amendment occurs by written notice to Agent on the date that the Administrative Borrower provides its Compliance Certificate.  Except for matters which, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Change, each Material Contract (other than those that have expired at the end of their normal terms) (a) is in full force and effect and is binding upon and enforceable against the applicable Loan Party or its Subsidiary and, to Borrowers’ knowledge, after due inquiry, each other Person that is a party thereto in accordance with its terms, (b) has not been otherwise amended or modified (other than amendments or modifications permitted by Section 6.7(b)), and (c) is not in default due to the action or inaction of the applicable Loan Party or its Subsidiary.

 

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4.18                           Patriot Act.  To the extent applicable, each Loan Party is in compliance, in all material respects, with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”).  No part of the proceeds of the loans made hereunder will be used by any Loan Party or any of their Affiliates, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

 

4.19                           Indebtedness.  Set forth on Schedule 4.19 is a true and complete list of all Indebtedness of each Loan Party and each of its Subsidiaries outstanding immediately prior to the Closing Date that is to remain outstanding immediately after giving effect to the closing hereunder on the Closing Date and such Schedule accurately sets forth the aggregate principal amount of such Indebtedness as of the Closing Date.

 

4.20                           Payment of Taxes.  Except as otherwise permitted under Section 5.5, all tax returns and reports of each Loan Party and its Subsidiaries required to be filed by any of them have been timely filed, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon a Loan Party and its Subsidiaries and upon their respective assets, income, businesses and franchises that are due and payable have been paid when due and payable.  Each Loan Party and each of its Subsidiaries have made adequate provision in accordance with GAAP for all taxes not yet due and payable.  No Borrower knows of any proposed tax assessment against a Loan Party or any of its Subsidiaries that is not being actively contested by such Loan Party or such Subsidiary diligently, in good faith, and by appropriate proceedings; provided such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.

 

4.21                           Margin Stock.  No Loan Party nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.  No part of the proceeds of the loans made to Borrowers will be used to purchase or carry any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors of the United States Federal Reserve.

 

4.22                           Governmental Regulation.  No Loan Party nor any of its Subsidiaries is subject to regulation under the Federal Power Act or the Investment Company Act of 1940 or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the Obligations unenforceable.  No Loan Party nor any of its Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.

 

4.23                           OFAC.  No Loan Party nor any of its Subsidiaries is in violation of any of the country or list based economic and trade sanctions administered and enforced by OFAC.  No Loan Party nor any of its Subsidiaries (a) is a Sanctioned Person or a Sanctioned Entity, (b) has its assets located in Sanctioned Entities, or (c) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities.  No proceeds of any loan made hereunder will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.

 

4.24                           Employee and Labor Matters.    There is (a) no unfair labor practice complaint pending or, to the knowledge of Borrowers, threatened against Parent or its Subsidiaries before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against Parent or its Subsidiaries which arises out of or under any collective bargaining agreement and that could reasonably be expected to result in a

 

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material liability, (b) no strike, labor dispute, slowdown, stoppage or similar action or grievance pending or threatened in writing against Parent or its Subsidiaries that could reasonably be expected to result in a material liability, or (c) to the knowledge of Borrowers, after due inquiry, no union representation question existing with respect to the employees of Parent or its Subsidiaries and no union organizing activity taking place with respect to any of the employees of Parent or its Subsidiaries.  Parent has not, and no Subsidiary of Parent has, incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act or similar state law, which remains unpaid or unsatisfied.  The hours worked and payments made to employees of Parent or its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable legal requirements, except to the extent such violations could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.  All material payments due from Parent or its Subsidiaries 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 Parent or its applicable Subsidiary, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.

 

4.25                           Parent as a Holding Company.  Parent is a holding company and does not have any material liabilities (other than liabilities arising under the Loan Documents), own any material assets (other than the Stock of Borrowers) or engage in any operations or business (other than the ownership of the Borrowers and their Subsidiaries).

 

4.26                           Eligible Accounts.  As to each Account that is identified by any Borrower as an Eligible Account in a Borrowing Base Certificate submitted to Agent, such Account is (a) a bona fide existing payment obligation of the applicable Account Debtor created by the sale and delivery of Inventory or the rendition of services to such Account Debtor in the ordinary course of Borrowers’ business, (b) owed to one or more of the Borrowers, and (c) not excluded as ineligible by virtue of one or more of the excluding criteria (other than Agent-discretionary criteria) set forth in the definition of Eligible Accounts.

 

4.27                           Eligible Inventory.  As to each item of Inventory that is identified by any Borrower as Eligible Inventory in a Borrowing Base Certificate submitted to Agent, such Inventory is (a) of good and merchantable quality, free from known defects and (b) not excluded as ineligible by virtue of one or more of the excluding criteria (other than Agent-discretionary criteria) set forth in the definition of Eligible Inventory.

 

4.28                           Locations of Inventory and Equipment.  The Inventory and Equipment (other than vehicles or Equipment out for repair) of the Loan Parties and their Subsidiaries are not stored with a bailee, warehouseman, or similar party and are located only at, or in-transit between or to, the locations identified on Schedule 4.28 (as such Schedule may be updated pursuant to Section 5.15).

 

4.29                           Inventory Records.  Each Loan Party  keeps correct and accurate records itemizing and describing the type, quality, and quantity of its and its Subsidiaries’ Inventory and the book value thereof.

 

5.                                      AFFIRMATIVE COVENANTS.

 

Each of Parent and each Borrower covenants and agrees that, until termination of all of the Revolver Commitments and payment in full of the Obligations, each Loan Party shall and shall cause each of their Subsidiaries to comply with each of the following:

 

5.1                                 Financial Statements, Reports, Certificates.  Deliver to Agent, with copies to each Lender, each of the financial statements, reports, and other items set forth on Schedule 5.1 no later than the times specified therein.  In addition, each of Parent and each Borrower agree that no Subsidiary of a Loan Party will have a fiscal year different from that of Parent.  In addition, Parent and Borrowers shall (and shall cause each of their Subsidiaries to) maintain a system of accounting that enables the Loan Parties to produce financial statements in accordance with GAAP.  Parent and Borrowers shall (and shall cause each of their Subsidiaries to) also (a) keep a reporting system that shows all additions, sales, claims, returns, and allowances with respect to their respective sales and (b) maintain their respective billing systems/practices substantially as in effect as

 

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of the Closing Date and shall only make material modifications thereto with notice to, and with the consent of, Agent.

 

5.2                                 Collateral Reporting.  Provide Agent (and if so requested by Agent, with copies for each Lender) with each of the reports set forth on Schedule 5.2 at the times specified therein.  In addition, each Borrower agrees to use commercially reasonable efforts in cooperation with Agent to facilitate and implement a system of electronic collateral reporting in order to provide electronic reporting of each of the items set forth on such Schedule.

 

5.3                                 Existence.  Except as otherwise permitted under Section 6.3 or Section 6.4, at all times maintain and preserve in full force and effect its existence (including being in good standing in its jurisdiction of organization) and all rights and franchises, licenses and permits material to its business; provided, however, that no Loan Party nor any of its Subsidiaries shall be required to preserve any such right or franchise, licenses or permits if such Person’s board of directors (or similar governing body) shall determine that the preservation thereof is no longer desirable in the conduct of the business of such Person, and that the loss thereof is not disadvantageous in any material respect to such Person or to the Lenders.

 

5.4                                 Maintenance of Properties.  Maintain and preserve all of its assets that are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear, tear, and casualty excepted and Permitted Dispositions excepted, and comply with the material provisions of all material leases to which it is a party as lessee, so as to prevent the loss or forfeiture thereof, unless such provisions are the subject of a Permitted Protest.

 

5.5                                 Taxes.  Cause all assessments and taxes imposed, levied, or assessed against any Loan Party or its Subsidiaries, or any of their respective assets or in respect of any of its income, businesses, or franchises to be paid in full, before delinquency or before the expiration of any extension period, except to the extent that the validity of such assessment or tax shall be the subject of a Permitted Protest and so long as, in the case of an assessment or tax that has or may become a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such assessment or tax.  Parent will and will cause each of its Subsidiaries to make timely payment or deposit of all tax payments and withholding taxes required of it and them by applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request, furnish Agent with proof reasonably satisfactory to Agent indicating that Parent and its Subsidiaries have made such payments or deposits.

 

5.6                                 Insurance.  At Borrowers’ expense, maintain insurance respecting each of the Loan Parties’ and their Subsidiaries’ assets wherever located, covering loss or damage by fire, theft, explosion, and all other hazards and risks as ordinarily are insured against by other Persons engaged in the same or similar businesses. Borrowers also shall maintain (with respect to each of the Loan Parties and their Subsidiaries) business interruption, general liability, product liability insurance, director’s and officer’s liability insurance, fiduciary liability insurance, and employment practices liability insurance, as well as flood insurance (as applicable) and insurance against larceny, embezzlement, and criminal misappropriation.  All such policies of insurance shall be with responsible and reputable insurance companies acceptable to Agent and in such amounts as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and located and in any event in amount, adequacy and scope reasonably satisfactory to Agent. All property insurance policies covering the Collateral are to be made payable to Agent for the benefit of Agent and the Lenders, as their interests may appear, in case of loss, pursuant to a standard loss payable endorsement with a standard non contributory “lender” or “secured party” clause and are to contain such other provisions as Agent may reasonably require to fully protect the Lenders’ interest in the Collateral and to any payments to be made under such policies.  All certificates of property and general liability insurance are to be delivered to Agent, with the loss payable (but only in respect of Collateral) and additional insured endorsements in favor of Agent and shall provide for not less than 30 days (10 days in the case of non-payment) prior written notice to Agent of the exercise of any right of cancellation.  If any Borrower fails to maintain such insurance, Agent may

 

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arrange for such insurance, but at such Borrower’s expense and without any responsibility on Agent’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims.  Borrowers shall give Agent prompt notice of any loss exceeding $500,000 covered by its casualty or business interruption insurance.  Upon the occurrence and during the continuance of an Event of Default, Agent shall have the sole right to file claims under any property and general liability insurance policies in respect of the Collateral, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

 

5.7                                 Inspection.  Permit Agent and each of its duly authorized representatives or agents to visit any of its properties and inspect any of its assets or books and records, to conduct appraisals and valuations, to examine and make copies of its books and records, and to discuss its affairs, finances, and accounts with, and to be advised as to the same by, its officers and employees at such reasonable times and intervals as Agent may designate and, so long as no Default or Event of Default exists, with reasonable prior notice to Administrative Borrower.

 

5.8                                 Compliance with Laws.  Comply with the requirements of all applicable laws, rules, regulations, and orders of any Governmental Authority, other than laws, rules, regulations, and orders, the non-compliance with which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Change.

 

5.9                                 Environmental.

 

(a)                                  Keep any property either owned or operated by Parent or its Subsidiaries free of any Environmental Liens or post bonds or other financial assurances reasonably sufficient to satisfy the obligations or liability evidenced by such Environmental Liens,

 

(b)                                 Comply, in all material respects, with Environmental Laws except as would not be reasonably expected to result in a Material Adverse Change and provide to Agent documentation of such compliance which Agent reasonably requests,

 

(c)                                  Accurately characterize and properly store and dispose of all wastes constituting Hazardous Materials, in all material respects, in accordance with applicable Environmental Laws,

 

(d)                                 Promptly notify Agent of any unpermitted release of which any Loan Party has knowledge of a Hazardous Material in any reportable quantity from or onto property owned or operated by Parent or its Subsidiaries and take any Remedial Actions required to abate said release or otherwise to come into compliance, in all material respects, with applicable Environmental Law, and

 

(e)                                  Promptly, but in any event within 10 Business Days of its receipt thereof, provide Agent with written notice of any of the following:  (i) written notice that an Environmental Lien has been filed against any of the real or personal property of Parent or its Subsidiaries, (ii) commencement of any Environmental Action or written notice that an Environmental Action will be filed against Parent or its Subsidiaries, and (iii) written notice of a violation, citation, or other administrative order from a Governmental Authority.

 

5.10                           Disclosure Updates.  Promptly and in no event later than 5 Business Days after obtaining knowledge thereof, notify Agent if any written information, exhibit, or report furnished to Agent or the Lenders contained, at the time it was furnished, any untrue statement of a material fact or omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made.  The foregoing to the contrary notwithstanding, any notification pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue statement of a material fact or omission of any

 

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material fact nor shall any such notification have the effect of amending or modifying this Agreement or any of the Schedules hereto.

 

5.11                           Formation of Subsidiaries.  At the time that any Loan Party forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary after the Closing Date, such Loan Party shall (a) within 10 days of such formation or acquisition (or such later date as permitted by Agent in its sole discretion) cause any such new Subsidiary to provide to Agent a Guaranty and a joinder to the Security Agreement, together with such other security documents (including mortgages with respect to any Real Property owned in fee of such new Subsidiary), as well as appropriate financing statements (and with respect to all property subject to a mortgage, fixture filings), all in form and substance reasonably satisfactory to Agent (including being sufficient to grant Agent a first priority Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Subsidiary); provided that such Guaranty and such joinder to the Security Agreement, and such other security documents shall not be required to be provided to Agent with respect to any direct or indirect Subsidiary of Parent that is a CFC if providing such documents would result in material adverse tax consequences, (b) within 10 days of such formation or acquisition (or such later date as permitted by Agent in its sole discretion) provide to Agent a pledge agreement (or an addendum to the Security Agreement) and appropriate certificates and powers or financing statements, pledging all of the direct or beneficial ownership interest in such new Subsidiary reasonably satisfactory to Agent; provided that only 65% of the total outstanding voting Stock of any first tier Subsidiary of Parent or any Borrower that is a CFC (and none of the Stock of any Subsidiary of such CFC) shall be required to be pledged if pledging a greater amount would result in material adverse tax consequences (which pledge, if reasonably requested by Agent, shall be governed by the laws of the jurisdiction of such Subsidiary), and (c) within 10 days of such formation or acquisition (or such later date as permitted by Agent in its sole discretion) provide to Agent all other documentation, including one or more opinions of counsel reasonably satisfactory to Agent, which in its opinion is appropriate with respect to the execution and delivery of the applicable documentation referred to above (including policies of title insurance or other documentation with respect to all Real Property owned in fee and subject to a mortgage).  Any document, agreement, or instrument executed or issued pursuant to this Section 5.11 shall be a Loan Document.

 

5.12                           Further Assurances.  At any time upon the reasonable request of Agent, execute or deliver to Agent any and all financing statements, fixture filings, security agreements, pledges, assignments, endorsements of certificates of title, mortgages, deeds of trust, opinions of counsel, and all other documents (the “Additional Documents”) that Agent may reasonably request in form and substance reasonably satisfactory to Agent, to create, perfect, and continue perfected or to better perfect Agent’s Liens in all of the assets of Parent and its Subsidiaries (whether now owned or hereafter arising or acquired, tangible or intangible, real or personal), to create and perfect Liens in favor of Agent in any Real Property acquired by Parent or its Subsidiaries after the Closing Date with a fair market value in excess of $250,000, and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents; provided that the foregoing shall not apply to any Subsidiary of Parent that is a CFC if providing such documents would result in material adverse tax consequences.  To the maximum extent permitted by applicable law, if any Loan Party or any of its Subsidiaries refuses or fails to execute or deliver any reasonably requested Additional Documents within a reasonable period of time following the request to do so, Parent and each Borrower hereby authorize Agent to execute any such Additional Documents in the applicable Loan Party’s or its Subsidiary’s name, as applicable, and authorizes Agent to file such executed Additional Documents in any appropriate filing office.  In furtherance and not in limitation of the foregoing, Parent and each Borrower shall (and shall cause each other Loan Party to) take such actions as Agent may reasonably request from time to time to ensure that the Obligations are guarantied by the Guarantors and are secured by substantially all of the assets of Parent and its Subsidiaries and all of the outstanding capital Stock of Borrowers and their Subsidiaries (subject to exceptions and limitations contained in the Loan Documents with respect to CFCs).

 

5.13                           Lender Meetings.  Within 90 days after the close of each Fiscal Year of Parent, at the request of Agent or of the Required Lenders and upon reasonable prior notice, hold a meeting (at a mutually agreeable location and time or, at the option of Agent, by conference call) with all Lenders who choose to attend such

 

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meeting at which meeting shall be reviewed the financial results of the previous Fiscal Year and the financial condition of Parent and its Subsidiaries and the projections presented for the current Fiscal Year of Parent and its Subsidiaries.

 

5.14                           Material Contracts.  Contemporaneously with the delivery of each Compliance Certificate pursuant to Section 5.1, provide Agent with copies of (a) each Material Contract entered into since the delivery of the previous Compliance Certificate and (b) each material amendment or modification of any Material Contract entered into since the delivery of the previous Compliance Certificate.

 

5.15                           Location of Inventory and Equipment.  Keep each Loan Parties’ and its Subsidiaries’ Inventory and Equipment (other than vehicles and Equipment out for repair) only at the locations identified on Schedule 4.28 and their chief executive offices only at the locations identified on Schedule 4.6(b); provided, however, that the Administrative Borrower may amend Schedule 4.28 or Schedule 4.6(b) so long as such amendment occurs by written notice to Agent not less than 10 days prior to the date on which such Inventory or Equipment is moved to such new location or such chief executive office is relocated and so long as such new location is within the continental United States, and so long as, at the time of such written notification, the applicable Borrower provides Agent a Collateral Access Agreement with respect thereto.

 

5.16                           Assignable Material Contracts.  Use commercially reasonable efforts to ensure that any Material Contract entered into after the Closing Date by Parent or one of its Subsidiaries that generates or, by its terms, will generate revenue, permits the assignment of such agreement (and all rights of Parent or such Subsidiary, as applicable, thereunder) to Parent’s or such Subsidiary’s lenders or an agent for any lenders (and any transferees of such lenders or such agent, as applicable).

 

5.17                           Depository Accounts.  Within  10 Business Days of the Closing Date, cause each Loan Party to establish and maintain their primary depository and treasury management relationships with one or more of Wells Fargo and its Affiliates, provided such depository and treasury management products are offered on commercially reasonable terms.

 

5.18                           Blocked Accounts and Securities Accounts.

 

(a)                                  Without duplication of Section 5.17, cause each Loan Party to establish and maintain cash management services of a type and on terms reasonably satisfactory to Agent at one or more of the banks set forth on Schedule 4.15 (each, a “Blocked Account Bank”).  Borrowers shall establish and (subject to the terms of this Section 5.18(a)) maintain a Blocked Account Agreement for the JPM Concentration Account and related lockbox in favor of Agent.  In addition, Borrowers shall establish and maintain a Blocked Account Agreement in favor of Agent for the Master Blocked Account and related lockbox with Wells Fargo and cause each Loan Party to take reasonable steps and issue all necessary instructions to ensure that all Collections are sent directly to the Master Blocked Account, the JPM Concentration Account and/or related lockboxes.  To the extent any Collections are received directly by a Loan Party, Borrowers shall cause the same to be deposited promptly, and in any event no later than the first Business Day after the date of receipt thereof, in the Master Blocked Account or JPM Concentration Account (or a Local Account provided that all proceeds of such Collections are swept to the Master Blocked Account within 2 Business Days of such receipt).  Each such Blocked Account Agreement shall provide, among other things, that (i) the Blocked Account Bank will comply with any instructions originated by Agent directing the disposition of the funds in such applicable account without further consent by the applicable Loan Party; (ii) the Blocked Account Bank waives, subordinates, or agrees not to exercise any rights of setoff or recoupment or any other claim against the applicable account other than for payment of its service fees and other charges directly related to the administration of such applicable account and for returned checks or other items of payment; and (iii) (A) in the case of the Master Blocked Account, the Blocked Account Bank will forward by daily sweep all amounts in the applicable account to the Agent’s Account or such other account as Agent may direct or (B) in the case of any other Blocked Account (including the JPM Concentration Account), upon the instruction of Agent (a “Sweep Instruction”), the Blocked Account Bank will forward by daily sweep all amounts in the applicable

 

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Blocked Account to the Agent’s Account (or such other account as Agent may direct).  Agent agrees to not issue a Sweep Instruction in respect of the JPM Concentration Account so long as no Default or Event of Default shall have occurred and then be continuing.  On each Business Day, prior to 11:00 am (Chicago time) Borrowers shall cause all available funds on deposit in the JPM Concentration Account in excess of the sum of (i) the funds needed to cover presentments drawn from such account that day and (ii) $100,000 to be forwarded by wire transfer to the Agent’s Account (with the appropriate “wpik number” designation) .  Notwithstanding the foregoing, Borrowers shall (and shall cause each other Loan Party to) (i) promptly, but not later than 30 days following the Closing Date, cease using the JPM Concentration Account and/or any other accounts operated by JPMorgan Chase Bank, N.A. to issue checks and/or otherwise fund payments to third parties and instead utilize the cash management system established at Wells Fargo and its Affiliates for such purposes and (ii) promptly, but not later than 10 Business Days following the Closing Date, take all reasonable steps and issue all necessary instructions to cause each Account Debtor to cease remitting payments to the JPM Concentration Account and/or any other accounts or lockboxes operated by JPMorgan Chase Bank, N.A. and instead remit all such payments to the Master Blocked Account and related lockbox.  In addition, not later than 120 days following the Closing Date (but, in any event, not earlier than the date Agent notifies Administrative Borrower that a Fully Acknowledged Assignment has occurred with respect to the DOS Agreement and that payments in respect thereof are being remitted to the Master Blocked Account operated by Wells Fargo), Borrowers shall cause the Master Blocked Account, any related lockboxes and any other accounts operated by JPMorgan Chase Bank, N.A and/or its Affiliates to be closed and all funds therein to be transferred to the Master Blocked Account.

 

(b)                                 Cause each Loan Party to be the sole account holder of each of its respective Deposit Accounts and Securities Accounts and not allow any other Person (other than Agent) to have control over any such Deposit Account, Securities Account or any property deposited therein except for the ALLY Collateral Account.  Borrowers shall promptly notify Agent of any opening or closing of a Deposit Account by any Loan Party.  Except as provided in Section 6.11(b) hereof, Borrowers shall cause each Deposit Account and Securities Account of each Loan Party to be subject to an applicable Blocked Account Agreement or Control Agreement in favor of Agent.  So long as no Default or Event of Default has occurred and is continuing, Borrowers may amend Schedule 4.15 to add, delete or replace a Blocked Account Bank, a Deposit Account or a Securities Account; provided, however, that (i) any such prospective Blocked Account Bank and/or financial institution shall be satisfactory to Agent, and (ii) prior to the time of the opening of such Deposit Account and/or Securities Account, the applicable Loan Party and such prospective Blocked Account Bank and/or financial institution shall have executed and delivered to Agent an applicable Blocked Account Agreement or Control Agreement satisfactory to Agent.  Each Borrower shall (and shall cause each other Loan Party to) close any of its Deposit Accounts and/or Securities Accounts (and establish replacement Deposit Accounts and/or Securities Accounts in accordance with the foregoing sentence) as promptly as practicable and in any event within 30 days of notice from Agent that the operating performance, funds transfer, or availability procedures or performance of the Blocked Account Bank or other financial institution with respect to such Deposit Accounts and/or Securities Accounts or Agent’s liability under any Blocked Account Agreement or Control Agreement with such Blocked Account Bank or other financial institution is no longer acceptable in Agent’s reasonable judgment.

 

5.19                           Pool Units.  Cause each Loan Party to apply 100% of the cash proceeds of each Pool Unit received by any Loan Party first to repay the Agreed Release Amount of such Pool Unit, and, the remainder, if any, to reduce the other ALLY Advances.

 

5.20                           Dissolution.  Cause Supreme Indiana Management, Inc. to be dissolved and wound up within 90 days of the Closing Date and promptly after such dissolution, deliver evidence of the same to Agent.

 

5.21                           Inventory Reporting.  Cause Borrowers to implement a perpetual Inventory management system reasonably satisfactory to Agent as soon as practicable but not later than June 30, 2012.

 

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5.22                           Pennsylvania Status Certificate.  Cause Borrowers to deliver a due qualification certificate for Supreme Indiana within 10 Business Days of the Closing Date.

 

6.                                       NEGATIVE COVENANTS.

 

Each of Parent and each Borrower covenants and agrees that, until termination of all of the Revolver Commitments and payment in full of the Obligations, the Loan Parties will not and will not permit any of their Subsidiaries to do any of the following:

 

6.1                                 Indebtedness.  Create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except for Permitted Indebtedness.

 

6.2                                 Liens.  Create, incur, assume, or suffer to exist, directly or indirectly, any Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens.

 

6.3                                 Restrictions on Fundamental Changes.

 

(a)                                  Enter into any merger, consolidation, reorganization, or recapitalization, or reclassify its Stock, except for (i) any merger between Loan Parties, provided that a Borrower must be the surviving entity of any such merger to which it is a party and no merger may occur between Parent and any other Loan Party, (ii) any merger between a Loan Party and Subsidiaries of such Loan Party that are not Loan Parties so long as such Loan Party is the surviving entity of any such merger, and (iii) any merger between Subsidiaries of Parent that are not Loan Parties,

 

(b)                                 Liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), except for (i) the liquidation or dissolution of non-operating Subsidiaries of Parent with nominal assets and nominal liabilities (including, without limitation, Supreme Indiana Management, Inc. and Supreme STB, LLC), (ii) the liquidation or dissolution of a Guarantor (other than Parent) or such Guarantor’s wholly-owned Subsidiaries so long as all of the assets (including any interest in any Stock) of such liquidating or dissolving Guarantor or Subsidiary are transferred to a Loan Party that is not liquidating or dissolving, or (iii) the liquidation or dissolution of a Subsidiary of Parent that is not a Loan Party (other than any such Subsidiary the Stock of which (or any portion thereof) is subject to a Lien in favor of Agent) so long as all of the assets of such liquidating or dissolving Subsidiary are transferred to a Subsidiary of Parent that is not liquidating or dissolving, provided that, in each case, Administrative Borrower shall provide 10 days’ prior written notice to Agent of any such liquidation of dissolution, or

 

(c)                                  Suspend or go out of a substantial portion of its or their business, except as permitted pursuant to clauses (a) or (b) above or in connection with the transactions permitted pursuant to Section 6.4.

 

6.4                                 Disposal of Assets.  Other than Permitted Dispositions or transactions expressly permitted by Sections 6.3 or 6.11, convey, sell, lease, license, assign, transfer, or otherwise dispose of (or enter into an agreement to convey, sell, lease, license, assign, transfer, or otherwise dispose of) Parent’s or any of its Subsidiaries’ assets.

 

6.5                                 Change Name.  Change Parent’s or any of its Subsidiaries’ name, organizational identification number, state of organization or organizational identity; provided, however, that Parent or any of its Subsidiaries may change its name upon at least 10 days’ prior written notice to Agent of such change.

 

6.6                                 Nature of Business.  Make any change in the nature of its or their business as described in Schedule 6.6 or acquire any properties or assets that are not reasonably related to the conduct of such business activities; provided, however, that the foregoing shall not prevent Parent and its Subsidiaries from engaging in any business that is reasonably related or ancillary to its or their business.

 

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6.7                                 Prepayments and Amendments.

 

(a)                                  Except in connection with Refinancing Indebtedness permitted by Section 6.1,

 

(i)                                     optionally prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of Parent and/or its Subsidiaries, other than (A) the Obligations in accordance with this Agreement, and (B) Permitted Intercompany Advances, or

 

(ii)                                  make any payment on account of Indebtedness that has been contractually subordinated in right of payment to the Obligations if such payment is not permitted at such time under the subordination terms and conditions, or

 

(b)                                 Directly or indirectly, amend, modify, or change any of the terms or provisions of

 

(i)                                     any agreement, instrument, document, indenture, or other writing evidencing or concerning Permitted Indebtedness other than (A) the Obligations in accordance with this Agreement, (B) Permitted Intercompany Advances, and (C) Indebtedness permitted under clauses (c), (f), (h) and (i) of the definition of Permitted Indebtedness,

 

(ii)                                  any Material Contract except to the extent that such amendment, modification, or change could not, individually or in the aggregate, reasonably be expected to be materially adverse to the interests of the Lenders, or

 

(iii)                               the Governing Documents of any Loan Party or any of its Subsidiaries if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of the Lenders.

 

6.8                                 Change of Control.  Cause, permit, or suffer, directly or indirectly, any Change of Control.

 

6.9                                 Restricted Junior Payments.  Make any Restricted Junior Payment; provided, however, that, so long as it is permitted by law, and so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom,

 

(a)                                  Parent may make distributions to former employees, officers, or directors of Parent (or any spouses, ex-spouses, or estates of any of the foregoing) on account of redemptions of Stock of Parent held by such Persons, provided, however, that the aggregate amount of such redemptions made by Parent during the term of this Agreement plus the amount of Indebtedness outstanding under clause (j) of the definition of Permitted Indebtedness, does not exceed $250,000 in the aggregate, and

 

(b)                                 Parent may make distributions to former employees, officers, or directors of Parent (or any spouses, ex-spouses, or estates of any of the foregoing), solely in the form of forgiveness of Indebtedness of such Persons owing to Parent on account of repurchases of the Stock of Parent held by such Persons; provided that such Indebtedness was incurred by such Persons solely to acquire Stock of Parent.

 

6.10                           Accounting Methods.  Modify or change its Fiscal Year or its method of accounting (other than as may be required to conform to GAAP).

 

6.11                           Investments; Controlled Investments.

 

(a)                                  Except for Permitted Investments, directly or indirectly, make or acquire any Investment or incur any liabilities (including contingent obligations) for or in connection with any Investment.

 

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(b)                                 Other than amounts deposited into Deposit Accounts specially and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for Parent’s or its Subsidiaries’ employees (any such Deposit Account, an “Exempt Account”), make, acquire, or permit to exist Permitted Investments consisting of cash, Cash Equivalents, or amounts credited to Deposit Accounts or Securities Accounts unless Parent or its Subsidiary, as applicable, and the applicable bank or securities intermediary have entered into Control Agreements with Agent governing such Permitted Investments in order to perfect (and further establish) Agent’s Liens in such Permitted Investments, provided that no such Control Agreement shall be required with respect to any Deposit Account or Securities Account with a balance at all times of less than $200,000, provided further that all such Deposit Accounts or Securities Accounts shall not have an aggregate balance cash in excess of $500,000 at any time (any such Deposit Account or Securities Account described in the foregoing provisos, a “Local Account”).

 

6.12                           Transactions with Affiliates.  Directly or indirectly enter into or permit to exist any transaction with any Affiliate of Parent or any of its Subsidiaries except for:

 

(a)                                  transactions (other than the payment of management, consulting, monitoring, or advisory fees) between Parent or its Subsidiaries, on the one hand, and any Affiliate of Parent or its Subsidiaries, on the other hand, so long as such transactions (i) are fully disclosed to Agent prior to the consummation thereof, if they involve one or more payments by Parent or its Subsidiaries in excess of $250,000 for any single transaction or series of related transactions, and (ii) are no less favorable, taken as a whole, to Parent or its Subsidiaries, as applicable, than would be obtained in an arm’s length transaction with a non-Affiliate,

 

(b)                                 so long as it has been approved by Parent’s or such Subsidiary’s board of directors (or comparable governing body) in accordance with applicable law, any indemnity provided for the benefit of directors (or comparable managers) of Parent or such Subsidiary,

 

(c)                                  so long as it has been approved by Parent’s or such Subsidiary’s board of directors (or comparable governing body) in accordance with applicable law, the payment of reasonable compensation, severance, or employee benefit arrangements to employees, officers, and outside directors of Parent and its Subsidiaries in the ordinary course of business and consistent with industry practice, and

 

(d)                                 transactions permitted by Section 6.3 or Section 6.9, or any Permitted Intercompany Advance.

 

6.13                           Use of Proceeds.  Use the proceeds of any loan made hereunder for any purpose other than (a) on the Closing Date, (i) to repay, in full, the outstanding principal, accrued interest, and accrued fees and expenses owing under or in connection with the Existing Credit Facility, and (ii) to pay transactional fees, costs, and expenses incurred in connection with this Agreement, the other Loan Documents, and the transactions contemplated hereby and thereby, and (b) thereafter, consistent with the terms and conditions hereof, for their lawful and permitted purposes (including that no part of the proceeds of the loans made to Borrowers will be used to purchase or carry any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors of the United States Federal Reserve).

 

6.14                           Limitation on Issuance of Stock.  Except for the issuance or sale of common stock or Permitted Preferred Stock by Parent, issue or sell or enter into any agreement or arrangement for the issuance and sale of any of its Stock.

 

6.15                           Parent as Holding Company.  Permit Parent to incur any liabilities (other than liabilities arising under the Loan Documents), own or acquire any assets (other than the Stock of Borrowers) or engage itself in any operations or business, except in connection with its ownership of Borrowers and their rights and obligations under the Loan Documents.

 

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6.16                           Consignments.  Except as set forth on Schedule 6.16, consign any of its or their Inventory or sell any of its or their Inventory on bill and hold, sale or return, sale on approval, or other conditional terms of sale except for Demonstration Units permitted pursuant to Section 6.20 below.

 

6.17                           Inventory and Equipment with Bailees.  Store the Inventory or Equipment of Parent or its Subsidiaries at any time now or hereafter with a bailee, warehouseman, or similar party, unless (a) such bailee, warehouseman, or similar party has provided Agent a Collateral Access Agreement in form and substance satisfactory to Agent or (b) the applicable Loan Party has provided Agent with prior written notice of the storage location, and, if Agent elects, Agent has established a related reserve against the Borrowing Base and/or the Maximum Revolver Amount in accordance with Section 2.1(c).

 

6.18                           Winding Down Subsidiaries.  Sell, assign, transfer, lease or otherwise dispose of any asset to Silver Crown, LLC, and/or Supreme Indiana Management, Inc. (the “Winding Down Entities”), make any loan to, Investment in or engage in any other transactions with any Winding Down Entity, except to the extent necessary to transfer assets to other Loan Parties in connection with the dissolution and winding up of any such Winding Down Entity.

 

6.19                           Captive Insurance Company.  Sell, assign, transfer, lease or otherwise dispose of any asset to Supreme Insurance Company, Inc., except in the ordinary course of business with respect to insurance matters between a Loan Party and Supreme Insurance Company, Inc., or make any loan to or Investment in Supreme Insurance Company, Inc., except for existing Investments outstanding on the Closing Date.

 

6.20                           Demonstration Units.  At any time (a) have more than 12 Demonstration Units in which any security interest is held by ALLY to secure the ALLY Loan Agreements (any such Demonstration Units, “ALLY Lien Demonstration Units), (b) have ALLY Lien Demonstration Units with an aggregate book value in excess of $436,000, (c) have ALLY Lien Demonstration Units for which the outstanding principal amount financed under the ALLY Loan Agreements exceeds $340,000 or (d) have Demonstration Units (other than ALLY Lien Demonstration Units) with an aggregate book value in excess of $200,000.

 

6.21                           California Real Estate.  Without the prior written consent of Agent, which consent shall not be unreasonably withheld or delayed so long as, after giving effect to such transaction, Excess Availability is not less than $10,000,000, (a) purchase, or enter into an agreement to purchase, the California Real Estate, (b) exercise any repurchase right, option to purchase, right of first refusal, or similar rights with respect to the California Real Estate, including without limitation any rights granted under the California Lease, or (c) agree to any amendment or other modification of the California Lease or waiver of any of the rights of Supreme Indiana, as tenant under the California Lease.

 

7.                                       FINANCIAL COVENANTS.

 

Each of Parent and each Borrower covenants and agrees that, until termination of all of the Revolver Commitments and payment in full of the Obligations, Parent and its Subsidiaries will, during any Trigger Period:

 

7.1                                 Fixed Charge Coverage Ratio.  Have a Fixed Charge Coverage Ratio, measured on a month-end basis, of at least the required amount set forth in the following table for the applicable period set forth opposite thereto:

 

	
Applicable Ratio
    	
 
    	
Applicable Period
    
	
 
    	
 
    	
 
    
	
1.1:1.0
    	
 
    	
For the 3 Fiscal Month period 
   ending with the August 2011 Fiscal Month
    

 

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1.1:1.0
    	
 
    	
For the 4 Fiscal Month period 
   ending with the September 2011 Fiscal Month
    
	
 
    	
 
    	
 
    
	
1.1:1.0
    	
 
    	
For the 5 Fiscal Month period 
   ending with the October 2011 Fiscal Month
    
	
 
    	
 
    	
 
    
	
1.1:1.0
    	
 
    	
For the 6 Fiscal Month period 
   ending with the November 2011 Fiscal Month
    
	
 
    	
 
    	
 
    
	
1.1:1.0
    	
 
    	
For the 7 Fiscal Month period 
   ending with the December 2011 Fiscal Month
    
	
 
    	
 
    	
 
    
	
1.1:1.0
    	
 
    	
For the 8 Fiscal Month period 
   ending with the January 2012 Fiscal Month
    
	
 
    	
 
    	
 
    
	
1.1:1.0
    	
 
    	
For the 9 Fiscal Month period 
   ending with the February 2012 Fiscal Month
    
	
 
    	
 
    	
 
    
	
1.1:1.0
    	
 
    	
For the 10 Fiscal Month period 
   ending with the March 2012 Fiscal Month
    
	
 
    	
 
    	
 
    
	
1.1:1.0
    	
 
    	
For the 11 Fiscal Month period 
   ending with the April 2012 Fiscal Month
    
	
 
    	
 
    	
 
    
	
1.1:1.0
    	
 
    	
For the 12 Fiscal Month period ending 
   each Fiscal Month thereafter
    

 

7.2                                 Capital Expenditures.  Not make Capital Expenditures (excluding the amount, if any, of Capital Expenditures made with Net Cash Proceeds reinvested pursuant to the proviso in Section 2.4(e)(ii)) in any Fiscal Year in an aggregate amount in excess of the amount set forth in the following table for the applicable period:

 

	
Fiscal Year 2011
    	
 
    	
Fiscal Year 2012
    	
 
    	
Fiscal Year 2013 and
   each Fiscal Year
   thereafter
    	
 
    
	
$
    	
3,000,000
    	
 
    	
$
    	
4,000,000
    	
 
    	
$
    	
5,000,000
    	
 
    
									

 

8.                                       EVENTS OF DEFAULT.

 

Any one or more of the following events shall constitute an event of default (each, an “Event of Default”) under this Agreement:

 

8.1                                 If Borrowers fail to pay when due and payable, or when declared due and payable, (a) all or any portion of the Obligations consisting of interest, fees, or charges due the Lender Group, reimbursement of Lender Group Expenses, or other amounts (other than any portion thereof constituting principal) constituting Obligations (including any portion thereof that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), and such failure continues for a period of 3 Business Days, or (b) all or any portion of the principal of the Obligations;

 

8.2                                 If any Loan Party or any of its Subsidiaries:

 

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(a)                                  fails to perform or observe any covenant or other agreement contained in any of (i) Sections 5.1, 5.2, 5.3 (solely if any Borrower is not in good standing in its jurisdiction of organization), 5.6, 5.7 (solely if any Borrower refuses to allow Agent or its representatives or agents to visit such Borrower’s properties, inspect its assets or books or records, examine and make copies of its books and records, or discuss such Borrower’s affairs, finances, and accounts with officers and employees of such Borrower), 5.10, 5.11, 5.13, 5.14, or 5.15 of this Agreement, (ii) Section 6 of this Agreement, (iii) Section 7 of this Agreement, or (iv) Section 6 of the Security Agreement;

 

(b)                                 fails to perform or observe any covenant or other agreement contained in any of Sections 5.3 (other than if any Borrower is not in good standing in its jurisdiction of organization), 5.4, 5.5, 5.8, and 5.12 of this Agreement and such failure continues for a period of 10 days after the earlier of (i) the date on which such failure shall first become known to any officer of any Borrower or (ii) the date on which written notice thereof is given to Administrative Borrower by Agent; or

 

(c)                                  fails to perform or observe any covenant or other agreement contained in this Agreement, or in any of the other Loan Documents, in each case, other than any such covenant or agreement that is the subject of another provision of this Section 8 (in which event such other provision of this Section 8 shall govern), and such failure continues for a period of 30 days after the earlier of (i) the date on which such failure shall first become known to any officer of any Borrower or (ii) the date on which written notice thereof is given to Administrative Borrower by Agent;

 

8.3                                 If one or more judgments, orders, or awards for the payment of money involving an aggregate amount of $500,000 or more (except to the extent fully covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has not denied coverage) is entered or filed against a Loan Party or any of its Subsidiaries, or with respect to any of their respective assets, and either (a) there is a period of 30 consecutive days at any time after the entry of any such judgment, order, or award during which (i) the same is not discharged, satisfied, vacated, or bonded pending appeal, or (ii) a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;

 

8.4                                 If an Insolvency Proceeding is commenced by a Loan Party or any of its Subsidiaries;

 

8.5                                 If an Insolvency Proceeding is commenced against a Loan Party or any of its Subsidiaries and any of the following events occur: (a) such Loan Party or such Subsidiary consents to the institution of such Insolvency Proceeding against it, (b) the petition commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not dismissed within 60 calendar days of the date of the filing thereof, (d) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, such Loan Party or its Subsidiary, or (e) an order for relief shall have been issued or entered therein;

 

8.6                                 If a Loan Party or any of its Subsidiaries is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of the business affairs of Parent and its Subsidiaries, taken as a whole;

 

8.7                                 If there is (a) a default in one or more agreements to which a Loan Party or any of its Subsidiaries is a party with one or more third Persons relative to a Loan Party’s or any of its Subsidiaries’ Indebtedness involving an aggregate amount of $500,000 or more, and such default (i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such third Person, irrespective of whether exercised, to accelerate the maturity of such Loan Party’s or its Subsidiary’s obligations thereunder, or (b) a default in or an involuntary early termination of one or more Hedge Agreements to which a Loan Party or any of its Subsidiaries is a party involving an aggregate amount of $500,000 or more;

 

8.8                                 If any warranty, representation, certificate, statement, or Record made herein or in any other Loan Document or delivered in writing to Agent or any Lender in connection with this Agreement or any other 

 

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Loan Document proves to be untrue in any material respect (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of the date of issuance or making or deemed making thereof;

 

8.9                                 If the obligation of any Guarantor under a Guaranty is limited or terminated by operation of law or by such Guarantor (other than in accordance with the terms of this Agreement);

 

8.10                           If the Security Agreement or any other Loan Document that purports to create a Lien shall, for any reason, fail or cease to create a valid and perfected and, except to the extent of Permitted Liens which are permitted purchase money Liens or the interests of lessors under Capital Leases, first priority Lien on the Collateral covered thereby, except (a) as a result of a disposition of the applicable Collateral in a transaction permitted under this Agreement, (b) with respect to Collateral the aggregate value of which, for all such Collateral, does not exceed at any time, $250,000, or (c) as the result of an action or failure to act on the part of Agent;

 

8.11                           The validity or enforceability of any Loan Document shall at any time for any reason (other than solely as the result of an action or failure to act on the part of Agent) be declared to be null and void, or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or by any Governmental Authority having jurisdiction over a Loan Party or its Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries shall deny that such Loan Party or its Subsidiaries has any liability or obligation purported to be created under any Loan Document;

 

8.12                           If ALLY (a) suspends, withdraws or terminates making advances on the ALLY Loan Agreements or (b) reduces or restricts the availability of funds to Supreme Indiana under the ALLY Loan Agreements, or alters the conditions to making advances under the ALLY Loan Agreements in a manner that has a material adverse effect on the acquisition of Pool Units by Supreme Indiana; or

 

8.13                           The occurrence of any “default” or “event of default” under or with respect to a Reimbursement and Pledge Agreement, dated as of October 11, 2000, between Supreme\Murphy Truck Bodies, Inc. and JPMorgan Chase Bank, N.A. (as successor to Bank One, Indiana, N.A.), as the same has been or may be amended from time to time.

 

9.                                       RIGHTS AND REMEDIES.

 

9.1                                 Rights and Remedies.  Upon the occurrence and during the continuation of an Event of Default, Agent may, and, at the instruction of the Required Lenders, shall (in each case under clauses (a) or (b) by written notice to Administrative Borrower), in addition to any other rights or remedies provided for hereunder or under any other Loan Document or by applicable law, do any one or more of the following:

 

(a)                                  declare the Obligations (other than the Bank Product Obligations), whether evidenced by this Agreement or by any of the other Loan Documents immediately due and payable, whereupon the same shall become and be immediately due and payable and Borrowers shall be obligated to repay all of such Obligations in full, without presentment, demand, protest, or further notice or other requirements of any kind, all of which are hereby expressly waived by each Borrower;

 

(b)                                 declare the Revolver Commitments terminated, whereupon the Revolver Commitments shall immediately be terminated together with (i) any obligation of any Lender hereunder to make Advances, (ii) the obligation of the Swing Lender to make Swing Loans, and (iii) the obligation of the Issuing Lender to issue Letters of Credit; and

 

(c)                                  exercise all other rights and remedies available to Agent or the Lenders under the Loan Documents or applicable law.

 

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The foregoing to the contrary notwithstanding, upon the occurrence of any Event of Default described in Section 8.4 or Section 8.5, in addition to the remedies set forth above, without any notice to any Borrower or any other Person or any act by the Lender Group, the Revolver Commitments shall automatically terminate and the Obligations (other than the Bank Product Obligations), inclusive of all accrued and unpaid interest thereon and all fees and all other amounts owing under this Agreement or under any of the other Loan Documents, shall automatically and immediately become due and payable and Borrowers shall be obligated to repay all of such Obligations in full, without presentment, demand, protest, or notice of any kind, all of which are expressly waived by Parent and each Borrower.

 

9.2                                 Remedies Cumulative.  The rights and remedies of the Lender Group under this Agreement, the other Loan Documents, and all other agreements shall be cumulative.  The Lender Group shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity.  No exercise by the Lender Group of one right or remedy shall be deemed an election, and no waiver by the Lender Group of any Event of Default shall be deemed a continuing waiver.  No delay by the Lender Group shall constitute a waiver, election, or acquiescence by it.

 

10.                                 WAIVERS; INDEMNIFICATION.

 

10.1                           Demand; Protest; etc.  Each Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held by the Lender Group on which such Borrower may in any way be liable.

 

10.2                           The Lender Group’s Liability for Collateral.  Each Borrower hereby agrees that:  (a) so long as Agent complies with its obligations, if any, under the Code, the Lender Group shall not in any way or manner be liable or responsible for:  (i) the safekeeping of the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of loss, damage, or destruction of the Collateral shall be borne by Borrowers.

 

10.3                           Indemnification.  Borrowers shall pay, indemnify, defend, and hold the Agent-Related Persons, the Lender-Related Persons, and each Participant (each, an “Indemnified Person”) harmless (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable fees and disbursements of attorneys, experts, or consultants and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution and delivery (provided that Borrowers shall not be liable for costs and expenses (including attorneys’ fees) of any Lender (other than WFCF) incurred in advising, structuring, drafting, reviewing, administering or syndicating the Loan Documents), enforcement, performance, or administration (including any restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents, or the transactions contemplated hereby or thereby or the monitoring of Parent’s and its Subsidiaries’ compliance with the terms of the Loan Documents (provided, however, that the indemnification in this clause (a) shall not extend to (i) disputes solely between or among the Lenders, (ii) disputes solely between or among the Lenders and their respective Affiliates; it being understood and agreed that the indemnification in this clause (a) shall extend to Agent (but not the Lenders) relative to disputes between or among Agent on the one hand, and one or more Lenders, or one or more of their Affiliates, on the other hand, or (iii) any Taxes or any costs attributable to Taxes, which shall be governed by Section 16), (b) with respect to any investigation, litigation, or proceeding related to this Agreement, any other Loan Document, or the use of the proceeds of the credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner related thereto, and (c) in connection with or arising out of any presence or release of Hazardous Materials at, on, under, to or from any assets or properties owned, leased or operated by any Borrower or any of its Subsidiaries 

 

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or any Environmental Actions, Environmental Liabilities or Remedial Actions related in any way to any such assets or properties of any Borrower or any of its Subsidiaries (each and all of the foregoing, the “Indemnified Liabilities”).  The foregoing to the contrary notwithstanding, no Borrower shall have any obligation to any Indemnified Person under this Section 10.3 with respect to any Indemnified Liability that (a) a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person or its officers, directors, employees, attorneys, or agents or (b) does not relate to or arise from such Indemnified Person’s acting as or for Agent (in its capacity as Agent), as or for a Lender (in its capacity as a Lender), or as or for a Participant (in its capacity as a Participant), in each case as applicable.  This provision shall survive the termination of this Agreement and the repayment of the Obligations.  If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which any Borrower was required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrowers with respect thereto.  WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.  BORROWERS HAVE NO OBLIGATION TO INDEMNIFY OR TAKE ANY OTHER ACTION UNDER THIS AGREEMENT WITH RESPECT TO RELEASES OF HAZARDOUS MATERIALS OR ANY VIOLATIONS OF ENVIRONMENTAL LAW THAT ARISE AFTER THE DATE OF A FORECLOSURE OR A CONVEYANCE IN LIEU OF FORECLOSURE.

 

11.                                 NOTICES.

 

Unless otherwise provided in this Agreement, all notices or demands relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as a party may designate in accordance herewith), or telefacsimile. In the case of notices or demands to any Loan Party or Agent, as the case may be, they shall be sent to the respective address set forth below:

 

	
If to Loan Parties:
    	
c/o Supreme Indiana Operations, Inc.
    
	
 
    	
2581   East Kercher Road
    
	
 
    	
Goshen,   Indiana 46528
    
	
 
    	
Attn:   Matthew W. Long
    
	
 
    	
Fax   No.: (574) 642-4540
    
	
 
    	
 
    
	
with copies to:
    	
Haynes   and Boone, LLP
    
	
 
    	
2323   Victory Avenue, Suite 700
    
	
 
    	
Dallas,   TX 75219-7673
    
	
 
    	
Attn:   Paul Amiel, Esq.
    
	
 
    	
Fax   No.: (214) 200-0555
    
	
 
    	
 
    
	
If to Agent:
    	
Wells Fargo Capital Finance, LLC
    
	
 
    	
150   South Wacker Drive, Suite 2200
    
	
 
    	
Chicago,   Illinois 60606
    
	
 
    	
Attn:   Loan Portfolio Manager (Supreme)
    
	
 
    	
Fax   No.: (312) 332-0424
    
	
 
    	
 
    
	
with copies to:
    	
McGuireWoods   LLP
    
	
 
    	
77   West Wacker Drive, Suite 4100
    
	
 
    	
Chicago,   Illinois 60601
    

 

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Attn:   Philip J. Perzek, Esq.
    
	
 
    	
Fax   No.: (312) 698-4555
    

 

Any party hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other party.  All notices or demands sent in accordance with this Section 11, shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail; provided, that (a) notices sent by overnight courier service shall be deemed to have been given when received, (b) notices by facsimile shall be deemed to have been given when sent (except 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) and (c) notices by electronic mail shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgment).

 

12.                                 CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 

(a)                                  THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

(b)                                 THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  EACH OF PARENT AND EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM  NON  CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).

 

(c)                                  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF PARENT AND EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH OF PARENT AND EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

(d)                                 EACH OF PARENT AND EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK AND THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY 

 

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LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT.  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 AGENT 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.

 

13.                                 ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

 

13.1                           Assignments and Participations.

 

(a)                                  With the prior written consent of Agent, which consent of Agent shall not be unreasonably withheld, delayed or conditioned, and shall not be required in connection with an assignment to a Person that is a Lender or an Affiliate (other than individuals) of a Lender, any Lender may assign and delegate to one or more assignees so long as such prospective assignee is an Eligible Transferee (each, an “Assignee”; provided, however, that no Loan Party or Affiliate of a Loan Party shall be permitted to become an Assignee) all or any portion of the Obligations, the Revolver Commitments and the other rights and obligations of such Lender hereunder and under the other Loan Documents, in a minimum amount (unless waived by Agent) of $5,000,000 (except such minimum amount shall not apply to (i) an assignment or delegation by any Lender to any other Lender or an Affiliate of any Lender or (ii) a group of new Lenders, each of which is an Affiliate of each other or a Related Fund of such new Lender to the extent that the aggregate amount to be assigned to all such new Lenders is at least $5,000,000); provided, however, that Borrowers and Agent may continue to deal solely and directly with such Lender in connection with the interest so assigned to an Assignee until (i) written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, have been given to Administrative Borrower and Agent by such Lender and the Assignee, (ii) such Lender and its Assignee have delivered to Administrative Borrower and Agent an Assignment and Acceptance and Agent has notified the assigning Lender of its receipt thereof in accordance with Section 13.1(b), and (iii) unless waived by Agent, the assigning Lender or Assignee has paid to Agent for Agent’s separate account a processing fee in the amount of $3,500.

 

(b)                                 From and after the date that Agent notifies the assigning Lender (with a copy to Administrative Borrower) that it has received an executed Assignment and Acceptance and, if applicable, payment of the required processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall be a “Lender” and shall have the rights and obligations of a Lender under the Loan Documents and (ii) the assigning Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (except with respect to Section 10.3) and be released from any future obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and thereto); provided, however, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of this Agreement, including such assigning Lender’s obligations under Section 15 and Section 17.9(a).

 

(c)                                  By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm to and agree with each other and the other parties hereto as follows:  (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished 

 

45

 

pursuant hereto, (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower or the performance or observance by any Borrower of any of its obligations under this Agreement or any other Loan Document furnished pursuant hereto, (iii) such Assignee confirms that it has received a copy of this Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance, (iv) such Assignee will, independently and without reliance upon Agent, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement, (v) such Assignee appoints and authorizes Agent to take such actions and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent, by the terms hereof and thereof, together with such powers as are reasonably incidental thereto, and (vi) such Assignee agrees that it will perform all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

 

(d)                                 Immediately upon Agent’s receipt of the required processing fee, if applicable, and delivery of notice to the assigning Lender pursuant to Section 13.1(b), this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Revolver Commitments arising therefrom.  The Revolver Commitment allocated to each Assignee shall reduce such Revolver Commitments of the assigning Lender pro tanto.

 

(e)                                  Any Lender may at any time sell to one or more commercial banks, financial institutions, or other Persons (a “Participant”) participating interests in all or any portion of its Obligations, its Revolver Commitment, and the other rights and interests of that Lender (the “Originating Lender”) hereunder and under the other Loan Documents; provided, however, that (i) the Originating Lender shall remain a “Lender” for all purposes of this Agreement and the other Loan Documents and the Participant receiving the participating interest in the Obligations, the Revolver Commitments, and the other rights and interests of the Originating Lender hereunder shall not constitute a “Lender” hereunder or under the other Loan Documents and the Originating Lender’s obligations under this Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, (iii) Borrowers, Agent, and the Lenders shall continue to deal solely and directly with the Originating Lender in connection with the Originating Lender’s rights and obligations under this Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant any participating interest under which the Participant has the right to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or consent or waiver with respect to this Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations hereunder in which such Participant is participating, (B) reduce the interest rate applicable to the Obligations hereunder in which such Participant is participating, (C) release all or substantially all of the Collateral or guaranties (except to the extent expressly provided herein or in any of the Loan Documents) supporting the Obligations hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the amount of, the interest or fees payable to such Participant through such Lender (other than a waiver of default interest), or (E) decrease the amount or postpone the due dates of scheduled principal repayments or prepayments or premiums payable to such Participant through such Lender, and (v) all amounts payable by Borrowers hereunder shall be determined as if such Lender had not sold such participation, except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement.  The rights of any Participant only shall be derivative through the Originating Lender with whom such Participant participates and no Participant shall have any rights under this Agreement or the other Loan Documents or any direct rights as to the other Lenders, Agent, Borrowers, the Collections of Loan Parties and their Subsidiaries, the Collateral, or otherwise in respect of the Obligations.  No Participant shall have the right to participate directly in the making of decisions by the Lenders among themselves.

 

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(f)                                    In connection with any such assignment or participation or proposed assignment or participation or any grant of a security interest in, or pledge of, its rights under and interest in this Agreement, a Lender may, subject to the provisions of Section 17.9, disclose all documents and information which it now or hereafter may have relating to Parent and its Subsidiaries and their respective businesses.

 

(g)                                 Any other provision in this Agreement notwithstanding, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.

 

13.2                           Successors.  This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; provided, however, that no Borrower may assign this Agreement or any rights or duties hereunder without the Lenders’ prior written consent and any prohibited assignment shall be absolutely void ab initio.  No consent to assignment by the Lenders shall release any Borrower from its Obligations.  A Lender may assign this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder pursuant to Section 13.1 and, except as expressly required pursuant to Section 13.1, no consent or approval by any Borrower is required in connection with any such assignment.

 

14.                                 AMENDMENTS; WAIVERS.

 

14.1                           Amendments and Waivers.

 

(a)                                  No amendment, waiver or other modification of any provision of this Agreement or any other Loan Document (other than Bank Product Agreements or the Fee Letter), and no consent with respect to any departure by Parent or any other Loan Party therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by Agent at the written request of the Required Lenders) and the Loan Parties that are party thereto and then any such waiver or consent shall be effective, but only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment, or consent shall, unless in writing and signed by all of the Lenders directly affected thereby and all of the Loan Parties that are party thereto, do any of the following:

 

(i)                                     increase the amount of or extend the expiration date of any Revolver Commitment of any Lender or amend, modify, or eliminate the last sentence of Section 2.4(c),

 

(ii)                                  postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees, or other amounts due hereunder or under any other Loan Document,

 

(iii)                               reduce the principal of, or the rate of interest on, any loan or other extension of credit hereunder, or reduce any fees or other amounts payable hereunder or under any other Loan Document (except (A) in connection with the waiver of applicability of Section 2.6(c) (which waiver shall be effective with the written consent of the Required Lenders) and (B) that any amendment or modification of defined terms used in the financial covenants in this Agreement shall not constitute a reduction in the rate of interest or a reduction of fees for purposes of this clause (iii)),

 

(iv)                              amend, modify, or eliminate this Section or any provision of this Agreement providing for consent or other action by all Lenders,

 

(v)                                 amend, modify, or eliminate Section 15.11,

 

(vi)                              other than as permitted by Section 15.11, release Agent’s Lien in and to any of the Collateral,

 

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(vii)                           amend, modify, or eliminate the definition of Required Lenders or Pro Rata Share,

 

(viii)                        contractually subordinate any of Agent’s Liens,

 

(ix)                                other than in connection with a merger, liquidation, dissolution or sale of such Person expressly permitted by the terms hereof or the other Loan Documents, release any Borrower or any Guarantor from any obligation for the payment of money or consent to the assignment or transfer by any Borrower or any Guarantor of any of its rights or duties under this Agreement or the other Loan Documents,

 

(x)                                   amend, modify, or eliminate any of the provisions of Section 2.4(b)(i) or (ii) or Section 2.4(e) or (f),

 

(xi)                                amend, modify, or eliminate any of the provisions of Section 13.1(a) to permit a Loan Party or an Affiliate of a Loan Party to be permitted to become an Assignee, or

 

(xii)                             amend, modify, or eliminate the definition of Borrowing Base or any of the defined terms (including the definitions of Eligible Accounts and Eligible Inventory) that are used in such definition to the extent that any such change results in more credit being made available to Borrowers based upon the Borrowing Base, but not otherwise, or the definition of Maximum Revolver Amount or change Section 2.1(c).

 

(b)                                 No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive (i) the definition of, or any of the terms or provisions of, the Fee Letter, without the written consent of Agent and Borrowers (and shall not require the written consent of any of the Lenders), and (ii) any provision of Section 15 pertaining to Agent, or any other rights or duties of Agent under this Agreement or the other Loan Documents, without the written consent of Agent, Borrowers, and the Required Lenders.

 

(c)                                  No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive any provision of this Agreement or the other Loan Documents pertaining to Issuing Lender, or any other rights or duties of Issuing Lender under this Agreement or the other Loan Documents, without the written consent of Issuing Lender, Agent, Borrowers, and the Required Lenders.

 

(d)                                 No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive any provision of this Agreement or the other Loan Documents pertaining to Swing Lender, or any other rights or duties of Swing Lender under this Agreement or the other Loan Documents, without the written consent of Swing Lender, Agent, Borrowers, and the Required Lenders.

 

(e)                                  Anything in this Section 14.1 to the contrary notwithstanding, (i) any amendment, modification, elimination, waiver, consent, termination, or release of, or with respect to, any provision of this Agreement or any other Loan Document that relates only to the relationship of the Lender Group among themselves, and that does not affect the rights or obligations of Parent or any other Loan Party, shall not require consent by or the agreement of any Loan Party, and (ii) any amendment, waiver, modification, elimination, or consent of or with respect to any provision of this Agreement or any other Loan Document may be entered into without the consent of, or over the objection of, any Defaulting Lender.

 

14.2                           Replacement of Certain Lenders.

 

(a)                                  If (i) any action to be taken by the Lender Group or Agent hereunder requires the consent, authorization, or agreement of all Lenders or all Lenders affected thereby and if such action has received the consent, authorization, or agreement of the Required Lenders but not of all Lenders or all Lenders affected thereby, or (ii) any Lender makes a claim for compensation under Section 16, then Borrowers or Agent, upon at least 5 Business Days’ prior irrevocable notice, may permanently replace any Lender that failed 

 

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to give its consent, authorization, or agreement (a “Holdout Lender”) or any Lender that made a claim for compensation (a “Tax Lender”) with one or more Replacement Lenders, and the Holdout Lender or Tax Lender, as applicable, shall have no right to refuse to be replaced hereunder.  Such notice to replace the Holdout Lender or Tax Lender, as applicable, shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given.

 

(b)                                 Prior to the effective date of such replacement, the Holdout Lender or Tax Lender, as applicable, and each Replacement Lender shall execute and deliver an Assignment and Acceptance, subject only to the Holdout Lender or Tax Lender, as applicable, being repaid in full its share of the outstanding Obligations (without any premium or penalty of any kind whatsoever, but including  (i) all interest, fees and other amounts that may be due in payable in respect thereof, and (ii) an assumption of its Pro Rata Share of participations in the Letters of Credit).  If the Holdout Lender or Tax Lender, as applicable, shall refuse or fail to execute and deliver any such Assignment and Acceptance prior to the effective date of such replacement, Agent may, but shall not be required to, execute and deliver such Assignment and Acceptance in the name or and on behalf of the Holdout Lender or Tax Lender, as applicable, and irrespective of whether Agent executes and delivers such Assignment and Acceptance, the Holdout Lender or Tax Lender, as applicable, shall be deemed to have executed and delivered such Assignment and Acceptance.  The replacement of any Holdout Lender or Tax Lender, as applicable, shall be made in accordance with the terms of Section 13.1.  Until such time as one or more Replacement Lenders shall have acquired all of the Obligations, the Revolver Commitments, and the other rights and obligations of the Holdout Lender or Tax Lender, as applicable, hereunder and under the other Loan Documents, the Holdout Lender or Tax Lender, as applicable, shall remain obligated to make the Holdout Lender’s or Tax Lender’s, as applicable, Pro Rata Share of Advances and to purchase a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of such Letters of Credit.

 

14.3                           No Waivers; Cumulative Remedies.  No failure by Agent or any Lender to exercise any right, remedy, or option under this Agreement or any other Loan Document, or delay by Agent or any Lender in exercising the same, will operate as a waiver thereof.  No waiver by Agent or any Lender will be effective unless it is in writing, and then only to the extent specifically stated.  No waiver by Agent or any Lender on any occasion shall affect or diminish Agent’s and each Lender’s rights thereafter to require strict performance by Parent and each Borrower of any provision of this Agreement.  Agent’s and each Lender’s rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that Agent or any Lender may have.

 

15.                                 AGENT; THE LENDER GROUP.

 

15.1                           Appointment and Authorization of Agent.  Each Lender hereby designates and appoints WFCF as its agent under this Agreement and the other Loan Documents and each Lender hereby irrevocably authorizes (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to designate, appoint, and authorize) Agent to execute and deliver each of the other Loan Documents on its behalf and to take such other action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to Agent by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto.  Agent agrees to act as agent for and on behalf of the Lenders (and the Bank Product Providers) on the conditions contained in this Section 15.  Any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent shall not have any duties or responsibilities, except those expressly set forth herein or in the other Loan Documents, nor shall Agent have or be deemed to have any fiduciary relationship with any Lender (or Bank Product Provider), and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Agent.  Without limiting the generality of the foregoing, the use of the term “agent” in this Agreement or the other Loan Documents with reference to Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only a 

 

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representative relationship between independent contracting parties.  Each Lender hereby further authorizes (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent to act as the secured party under each of the Loan Documents that create a Lien on any item of Collateral.  Except as expressly otherwise provided in this Agreement, Agent shall have and may use its sole discretion with respect to exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions that Agent expressly is entitled to take or assert under or pursuant to this Agreement and the other Loan Documents.  Without limiting the generality of the foregoing, or of any other provision of the Loan Documents that provides rights or powers to Agent, Lenders agree that Agent shall have the right to exercise the following powers as long as this Agreement remains in effect:  (a) maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Collateral, the Collections of Loan Parties and their Subsidiaries, and related matters, (b) execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to the Loan Documents, (c) make Advances, for itself or on behalf of Lenders, as provided in the Loan Documents, (d) exclusively receive, apply, and distribute the Collections of Loan Parties and their Subsidiaries as provided in the Loan Documents, (e) open and maintain such bank accounts and cash management arrangements as Agent deems necessary and appropriate in accordance with the Loan Documents for the foregoing purposes with respect to the Collateral and the Collections of Loan Parties and their Subsidiaries, (f) perform, exercise, and enforce any and all other rights and remedies of the Lender Group with respect to Parent or its Subsidiaries, the Obligations, the Collateral, the Collections of Loan Parties and their Subsidiaries, or otherwise related to any of same as provided in the Loan Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan Documents.

 

15.2                           Delegation of Duties.  Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  Agent shall not be responsible for the negligence or misconduct of any agent or attorney in fact that it selects as long as such selection was made without gross negligence or willful misconduct.

 

15.3                           Liability of Agent.  None of the Agent-Related Persons shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct) or (b) be responsible in any manner to any of the Lenders (or Bank Product Providers) for any recital, statement, representation or warranty made by Parent or any of its Subsidiaries or Affiliates, or any officer or director thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of Parent or its Subsidiaries or any other party to any Loan Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any obligation to any Lenders (or Bank Product Providers) to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the books and records or properties of Parent or its Subsidiaries.

 

15.4                           Reliance by Agent.  Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, telefacsimile or other electronic method of transmission, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent, or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Borrowers or counsel to any Lender), independent accountants and other experts selected by Agent.  Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless Agent shall first receive such advice or concurrence of the Lenders as it deems appropriate and until such instructions are received, Agent shall act, or refrain from acting, as it deems advisable.  If Agent so requests, it shall first be 

 

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indemnified to its reasonable satisfaction by the Lenders (and, if it so elects, the Bank Product Providers) against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.  Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders (and Bank Product Providers).

 

15.5                           Notice of Default or Event of Default.  Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest, fees, and expenses required to be paid to Agent for the account of the Lenders and, except with respect to Events of Default of which Agent has actual knowledge, unless Agent shall have received written notice from a Lender or any Borrower referring to this Agreement, describing such Default or Event of Default, and stating that such notice is a “notice of default.”  Agent promptly will notify the Lenders of its receipt of any such notice or of any Event of Default of which Agent has actual knowledge.  If any Lender obtains actual knowledge of any Event of Default, such Lender promptly shall notify the other Lenders and Agent of such Event of Default.  Each Lender shall be solely responsible for giving any notices to its Participants, if any.  Subject to Section 15.4, Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders in accordance with Section 9; provided, however, that unless and until Agent has received any such request, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable.

 

15.6                           Credit Decision.  Each Lender (and Bank Product Provider) acknowledges that none of the Agent-Related Persons has made any representation or warranty to it, and that no act by Agent hereinafter taken, including any review of the affairs of Parent and its Subsidiaries or Affiliates, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender (or Bank Product Provider).  Each Lender represents (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to represent) to Agent that it has, independently and without reliance upon any Agent-Related Person and based on such due diligence, documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of any Borrower or any other Person party to a Loan Document, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrowers.  Each Lender also represents (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to represent) that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of any Borrower or any other Person party to a Loan Document.  Except for notices, reports, and other documents expressly herein required to be furnished to the Lenders by Agent, Agent shall not have any duty or responsibility to provide any Lender (or Bank Product Provider) with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any Borrower or any other Person party to a Loan Document that may come into the possession of any of the Agent-Related Persons.  Each Lender acknowledges (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that Agent does not have any duty or responsibility, either initially or on a continuing basis (except to the extent, if any, that is expressly specified herein) to provide such Lender (or Bank Product Provider) with any credit or other information with respect to any Borrower, its Affiliates or any of their respective business, legal, financial or other affairs, and irrespective of whether such information came into Agent’s or its Affiliates’ or representatives’ possession before or after the date on which such Lender became a party to this Agreement (or such Bank Product Provider entered into a Bank Product Agreement).

 

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15.7                           Costs and Expenses; Indemnification.  Agent may incur and pay Lender Group Expenses to the extent Agent reasonably deems necessary or appropriate for the performance and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including court costs, attorneys’ fees and expenses, fees and expenses of financial accountants, advisors, consultants, and appraisers, costs of collection by outside collection agencies, auctioneer fees and expenses, and costs of security guards or insurance premiums paid to maintain the Collateral, whether or not Borrowers are obligated to reimburse Agent or Lenders for such expenses pursuant to this Agreement or otherwise.  Agent is authorized and directed to deduct and retain sufficient amounts from the Collections of Loan Parties and their Subsidiaries received by Agent to reimburse Agent for such out-of-pocket costs and expenses prior to the distribution of any amounts to Lenders (or Bank Product Providers).  In the event Agent is not reimbursed for such costs and expenses by or on behalf of Borrowers, each Lender hereby agrees that it is and shall be obligated to pay to Agent such Lender’s ratable share thereof.  Whether or not the transactions contemplated hereby are consummated, each of the Lenders, on a ratable basis, shall indemnify and defend the Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrowers and without limiting the obligation of Borrowers to do so) from and against any and all Indemnified Liabilities; provided, however, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting solely from such Person’s gross negligence or willful misconduct nor shall any Lender be liable for the obligations of any Defaulting Lender in failing to make an Advance or other extension of credit hereunder.  Without limitation of the foregoing, each Lender shall reimburse Agent upon demand for such Lender’s ratable share of any costs or out-of-pocket expenses (including attorneys, accountants, advisors, and consultants fees and expenses) incurred by Agent in connection with the preparation, execution, delivery, administration, modification, amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement or any other Loan Document to the extent that Agent is not reimbursed for such expenses by or on behalf of Borrowers.  The undertaking in this Section shall survive the payment of all Obligations hereunder and the resignation or replacement of Agent.

 

15.8                           Agent in Individual Capacity.  WFCF and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, provide Bank Products to, acquire equity interests in, and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with Parent and its Subsidiaries and Affiliates and any other Person party to any Loan Document as though WFCF were not Agent hereunder, and, in each case, without notice to or consent of the other members of the Lender Group.  The other members of the Lender Group acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, pursuant to such activities, WFCF or its Affiliates may receive information regarding Parent or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of Parent or such other Person and that prohibit the disclosure of such information to the Lenders (or Bank Product Providers), and the Lenders acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver Agent will use its reasonable best efforts to obtain), Agent shall not be under any obligation to provide such information to them.  The terms “Lender” and “Lenders” include WFCF in its individual capacity.

 

15.9                           Successor Agent.  Agent may resign as Agent upon 30 days’ prior written notice to the Lenders (unless such notice is waived by the Required Lenders) and Administrative Borrower (unless such notice is waived by Borrowers) and without any notice to the Bank Product Providers.  If Agent resigns under this Agreement, the Required Lenders shall be entitled, with (so long as no Event of Default has occurred and is continuing) the consent of Administrative Borrower (such consent not to be unreasonably withheld, delayed, or conditioned), to appoint a successor Agent for the Lenders (and the Bank Product Providers).  If, at the time that Agent’s resignation is effective, it is acting as the Issuing Lender or the Swing Lender, such resignation shall also operate to effectuate its resignation as the Issuing Lender or the Swing Lender, as applicable, and it shall automatically be relieved of any further obligation to issue Letters of Credit, to cause the Underlying Issuer to issue Letters of Credit, or to make Swing Loans.  If no successor Agent is appointed prior to the effective date of the resignation of Agent, Agent may appoint, after consulting with the Lenders and 

 

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Administrative Borrower, a successor Agent.  If Agent has materially breached or failed to perform any material provision of this Agreement or of applicable law, the Required Lenders may agree in writing to remove and replace Agent with a successor Agent from among the Lenders with (so long as no Event of Default has occurred and is continuing) the consent of Borrowers (such consent not to be unreasonably withheld, delayed, or conditioned).  In any such event, upon the acceptance of its appointment as successor Agent hereunder, such successor Agent shall succeed to all the rights, powers, and duties of the retiring Agent and the term “Agent” shall mean such successor Agent and the retiring Agent’s appointment, powers, and duties as Agent shall be terminated.  After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 15 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.  If no successor Agent has accepted appointment as Agent by the date which is 30 days following a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the Lenders appoint a successor Agent as provided for above.

 

15.10                     Lender in Individual Capacity.  Any Lender and its respective Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, provide Bank Products to, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with Parent and its Subsidiaries and Affiliates and any other Person party to any Loan Documents as though such Lender were not a Lender hereunder without notice to or consent of the other members of the Lender Group (or the Bank Product Providers).  The other members of the Lender Group acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, pursuant to such activities, such Lender and its respective Affiliates may receive information regarding Parent or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of Parent or such other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver such Lender will use its reasonable best efforts to obtain), such Lender shall not be under any obligation to provide such information to them.

 

15.11                     Collateral Matters.

 

(a)                                  The Lenders hereby irrevocably authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent to release any Lien on any Collateral (i) upon the termination of the Revolver Commitments and payment and satisfaction in full by Borrowers of all of the Obligations, (ii) constituting property being sold or disposed of if a release is required or desirable in connection therewith and if Borrowers certify to Agent that the sale or disposition is permitted under Section 6.4 (and Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property in which neither Parent nor any Subsidiary of Parent owned any interest at the time Agent’s Lien was granted nor at any time thereafter, or (iv) constituting property leased to Parent or its Subsidiaries under a lease that has expired or is terminated in a transaction permitted under this Agreement.  The Loan Parties and the Lenders hereby irrevocably authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent, based upon the instruction of the Required Lenders, to (i) consent to, credit bid or purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Section 363 of the Bankruptcy Code, (ii) credit bid or purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any sale or other disposition thereof conducted under the provisions of the Code, including pursuant to Sections 9-610 or 9-620 of the Code, or (iii) credit bid or purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any other sale or foreclosure conducted by Agent (whether by judicial action or otherwise) in accordance with applicable law.  In connection with any such credit bid or purchase, the Obligations owed to the Lenders and the Bank Product Providers shall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated claims being estimated for such purpose if the fixing or liquidation thereof would not unduly delay the ability of Agent to credit bid or 

 

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purchase at such sale or other disposition of the Collateral and, if such claims cannot be estimated without unduly delaying the ability of Agent to credit bid, then such claims shall be disregarded, not credit bid, and not entitled to any interest in the asset or assets purchased by means of such credit bid) and the Lenders and the Bank Product Providers whose Obligations are credit bid shall be entitled to receive interests (ratably based upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) in the asset or assets so purchased (or in the Stock of the acquisition vehicle or vehicles that are used to consummate such purchase).  Except as provided above, Agent will not execute and deliver a release of any Lien on any Collateral without the prior written authorization of (i) if the release is of all or substantially all of the Collateral, all of the Lenders (without requiring the authorization of the Bank Product Providers), or (ii) otherwise, the Required Lenders (without requiring the authorization of the Bank Product Providers).  Upon request by Agent or any Borrower at any time, the Lenders will (and if so requested, the Bank Product Providers will) confirm in writing Agent’s authority to release any such Liens on particular types or items of Collateral pursuant to this Section 15.11; provided, however, that (i) Agent shall not be required to execute any document necessary to evidence such release on terms that, in Agent’s opinion, would expose Agent to liability or create any obligation or entail any consequence other than the release of such Lien without recourse, representation, or warranty, and (ii) such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of any Borrower in respect of) all interests retained by any Borrower, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral.  The Lenders further hereby irrevocably authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent, at its option and in its sole discretion, to subordinate any Lien granted to or held by Agent under any Loan Document to the holder of any Permitted Lien on such property if such Permitted Lien secures Permitted Purchase Money Indebtedness.

 

(b)                                 Agent shall have no obligation whatsoever to any of the Lenders (or the Bank Product Providers) to assure that the Collateral exists or is owned by Parent or its Subsidiaries or is cared for, protected, or insured or has been encumbered, or that Agent’s Liens have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, or that any particular items of Collateral meet the eligibility criteria applicable in respect thereof, or whether to impose, maintain, reduce, or eliminate any particular reserve hereunder or whether the amount of any such reserve is appropriate or not, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, subject to the terms and conditions contained herein, Agent may act in any manner it may deem appropriate, in its sole discretion given Agent’s own interest in the Collateral in its capacity as one of the Lenders and that Agent shall have no other duty or liability whatsoever to any Lender (or Bank Product Provider) as to any of the foregoing, except as otherwise provided herein.

 

15.12                     Restrictions on Actions by Lenders; Sharing of Payments.

 

(a)                                  Each of the Lenders agrees that it shall not, without the express written consent of Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the written request of Agent, set off against the Obligations, any amounts owing by such Lender to Parent or its Subsidiaries or any deposit accounts of Parent or its Subsidiaries now or hereafter maintained with such Lender.  Each of the Lenders further agrees that it shall not, unless specifically requested to do so in writing by Agent, take or cause to be taken any action, including the commencement of any legal or equitable proceedings to enforce any Loan Document against any Borrower or any Guarantor or to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral.

 

(b)                                 If, at any time or times any Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments with respect to the Obligations, except for any such proceeds or payments received by such Lender from Agent pursuant to the terms of this Agreement, or (ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such distributions by Agent, such 

 

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Lender promptly shall (A) turn the same over to Agent, in kind, and with such endorsements as may be required to negotiate the same to Agent, or in immediately available funds, as applicable, for the account of all of the Lenders and for application to the Obligations in accordance with the applicable provisions of this Agreement, or (B) purchase, without recourse or warranty, an undivided interest and participation in the Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as among the Lenders in accordance with their Pro Rata Shares; provided, however, that to the extent that such excess payment received by the purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment.

 

15.13                     Agency for Perfection.  Agent hereby appoints each other Lender (and each Bank Product Provider) as its agent (and each Lender hereby accepts (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to accept) such appointment) for the purpose of perfecting Agent’s Liens in assets which, in accordance with Article 8 or Article 9, as applicable, of the Code can be perfected by possession or control.  Should any Lender obtain possession or control of any such Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent’s request therefor, shall deliver possession or control of such Collateral to Agent or in accordance with Agent’s instructions.

 

15.14                     Payments by Agent to the Lenders.  All payments to be made by Agent to the Lenders (or Bank Product Providers) shall be made by bank wire transfer of immediately available funds pursuant to such wire transfer instructions as each party may designate for itself by written notice to Agent.  Concurrently with each such payment, Agent shall identify whether such payment (or any portion thereof) represents principal, premium, fees, or interest of the Obligations.

 

15.15                     Concerning the Collateral and Related Loan Documents.  Each member of the Lender Group authorizes and directs Agent to enter into this Agreement and the other Loan Documents.  Each member of the Lender Group agrees (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to agree) that any action taken by Agent in accordance with the terms of this Agreement or the other Loan Documents relating to the Collateral and the exercise by Agent of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Lenders (and such Bank Product Provider).

 

15.16                     Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information.  By becoming a party to this Agreement, each Lender:

 

(a)                                  is deemed to have requested that Agent furnish such Lender, promptly after it becomes available, a copy of each field audit or examination report respecting Parent or its Subsidiaries (each, a “Report”) prepared by or at the request of Agent, and Agent shall so furnish each Lender with such Reports,

 

(b)                                 expressly agrees and acknowledges that Agent (i) does not make any representation or warranty as to the accuracy of any Report and (ii) shall not be liable for any information contained in any Report,

 

(c)                                  expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or other party performing any audit or examination will inspect only specific information regarding Parent and its Subsidiaries and will rely significantly upon Parent’s and its Subsidiaries’ books and records, as well as on representations of each Borrower’s personnel,

 

(d)                                 agrees to keep all Reports and other material, non-public information regarding Parent and its Subsidiaries and their operations, assets, and existing and contemplated business plans in a confidential manner in accordance with Section 17.9, and

 

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(e)                                  without limiting the generality of any other indemnification provision contained in this Agreement, agrees:  (i) to hold Agent and any other Lender preparing a Report harmless from any action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to Borrowers, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or loans of Borrowers, and (ii) to pay and protect, and indemnify, defend and hold Agent, and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including attorneys’ fees and costs) incurred by Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

 

In addition to the foregoing:  (x) any Lender may from time to time request of Agent in writing that Agent provide to such Lender a copy of any report or document provided by Parent or its Subsidiaries to Agent that has not been contemporaneously provided by Parent or such Subsidiary to such Lender, and, upon receipt of such request, Agent promptly shall provide a copy of same to such Lender, (y) to the extent that Agent is entitled, under any provision of the Loan Documents, to request additional reports or information from Parent or any Subsidiary, any Lender may, from time to time, reasonably request Agent to exercise such right as specified in such Lender’s notice to Agent, whereupon Agent promptly shall request of Parent or such Subsidiary the additional reports or information reasonably specified by such Lender, and, upon receipt thereof from Parent or such Subsidiary, Agent promptly shall provide a copy of same to such Lender, and (z) any time that Agent renders to any Borrower a statement regarding the Loan Account, Agent shall send a copy of such statement to each Lender.

 

15.17                     Several Obligations; No Liability.  Notwithstanding that certain of the Loan Documents now or hereafter may have been or will be executed only by or in favor of Agent in its capacity as such, and not by or in favor of the Lenders, any and all obligations on the part of Agent (if any) to make any credit available hereunder shall constitute the several (and not joint) obligations of the respective Lenders on a ratable basis, according to their respective Revolver Commitments, to make an amount of such credit not to exceed, in principal amount, at any one time outstanding, the amount of their respective Revolver Commitments.  Nothing contained herein shall confer upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the business, assets, profits, losses, or liabilities of any other Lender.  Each Lender shall be solely responsible for notifying its Participants of any matters relating to the Loan Documents to the extent any such notice may be required, and no Lender shall have any obligation, duty, or liability to any Participant of any other Lender.  Except as provided in Section 15.7, no member of the Lender Group shall have any liability for the acts of any other member of the Lender Group.  No Lender shall be responsible to any Borrower or any other Person for any failure by any other Lender (or Bank Product Provider) to fulfill its obligations to make credit available hereunder, nor to advance for such Lender (or Bank Product Provider) or on its behalf, nor to take any other action on behalf of such Lender (or Bank Product Provider) hereunder or in connection with the financing contemplated herein.

 

16.                                 WITHHOLDING TAXES.

 

(a)                                  All payments made by any Borrower hereunder or under any note or other Loan Document will be made without setoff, counterclaim, or other defense.  In addition, all such payments will be made free and clear of, and without deduction or withholding for, any present or future Taxes, and in the event any deduction or withholding of Taxes is required, Borrowers shall comply with the next sentence of this Section 16(a).  If any Taxes are so levied or imposed, Borrowers agree to pay the full amount of such Taxes and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement, any note, or Loan Document, including any amount paid pursuant to this Section 16(a) after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein; provided, however, that Borrowers shall not be required to increase any such amounts if the increase in such amount payable results from Agent’s or such Lender’s own willful misconduct or gross negligence (as finally determined by a court of competent jurisdiction).  Borrowers will furnish to Agent as promptly as possible 

 

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after the date the payment of any Tax is due pursuant to applicable law, certified copies of tax receipts evidencing such payment by Borrowers.

 

(b)                                 Borrowers agree to pay any present or future stamp, value added or documentary taxes or any other excise or property taxes, charges, or similar levies that arise from any payment made hereunder or from the execution, delivery, performance, recordation, or filing of, or otherwise with respect to this Agreement or any other Loan Document.

 

(c)                                  If a Lender or Participant is entitled to claim an exemption or reduction from United States withholding tax, such Lender or Participant agrees with and in favor of Agent, to deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only) one of the following before receiving its first payment under this Agreement:

 

(i)                                     if such Lender or Participant is entitled to claim an exemption from United States withholding tax pursuant to the portfolio interest exception, (A) a statement of the Lender or Participant, signed under penalty of perjury, that it is not (1) a “bank” as described in Section 881(c)(3)(A) of the IRC, (2) a 10% shareholder of any Borrower (within the meaning of Section 871(h)(3)(B) of the IRC), or (3) a controlled foreign corporation related to any Borrower within the meaning of Section 864(d)(4) of the IRC, and (B) a properly completed and executed IRS Form W-8BEN or Form W-8IMY (with proper attachments);

 

(ii)                                  if such Lender or Participant is entitled to claim an exemption from, or a reduction of, withholding tax under a United States tax treaty, a properly completed and executed copy of IRS Form W-8BEN;

 

(iii)                               if such Lender or Participant is entitled to claim that interest paid under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States trade or business of such Lender, a properly completed and executed copy of IRS Form W-8ECI;

 

(iv)                              if such Lender or Participant is entitled to claim that interest paid under this Agreement is exempt from United States withholding tax because such Lender or Participant serves as an intermediary, a properly completed and executed copy of IRS Form W-8IMY (with proper attachments); or

 

(v)                                 a properly completed and executed copy of any other form or forms, including IRS Form W-9, as may be required under the IRC or other laws of the United States as a condition to exemption from, or reduction of, United States withholding or backup withholding tax.

 

Each Lender or Participant shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and to promptly notify Agent (or, in the case of a Participant, to the Lender granting the participation only) of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

 

(d)                                 If a Lender or Participant claims an exemption from withholding tax in a jurisdiction other than the United States, such Lender or such Participant agrees, with and in favor of Agent, to deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only) any such form or forms, as may be required under the laws of such jurisdiction as a condition to exemption from, or reduction of, foreign withholding or backup withholding tax before receiving its first payment under this Agreement, but only if such Lender or such Participant is legally able to deliver such forms, provided, however, that nothing in this Section 16(d) shall require a Lender or Participant to disclose any information that it deems to be confidential (including without limitation, its tax returns).  Each Lender and each Participant shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and to promptly notify Agent (or, in the case of a Participant, to the Lender granting the participation only) of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

 

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(e)                                  If a Lender or Participant claims exemption from, or reduction of, withholding tax and such Lender or Participant sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Borrowers to such Lender or Participant, such Lender or Participant agrees to notify Agent (or, in the case of a sale of a participation interest, to the Lender granting the participation only) of the percentage amount in which it is no longer the beneficial owner of Obligations of Borrowers to such Lender or Participant.  To the extent of such percentage amount, Agent will treat such Lender’s or such Participant’s documentation provided pursuant to Section 16(c) or (d) as no longer valid.  With respect to such percentage amount, such Participant or Assignee may provide new documentation, pursuant to Section 16(c) or (d), if applicable.  Each Borrower agrees that each Participant shall be entitled to the benefits of this Section 16 with respect to its participation in any portion of the Revolver Commitments and the Obligations so long as such Participant complies with the obligations set forth in this Section 16 with respect thereto.

 

(f)                                    If a Lender or a Participant is entitled to a reduction in the applicable withholding tax, Agent (or, in the case of a Participant, to the Lender granting the participation) may withhold from any interest payment to such Lender or such Participant an amount equivalent to the applicable withholding tax after taking into account such reduction.  If the forms or other documentation required by Section 16(c) or (d) are not delivered to Agent (or, in the case of a Participant, to the Lender granting the participation), then Agent (or, in the case of a Participant, to the Lender granting the participation) may withhold from any interest payment to such Lender or such Participant not providing such forms or other documentation an amount equivalent to the applicable withholding tax.

 

(g)                                 If the Internal Revenue Service or any other Governmental Authority of the United States or other jurisdiction asserts a claim that Agent (or, in the case of a Participant, to the Lender granting the participation) did not properly withhold tax from amounts paid to or for the account of any Lender or any Participant due to a failure on the part of the Lender or any Participant (because the appropriate form was not delivered or was not properly executed, or because such Lender failed to notify Agent (or such Participant failed to notify the Lender granting the participation) of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason), such Lender shall indemnify and hold Agent harmless (or, in the case of a Participant, such Participant shall indemnify and hold the Lender granting the participation harmless) for all amounts paid, directly or indirectly, by Agent (or, in the case of a Participant, to the Lender granting the participation), as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to Agent (or, in the case of a Participant, to the Lender granting the participation only) under this Section 16, together with all costs and expenses (including attorneys’ fees and expenses).  The obligation of the Lenders and the Participants under this subsection shall survive the payment of all Obligations and the resignation or replacement of Agent.

 

(h)                                 If Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes as to which it has been indemnified by Borrowers or with respect to which Borrowers have paid additional amounts pursuant to this Section 16, so long as no Default or Event of Default has occurred and is continuing, it shall pay over such refund to Borrowers (but only to the extent of payments made, or additional amounts paid, by Borrowers under this Section 16 with respect to Taxes giving rise to such a refund), net of all out-of-pocket expenses of Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such a refund); provided, that Borrowers, upon the request of Agent or such Lender, agree to repay the amount paid over to Borrowers (plus any penalties, interest or other charges, imposed by the relevant Governmental Authority, other than such penalties, interest or other charges imposed as a result of the willful misconduct or gross negligence of Agent hereunder) to Agent or such Lender in the event Agent or such Lender is required to repay such refund to such Governmental Authority.  Notwithstanding anything in this Agreement to the contrary, this Section 16 shall not be construed to require Agent or any Lender to make available its tax returns (or any other information which it deems confidential) to any Borrower or any other Person.

 

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17.                                 GENERAL PROVISIONS.

 

17.1                           Effectiveness.  This Agreement shall be binding and deemed effective when executed by Parent, each Borrower, Agent, and each Lender whose signature is provided for on the signature pages hereof.

 

17.2                           Section Headings.  Headings and numbers have been set forth herein for convenience only.  Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

 

17.3                           Interpretation.  Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against the Lender Group, Parent, or any Borrower, whether under any rule of construction or otherwise.  On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

 

17.4                           Severability of Provisions.  Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

 

17.5                           Bank Product Providers.  Each Bank Product Provider shall be deemed a third party beneficiary hereof and of the provisions of the other Loan Documents for purposes of any reference in a Loan Document to the parties for whom Agent is acting.  Agent hereby agrees to act as agent for such Bank Product Providers and, by virtue of entering into a Bank Product Agreement, the applicable Bank Product Provider shall be automatically deemed to have appointed Agent as its agent and to have accepted the benefits of the Loan Documents; it being understood and agreed that the rights and benefits of each Bank Product Provider under the Loan Documents consist exclusively of such Bank Product Provider’s being a beneficiary of the Liens and security interests (and, if applicable, guarantees) granted to Agent and the right to share in payments and collections out of the Collateral as more fully set forth herein. In addition, each Bank Product Provider, by virtue of entering into a Bank Product Agreement, shall be automatically deemed to have agreed that Agent shall have the right, but shall have no obligation, to establish, maintain, relax, or release reserves in respect of the Bank Product Obligations and that if reserves are established there is no obligation on the part of Agent to determine or insure whether the amount of any such reserve is appropriate or not.  In connection with any such distribution of payments or proceeds of Collateral, Agent shall be entitled to assume no amounts are due or owing to any Bank Product Provider unless such Bank Product Provider has provided a written certification (setting forth a reasonably detailed calculation) to Agent as to the amounts that are due and owing to it and such written certification is received by Agent a reasonable period of time prior to the making of such distribution.  Agent shall have no obligation to calculate the amount due and payable with respect to any Bank Products, but may rely upon the written certification of the amount due and payable from the relevant Bank Product Provider.  In the absence of an updated certification, Agent shall be entitled to assume that the amount due and payable to the relevant Bank Product Provider is the amount last certified to Agent by such Bank Product Provider as being due and payable (less any distributions made to such Bank Product Provider on account thereof).  Any Borrower may obtain Bank Products from any Bank Product Provider, although no Borrower is required to do so; provided, that until all Obligations have been indefeasibly paid in full in cash and this Agreement and the Revolver Commitments hereunder have been terminated, each Borrower shall offer WFCF (or one or more of its Affiliates) the first opportunity to bid for all interest rate protection agreements, currency hedge agreements and commodity hedge agreements.  Each Borrower acknowledges and agrees that no Bank Product Provider has committed to provide any Bank Products and that the providing of Bank Products by any Bank Product Provider is in the sole and absolute discretion of such Bank Product Provider.  Notwithstanding anything to the contrary in this Agreement or any other Loan Document, no provider or holder of any Bank Product shall have any voting or approval rights hereunder (or be deemed a Lender) solely by virtue of its status as the provider or holder of such agreements or products or the Obligations owing thereunder, nor shall the consent of any such provider or holder be required (other than in 

 

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their capacities as Lenders, to the extent applicable) for any matter hereunder or under any of the other Loan Documents, including as to any matter relating to the Collateral or the release of Collateral or Guarantors.

 

17.6                           Debtor-Creditor Relationship.  The relationship between the Lenders and Agent, on the one hand, and the Loan Parties, on the other hand, is solely that of creditor and debtor.  No member of the Lender Group has (or shall be deemed to have) any fiduciary relationship or duty to any Loan Party arising out of or in connection with the Loan Documents or the transactions contemplated thereby, and there is no agency or joint venture relationship between the members of the Lender Group, on the one hand, and the Loan Parties, on the other hand, by virtue of any Loan Document or any transaction contemplated therein.

 

17.7                           Counterparts; Electronic Execution.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.  Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.  The foregoing shall apply to each other Loan Document mutatis mutandis.

 

17.8                           Revival and Reinstatement of Obligations.  If the incurrence or payment of the Obligations by any Borrower or Guarantor or the transfer to the Lender Group of any property should for any reason subsequently be asserted, or declared, to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (each, a “Voidable Transfer”), and if the Lender Group is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the advice of counsel, then, as to any such Voidable Transfer, or the amount thereof that the Lender Group is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys’ fees of the Lender Group related thereto, the liability of Borrowers or Guarantor automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.

 

17.9                           Confidentiality.

 

(a)                                  Agent and Lenders each individually (and not jointly or jointly and severally) agree that material, non-public information regarding Parent and its Subsidiaries, their operations, assets, and existing and contemplated business plans (“Confidential Information”) shall be treated by Agent and the Lenders in a confidential manner, and shall not be disclosed by Agent and the Lenders to Persons who are not parties to this Agreement, except:  (i) to attorneys for and other advisors, accountants, auditors, and consultants to any member of the Lender Group and to employees, directors and officers of any member of the Lender Group (the Persons in this clause (i), “Lender Group Representatives”) on a “need to know” basis in connection with this Agreement and the transactions contemplated hereby and on a confidential basis, (ii) to Subsidiaries and Affiliates of any member of the Lender Group (including the Bank Product Providers), provided that any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this Section 17.9, (iii) as may be required by regulatory authorities so long as such authorities are informed of the confidential nature of such information, (iv) as may be required by statute, decision, or judicial or administrative order, rule, or regulation; provided that (A) prior to any disclosure under this clause (iv), the disclosing party agrees to provide Administrative Borrower with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice pursuant to the terms of the applicable statute, decision, or judicial or administrative order, rule, or regulation and (B) any disclosure under this clause (iv) shall be limited to the portion of the Confidential Information as may be required by such statute, decision, or judicial or administrative order, rule, or regulation, (v) as may be agreed to in advance in writing by Borrowers, (vi) as requested or required by any Governmental Authority pursuant to any subpoena or other legal process, provided, that, (A) prior to any disclosure under this 

 

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clause (vi) the disclosing party agrees to provide Administrative Borrower with prior written notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior written notice pursuant to the terms of the subpoena or other legal process and (B) any disclosure under this clause (vi) shall be limited to the portion of the Confidential Information as may be required by such Governmental Authority pursuant to such subpoena or other legal process, (vii) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Agent or the Lenders or the Lender Group Representatives), (viii) in connection with any assignment, participation or pledge of any Lender’s interest under this Agreement, provided that prior to receipt of Confidential Information any such assignee, participant, or pledgee shall have agreed in writing to receive such Confidential Information hereunder subject to the terms of this Section, (ix) in connection with any litigation or other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents; provided, that, prior to any disclosure to any Person (other than any Loan Party, Agent, any Lender, any of their respective Affiliates, or their respective counsel) under this clause (ix) with respect to litigation involving any Person (other than any Borrower, Agent, any Lender, any of their respective Affiliates, or their respective counsel), the disclosing party agrees to provide Administrative Borrower with prior written notice thereof, and (x) in connection with, and to the extent reasonably necessary for, the exercise of any secured creditor remedy under this Agreement or under any other Loan Document.

 

(b)                                 Anything in this Agreement to the contrary notwithstanding, Agent may (i) provide information concerning the terms and conditions of this Agreement and the other Loan Documents to loan syndication and pricing reporting services, and (ii) use the name, logos, and other insignia of Borrowers and Loan Parties and the Revolver Commitments provided hereunder in any “tombstone” or comparable advertising, on its website or in other marketing materials of the Agent.

 

17.10                     Lender Group Expenses.  Borrowers agree to pay the Lender Group Expenses on the earlier of (a) the first day of the month following the date on which such Lender Group Expenses were first incurred or (b) the date on which demand therefor is made by Agent.  Borrowers agree that their respective obligations contained in this Section 17.10 shall survive payment or satisfaction in full of all other Obligations.

 

17.11                     Survival.  All 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 and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Agent, the Issuing Lender, or any Lender may have had notice or knowledge of any Default or 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 any Letter of Credit is outstanding and so long as the Revolver Commitments have not expired or terminated.

 

17.12                     Patriot Act.  Each Lender that is subject to the requirements of the Patriot Act hereby notifies Borrowers that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of each Borrower and other information that will allow such Lender to identify each Borrower in accordance with the Patriot Act.  In addition, if Agent is required by law or regulation or internal policies to do so, it shall have the right to periodically conduct (a) Patriot Act searches, OFAC/PEP searches, and customary individual background checks for the Loan Parties and (b) OFAC/PEP searches and customary individual background checks for the Loan Parties’ senior management and key principals, and each Borrower agrees to cooperate in respect of the conduct of such searches and further agrees that the reasonable costs and charges for such searches shall constitute Lender Expenses hereunder and be for the account of Borrowers.

 

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17.13                     Integration.  This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.  The foregoing to the contrary notwithstanding, all Bank Product Agreements, if any, are independent agreements governed by the written provisions of such Bank Product Agreements, which will remain in full force and effect, unaffected by any repayment, prepayments, acceleration, reduction, increase, or change in the terms of any credit extended hereunder, except as otherwise expressly provided in such Bank Product Agreement.

 

17.14                     Supreme Indiana as Agent for Borrowers.  Each Borrower hereby irrevocably appoints Supreme Indiana as the borrowing agent and attorney-in-fact for all Borrowers (the “Administrative Borrower”) which appointment shall remain in full force and effect unless and until Agent shall have received prior written notice signed by each Borrower that such appointment has been revoked and that another Borrower has been appointed Administrative Borrower.  Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (a) to provide Agent with all notices with respect to Advances and Letters of Credit obtained for the benefit of any Borrower and all other notices and instructions under this Agreement, and (b) to take such action as the Administrative Borrower deems appropriate on its behalf to obtain Advances and Letters of Credit and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement.  It is understood that the handling of the Loan Account and Collateral in a combined fashion, as more fully set forth herein, is done solely as an accommodation to Borrowers in order to utilize the collective borrowing powers of Borrowers in the most efficient and economical manner and at their request, and that Lender Group shall not incur liability to any Borrower as a result hereof.  Each Borrower expects to derive benefit, directly or indirectly, from the handling of the Loan Account and the Collateral in a combined fashion since the successful operation of each Borrower is dependent on the continued successful performance of the integrated group.  To induce the Lender Group to do so, and in consideration thereof, each Borrower hereby jointly and severally agrees to indemnify each member of the Lender Group and hold each member of the Lender Group harmless against any and all liability, expense, loss or claim of damage or injury, made against the Lender Group by any Borrower or by any third party whosoever, arising from or incurred by reason of (a) the handling of the Loan Account and Collateral of Borrowers as herein provided, or (b) the Lender Group’s relying on any instructions of the Administrative Borrower, except that Borrowers will have no liability to the relevant Agent-Related Person or Lender-Related Person under this Section 17.14 with respect to any liability that has been finally determined by a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of such Agent-Related Person or Lender-Related Person, as the case may be.

 

[Signature pages to follow.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

 

	
 
    	
SUPREME   INDUSTRIES, INC.  
   a Delaware corporation, as Parent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kim Korth
    
	
 
    	
Name:   Kim Korth
    
	
 
    	
Title:   President and CEO
    
	
 
    	
 
    
	
 
    	
SUPREME   INDIANA OPERATIONS, INC.  
   a Delaware corporation, as Administrative Borrower and as a Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kim Korth
    
	
 
    	
Name:   Kim Korth
    
	
 
    	
Title:   President and CEO
    
	
 
    	
 
    
	
 
    	
SUPREME   CORPORATION OF TEXAS  
   a Texas corporation, as a Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kim Korth
    
	
 
    	
Name:   Kim Korth
    
	
 
    	
Title:   President and CEO
    
	
 
    	
 
    
	
 
    	
SUPREME   MID-ATLANTIC CORPORATION  
   a Texas corporation, as a Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kim Korth
    
	
 
    	
Name:   Kim Korth
    
	
 
    	
Title:   President and CEO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SUPREME   TRUCK BODIES OF CALIFORNIA, INC.  
   a California corporation, as a Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Kim Korth
    
	
 
    	
Name:   Kim Korth
    
	
 
    	
Title:   President and CEO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS FARGO CAPITAL FINANCE, LLC,  
   a Delaware limited liability company, as Agent and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Sean Mullaney
    
	
 
    	
Name:   Sean Mullaney
    
	
 
    	
Title:   Vice President
    

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

EXHIBIT A-1

 

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

This ASSIGNMENT AND ACCEPTANCE AGREEMENT (“Assignment Agreement”) is entered into as of           between              (“Assignor”) and              (“Assignee”).  Reference is made to the Agreement described in Annex I hereto (the “Credit Agreement”).  Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Credit Agreement.

 

1.                                       In accordance with the terms and conditions of Section 13 of the Credit Agreement, the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, that interest in and to the Assignor’s rights and obligations under the Loan Documents as of the date hereof with respect to the Obligations owing to the Assignor, and Assignor’s portion of the Revolver Commitments, all to the extent specified on Annex I.

 

2.                                       The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim and (ii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment Agreement and to consummate the transactions contemplated hereby; (b) makes no representation or warranty and assumes no responsibility with respect to (i) any statements, representations or warranties made in or in connection with the Loan Documents, or (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any other instrument or document furnished pursuant thereto; (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower or any Guarantor or the performance or observance by any Borrower or any Guarantor of any of its obligations under the Loan Documents or any other instrument or document furnished pursuant thereto, and (d) represents and warrants that the amount set forth as the Purchase Price on Annex I represents the amount owed by the Borrowers to Assignor with respect to Assignor’s share of the Advances assigned hereunder, as reflected on Assignor’s books and records.

 

3.                                       The Assignee (a) confirms that it has received copies of the Credit Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement; (b) agrees that it will, independently and without reliance upon Agent, Assignor, or any other Lender, based upon such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under the Loan Documents; (c) confirms that it is an Eligible Transferee; (d) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (e) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender; [and (f) attaches the forms prescribed by the Internal Revenue Service of the United States certifying as to the Assignee’s status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Credit Agreement or such other documents as are necessary to indicate that all such payments are subject to such rates at a rate reduced by an applicable tax treaty.]

 

4.                                       Following the execution of this Assignment Agreement by the Assignor and Assignee, the Assignor will deliver this Assignment Agreement to the Agent for recording by the Agent.  The effective date of this Assignment (the “Settlement Date”) shall be the latest to occur of (a) the date of the execution and delivery hereof by the Assignor and the Assignee, (b) the receipt by Agent for its sole and 

 

1

 

separate account a processing fee in the amount of $5,000 (if required by the Credit Agreement), (c) the receipt of any required consent of the Agent, and (d) the date specified in Annex I.

 

5.                                       As of the Settlement Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent of the interest assigned pursuant to this Assignment Agreement, have the rights and obligations of a Lender thereunder and under the other Loan Documents, and (b) the Assignor shall, to the extent of the interest assigned pursuant to this Assignment Agreement, relinquish its rights and be released from its obligations under the Credit Agreement and the other Loan Documents, provided, however, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of this Agreement, including such assigning Lender’s obligations under Article 15 and Section 17.9(a) of the Credit Agreement.

 

6.                                       Upon the Settlement Date, Assignee shall pay to Assignor the Purchase Price (as set forth in Annex I).  From and after the Settlement Date, Agent shall make all payments that are due and payable to the holder of the interest assigned hereunder (including payments of principal, interest, fees and other amounts) to Assignor for amounts which have accrued up to but excluding the Settlement Date and to Assignee for amounts which have accrued from and after the Settlement Date.  On the Settlement Date, Assignor shall pay to Assignee an amount equal to the portion of any interest, fee, or any other charge that was paid to Assignor prior to the Settlement Date on account of the interest assigned hereunder and that are due and payable to Assignee with respect thereto, to the extent that such interest, fee or other charge relates to the period of time from and after the Settlement Date.

 

7.                                       This Assignment Agreement may be executed in counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.  This Assignment Agreement may be executed and delivered by telecopier or other facsimile transmission all with the same force and effect as if the same were a fully executed and delivered original manual counterpart.

 

8.                                       THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

2

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement and Annex I hereto to be executed by their respective officers, as of the first date written above.

 

	
 
    	
[NAME   OF ASSIGNOR]
    
	
 
    	
 
    
	
 
    	
  as   Assignor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[NAME   OF ASSIGNEE]
    
	
 
    	
 
    
	
 
    	
  as   Assignee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

ACCEPTED THIS          DAY OF

 

WELLS FARGO CAPITAL FINANCE, LLC,

a Delaware limited liability company, as Agent

 

	
By
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

3

 

ANNEX FOR ASSIGNMENT AND ACCEPTANCE

 

ANNEX I

 

1.                                       Borrowers:

 

2.                                       Name and Date of Credit Agreement:

 

Credit Agreement, dated as of September 14, 2011 by and among Supreme Industries, Inc., Supreme Indiana Operations, Inc., certain of its subsidiaries identified on the signature pages thereof, the lenders from time to time a party thereto (the “Lenders”), and Wells Fargo Capital Finance, LLC, a Delaware limited liability company, as the arranger and administrative agent for the Lenders

 

	
3.                                       Date of   Assignment Agreement:
    	
 
    
	
 
    	
 
    
	
4.                                       Amounts:
    	
 
    
	
 
    	
 
    
	
a.                                       Assigned Amount of   Revolver Commitment
    	
$
    
	
 
    	
 
    
	
b.                                      Assigned Amount of   Advances
    	
$
    
	
 
    	
 
    
	
5.                                       Settlement   Date:
    	
 
    
	
 
    	
 
    
	
6.                                       Purchase   Price
    	
$
    
	
 
    	
 
    
	
7.                                       Notice and   Payment Instructions, etc.
    	
 
    
	
 
    	
 
    	
 
    
	
Assignee:
    	
Assignor:
    	
 
    

 

4

 

8.                                       Agreed and Accepted:

 

	
[ASSIGNOR]   
    	
 
    	
[ASSIGNEE]   
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:   
    	
 
    
	
Title:
    	
 
    	
 
    	
Title:
    	
 
    

 

 

Accepted:

WELLS FARGO CAPITAL FINANCE, LLC,

a Delaware limited liability company, as Agent

 

 

	
By
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

5

 

EXHIBIT B-1

 

FORM OF BORROWING BASE CERTIFICATE

 

(See attached.)

 

1

 

	

    	
Summary Page Borrowing Base Certificate
    	
 
    

 

	
Date
    	
 
    	
 
    
	
Name
    	
 
    	
 
    
	
 
    	
A/R As of:              
    	
 
    
	
 
    	
Inventory As of:              
    	
 
    

 

The undersigned, Supreme Indiana Operations, Inc., a Delaware corporation (“Administrative Borrower”), pursuant to Schedule 5.2 of that certain Credit Agreement dated as of September 14, 2011 (as amended, restated, modified, supplemented, refinanced, renewed, or extended from time to time, the “Credit Agreement”), entered into among Supreme Industries, Inc., Supreme Indiana Operations, Inc., and certain of its subsidiaries identified on the signature pages thereof, the lenders signatory thereto from time to time, and Wells Fargo Capital Finance, LLC, a Delaware limited liability company as the arranger and administrative agent (in such capacity, together with its successors and assigns, if any, in such capacity, “Agent”), hereby certifies to Agent, on behalf of the Borrowers, that the following items, calculated in accordance with the terms and definitions set forth in the Credit Agreement for such items are true and correct, and that Borrowers are in compliance with and, after giving effect to any currently requested Advances, will be in compliance with, the terms, conditions, and provisions of the Credit Agreement.

 

Accounts Receivable

 

	
Accounts   Receivable Balance per Aging Report Assigned To Wells Fargo Capital Finance
    	
 
    
	
Less Ineligibles (detailed on page 2)
    	
 
    
	
Net   Eligible Accounts Receivable
    	
 
    
	
Accounts   Receivable Availability before Sublimit(s)
    	
 
    
	
 
    	
 
    
	
Net Available Accounts Receivable after Sublimit(s)
    	
 
    
	
 
    	
 
    
	
Inventory
    
	
 
    	
 
    
	
Inventory   Balance Assigned To Wells Fargo Capital Finance
    	
 
    
	
Less Ineligibles (detailed on page 3)
    	
 
    
	
Eligible   Inventory
    	
 
    
	
Inventory   Availability before Sublimit(s)
    	
 
    
	
 
    	
 
    
	
Available Inventory after Sublimit(s)
    	
 
    
	
INV to AR Ratio
    	
 
    
	
 
    	
 
    
	
Net Available Inventory after INV to AR Ratio Cap
    	
 
    

 

 

2

 

Other Assets

 

	
Total Availability before Reserves
    	
 
    
	
Reserves
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Total Reserves
    	
 
    
	
 
    	
 
    
	
Total Availability after Reserves before Loan Balance and   LCs
    	
 
    
	
 
    	
 
    
	
Total Credit Line  
    	
Suppressed Availability
    	
 
    
	
Availability before Loan Balance
    	
 
    	
 
    
	
Letter   of Credit Balance 
    	
As   of:
    	
 
    
	
Loan   Ledger Balance 
    	
As   of:
    	
 
    
	
Cash   in-transit
    	
 
    
	
Adjusted   Loan Balance
    	
 
    
	
 
    	
 
    
	
Net Availability
    	
 
    

 

Additionally, the undersigned hereby certifies and represents and warrants to the Lender Group on behalf of Loan Parties that (i) as of the date hereof, each representation or warranty contained in or pursuant to any Loan Document, any agreement, instrument, certificate, document or other writing furnished at any time under or in connection with any Loan Document, and as of the effective date of any advance, continuation or conversion requested above is true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof and except to the extent any representation or warranty expressly related to an earlier date), (ii) each of the covenants and agreements contained in any Loan Document have been performed (to the extent required to be performed on or before the date hereof or each such effective date), (iii) no Default or Event of Default has occurred and is continuing on the date hereof, nor will any thereof occur after giving effect to the request above, and (iv) all of the foregoing is true and correct as of the effective date of the calculations set forth above and herein and that such calculations have been made in accordance with the requirements of the Credit Agreement.  All initially capitalized terms used in this Borrowing Base Certificate have the meanings set forth in the Credit Agreement unless specifically defined herein.

 

	
 
    	
List of attachments with this Borrowing Base Certificate:
    
	
Authorized   Signer
    	
Page 2   - Accounts Receivable Availability Detail
    
	
 
    	
Page 2b   - Accounts Receivable Concentrations
    
	
 
    	
Page 2c   - Accounts Receivable Dilution
    
	
 
    	
Page 3   - Inventory Availability Detail
    
	
 
    	
Page 3a   - Inventory Availability Detail
    
	
 
    	
Page 3b   - Inventory Availability Summary
    

 

3

 

EXHIBIT C-1

 

FORM OF COMPLIANCE CERTIFICATE

 

[on Administrative Borrower’s letterhead]

 

To:                              Wells Fargo Capital Finance, LLC
 150 South Wacker Drive, Suite 2200
 Chicago, Illinois 60606
 Attn: Loan Portfolio Manager (Supreme)

 

Re:                               Compliance Certificate dated

 

Ladies and Gentlemen:

 

Reference is made to that certain CREDIT AGREEMENT (the “Credit Agreement”) dated as of September 14, 2011, by and among the lenders identified on the signature pages thereof (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company, as the arranger and administrative agent for the Lenders (“Agent”), and SUPREME INDUSTRIES, INC., a Delaware corporation (the “Parent”), SUPREME INDIANA OPERATIONS, INC., a Delaware corporation, and its Subsidiaries identified on the signature pages thereof (collectively, the “Borrowers”).  Capitalized terms used in this Compliance Certificate have the meanings set forth in the Credit Agreement unless specifically defined herein.

 

Pursuant to Schedule 5.1 of the Credit Agreement, the undersigned officer of Administrative Borrower hereby certifies, on behalf of Loan Parties, that:

 

1.                                       The financial information of Loan Parties and their Subsidiaries furnished in Schedule 1 attached hereto, has been prepared in accordance with GAAP (except for year-end adjustments and the lack of footnotes), and fairly presents in all material respects the financial condition of Loan Parties and their Subsidiaries.

 

2.                                       Such officer has reviewed the terms of the Credit Agreement and has made, or caused to be made under his/her supervision, a review in reasonable detail of the transactions and condition of Loan Parties and their Subsidiaries during the accounting period covered by the financial statements delivered pursuant to Schedule 5.1 of the Credit Agreement.

 

3.                                       Such review has not disclosed the existence on and as of the date hereof, and the undersigned does not have knowledge of the existence as of the date hereof, of any event or condition that constitutes a Default or Event of Default, except for such conditions or events listed on Schedule 2 attached hereto, specifying the nature and period of existence thereof and what action Loan Parties and their Subsidiaries have taken, are taking, or propose to take with respect thereto.

 

4.                                       The representations and warranties of Loan Parties and their Subsidiaries set forth in the Credit Agreement and the other Loan Documents are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are 

 

1

 

qualified or modified by materiality in the text thereof) on and as of the date hereof (except to the extent they relate to a specified date), except as set forth on Schedule 3 attached hereto.

 

5.                                       The Excess Availability Calculation for Parent and its Subsidiaries is demonstrated on Schedule 4 hereof.

 

6.                                       [Parent and its Subsidiaries are in compliance with the applicable covenants contained in Section 7 of the Credit Agreement as demonstrated on Schedule 5 hereof.] (1)

 

(1)  Include to the extent that Section 7 is applicable.

 

2

 

IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned this            day of                               ,                 .

 

 

	
 
    	
SUPREME   INDIANA OPERATIONS, INC.
    
	
 
    	
as   Administrative Borrower
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[SIGNATURE PAGE TO COMPLIANCE CERTIFICATE]

 

3

 

SCHEDULE 1

 

Financial Information

 

4

 

SCHEDULE 2

 

Default or Event of Default

 

5

 

SCHEDULE 3

 

Representations and Warranties

 

6

 

SCHEDULE 4

 

Excess Availability Calculation

 

7

 

SCHEDULE 5(2)

 

Financial Covenants

 

1.                                       Fixed Charge Coverage Ratio.

 

Parent’s and its Subsidiaries’ Fixed Charge Coverage Ratio, measured on a month-end basis, for the [3, 4, 5, 6, 7, 8, 9, 10, 11, 12] Fiscal Month period ending                   ,                 , is       :1.0, which [is/is not] greater than or equal to the amount set forth in Section 7 of the Credit Agreement for the corresponding period.

 

2.                                       Capital Expenditures.

 

Parent’s and its Subsidiaries’ Capital Expenditures from the beginning of Administrative Borrower’s most recent Fiscal Year to the date hereof is                         , which [is/is not] less than or equal to the amount set forth in Section 7 of the Credit Agreement for the corresponding period.

 

(2)  Include to the extent that Section 7 is applicable.

 

8

 

EXHIBIT G-1

 

FORM OF GUARANTY

 

GENERAL CONTINUING GUARANTY

 

This GENERAL CONTINUING GUARANTY (this “Guaranty”), dated as of                     , is executed and delivered by                               ,  a                                (“Guarantor”), in favor of WELLS FARGO CAPITAL FINANCE, LLC,  a Delaware limited liability company, as agent for the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns, if any, in such capacity, “Agent”), in light of the following:

 

WHEREAS, Supreme Industries, Inc., a Delaware corporation, Supreme Indiana Operations, Inc., a Delaware corporation (“Supreme Indiana”) and certain of its Subsidiaries identified on the signature pages thereof (collectively with Supreme Indiana, the “Borrowers”), the below defined Lenders, and Agent [are, contemporaneously herewith, entering into that certain Credit Agreement of even date herewith][entered into that certain Credit Agreement dated as of September 14, 2011] (as amended, restated, modified, renewed or extended from time to time, the “Credit Agreement”);

 

WHEREAS, Guarantor is [an Affiliate] [a Subsidiary] of Borrowers and, as such, will benefit by virtue of the financial accommodations extended to Borrowers by the Lender Group; and

 

WHEREAS, in order to induce the Lender Group to enter into the Credit Agreement and the other Loan Documents and to extend the loans and other financial accommodations to Borrowers pursuant to the Credit Agreement, and in consideration thereof, and in consideration of any loans or other financial accommodations heretofore or hereafter extended by the below defined Lender Group to Borrowers pursuant to the Loan Documents, Guarantor has agreed to guaranty the Guarantied Obligations.

 

NOW, THEREFORE, in consideration of the foregoing, Guarantor hereby agrees as follows:

 

1.                                       Definitions and Construction.

 

(a)                                  Definitions.  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.  The following terms, as used in this Guaranty, shall have the following meanings:

 

“Agent” has the meaning set forth in the preamble to this Guaranty.

 

“Borrowers” has the meaning set forth in the recitals to this Guaranty.

 

“Credit Agreement” has the meaning set forth in the recitals to this Guaranty.

 

“Guarantied Obligations” means all of the Obligations (including any Bank Product Obligations) now or hereafter existing, whether for principal, interest (including any interest that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), fees (including the fees provided for in the Fee Letter), Lender Group Expenses (including any fees or expenses that accrue after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), or otherwise, and any and all expenses (including reasonable counsel fees and expenses) incurred by the Agent, the Lenders or the Issuing Lender (or any of them) in enforcing any rights under this Guaranty.  Without limiting the generality of the foregoing, Guarantied Obligations shall include all amounts that 

 

1

 

constitute part of the Guarantied Obligations and would be owed by the Borrowers to the Agent, the Lenders or the Issuing Lender but for the fact that they are unenforceable or not allowable, including due to the existence of a bankruptcy, reorganization, other Insolvency Proceeding or similar proceeding involving any Borrower or any other guarantor.

 

“Guarantor” has the meaning set forth in the preamble to this Guaranty.

 

“Guaranty” has the meaning set forth in the preamble to this Guaranty.

 

“Lender Group” means, individually and collectively, each of the Lenders and Agent.

 

“Lenders” means, individually and collectively, each of the lenders identified on the signature pages to the Credit Agreement, and shall include any other Person made a party to the Credit Agreement in accordance with the provisions thereof (together with their respective successors and assigns).

 

“Record” means information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.

 

“Voidable Transfer” has the meaning set forth in Section 9 of this Guaranty.

 

(b)                                 Construction.  Unless the context of this Guaranty clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the part includes the whole, the terms “includes” and  “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,” and other similar terms in this Guaranty refer to this Guaranty as a whole and not to any particular provision of this Guaranty.  Section, subsection, clause, schedule, and exhibit references herein are to this Guaranty unless otherwise specified.  Any reference in this Guaranty to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein).  Neither this Guaranty nor any uncertainty or ambiguity herein shall be construed or resolved against the Lender Group or Borrowers, whether under any rule of construction or otherwise.  On the contrary, this Guaranty has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of Guarantor and Agent.  Any reference herein to the satisfaction, repayment, or payment in full of the Guarantied Obligations shall mean the repayment in full in cash or immediately available funds (or, (i) in the case of contingent reimbursement obligations with respect to Letters of Credit, providing Letter of Credit Collateralization, and (ii) in the case of obligations with respect to Bank Products (other than Hedge Obligations), providing Bank Product Collateralization) of all of the Guarantied Obligations (including the payment of any termination amount then applicable (or which would or could become applicable as a result of the repayment of the other Guarantied Obligations) under Hedge Agreements provided by Hedge Providers) other than (A) unasserted contingent indemnification Guarantied Obligations, (B) any Bank Product Obligations (other than Hedge Obligations) that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding without being required to be repaid or cash collateralized, and (C) any Hedge Obligations that, at such time, are allowed by the applicable Hedge Provider to remain outstanding without being required to be repaid. Any reference herein to any Person shall be construed to include such Person’s successors and assigns.  Any requirement of a writing contained herein shall be satisfied by the transmission of a Record and any Record transmitted shall constitute a representation and warranty as to the accuracy and completeness of the information contained therein.  The captions and headings are for convenience of reference only and shall not affect the construction of this Guaranty.

 

2

 

2.                                       Guarantied Obligations.  Guarantor hereby irrevocably and unconditionally guaranties to Agent, for the benefit of the Lender Group and the Bank Product Providers, as and for its own debt, until the final payment in full thereof, in cash, has been made, (a) the due and punctual payment of the Guarantied Obligations, when and as the same shall become due and payable, whether at maturity, pursuant to a mandatory prepayment requirement, by acceleration, or otherwise; it being the intent of Guarantor that the guaranty set forth herein shall be a guaranty of payment and not a guaranty of collection; and (b) the punctual and faithful performance, keeping, observance, and fulfillment by Borrowers of all of the agreements, conditions, covenants, and obligations of Borrowers contained in the Credit Agreement and under each of the other Loan Documents.

 

3.                                       Continuing Guaranty.  This Guaranty includes Guarantied Obligations arising under successive transactions continuing, compromising, extending, increasing, modifying, releasing, or renewing the Guarantied Obligations, changing the interest rate, payment terms, or other terms and conditions thereof, or creating new or additional Guarantied Obligations after prior Guarantied Obligations have been satisfied in whole or in part.  To the maximum extent permitted by law, Guarantor hereby waives any right to revoke this Guaranty as to future Guarantied Obligations.  If such a revocation is effective notwithstanding the foregoing waiver, Guarantor acknowledges and agrees that (a) no such revocation shall be effective until written notice thereof has been received by Agent, (b) no such revocation shall apply to any Guarantied Obligations in existence on the date of receipt by Agent of such written notice (including any subsequent continuation, extension, or renewal thereof, or change in the interest rate, payment terms, or other terms and conditions thereof), (c) no such revocation shall apply to any Guarantied Obligations made or created after such date to the extent made or created pursuant to a legally binding commitment of the Lender Group in existence on the date of such revocation, (d) no payment by Guarantor, any Borrower, or from any other source, prior to the date of Agent’s receipt of written notice of such revocation shall reduce the maximum obligation of Guarantor hereunder, and (e) any payment by any Borrower or from any source other than Guarantor subsequent to the date of such revocation shall first be applied to that portion of the Guarantied Obligations as to which the revocation is effective and which are not, therefore, guarantied hereunder, and to the extent so applied shall not reduce the maximum obligation of Guarantor hereunder.

 

4.                                       Performance Under this Guaranty.  In the event that Borrowers fail to make any payment of any Guarantied Obligations, on or prior to the due date thereof, or if Borrowers shall fail to perform, keep, observe, or fulfill any other obligation referred to in clause (b) of Section 2 of this Guaranty in the manner provided in the Credit Agreement or any other Loan Document, Guarantor immediately shall cause, as applicable, such payment in respect of the Guarantied Obligations to be made or such obligation to be performed, kept, observed, or fulfilled.

 

5.                                       Primary Obligations.  This Guaranty is a primary and original obligation of Guarantor, is not merely the creation of a surety relationship, and is an absolute, unconditional, and continuing guaranty of payment and performance which shall remain in full force and effect without respect to future changes in conditions.  Guarantor hereby agrees that it is directly, jointly and severally with each other guarantor of the Guarantied Obligations, liable to Agent, for the benefit of the Lender Group and the Bank Product Providers, that the obligations of Guarantor hereunder are independent of the obligations of Borrowers or any other guarantor, and that a separate action may be brought against Guarantor, whether such action is brought against any Borrower or any other guarantor or whether any Borrower or any other guarantor is joined in such action.  Guarantor hereby agrees that its liability hereunder shall be immediate and shall not be contingent upon the exercise or enforcement by any member of the Lender Group or any Bank Product Provider of whatever remedies they may have against any Borrower or any other guarantor, or the enforcement of any lien or realization upon any security by any member of the Lender Group or any Bank Product Provider.  Guarantor hereby agrees that any release which may be given by Agent to any Borrower or any other guarantor, or with respect to any property or asset subject to a Lien, shall not release Guarantor.  Guarantor consents and agrees that no member of the Lender Group nor any Bank Product Provider shall be under any obligation to marshal 

 

3

 

any property or assets of any Borrower or any other guarantor in favor of Guarantor, or against or in payment of any or all of the Guarantied Obligations.

 

6.                                       Waivers.

 

(a)                                  To the fullest extent permitted by applicable law, Guarantor hereby waives: (i) notice of acceptance hereof; (ii) notice of any loans or other financial accommodations made or extended under the Credit Agreement, or the creation or existence of any Guarantied Obligations; (iii) notice of the amount of the Guarantied Obligations, subject, however, to Guarantor’s right to make inquiry of Agent to ascertain the amount of the Guarantied Obligations at any reasonable time; (iv) notice of any adverse change in the financial condition of Borrowers or of any other fact that might increase Guarantor’s risk hereunder; (v) notice of presentment for payment, demand, protest, and notice thereof as to any instrument among the Loan Documents; (vi) notice of any Default or Event of Default under any of the Loan Documents; and (vii) all other notices (except if such notice is specifically required to be given to Guarantor under this Guaranty or any other Loan Documents to which Guarantor is a party) and demands to which Guarantor might otherwise be entitled.

 

(b)                                 To the fullest extent permitted by applicable law, Guarantor hereby waives the right by statute or otherwise to require any member of the Lender Group or any Bank Product Provider, to institute suit against any Borrower or any other guarantor or to exhaust any rights and remedies which any member of the Lender Group or any Bank Product Provider, has or may have against any Borrower or any other guarantor.  In this regard, Guarantor agrees that it is bound to the payment of each and all Guarantied Obligations, whether now existing or hereafter arising, as fully as if the Guarantied Obligations were directly owing to Agent, the Lender Group, or the Bank Product Providers, as applicable, by Guarantor.  Guarantor further waives any defense arising by reason of any disability or other defense (other than the defense that the Guarantied Obligations shall have been fully and finally performed and indefeasibly paid in full in cash, to the extent of any such payment) of any Borrower or by reason of the cessation from any cause whatsoever of the liability of any Borrower in respect thereof.

 

(c)                                  To the fullest extent permitted by applicable law, Guarantor hereby waives: (i) any right to assert against any member of the Lender Group or any Bank Product Provider, any defense (legal or equitable), set-off, counterclaim, or claim which Guarantor may now or at any time hereafter have against any Borrower or any other party liable to any member of the Lender Group or any Bank Product Provider; (ii) any defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity, or enforceability of the Guarantied Obligations or any security therefor; (iii) any right or defense arising by reason of any claim or defense based upon an election of remedies by any member of the Lender Group or any Bank Product Provider including any defense based upon an impairment or elimination of Guarantor’s rights of subrogation, reimbursement, contribution, or indemnity of Guarantor against Borrowers or other guarantors or sureties; (iv) the benefit of any statute of limitations affecting Guarantor’s liability hereunder or the enforcement thereof, and any act which shall defer or delay the operation of any statute of limitations applicable to the Guarantied Obligations shall similarly operate to defer or delay the operation of such statute of limitations applicable to Guarantor’s liability hereunder.

 

(d)                                 Until the Guarantied Obligations have been paid in full in cash, (i) Guarantor hereby postpones and agrees not to exercise any right of subrogation Guarantor has or may have as against Borrowers with respect to the Guarantied Obligations; (ii) Guarantor hereby postpones and agrees not to exercise any right to proceed against any Borrower or any other Person now or hereafter liable on account of the Obligations for contribution, indemnity, reimbursement, or any other similar rights (irrespective of whether direct or indirect, liquidated or contingent); and (iii) Guarantor hereby postpones and agrees not to exercise any right it may have to proceed or to seek recourse against or with respect to any property or asset of any Borrower or any other Person now or hereafter liable on account of the Obligations.  Notwithstanding anything to the contrary contained in this Guaranty, Guarantor shall not exercise any rights of subrogation, contribution, 

 

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indemnity, reimbursement or other similar rights against, and shall not proceed or seek recourse against or with respect to any property or asset of, any Borrower or any other guarantor (including after payment in full of the Guaranteed Obligations) if all or any portion of the Obligations have been satisfied in connection with an exercise of remedies in respect of the Stock of any Borrower or such other guarantor whether pursuant to the Security Agreement or otherwise.

 

(e)                                  If any of the Guarantied Obligations or the obligations of Guarantor under this Guaranty at any time are secured by a mortgage or deed of trust upon real property, any member of the Lender Group or any Bank Product Provider may elect, in its sole discretion, upon a default with respect to the Guarantied Obligations or the obligations of Guarantor under this Guaranty, to foreclose such mortgage or deed of trust judicially or nonjudicially in any manner permitted by law, before or after enforcing this Guaranty, without diminishing or affecting the liability of Guarantor hereunder.  Guarantor understands that (i) by virtue of the operation of antideficiency law applicable to nonjudicial foreclosures, an election by any member of the Lender Group or any Bank Product Provider to nonjudicially foreclose on such a mortgage or deed of trust probably would have the effect of impairing or destroying rights of subrogation, reimbursement, contribution, or indemnity of Guarantor against Borrowers or other guarantors or sureties, and (ii) absent the waiver given by Guarantor herein, such an election would estop any member of the Lender Group and the Bank Product Providers from enforcing this Guaranty against Guarantor.  Understanding the foregoing, and understanding that Guarantor is hereby relinquishing a defense to the enforceability of this Guaranty, Guarantor hereby waives any right to assert against any member of the Lender Group or any Bank Product Provider any defense to the enforcement of this Guaranty, whether denominated “estoppel” or otherwise, based on or arising from an election by any member of the Lender Group or any Bank Product Provider to nonjudicially foreclose on any such mortgage or deed of trust or as a result of any other exercise of remedies, whether under a mortgage or deed of trust or under any personal property security agreement.  Guarantor understands that the effect of the foregoing waiver may be that Guarantor may have liability hereunder for amounts with respect to which Guarantor may be left without rights of subrogation, reimbursement, contribution, or indemnity against Borrowers or other guarantors or sureties.  [Guarantor also agrees that the “fair market value” provisions of Section 580a of the California Code of Civil Procedure (and any similar law of New York or any other applicable jurisdiction) shall have no applicability with respect to the determination of Guarantor’s liability under this Guaranty.](3)

 

(f)                                    Without limiting the generality of any other waiver or other provision set forth in this Guaranty, Guarantor waives all rights and defenses that Guarantor may have if all or part of the Guarantied Obligations are secured by real property.  This means, among other things:

 

(i)                                     Any member of the Lender Group or any Bank Product Provider may collect from Guarantor without first foreclosing on any real or personal property collateral that may be pledged by Guarantor, any Borrower, or any other guarantor.

 

(ii)                                  If any member of the Lender Group or any Bank Product Provider forecloses on any real property collateral that may be pledged by Guarantor, any Borrower or any other guarantor:

 

(A)                              The amount of the Guarantied Obligations or any obligations of any guarantor in respect thereof may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price.

 

(3)  Bracketed provisions relating to California law to be included if Guarantor is organized or resident in California or otherwise has a nexus with California.

 

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(B)                                Agent may collect from Guarantor even if any member of the Lender Group or any Bank Product Provider, by foreclosing on the real property collateral, has destroyed any right Guarantor may have to collect from any Borrower or any other guarantor.

 

This is an unconditional and irrevocable waiver of any rights and defenses Guarantor may have if all or part of the Guarantied Obligations are secured by real property.  These rights and defenses are based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure [, North Carolina General Statutes Sections 26-7 and 26-9,](4) and any similar law of New York or any other jurisdiction.

 

(g)                                 [WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN THIS GUARANTY, GUARANTOR HEREBY WAIVES, TO THE MAXIMUM EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY AND ALL BENEFITS OR DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF [CALIFORNIA CIVIL CODE §§ 2787, 2799, 2808, 2815, 2819, 2820, 2821, 2822, 2838, 2839, 2847, 2848, AND 2855, CALIFORNIA CODE OF CIVIL PROCEDURE §§ 580A, 580B, 580C, 580D, AND 726, AND CHAPTER 2 OF TITLE 14 OF THE CALIFORNIA CIVIL CODE] [NORTH CAROLINA GENERAL STATUTES SECTIONS 26-7 AND 26-9] OR ANY SIMILAR LAWS OF ANY OTHER APPLICABLE JURISDICTION.]

 

(h)                                 WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN THIS GUARANTY, GUARANTOR WAIVES ALL RIGHTS AND DEFENSES ARISING OUT OF AN ELECTION OF REMEDIES BY ANY MEMBER OF THE LENDER GROUP OR ANY BANK PRODUCT PROVIDER, EVEN THOUGH SUCH ELECTION OF REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE WITH RESPECT TO SECURITY FOR THE GUARANTIED OBLIGATIONS, HAS DESTROYED GUARANTOR’S RIGHTS OF SUBROGATION AND REIMBURSEMENT AGAINST ANY BORROWER BY THE OPERATION OF APPLICABLE LAW [INCLUDING §580D OF THE CALIFORNIA CODE OF CIVIL PROCEDURE OR ANY SIMILAR LAWS OF ANY OTHER APPLICABLE JURISDICTION] [INCLUDING NORTH CAROLINA GENERAL STATUTES SECTIONS 26-7 AND 26-9 OR ANY SIMILAR LAWS OF ANY OTHER APPLICABLE JURISDICTION].

 

(i)                                     Without limiting the generality of any other waiver or other provision set forth in this Guaranty, Guarantor hereby also agrees to the following waivers:

 

(i)                                     Agent’s right to enforce this Guaranty is absolute and is not contingent upon the genuineness, validity or enforceability of the Guarantied Obligations or any of the Loan Documents.  Guarantor [waives all benefits and defenses it may have under California Civil Code Section 2810 or any similar laws in any other applicable jurisdiction and]  [waives all benefits and defenses it may have under North Carolina General Statutes Sections 26-7 and 26-9 or any similar laws in any other applicable jurisdiction and] agrees that Agent’s rights under this Guaranty shall be enforceable even if Borrowers had no liability at the time of execution of the Loan Documents or the Guarantied Obligations are unenforceable in whole or in part, or any Borrower ceases to be liable with respect to all or any portion of the Guarantied Obligations.

 

(4)  Bracketed provisions relating to North Carolina law to be included if Guarantor is organized or resident in North Carolina or otherwise has a nexus with North Carolina.

 

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(ii)                                  Guarantor [waives all benefits and defenses it may have under California Civil Code Section 2809 or any similar laws in any other applicable jurisdiction with respect to its obligations under this Guaranty and]  [waives all benefits and defenses it may have under North Carolina General Statutes Sections 26-7 and 26-9 or any similar laws in any other applicable jurisdiction with respect to its obligations under this Guaranty and] agrees that Agent’s rights under the Loan Documents will remain enforceable even if the amount guaranteed hereunder is larger in amount and more burdensome than that for which Borrowers are responsible.  The enforceability of this Guaranty against Guarantor shall continue until all sums due under the Loan Documents have been paid in full and shall not be limited or affected in any way by any impairment or any diminution or loss of value of any security or collateral for Borrowers’ obligations under the Loan Documents, from whatever cause, the failure of any security interest in any such security or collateral or any disability or other defense of any Borrower, any other guarantor of any Borrower’s obligations under any other Loan Document, any pledgor of collateral for any person’s obligations to Agent or any other person in connection with the Loan Documents.

 

(iii)                               Guarantor waives [all benefits and defenses it may have under California Civil Code §§ 2845, 2849 and 2850 or any similar laws of any other applicable jurisdiction with respect to its obligations under this Guaranty, including]  [all benefits and defenses it may have under North Carolina General Statutes Sections 26-7 and 26-9 or any similar laws of any other applicable jurisdiction with respect to its obligations under this Guaranty, including] the right to require Agent to (A) proceed against any Borrower, any guarantor of any Borrower’s obligations under any Loan Document, any other pledgor of collateral for any person’s obligations to Agent or any other person in connection with the Guarantied Obligations, (B) proceed against or exhaust any other security or collateral Agent may hold, or (C) pursue any other right or remedy for Guarantor’s benefit, and agrees that Agent may exercise its right under this Guaranty without taking any action against any Borrower, any other guarantor of any Borrower’s obligations under the Loan Documents, any pledgor of collateral for any person’s obligations to Agent or any other person in connection with the Guarantied Obligations, and without proceeding against or exhausting any security or collateral Agent holds.

 

(iv)                              [The paragraphs in this Section 6 which refer to certain sections of the California Civil Code are included in this Guaranty solely out of an abundance of caution and shall not be construed to mean that any of the above-referenced provisions of California law are in any way applicable to this Guaranty.] [The paragraphs in this Section 6 which refer to certain sections of the North Carolina General Statutes are included in this Guaranty solely out of an abundance of caution and shall not be construed to mean that any of the above-referenced provisions of North Carolina law are in any way applicable to this Guaranty.]

 

7.                                       Releases.  Guarantor consents and agrees that, without notice to or by Guarantor and without affecting or impairing the obligations of Guarantor hereunder, subject to the terms of the Credit Agreement and the other Loan Documents, any member of the Lender Group or any Bank Product Provider may, by action or inaction, compromise or settle, shorten or extend the Maturity Date or any other period of duration or the time for the payment of the Obligations, or discharge the performance of the Obligations, or may refuse to enforce the Obligations, or otherwise elect not to enforce the Obligations, or may, by action or inaction, release all or any one or more parties to, any one or more of the terms and provisions of the Credit Agreement or any of the 

 

7

 

other Loan Documents or may grant other indulgences to any Borrower or any other guarantor in respect thereof, or may amend or modify in any manner and at any time (or from time to time) any one or more of the Obligations, the Credit Agreement or any other Loan Document (including any increase or decrease in the principal amount of any Obligations or the interest, fees or other amounts that may accrue from time to time in respect thereof), or may, by action or inaction, release or substitute any Borrower or any guarantor, if any, of the Guarantied Obligations, or may enforce, exchange, release, or waive, by action or inaction, any security for the Guarantied Obligations or any other guaranty of the Guarantied Obligations, or any portion thereof.

 

8.                                       No Election.  The Lender Group and the Bank Product Providers shall have the right to seek recourse against Guarantor to the fullest extent provided for herein and no election by any member of the Lender Group or any Bank Product Provider to proceed in one form of action or proceeding, or against any party, or on any obligation, shall constitute a waiver of the Lender Group’s or any Bank Product Provider’s right to proceed in any other form of action or proceeding or against other parties unless Agent, on behalf of the Lender Group or the Bank Product Providers, has expressly waived such right in writing.  Specifically, but without limiting the generality of the foregoing, no action or proceeding by the Lender Group or the Bank Product Providers under any document or instrument evidencing the Guarantied Obligations shall serve to diminish the liability of Guarantor under this Guaranty except to the extent that the Lender Group and the Bank Product Providers finally and unconditionally shall have realized indefeasible payment in full of the Guarantied Obligations by such action or proceeding.

 

9.                                       Revival and Reinstatement.  If the incurrence or payment of the Guarantied Obligations or the obligations of Guarantor under this Guaranty by Guarantor or the transfer by Guarantor to Agent of any property of Guarantor should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (collectively, a “Voidable Transfer”), and if the Lender Group is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that the Lender Group is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys’ fees of the Lender Group related thereto, the liability of Guarantor automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.

 

10.                                 Financial Condition of Borrowers.  Guarantor represents and warrants to the Lender Group and the Bank Product Providers that it is currently informed of the financial condition of Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Guarantied Obligations.  Guarantor further represents and warrants to the Lender Group and the Bank Product Providers that it has read and understands the terms and conditions of the Credit Agreement and each other Loan Document.  Guarantor hereby covenants that it will continue to keep itself informed of Borrowers’ financial condition, the financial condition of other guarantors, if any, and of all other circumstances which bear upon the risk of nonpayment or nonperformance of the Guarantied Obligations.

 

11.                                 Payments; Application.  All payments to be made hereunder by Guarantor shall be made in Dollars, in immediately available funds, and without deduction (whether for taxes or otherwise) or offset and shall be applied to the Guarantied Obligations in accordance with the terms of the Credit Agreement.

 

12.                                 Attorneys’ Fees and Costs.  Guarantor agrees to pay, on demand, all attorneys’ fees and all other costs and expenses which may be incurred by Agent or the Lender Group in connection with the enforcement of this Guaranty or in any way arising out of, or consequential to, the protection, assertion, or enforcement of the Guarantied Obligations (or any security therefor), irrespective of whether suit is brought.

 

13.                                 Notices.  All notices and other communications hereunder to Agent shall be in writing and shall be mailed, sent, or delivered in accordance Section 11 of the Credit Agreement.  All notices and other 

 

8

 

communications hereunder to Guarantor shall be in writing and shall be mailed, sent, or delivered in care of Borrowers in accordance with Section 11 of the Credit Agreement.

 

14.                                 Cumulative Remedies.  No remedy under this Guaranty, under the Credit Agreement, or any other Loan Document is intended to be exclusive of any other remedy, but each and every remedy shall be cumulative and in addition to any and every other remedy given under this Guaranty, under the Credit Agreement, or any other Loan Document, and those provided by law.  No delay or omission by the Lender Group or Agent on behalf thereof to exercise any right under this Guaranty shall impair any such right nor be construed to be a waiver thereof.  No failure on the part of the Lender Group or Agent on behalf thereof to exercise, and no delay in exercising, any right under this Guaranty shall operate as a waiver thereof; nor shall any single or partial exercise of any right under this Guaranty preclude any other or further exercise thereof or the exercise of any other right.

 

15.                                 Severability of Provisions.  Each provision of this Guaranty shall be severable from every other provision of this Guaranty for the purpose of determining the legal enforceability of any specific provision.

 

16.                                 Entire Agreement; Amendments.  This Guaranty constitutes the entire agreement between Guarantor and the Lender Group pertaining to the subject matter contained herein.  This Guaranty may not be altered, amended, or modified, nor may any provision hereof be waived or noncompliance therewith consented to, except by means of a writing executed by Guarantor and Agent, on behalf of the Lender Group.  Any such alteration, amendment, modification, waiver, or consent shall be effective only to the extent specified therein and for the specific purpose for which given.  No course of dealing and no delay or waiver of any right or default under this Guaranty shall be deemed a waiver of any other, similar or dissimilar, right or default or otherwise prejudice the rights and remedies hereunder.

 

17.                                 Successors and Assigns.  This Guaranty shall be binding upon Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Lender Group and the Bank Product Providers; provided, however, Guarantor shall not assign this Guaranty or delegate any of its duties hereunder without Agent’s prior written consent and any unconsented to assignment shall be absolutely null and void.  In the event of any assignment, participation, or other transfer of rights by the Lender Group or the Bank Product Providers, the rights and benefits herein conferred upon the Lender Group and the Bank Product Providers shall automatically extend to and be vested in such assignee or other transferee.

 

18.                                 No Third Party Beneficiary.  This Guaranty is solely for the benefit of each member of the Lender Group, each Bank Product Provider, and each of their successors and assigns and may not be relied on by any other Person.

 

19.                                 CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 

THE VALIDITY OF THIS GUARANTY, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS GUARANTY SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY 

 

9

 

JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  GUARANTOR AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 19.

 

GUARANTOR AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  GUARANTOR AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS SECTION MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

20.                                 Counterparts; Telefacsimile Execution.  This Guaranty may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Guaranty.  Delivery of an executed counterpart of this Guaranty by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Guaranty.  Any party delivering an executed counterpart of this Guaranty by telefacsimile also shall deliver an original executed counterpart of this Guaranty but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Guaranty.

 

21.                                 Agreement to be Bound.  Guarantor hereby agrees to be bound by each and all of the terms and provisions of the Credit Agreement applicable to Guarantor.  Without limiting the generality of the foregoing, by its execution and delivery of this Guaranty, Guarantor hereby:  (a) makes to the Lender Group each of the representations and warranties set forth in the Credit Agreement applicable to Guarantor fully as though Guarantor were a party thereto, and such representations and warranties are incorporated herein by this reference, mutatis mutandis; and (b) agrees and covenants (i) to do each of the things set forth in the Credit Agreement that Borrowers agree and covenant to cause Guarantor to do, and (ii) to not do each of the things set forth in the Credit Agreement that Borrowers agree and covenant to cause Guarantor not to do, in each case, fully as though Guarantor was a party thereto, and such agreements and covenants are incorporated herein by this reference, mutatis mutandis.

 

[Signature page to follow]

 

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IN WITNESS WHEREOF, the undersigned has executed and delivered this Guaranty as of the date first written above.

 

 

	
 
    	
a
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Title:
    	
 
    

 

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EXHIBIT L-1

 

FORM OF LIBOR NOTICE

 

Wells Fargo Capital Finance, LLC, as Agent
 under the below referenced Credit Agreement
 150 South Wacker Drive, Suite 2200
 Chicago, Illinois 60606
 Attn: Loan Portfolio Manager (Supreme)

 

Ladies and Gentlemen:

 

Reference hereby is made to that certain Credit Agreement, dated as of September 14, 2011 (the “Credit Agreement”), among Supreme Industries, Inc., a Delaware corporation, Supreme Indiana Operations, Inc., a Delaware corporation (“Supreme Indiana”) and its Subsidiaries identified on the signature pages thereof (collectively with Supreme Indiana, the “Borrowers”), the lenders signatory thereto (the “Lenders”), and Wells Fargo Capital Finance, LLC, a Delaware limited liability company, as the arranger and administrative agent for the Lenders (“Agent”).  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

 

This LIBOR Notice represents Borrowers’ request to elect the LIBOR Option with respect to outstanding Advances in the amount of $                 (the “LIBOR Rate Advance”)[, and is a written confirmation of the telephonic notice of such election given to Agent].

 

The LIBOR Rate Advance will have an Interest Period of [1, 2, or 3] month(s) commencing on                                 .

 

This LIBOR Notice further confirms Borrowers’ acceptance, for purposes of determining the rate of interest based on the LIBOR Rate under the Credit Agreement, of the LIBOR Rate as determined pursuant to the Credit Agreement.

 

Administrative Borrower, on behalf of Borrowers, represents and warrants that (i) as of the date hereof, each representation or warranty contained in or pursuant to any Loan Document or any agreement, instrument, certificate, document or other writing furnished at any time under or in connection with any Loan Document, and as of the effective date of any advance, continuation or conversion requested above, is true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof and except to the extent any representation or warranty expressly related to an earlier date), (ii) each of the covenants and agreements contained in any Loan Document have been performed (to the extent required to be performed on or before the date hereof or each such effective date), and (iii) no Default or Event of Default has occurred and is continuing on the date hereof, nor will any thereof occur after giving effect to the request above.

 

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Dated:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SUPREME   INDIANA OPERATIONS, INC., a Delaware corporation,   as Administrative Borrower
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
Acknowledged   by:
    	
 
    
	
 
    	
 
    
	
WELLS   FARGO CAPITAL FINANCE, LLC,
    	
 
    
	
a   Delaware limited liability company, as Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    

 

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Schedule A-1

 

Agent’s Account

 

An account at a bank designated by Agent from time to time as the account into which Borrowers shall make all payments to Agent for the benefit of the Lender Group and into which the Lender Group shall make all payments to Agent under this Agreement and the other Loan Documents.  Unless and until Agent notifies Borrowers and the Lender Group to the contrary, Agent’s Account shall be that certain deposit account bearing account number 4124923707 and maintained by Agent with Wells Fargo Bank, N.A., San Francisco, CA, ABA #121-000-248.

 

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Schedule A-2

 

Authorized Persons

 

Matt W. Long

 

Jeff Mowery

 

Terry Pipp

 

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Schedule C-1

 

Revolver Commitments

 

	
Lender
    	
 
    	
Revolver Commitment
    	
 
    
	
Wells Fargo Capital Finance, LLC
    	
 
    	
$
    	
45,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
All Lenders
    	
 
    	
$
    	
45,000,000
    	
 
    

 

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Schedule D-1

 

Designated Account

 

Account number 4122213648 of Administrative Borrower maintained with Administrative Borrower’s Designated Account Bank, or such other deposit account of Administrative Borrower (located within the United States) that has been designated as such, in writing, by Administrative Borrower to Agent.

 

“Designated Account Bank” means Wells Fargo, whose ABA number is 121000248.

 

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Schedule E-1

 

Eligible Inventory Locations

 

	
Loan Party
    	
 
    	
Property Information
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
2572   E. Kercher Rd., Goshen, IN 46528
    
	
 
    	
 
    	
2581   E. Kercher Rd., Goshen, IN 46528
    
	
 
    	
 
    	
2592   E. Kercher Rd., Goshen, IN 46528
    
	
 
    	
 
    	
3352   Maple City Drive, Goshen, IN 46528
    
	
 
    	
 
    	
6577   Romiss St., Berkeley, MO 63134
    
	
 
    	
 
    	
2051   US Highway 41, Griffin, GA 30224
    
	
 
    	
 
    	
Etheridge   Mill Road, Griffin, GA 30224
    
	
 
    	
 
    	
3050   Dee St., Apopka, FL 32703
    
	
Supreme   Mid-Atlantic Corporation
    	
 
    	
411   Jonestown Rd. Jonestown, PA 17038
    
	
 
    	
 
    	
135   Douglas Pike, Harrisville, RI 02830
    
	
Supreme   Truck Bodies of California, Inc.
    	
 
    	
22135 Alessandro Blvd., Moreno Valley, CA   92553
    
	
Supreme   Corporation of Texas
    	
 
    	
500   Commerce Blvd., Cleburne, TX 76033
    
	
 
    	
 
    	
3001   Main St., Cleburne, TX 76033
    
	
Supreme   Northwest, L.L.C.
    	
 
    	
2450   Progress Way, Woodburn, OR 97071
    
	
Supreme\Murphy   Truck Bodies, Inc.
    	
 
    	
4000   Airport Dr., Wilson, NC 27894
    
	
SC   Tower Structural Laminating, Inc.
    	
 
    	
1491   Gerber St., Ligonier, IN 46767
    

 

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Schedule P-1

 

Permitted Investments

 

1.               Supreme Indiana Operations, Inc. owns a 1% General Partnership interest in G-2, Ltd.

 

2.               Supreme Indiana Operations, Inc. owns a 35.48% membership interest in BFG2011 Limited Liability Company.

 

1

 

Schedule P-2

 

Permitted Liens

 

	
Debtor
    	
 
    	
Secured Party
    	
 
    	
Jurisdiction
    	
 
    	
File Date
    	
 
    	
File Number
    	
 
    	
Collateral Description
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Ford   Motor Company
    	
 
    	
Delaware   Secretary of State
    	
 
    	
10/18/2010
    	
 
    	
20103632548
    	
 
    	
All   motor vehicles owned by the Ford Motor Company as consignor/bailor/secured   party on consignment/ bailment with the Debtor.
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Ally   Financial
    	
 
    	
Delaware   Secretary of State
    	
 
    	
11/17/2010
    	
 
    	
20104031955
    	
 
    	
All   chassis and/or vehicles manufactured or distributed by motor vehicle   manufacturers and all other inventory owned or acquired; all reserves or   other accounts held by Secured Party; all amounts due or to become due from   any manufacturer, distributor or other seller of inventory including, factory   holdbacks, warranty accounts, rebates, incentives or discounts; all proceeds   of the foregoing including accounts, chattel paper or insurance proceeds.
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Sutton   Ford, Inc.
    	
 
    	
Delaware   Secretary of State
    	
 
    	
11/22/2010
    	
 
    	
20104091199
    	
 
    	
All   motor vehicles owned by the Secured Party as consignor/secured party and on   consignment with or otherwise delivered to the Debtor as consignee/debtor for   upfitting, modification or sale.
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Sawgrass   Ford, Inc.
    	
 
    	
Delaware   Secretary of State
    	
 
    	
01/25/2011
    	
 
    	
20110269251
    	
 
    	
All   motor vehicles owned by the Secured Party as consignor/secured party and on   consignment with or otherwise delivered to the Debtor as consignee/debtor for   upfitting, modification or sale.
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Hooley   Family Management, Inc.
    	
 
    	
Delaware   Secretary of State
    	
 
    	
01/25/2011
    	
 
    	
20110269384
    	
 
    	
All   motor vehicles owned by the Secured Party as consignor/secured party and on   consignment with or otherwise delivered to the Debtor as consignee/debtor for   upfitting, modification or sale.
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Brasada   Ford, Ltd.
    	
 
    	
Delaware   Secretary of State
    	
 
    	
01/25/2011
    	
 
    	
20110269673
    	
 
    	
All   motor vehicles owned by the Secured Party as consignor/secured party and on   consignment with or otherwise delivered to the Debtor as consignee/debtor for   upfitting,
    

 

1

 

	
Debtor
    	
 
    	
Secured Party
    	
 
    	
Jurisdiction
    	
 
    	
File Date
    	
 
    	
File Number
    	
 
    	
Collateral Description
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
modification   or sale.
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Watson   Quality Ford, Inc.
    	
 
    	
Delaware   Secretary of State
    	
 
    	
05/24/2011
    	
 
    	
20111965147
    	
 
    	
All   motor vehicles owned by the Secured Party as consignor/secured party and on   consignment with or otherwise delivered to the Debtor as consignee/debtor for   upfitting, modification or sale.
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Isuzu   Corporation of America, Inc.
    	
 
    	
Delaware   Secretary of State
    	
 
    	
08/23/2011
    	
 
    	
20113272815
    	
 
    	
Notice   to put creditors of Supreme Corporation on notice of bailment arrangement   between Supreme Corporation and the Secured Party
    
	
Supreme   Indiana Operations, Inc.

 

NOTE: filing was   amended to change Debtor’s name from Supreme Corporation to Supreme Indiana   Operations, Inc.
    	
 
    	
General   Motors Acceptance Corporation
    	
 
    	
Texas   Secretary of State
    	
 
    	
10/17/1988
    	
 
    	
88-00239558
    	
 
    	
All   chasses and/or vehicles manufactured or distributed by General Motors owned   or acquired; all reserves and other accounts held by Secured Party; all   amounts due or to become due from Debtor from any manufacturer, distributor   or other seller of chassis and/or vehicles manufactured or distributed by   General Motors, including factory holdbacks, warranty accounts, rebates,   incentives or discounts; and all proceeds including general intangibles,   contract rights, chattel paper, insurance proceeds, accounts and assignments   of accounts.
    
	
Supreme   Indiana Operations, Inc.

 

NOTE: filing was   amended to change Debtor’s name from Supreme Corporation to Supreme Indiana   Operations, Inc.
    	
 
    	
GMAC
    	
 
    	
Texas   Secretary of State
    	
 
    	
01/08/2003
    	
 
    	
03-0013227199
    	
 
    	
All   chassis and/or vehicles manufactured or distributed by General Motors owned   or acquired; all reserves and other accounts held by Secured Party; all   amounts due or to become due from Debtor from any manufacturer, distributor   or other seller of chassis and/or vehicles manufactured or distributed by   General Motors, including factory holdbacks, warranty accounts, rebates,   incentives or discounts; and all proceeds including general intangibles,   contract rights, chattel paper, insurance proceeds, accounts and assignments   of accounts.
    

 

2

 

	
Debtor
    	
 
    	
Secured Party
    	
 
    	
Jurisdiction
    	
 
    	
File Date
    	
 
    	
File Number
    	
 
    	
Collateral Description
    
	
Supreme   Corporation
    	
 
    	
Trans   Air Manufacturing Corporation
    	
 
    	
Texas   Secretary of State
    	
 
    	
08/10/2007
    	
 
    	
07-0027370894
    	
 
    	
All   inventory, equipment, parts and components from time to time delivered by   Secured Party or anyone on its behalf to Debtor or its premises, under a   bailment arrangement.
    
	
Supreme   Corporation
    	
 
    	
MacNab   Auto Sales Limited
    	
 
    	
Texas   Secretary of State
    	
 
    	
05/13/2008
    	
 
    	
08-0016480916
    	
 
    	
Specified   collateral on consignment.
    
	
Supreme   Corporation
    	
 
    	
Ford   Motor Company
    	
 
    	
Texas   Secretary of State
    	
 
    	
05/28/2008
    	
 
    	
08-0018067313
    	
 
    	
All   motor vehicles owned by Ford Motor Company as consignor/bailor/secured party   and on consignment/bailment with or otherwise delivered to Debtor as   consignee/bailee/debtor.
    
	
Supreme   Corporation
    	
 
    	
Sawgrass   Ford, Inc.
    	
 
    	
Texas   Secretary of State
    	
 
    	
06/02/2008
    	
 
    	
08-0018549227
    	
 
    	
All   motor vehicles owned by the Secured Party as consignor/secured party and on   consignment with or otherwise delivered to the Debtor as consignee/debtor for   upfitting, modification or sale.
    
	
Supreme   Corporation
    	
 
    	
Atlantic   Ford Ford Truck Sales Inc.
    	
 
    	
Texas   Secretary of State
    	
 
    	
08/13/2008
    	
 
    	
08-0027120696
    	
 
    	
All   motor vehicles owned by the Secured Party as consignor/secured party and on   consignment with or otherwise delivered to the Debtor as consignee/debtor for   upfitting, modification or sale.
    
	
Supreme   Corporation
    	
 
    	
Hooley   Family Management, Inc.
    	
 
    	
Texas   Secretary of State
    	
 
    	
08/26/2008
    	
 
    	
08-0028526485
    	
 
    	
All   motor vehicles owned by the Secured Party as consignor/secured party and on   consignment with or otherwise delivered to the Debtor as consignee/debtor for   upfitting, modification or sale.
    
	
Supreme   Corporation
    	
 
    	
Pearson   Ford, Inc.
    	
 
    	
Texas   Secretary of State
    	
 
    	
12/15/2008
    	
 
    	
08-0038902717
    	
 
    	
All   motor vehicles owned by the Secured Party as consignor/secured party and on   consignment with or otherwise delivered to the Debtor as consignee/debtor for   upfitting, modification or sale.
    

 

3

 

	
Debtor
    	
 
    	
Secured Party
    	
 
    	
Jurisdiction
    	
 
    	
File Date
    	
 
    	
File Number
    	
 
    	
Collateral Description
    
	
Supreme   Corporation
    	
 
    	
Brasada   Ford, Ltd.
    	
 
    	
Texas   Secretary of State
    	
 
    	
12/16/2008
    	
 
    	
08-0039826581
    	
 
    	
All   motor vehicles owned by the Secured Party as consignor/secured party and on   consignment with or otherwise delivered to the Debtor as consignee/debtor for   upfitting, modification or sale.
    
	
Supreme   Corporation
    	
 
    	
Freightliner   Customer Chassis Corporation
    	
 
    	
Texas   Secretary of State
    	
 
    	
04/29/2010
    	
 
    	
10-0012136478
    	
 
    	
All   motor vehicle chassis manufactured by the Secured Party; all additions and   accessions to said motor vehicle chassis including all vehicle bodies,   inventory or equipment attached or accessed thereto; all manufacturer’s   certificates and certificates of title or ownership; all proceeds.
    
	
Supreme   Corporation
    	
 
    	
NMHG   Financial Services, Inc.
    	
 
    	
Texas   Secretary of State
    	
 
    	
03/31/2011
    	
 
    	
11-0009608934
    	
 
    	
All   equipment leased to Debtor by Secured Party.
    
	
Supreme   Mid-Atlantic Corporation
    	
 
    	
Department   of Community and Economic Development-MELF
    	
 
    	
Texas   Secretary of State
    	
 
    	
09/29/2005
    	
 
    	
05-0030345454
    	
 
    	
Equipment   financed with the proceeds of a loan from the Machinery and Equipment Loan   Fund.
    
	
Supreme   Mid-Atlantic Corporation
    	
 
    	
Bayshore   Ford Truck Sales, Inc.
    	
 
    	
Texas   Secretary of State
    	
 
    	
12/16/2008
    	
 
    	
08-0039809633
    	
 
    	
All   motor vehicles owned by the Secured Party as consignor/secured party and on   consignment with or otherwise delivered to the Debtor as consignee/debtor for   upfitting, modification or sale.
    
	
Supreme   Truck Bodies of California, Inc.
    	
 
    	
South   Bay Ford, Inc.
    	
 
    	
California   Secretary of State
    	
 
    	
11/28/2008
    	
 
    	
08-7179811638
    	
 
    	
All   motor vehicles owned by the Secured Party as consignor/secured party and on   consignment with or otherwise delivered to the Debtor as consignee/debtor for   upfitting, modification or sale.
    
	
Supreme   Truck Bodies of California, Inc.
    	
 
    	
Five   Star Ford, Inc.
    	
 
    	
California   Secretary of State
    	
 
    	
 
    	
 
    	
 
    	
 
    	
All   motor vehicles owned by the Secured Party as consignor/secured party and on   consignment with or otherwise delivered to the Debtor as consignee/debtor for   upfitting, modification or sale.
    

 

4

 

Schedule R-1

 

Real Property Collateral

 

	
Owner
    	
 
    	
Address
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
2572 – 2581 East Kercher   Road, Goshen, IN 46528
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
3352 Maple City Drive,   Goshen, IN 46528
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
1491 Gerber St., Ligonier,   IN 46767
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
1493 Gerber St., Ligonier,   IN 46767
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
2051 U.S. Highway 41,   Griffin, GA 30224
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
Etheridge Mill Road,   Griffin, GA 30224
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
3050 Dee Street, Apopka,   FL 32703
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
6577 - 6581 Romiss Court,   Berkeley, MO 63134
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
1240 Ethan Dr.,   Streetsboro, OH 44241
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
104 - 106 Miller Drive,   White Pigeon, MI 49099
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
2450 Progress Way,   Woodburn, OR 97071
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
24 Howard Lane, Jonestown,   PA 17038
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
401 Jonestown Road,   Jonestown, PA 17038
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
411 Jonestown Road,   Jonestown, PA 17038
    
	
Supreme Indiana   Operations, Inc.
    	
 
    	
NS Jonestown Road,   Jonestown, PA 17038
    
	
Supreme Mid-Atlantic   Corporation
    	
 
    	
2490 State Route 72,   Jonestown, PA 17038
    
	
Supreme Corporation of Texas
    	
 
    	
500 Commerce Blvd.,   Cleburne, TX 76033
    
	
Supreme Corporation of   Texas
    	
 
    	
3001 Main St., Cleburne,   TX 76033
    
	
Supreme\Murphy Truck   Bodies, Inc.
    	
 
    	
4000 Airport Drive,   Wilson, NC 27894
    

 

1

 

Schedule R-2

 

Real Property Held for Sale

 

	
2450   Progress Way, Woodburn, Oregon
    	
 
    	
Marion   County
    
	
4000   Airport Dr., Wilson, North Carolina
    	
 
    	
Wilson   County
    
	
104-106   Miller Drive, White Pigeon, Michigan
    	
 
    	
St.   Joseph County
    
	
3352   Maple City Drive, Goshen, Indiana
    	
 
    	
Elkhart   County
    
	
1493   Gerber St., Ligonier, Indiana
    	
 
    	
Noble   County
    
	
1240   Ethan Drive, Steetsboro, Ohio
    	
 
    	
Portage   County
    

 

1

 

Schedule 1.1

 

As used in the Agreement, the following terms shall have the following definitions:

 

“ACA Assignment” has the meaning specified therefor in clause (g) of the definition of Eligible Accounts.

 

“Accession” means an accession (as that term is defined in the Code), attached to or otherwise physically united with a Pool Unit after possession of the Pool Unit is delivered to Supreme Indiana.

 

“Account” means an account (as that term is defined in the Code).

 

“Account Debtor” means any Person who is obligated on an Account, chattel paper, or a general intangible.

 

“Accounting Changes” means changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or successor thereto or any agency with similar functions).

 

“Additional Documents” has the meaning specified therefor in Section 5.12 of the Agreement.

 

“Administrative Borrower” has the meaning specified therefor in Section 17.14 of the Agreement.

 

“Advances” has the meaning specified therefor in Section 2.1(a) of the Agreement.

 

“Affected Lender” has the meaning specified therefor in Section 2.13(b) of the Agreement.

 

“Affiliate” means, as applied to any Person, any other Person who controls, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” means the possession, directly or indirectly through one or more intermediaries, of the power to direct the management and policies of a Person, whether through the ownership of Stock, by contract, or otherwise; provided, however, that, for purposes of the definition of Eligible Accounts and Section 6.12 of the Agreement: (a) any Person which owns directly or indirectly 10% or more of the Stock having ordinary voting power for the election of directors or other members of the governing body of a Person or 10% or more of the partnership or other ownership interests of a Person (other than as a limited partner of such Person) shall be deemed an Affiliate of such Person, (b) each director (or comparable manager) of a Person shall be deemed to be an Affiliate of such Person, and (c) each partnership in which a Person is a general partner shall be deemed an Affiliate of such Person.

 

“Agent” has the meaning specified therefor in the preamble to the Agreement.

 

“Agent-Related Persons” means Agent, together with its Affiliates, officers, directors, employees, attorneys, and agents.

 

“Agent’s Account” means the Deposit Account of Agent identified on Schedule A-1.

 

“Agent’s Liens” means the Liens granted by Parent or its Subsidiaries to Agent under the Loan Documents.

 

“Agreed Release Amount” means, with respect to each Pool Unit, an amount equal to the amount advanced by ALLY to or for the account of Supreme Indiana for the acquisition or obtaining of such 

 

1

 

Pool Unit, plus accrued, unpaid interest on the unpaid balance of such advance and other customary fees and charges of ALLY specifically related only to such advance.

 

“Agreement” means the Credit Agreement to which this Schedule 1.1 is attached.

 

“ALLY” means ALLY Financial Inc. and ALLY Bank and their respective successors and assigns, both collectively and individually.

 

“ALLY Advances” has the meaning specified therefor in clause (m) of the definition of Permitted Indebtedness.

 

“ALLY Collateral” means the ALLY Priority Collateral (as such term is the defined in the ALLY Intercreditor Agreement), the ALLY Pledged Funds, and the Georgia Real Estate.

 

“ALLY Collateral Account” has the meaning ascribed to such term in the ALLY Intercreditor Agreement.

 

“ALLY Documents” means the ALLY Loan Agreements and all other instruments, agreements and other documents evidencing or governing the Indebtedness evidenced by the ALLY Loan Agreements or providing for any guarantee or other right in respect thereof.

 

“ALLY Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of even date with the Agreement, among the Loan Parties, ALLY and Agent, the form and substance of which is satisfactory to Agent.

 

“ALLY Loan Agreements” means each ALLY Inventory Loan and Security Agreement (as such term is defined in the ALLY Intercreditor Agreement), whether such arrangement is a loan, financing, bailment, consignment or other title retention arrangement.

 

“ALLY Pledged Funds” means cash (whether or not held in the ALLY Collateral Account) and deposit accounts pledged to ALLY and in which ALLY has a first priority Lien, but excepting the proceeds of Manufacturer Receivables (as such term is defined in the ALLY Intercreditor Agreement).

 

“Application Event” means the occurrence of (a) a failure by Borrowers to repay all of the Obligations in full on the Maturity Date, or (b) an Event of Default and the election by Agent or the Required Lenders to require that payments and proceeds of Collateral be applied pursuant to Section 2.4(b)(ii) of the Agreement.

 

“Assignee” has the meaning specified therefor in Section 13.1(a) of the Agreement.

 

“Assignment and Acceptance” means an Assignment and Acceptance Agreement substantially in the form of Exhibit A-1.

 

“Authorized Person” means any one of the individuals identified on Schedule A-2, as such schedule is updated from time to time by written notice from Administrative Borrower to Agent.

 

“Availability” means, as of any date of determination, the amount that Borrowers are entitled to borrow as Advances under Section 2.1 of the Agreement (after giving effect to all then outstanding Obligations (other than Bank Product Obligations)).

 

“Bank Product” means any one or more of the following financial products or accommodations extended to Parent or its Subsidiaries by a Bank Product Provider:  (a) credit cards, (b) credit

 

2

 

card processing services, (c) debit cards, (d) stored value cards, (e) purchase cards (including so-called “procurement cards” or “P-cards”), (f) Cash Management Services, or (g) transactions under Hedge Agreements.

 

“Bank Product Agreements” means those agreements entered into from time to time by Parent or its Subsidiaries with a Bank Product Provider in connection with the obtaining of any of the Bank Products.

 

“Bank Product Collateralization” means providing cash collateral (pursuant to documentation reasonably satisfactory to Agent) to be held by Agent for the benefit of the Bank Product Providers (other than the Hedge Providers) in an amount determined by Agent as sufficient to satisfy the reasonably estimated credit exposure with respect to the then existing Bank Product Obligations (other than Hedge Obligations).

 

“Bank Product Obligations” means (a) all obligations, liabilities, reimbursement obligations, fees, or expenses owing by Parent or its Subsidiaries to any Bank Product Provider pursuant to or evidenced by a Bank Product Agreement and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, (b) all Hedge Obligations, and (c) all amounts that Agent or any Lender is obligated to pay to a Bank Product Provider as a result of Agent or such Lender purchasing participations from, or executing guarantees or indemnities or reimbursement obligations to, a Bank Product Provider with respect to the Bank Products provided by such Bank Product Provider to Parent or its Subsidiaries.

 

“Bank Product Provider” means Wells Fargo or any of its Affiliates (including WFCF).

 

“Bank Product Reserve Amount” means, as of any date of determination, the Dollar amount of reserves that Agent has determined it is necessary or appropriate to establish (based upon the Bank Product Providers’ reasonable determination of their credit exposure to Parent and its Subsidiaries in respect of Bank Product Obligations) in respect of Bank Products then provided or outstanding.

 

“Bankruptcy Code” means title 11 of the United States Code, as in effect from time to time.

 

“Base Rate” means the greatest of (a) 3.25% per annum, (b) the Federal Funds Rate plus 1.0%, (c) the LIBOR Rate (which rate shall be calculated based upon an Interest Period of 3 months and shall be determined on a daily basis), plus 1.0%, and (d) the rate of interest announced, from time to time, within Wells Fargo at its principal office in San Francisco as its “prime rate”, with the understanding that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publications as Wells Fargo may designate.

 

“Base Rate Loan” means each portion of the Advances that bears interest at a rate determined by reference to the Base Rate.

 

“Base Rate Margin” means, as of any date of determination (with respect to any portion of the outstanding Advances on such date that is a Base Rate Loan), the applicable margin set forth in the following table that corresponds to the most recent Excess Availability calculation delivered to Agent pursuant to Section 5.1 of the Agreement (the “Excess Availability Calculation”); provided, however, that for the period from the Closing Date through the date Agent receives the Excess Availability Calculation in respect of the testing period ending December 31, 2011, the Base Rate Margin shall be at the margin in the row styled “Level II”:

 

3

 

	
Level
    	
 
    	
Excess Availability Calculation
    	
 
    	
Base Rate Margin
    
	
I
    	
 
    	
If Excess Availability is greater than or equal to $20,000,000
    	
 
    	
0.75%
    
	
II
    	
 
    	
If Excess Availability is less than $20,000,000 but greater than or   equal to $10,000,000
    	
 
    	
1.00%
    
	
III
    	
 
    	
If Excess Availability is less than $10,000,000
    	
 
    	
1.25%
    

 

Except as set forth in the foregoing proviso, the Base Rate Margin shall be based upon the most recent Excess Availability Calculation, which will be calculated as of the end of each Fiscal Quarter.  Except as set forth in the foregoing proviso, the Base Rate Margin shall be re-determined quarterly on the first day of the month following the date of delivery to Agent of the certified calculation of Excess Availability pursuant to Section 5.1 of the Agreement; provided, however, that if Borrowers fail to provide such certification when such certification is due, the Base Rate Margin shall be set at the margin in the row styled “Level III” as of the first day of the month following the date on which the certification was required to be delivered until the date on which such certification is delivered (on which date (but not retroactively), without constituting a waiver of any Default or Event of Default occasioned by the failure to timely deliver such certification, the Base Rate Margin shall be set at the margin based upon the calculations disclosed by such certification).  In the event that the information regarding Excess Availability contained in any certificate delivered pursuant to Section 5.1 of the Agreement is shown to be inaccurate, and such inaccuracy, if corrected, would have led to the application of a higher Base Rate Margin for any period (a “Base Rate Period”) than the Base Rate Margin actually applied for such Base Rate Period, then (a) Borrowers shall immediately deliver to Agent a correct certificate for such Base Rate Period, (b) the Base Rate Margin shall be determined as if the correct Base Rate Margin (as set forth in the table above) were applicable for such Base Rate Period, and (c) Borrowers shall immediately deliver to Agent full payment in respect of the accrued additional interest as a result of such increased Base Rate Margin for such Base Rate Period, which payment shall be promptly applied by Agent to the affected Obligations.

 

“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of ERISA) for which Parent or any of its Subsidiaries or ERISA Affiliates has been an “employer” (as defined in Section 3(5) of ERISA) within the past six years.

 

“Blocked Account Agreement” means a cash management agreement, in form and substance reasonably satisfactory to Agent, which is executed and delivered by a Loan Party, Agent, and the Blocked Account Bank.

 

“Blocked Account Bank” has the meaning specified therefor in Section 5.18(a) of the Agreement.

 

“Board of Directors” means the board of directors (or comparable managers) of Parent or any committee thereof duly authorized to act on behalf of the board of directors (or comparable managers).

 

“Borrower” and “Borrowers” have the respective meanings specified therefor in the preamble to the Agreement.

 

“Borrowing” means a borrowing consisting of Advances made on the same day by the Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a Swing Loan, or by Agent in the case of a Protective Advance.

 

4

 

“Borrowing Base” means, as of any date of determination, the result of:

 

(a)           85% of the amount of Eligible Accounts, less the amount, if any, of the Dilution Reserve (collectively, the “Accounts Borrowing Base”), plus

 

(b)           the lesser of

 

(i)            65% of the value (calculated at the lower of cost or market on a basis consistent with Borrowers’ historical accounting practices) of Eligible Inventory,

 

(ii)           85% times the most recently determined Net Liquidation Percentage times the value (calculated at the lower of cost or market on a basis consistent with Borrowers’ historical accounting practices) of Eligible Inventory; provided, that, in the case of the foregoing clauses (i) and/or (ii), the Availability generated by Eligible Inventory consisting of work-in-process shall not exceed $4,000,000 at any time, and

 

(iii)          an amount equal to 110% of the Accounts Borrowing Base as of such date of determination, minus

 

(c)           the aggregate amount of reserves, if any, established by Agent under Section 2.1(c) of the Agreement.

 

“Borrowing Base Certificate” means a certificate in the form of Exhibit B-1.

 

“Borrowing Base Excess” has the meaning set forth in Section 2.4(e)(i).

 

“Business Day” means any day that is not a Saturday, Sunday, or other day on which banks are authorized or required to close in the state of New York, except that, if a determination of a Business Day shall relate to a LIBOR Rate Loan, the term “Business Day” also shall exclude any day on which banks are closed for dealings in Dollar deposits in the London interbank market.

 

“California Lease” means that certain AIR Commercial Real Estate Association Standard Industrial Commercial Single-Tenant Lease-Net, dated as of May 12, 2011, between Supreme Indiana and BFG2011 Limited Liability Company, a New Jersey limited liability company doing business in California as 22135 Alessandro, LLC.

 

“California Real Estate” means the real property and improvements with street addresses of 22201 and 22135 Alessandro Blvd., Moreno Valley, CA 92553.

 

“Capital Expenditures” means, with respect to any Person for any period, the aggregate of all expenditures by such Person and its Subsidiaries during such period that are capital expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or financed.

 

“Capitalized Lease Obligation” means that portion of the obligations under a Capital Lease that is required to be capitalized in accordance with GAAP.

 

“Capital Lease” means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

 

“Cash Equivalents” means (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct

 

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obligations issued or fully guaranteed by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”), (c) commercial paper maturing no more than 270 days from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit, time deposits, overnight bank deposits or bankers’ acceptances maturing within 1 year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any state thereof or the District of Columbia or any United States branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $250,000,000, (e) Deposit Accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or (ii) any other bank organized under the laws of the United States or any state thereof so long as the full amount maintained with any such other bank is insured by the Federal Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank satisfying the requirements of clause (d) of this definition or recognized securities dealer having combined capital and surplus of not less than $250,000,000, having a term of not more than seven days, with respect to securities satisfying the criteria in clauses (a) or (d) above, (g) debt securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the criteria described in clause (d) above, and (h) Investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (g) above.

 

“Cash Management Services” means any cash management or related services including treasury, depository, return items, overdraft, controlled disbursement,  merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) and other cash management arrangements.

 

“Casualty Event” means, with respect to any property (including real property) of any Person, any loss of title with respect to such property or any loss of or damage to or destruction of, or any condemnation or other taking (including by any Governmental Authority) of, such property for which such Person or any of its Subsidiaries receives insurance proceeds or proceeds of a condemnation award or other compensation.  “Casualty Event” includes, but is not limited to, any taking of all or any part of any real property of any Person or any part thereof, in or by condemnation or other eminent domain proceedings pursuant to any law, or by reason of the temporary requisition of the use or occupancy of all or any part of any real property of any Person or any part thereof by any Governmental Authority.

 

“CFC” means a controlled foreign corporation (as that term is defined in the IRC).

 

“Change of Control” means that (a) any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 25%, or more, of the Stock of Parent having the right to vote for the election of members of the Board of Directors, (b) a majority of the members of the Board of Directors do not constitute Continuing Directors, or (c) Parent fails to own and control, directly or indirectly, 100% of the Stock of each other Loan Party.

 

“Closing Date” means the date of the making of the initial Advance (or other extension of credit) under the Agreement.

 

“Code” means the New York Uniform Commercial Code, as in effect from time to time.

 

“Collateral” means all assets and interests in assets and proceeds thereof now owned or hereafter acquired by a Loan Party in or upon which a Lien is granted by such Person in favor of Agent or the Lenders under any of the Loan Documents.

 

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“Collateral Access Agreement” means a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, warehouseman, processor, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in a Loan Party’s books and records, Equipment, or Inventory, in each case, in form and substance reasonably satisfactory to Agent.

 

“Collections” means all cash, checks, notes, instruments, and other items of payment (including insurance proceeds, cash proceeds of asset sales, rental proceeds, and tax refunds).

 

“Compliance Certificate” means a certificate substantially in the form of Exhibit C-1 delivered by the chief financial officer of Administrative Borrower to Agent.

 

“Confidential Information” has the meaning specified therefor in Section 17.9(a) of the Agreement.

 

“Continuing Director” means (a) any member of the Board of Directors who was a director (or comparable manager) of Parent on the Closing Date and (b) any individual who becomes a member of the Board of Directors after the Closing Date if such individual was approved, appointed or nominated for election to the Board of Directors by a majority of the Continuing Directors, but excluding any such individual originally proposed for election in opposition to the Board of Directors in office at the Closing Date in an actual or threatened election contest relating to the election of the directors (or comparable managers) of Parent and whose initial assumption of office resulted from such contest or the settlement thereof.

 

“Contracting Officer Acknowledgement” has the meaning specified therefor in clause (g) of the definition of Eligible Accounts.

 

“Control Agreement” means a control agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by a Loan Party, Agent, and the applicable securities intermediary (with respect to a Securities Account) or bank (with respect to a Deposit Account).

 

“Daily Balance” means, as of any date of determination and with respect to any Obligation, the amount of such Obligation owed at the end of such day.

 

“Default” means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default.

 

“Defaulting Lender” means any Lender that (a) has failed to fund any amounts required to be funded by it under the Agreement on the date that it is required to do so under the Agreement (including the failure to make available to Agent amounts required pursuant to a Settlement or to make a required payment in connection with a Letter of Credit Disbursement), (b) notified Parent, any Borrower, Agent, or any Lender in writing that it does not intend to comply with all or any portion of its funding obligations under the Agreement, (c) has made a public statement to the effect that it does not intend to comply with its funding obligations under the Agreement or under other agreements generally (as reasonably determined by Agent) under which it has committed to extend credit, (d) failed, within 1 Business Day after written request by Agent, to confirm that it will comply with the terms of the Agreement relating to its obligations to fund any amounts required to be funded by it under the Agreement, (e) otherwise failed to pay over to Agent or any other Lender any other amount required to be paid by it under the Agreement on the date that it is required to do so under the Agreement, or (f) (i) becomes or is insolvent or has a parent company that has become or is insolvent or (ii) becomes the subject of a bankruptcy or Insolvency Proceeding, or has had a receiver, conservator, trustee, or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or Insolvency Proceeding, or has had a receiver, conservator, trustee, or custodian appointed for

 

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it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

 

“Defaulting Lender Rate” means (a) for the first 3 days from and after the date the relevant payment is due, the Base Rate, and (b) thereafter, the interest rate then applicable to Advances that are Base Rate Loans (inclusive of the Base Rate Margin applicable thereto).

 

“Demonstration Unit” means a motor vehicle chassis that satisfies both of the following requirements:  (a) a Loan Party has added accessions (as such term is defined in the Code) to such motor vehicle chassis or such motor vehicle chassis has been fully or partially accessorized, improved, changed, converted, altered, modified or otherwise converted by a Loan Party, in each case since the delivery of such motor vehicle chassis, and (b) such motor vehicle chassis and its accessions (as such term is defined in the Code) are not subject to a contract for the purchase between such Loan Party, as seller, and a bona fide purchaser for value, as buyer.

 

“Deposit Account” means any deposit account (as that term is defined in the Code).

 

“Designated Account” means the Deposit Account of Administrative Borrower identified on Schedule D-1.

 

“Designated Account Bank” has the meaning specified therefor in Schedule D-1.

 

“Dilution” means, as of any date of determination, a percentage, based upon the experience of the immediately prior 365 consecutive days, that is the result of dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with respect to Borrowers’ Accounts during such period, by (b) Borrowers’ billings with respect to Accounts during such period.

 

“Dilution Reserve” means, as of any date of determination, an amount sufficient to reduce the advance rate against Eligible Accounts by 1 percentage point for each percentage point by which Dilution is in excess of 5%.

 

“Dollars” or “$” means United States dollars.

 

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

 

“EBITDA” means, with respect to any fiscal period, Parent’s and its Subsidiaries’ consolidated net earnings (or loss), minus extraordinary gains and interest income, plus Stock-based compensation, plus non-cash extraordinary losses, Interest Expense, income taxes, and depreciation and amortization for such period, in each case, determined on a consolidated basis in accordance with GAAP.

 

“Eligible Accounts” means those Accounts created by any Borrower in the ordinary course of its business, that arise out of such Borrower’s sale of goods or rendition of services, that comply with each of the representations and warranties respecting Eligible Accounts made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the results of any audit performed by Agent from time to time after the Closing Date.  In determining the amount to be included, Eligible Accounts shall be calculated net of customer deposits and unapplied cash.  Eligible Accounts shall not include the following:

 

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(a)           Accounts that the Account Debtor has failed to pay within 90 days of original invoice date or Accounts with selling terms of more than 60 days,

 

(b)           Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above,

 

(c)           Accounts with respect to which the Account Debtor is an Affiliate of a Borrower or an employee or agent of a Borrower or any Affiliate of a Borrower,

 

(d)           Accounts arising in a transaction wherein goods are placed on consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold (other than a Permitted Bill and Hold Agreement), or any other terms by reason of which the payment by the Account Debtor may be conditional,

 

(e)           Accounts that are not payable in Dollars,

 

(f)            Accounts with respect to which the Account Debtor either (i) does not maintain its chief executive office in the United States or Canada, or (ii) is not organized under the laws of the United States or Canada or any state or province thereof, or (iii) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (A) the Account is supported by an irrevocable letter of credit reasonably satisfactory to Agent (as to form, substance, and issuer or domestic confirming bank) that has been delivered to Agent and is directly drawable by Agent, or (B) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, reasonably satisfactory to Agent,

 

(g)           Accounts with respect to which the Account Debtor is either (i) the United States or any department, agency, or instrumentality of the United States or (ii) any state of the United States, unless (A) (1) the applicable Borrower has assigned its right to payment of a particular governmental Account to Agent pursuant to the Federal Assignment of Claims Act (an “ACA Assignment”), (2) such ACA Assignment has been duly acknowledged by a signed writing from the appropriate contracting officer administering the relevant government contract (a “Contracting Officer Acknowledgement”), and (3) the appropriate disbursement or entitlement officer administering payments under such government contract receives such Contracting Officer’s Acknowledgement, if different than the appropriate contracting officer (the occurrence of (1), (2) and (3) in respect of any such Government Receivable, hereinafter a “Fully Acknowledged Assignment”) or (B) the applicable Borrower has otherwise complied with other applicable statutes or ordinances; provided that a Fully Acknowledged Assignment will not be required for (1) the DOS Agreement so long as (x) Supreme Corporation of Texas has delivered a fully completed assignment (with all necessary Borrower signatures) and cover letter properly addressed to the relevant contracting officer and disbursing officer identified on the DOS Agreement to properly assign payment in respect of the DOS Agreement to the Agent in compliance with the Federal Assignment of Claims Act, in form and substance acceptable to the Agent, on or prior to the Closing Date, and (y) no later than 90 days from the date of this Agreement, a Fully Acknowledged Assignment occurs with respect to the DOS Agreement or (2) so long as no Default or Event of Default has occurred and is continuing, any government contracts entered into after the date of this Agreement so long as the aggregate face amount of such Accounts is no greater than $5,000,000,

 

(h)           Accounts with respect to which the Account Debtor is a creditor of a Borrower, has or has asserted a right of setoff, or has disputed its obligation to pay all or any portion of the Account, to the extent of such claim, right of setoff, or dispute,

 

(i)            Accounts with respect to an Account Debtor whose total obligations owing to Borrowers exceed 15% (or (i) in the case of Penske Corporation, 30% and (ii) in the case of the United States

 

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Department of State, 25%) (each such percentage, as applied to a particular Account Debtor, being subject to reduction by Agent in its Permitted Discretion if the creditworthiness of such Account Debtor deteriorates) of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess of such percentage; provided, however, that, in each case, the amount of Eligible Accounts that are excluded because they exceed the foregoing percentage shall be determined by Agent based on all of the otherwise Eligible Accounts prior to giving effect to any eliminations based upon the foregoing concentration limit,

 

(j)            Accounts with respect to which the Account Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone out of business, or as to which a Borrower has received notice of an imminent Insolvency Proceeding or a material impairment of the financial condition of such Account Debtor,

 

(k)           Accounts, the collection of which, Agent, in its Permitted Discretion, believes to be doubtful by reason of the Account Debtor’s financial condition,

 

(l)            Accounts that are not subject to a valid and perfected first priority Agent’s Lien,

 

(m)          Accounts with respect to which (i) the goods giving rise to such Account have not been shipped and billed to the Account Debtor or (ii) the services giving rise to such Account have not been performed and billed to the Account Debtor,

 

(n)           Accounts with respect to which the Account Debtor is a Sanctioned Person or Sanctioned Entity, or

 

(o)           Accounts that represent the right to receive progress payments or other advance billings that are due prior to the completion of performance by Borrowers of the subject contract for goods or services.

 

“Eligible Inventory” means Inventory consisting of first quality finished goods held for sale in the ordinary course of Borrowers’ business, work-in-process and raw materials, in each case that complies with each of the representations and warranties respecting Eligible Inventory made in the Loan Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the results of any audit or appraisal performed by Agent from time to time after the Closing Date.  In determining the amount to be so included, Inventory shall be valued at the lower of cost or market on a basis consistent with Borrowers’ historical accounting practices.  An item of Inventory shall not be included in Eligible Inventory if:

 

(a)           a Borrower does not have good, valid, and marketable title thereto,

 

(b)           a Borrower does not have actual and exclusive possession thereof (either directly or through a bailee or agent of such Borrower),

 

(c)           it is not located at one of the locations in the continental United States set forth on Schedule E-1 (or in-transit from one such location to another such location),

 

(d)           it is in-transit to or from a location of a Borrower (other than in-transit from one location set forth on Schedule E-1 to another location set forth on Schedule E-1),

 

(e)           it is located on real property leased by a Borrower or in a contract warehouse, in each case, unless it is subject to a Collateral Access Agreement executed by the lessor or warehouseman, as the case may be, and unless it is segregated or otherwise separately identifiable from goods of others, if any, stored on the premises,

 

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(f)            it is the subject of a bill of lading or other document of title,

 

(g)           it is not subject to a valid and perfected first priority Agent’s Lien,

 

(h)           it consists of goods returned or rejected by a Borrower’s customers,

 

(i)            it consists of goods that are obsolete or slow moving, restrictive or custom items, or goods that constitute spare parts, packaging and shipping materials, supplies used or consumed in Borrowers’ business, bill and hold goods (other than pursuant to a Permitted Bill and Hold Agreement), defective goods, “seconds,” or Inventory acquired on consignment, or

 

(j)            it is subject to third party trademark, licensing or other proprietary rights, unless Agent is satisfied that such Inventory can be freely sold by Agent on and after the occurrence of an Event of a Default despite such third party rights.

 

“Eligible Transferee” means (a) a commercial bank organized under the laws of the United States, or any state thereof, and having total assets in excess of $250,000,000, (b) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development or a political subdivision of any such country and which has total assets in excess of $250,000,000, provided that such bank is acting through a branch or agency located in the United States, (c) a finance company, insurance company, or other financial institution or fund that is engaged in making, purchasing, or otherwise investing in commercial loans in the ordinary course of its business and having (together with its Affiliates) total assets in excess of $250,000,000, (d) any Affiliate (other than individuals) of a pre-existing Lender, (e) so long as no Event of Default has occurred and is continuing, any other Person approved by Agent and Borrowers (such approval by Borrowers not to be unreasonably withheld, conditioned or delayed), and (f) during the continuation of an Event of Default, any other Person approved by Agent.

 

“Environmental Action” means any written complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter, or other written communication from any Governmental Authority, or any third party involving violations of Environmental Laws or releases of Hazardous Materials (a) from any assets, properties, or businesses of any Borrower, any Subsidiary of a Borrower, or any of their predecessors in interest, (b) from adjoining properties or businesses, or (c) from or onto any facilities which received Hazardous Materials generated by any Borrower, any Subsidiary of a Borrower, or any of their predecessors in interest for which a Borrower or any of its Subsidiaries is legally obligated or liable.

 

“Environmental Law” means any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, or rule of common law now or hereafter in effect and in each case as amended, or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, in each case, to the extent binding on Parent or its Subsidiaries, relating to the environment, the effect of the environment on employee health, or Hazardous Materials, in each case as amended from time to time.

 

“Environmental Liabilities” means all liabilities, monetary obligations, losses, damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, or consultants, and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand, or Remedial Action required, by any Governmental Authority or any third party, and which relate to any Environmental Action.

 

“Environmental Lien” means any Lien in favor of any Governmental Authority for Environmental Liabilities.

 

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“Equipment” means equipment (as that term is defined in the Code).

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto.

 

“ERISA Affiliate” means (a) any Person subject to ERISA whose employees are treated as employed by the same employer as the employees of Parent or its Subsidiaries under IRC Section 414(b), (b) any trade or business subject to ERISA whose employees are treated as employed by the same employer as the employees of Parent or its Subsidiaries under IRC Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any organization subject to ERISA that is a member of an affiliated service group of which Parent or any of its Subsidiaries is a member under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any Person subject to ERISA that is a party to an arrangement with Parent or its Subsidiaries and whose employees are aggregated with the employees of Parent or its Subsidiaries under IRC Section 414(o).

 

“Event of Default” has the meaning specified therefor in Section 8 of the Agreement.

 

“Excess Availability” means, as of any date of determination, the amount equal to Availability minus the aggregate amount, if any, of all trade payables of Parent and its Subsidiaries aged in excess of historical levels with respect thereto and all book overdrafts of Parent and its Subsidiaries in excess of historical practices with respect thereto, in each case as determined by Agent in its Permitted Discretion.

 

“Excess Availability Calculation” has the meaning specified therefor in the definition of Base Rate Margin.

 

“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time to time.

 

“Exempt Account” has the meaning specified therefor in Section 6.11 of the Agreement.

 

“Existing Credit Facility” means that certain Amended and Restated Credit Agreement dated as of September 30, 2010, among Supreme Industries, Inc., its Subsidiaries identified on the signature pages thereof as “Loan Parties” and JPMorgan Chase Bank, N.A., as amended, supplemented or otherwise modified from time to time.

 

“Extraordinary Receipts” means any payments received by Parent or any of its Subsidiaries not in the ordinary course of business (and not consisting of proceeds described in Section 2.4(e)(ii) of the Agreement) consisting of (a) proceeds of judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, (b) indemnity payments (other than to the extent such indemnity payments are (i) immediately payable to a Person that is not an Affiliate of Parent or any of its Subsidiaries or (ii) received by Parent or any of its Subsidiaries as reimbursement for any payment previously made to such Person), and (c) any purchase price adjustment (other than a working capital adjustment) received in connection with any purchase agreement.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal to, for each day during such period, the weighted average 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 which is a Business Day, the average of the quotations for such day on such transactions received by Agent from three Federal funds brokers of recognized standing selected by it.

 

“Fee Letter” means that certain fee letter, dated as of even date with the Agreement, among Borrowers and Agent, in form and substance reasonably satisfactory to Agent.

 

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

 

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

 

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

 

“Fixed Charge Coverage Ratio” means, with respect to Borrowers and their Subsidiaries for any period, the ratio of (i) EBITDA for such period minus Capital Expenditures made (to the extent not already incurred in a prior period) or incurred during such period to (ii) Fixed Charges for such period.

 

“Fixed Charges” means, with respect to any fiscal period and with respect to Parent and its Subsidiaries determined on a consolidated basis in accordance with GAAP, the sum, without duplication, of (a) Interest Expense accrued (other than interest paid-in-kind, amortization of financing fees, and other non-cash Interest Expense) during such period, (b) principal payments in respect of Indebtedness paid during such period (other than any GM Credited Principal Payment), (c) all federal, state, and local income taxes accrued during such period, and (d) all Restricted Junior Payments paid (whether in cash or other property, other than common Stock) during such period.

 

“Foreign Lender” means any Lender or Participant that is not a United States person within the meaning of IRC section 7701(a)(30).

 

“Fully Acknowledged Assignment” has the meaning specified therefor in clause (g) of the definition of Eligible Accounts.

 

“Funding Date” means the date on which a Borrowing occurs.

 

“Funding Losses” has the meaning specified therefor in Section 2.12(b)(ii) of the Agreement.

 

“GAAP” means generally accepted accounting principles as in effect from time to time in the United States, consistently applied; provided, however, that all calculations relative to liabilities shall be made without giving effect to Statement of Financial Accounting Standards No. 159.

 

“Georgia Real Estate” means the real property and improvements with a street address of 3127 Ethridge Mill Road, Griffin, Georgia in which Agent has agreed to subordinate its Lien to the Lien of ALLY on such Georgia Real Estate securing the ALLY Advances pursuant to the ALLY Intercreditor Agreement.

 

“GM Converters Agreement” means that certain Special Vehicle Manufacturer Converters Agreement effective as of February 29, 2008, by and between Supreme Indiana (successor by merger to Supreme Corporation) and General Motors Corporation.

 

“GM Credited Principal Payment” means any payment made by or on behalf of any Loan Party on the outstanding principal balance of any ALLY Advance in respect of any Pool Unit which is funded by General Motors Corporation pursuant to Section 5.2 of the GM Converters Agreement.

 

“Governing Documents” means, with respect to any Person, the certificate or articles of incorporation, by-laws, or other organizational documents of such Person.

 

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“Governmental Authority” means any federal, state, local, or other governmental or administrative body, instrumentality, board, department, or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body.

 

“Guarantors” means (a) Supreme Northwest, L.L.C. a Texas limited liability company, (b) SC Tower Structural Laminating, Inc., a Texas corporation, (c) Silver Crown, LLC, a Delaware limited liability company, (d) Supreme STB, LLC, a California limited liability company, (e) Supreme\Murphy Truck Bodies, Inc., a North Carolina corporation, (f) Parent and (g) each other Person that becomes a guarantor after the Closing Date, and “Guarantor” means any one of them.

 

“Guaranty” means, collectively, (a) that certain general continuing guaranty, dated as of even date with the Agreement (or any time hereafter), executed and delivered by each extant Guarantor in favor of Agent, for the benefit of the Lender Group and the Bank Product Providers and (b) any general continuing guaranty, substantially in the form of Exhibit G-1 or otherwise in form and substance reasonably satisfactory to Agent, executed and delivered by any party which becomes a Guarantor after the Closing Date.

 

“Hazardous Materials” means (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as “hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic substances,” or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources, (c) any explosives or any radioactive materials, and (d) asbestos in any form or electrical equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million.

 

“Hedge Agreement” means a “swap agreement” as that term is defined in Section 101(53B)(A) of the Bankruptcy Code.

 

“Hedge Obligations” means any and all obligations or liabilities, whether absolute or contingent, due or to become due, now existing or hereafter arising, of Parent or its Subsidiaries arising under, owing pursuant to, or existing in respect of Hedge Agreements entered into with one or more of the Bank Product Providers.

 

“Hedge Provider” means Wells Fargo or any of its Affiliates.

 

“Holdout Lender” has the meaning specified therefor in Section 14.2(a) of the Agreement.

 

“Indebtedness” as to any Person means (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, or other financial products, (c) all obligations of such Person as a lessee under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any asset of such Person, irrespective of whether such obligation or liability is assumed, (e) all obligations of such Person to pay the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business and repayable in accordance with customary trade practices), (f) all obligations of such Person owing under Hedge Agreements (which amount shall be calculated based on the amount that would be payable by such Person if the Hedge Agreement were terminated on the date of determination), (g) any Prohibited Preferred Stock of such Person, and (h) any obligation of such Person guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (g) above.  For purposes of this definition, (i) the amount of any Indebtedness represented by a guaranty or other similar instrument shall be the lesser of the principal amount of the 

 

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obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Indebtedness, and (ii) the amount of any Indebtedness described in clause (d) above shall be the lower of the amount of the obligation and the fair market value of the assets of such Person securing such obligation.  In addition, with respect to any Loan Party, the term “Indebtedness” includes, without limitation, all obligations of any Loan Party arising in connection with any of the ALLY Loan Agreements (including all ALLY Advances), or in connection with any similar arrangement or transaction, between or among any Loan Party and ALLY, whether such arrangement is a loan, financing, bailment, consignment or other title retention arrangement.  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 Liabilities” has the meaning specified therefor in Section 10.3 of the Agreement.

 

“Indemnified Person” has the meaning specified therefor in Section 10.3 of the Agreement.

 

“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

 

“Intercompany Subordination Agreement” means an intercompany subordination agreement, dated as of even date with the Agreement, executed and delivered by Parent, each of the other Loan Parties, and Agent, the form and substance of which is satisfactory to Agent.

 

“Interest Expense” means, for any period, the aggregate of the interest expense of Parent and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP, less the aggregate amount of Interest Support Payments received by Parent and its Subsidiaries during such period.

 

“Interest Period” means, with respect to each LIBOR Rate Loan, a period commencing on the date of the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending 1, 2, or 3 months thereafter; provided, however, that (a) interest shall accrue at the applicable rate based upon the LIBOR Rate from and including the first day of each Interest Period to, but excluding, the day on which any Interest Period expires, (b) any Interest Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (c) with respect to an Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), the Interest Period shall end on the last Business Day of the calendar month that is 1, 2, or 3 months after the date on which the Interest Period began, as applicable, and (d) Borrowers may not elect an Interest Period which will end after the Maturity Date.

 

“Interest Support Payment” means payments to or for the account of any Loan Party made by General Motors Corporation or any other manufacturer or distributor of motor vehicle chassis in connection with the purchase or obtaining by such Loan Party, or any Affiliate of such Loan Party, of a motor vehicle chassis from such manufacturer or distributor, the purpose of which is to offset or reimburse such Loan Party for interest expense incurred or to be incurred by such Loan Party in connection with financing the acquisition or obtaining of such motor vehicle chassis.

 

“Inventory” means inventory (as that term is defined in the Code).

 

15

 

“Investment” means, with respect to any Person, any investment by such Person in any other Person (including Affiliates) in the form of loans, guarantees, advances, capital contributions (excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the ordinary course of business, and (b) bona fide Accounts arising in the ordinary course of business), or acquisitions of Indebtedness, Stock, or all or substantially all of the assets of such other Person (or of any division or business line of such other Person), and any other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP.

 

“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.

 

“Issuing Lender” means WFCF or any other Lender that, at the request of any Borrower and with the consent of Agent, agrees, in such Lender’s sole discretion, to become an Issuing Lender for the purpose of issuing Letters of Credit or Reimbursement Undertakings pursuant to Section 2.11 of the Agreement and the Issuing Lender shall be a Lender.

 

“JPM Concentration Account” means account number 00030000-186-2236 established in the name of Supreme Indiana at JPMorgan Chase Bank, N.A. which is subject to a Blocked Account Agreement in favor of Agent.

 

“Lender” has the meaning set forth in the preamble to the Agreement, shall include the Issuing Lender and the Swing Lender, and shall also include any other Person made a party to the Agreement pursuant to the provisions of Section 13.1 of the Agreement and “Lenders” means each of the Lenders or any one or more of them.

 

“Lender Group” means each of the Lenders (including the Issuing Lender and the Swing Lender) and Agent, or any one or more of them.

 

“Lender Group Expenses” means all (a) costs or expenses (including taxes, and insurance premiums) required to be paid by Parent or its Subsidiaries under any of the Loan Documents that are paid, advanced, or incurred by the Lender Group, (b) out-of-pocket fees or charges paid or incurred by Agent in connection with the Lender Group’s transactions with Parent or its Subsidiaries under any of the Loan Documents, including fees or charges for photocopying, notarization, couriers and messengers, telecommunication, public record searches (including tax lien, litigation, and UCC searches and including searches with the patent and trademark office, the copyright office, or the department of motor vehicles), filing, recording, publication, appraisal (including periodic collateral appraisals or business valuations to the extent of the fees and charges (and up to the amount of any limitation) contained in the Agreement or the Fee Letter), real estate surveys, real estate title policies and endorsements, and environmental audits, (c) Agent’s customary fees and charges (as adjusted from time to time) with respect to the disbursement of funds (or the receipt of funds) to or for the account of Borrowers (whether by wire transfer or otherwise), together with any out-of-pocket costs and expenses incurred in connection therewith, (d) out-of-pocket charges paid or incurred by Agent resulting from the dishonor of checks payable by or to any Loan Party, (e) reasonable out-of-pocket costs and expenses paid or incurred by the Lender Group to correct any default or enforce any provision of the Loan Documents, or during the continuance of an Event of Default, in gaining possession of, maintaining, handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is consummated, (f) reasonable out-of-pocket audit fees and expenses (including travel, meals, and lodging) of Agent related to any inspections or audits to the extent of the fees and charges (and up to the amount of any limitation) contained in the Agreement or the Fee Letter, (g) reasonable out-of-pocket costs and expenses of third party claims or any other suit paid or incurred by the Lender Group in enforcing or defending the Loan Documents or in connection with the transactions contemplated by the Loan Documents or the Lender Group’s relationship with Parent or any of its Subsidiaries, (h) Agent’s reasonable costs and expenses (including reasonable attorneys’ fees) incurred in advising, structuring, drafting, reviewing, administering (including travel, meals, and lodging), syndicating, or 

 

16

 

amending the Loan Documents, (i) Agent’s and each Lender’s reasonable costs and expenses (including reasonable attorneys, accountants, consultants, and other advisors fees and expenses) incurred in terminating, enforcing (including attorneys, accountants, consultants, and other advisors fees and expenses incurred in connection with a “workout,” a “restructuring,” or an Insolvency Proceeding concerning Parent or any of its Subsidiaries or in exercising rights or remedies under the Loan Documents), or defending the Loan Documents, irrespective of whether suit is brought, or in taking any Remedial Action concerning the Collateral, and (j) usage charges, charges, fees, costs and expenses for amendments, renewals, extensions, transfers, or drawings from time to time imposed by the Underlying Issuer or incurred by the Issuing Lender in respect of Letters of Credit and out-of-pocket charges, fees, costs and expenses paid or incurred by the Underlying Issuer or Issuing Lender in connection with the issuance, amendment, renewal, extension, or transfer of, or drawing under, any Letter of Credit or any demand for payment thereunder.

 

“Lender Group Representatives” has the meaning specified therefor in Section 17.9 of the Agreement.

 

“Lender-Related Person” means, with respect to any Lender, such Lender, together with such Lender’s Affiliates, officers, directors, employees, attorneys, and agents.

 

“Letter of Credit” means a letter of credit (as that term is defined in the Code) issued by Issuing Lender or a letter of credit (as that term is defined in the Code) issued by Underlying Issuer, as the context requires.

 

“Letter of Credit Collateralization” means either (a) providing cash collateral (pursuant to documentation reasonably satisfactory to Agent, including provisions that specify that the Letter of Credit fee and all usage charges set forth in the Agreement will continue to accrue while the Letters of Credit are outstanding) to be held by Agent for the benefit of those Lenders with a Revolver Commitment in an amount equal to 105% of the then existing Letter of Credit Usage, (b) delivering to Agent documentation executed by all beneficiaries under the Letters of Credit, in form and substance reasonably satisfactory to Agent and the Issuing Lender, terminating all of such beneficiaries’ rights under the Letters of Credit, or (c) providing Agent with a standby letter of credit, in form and substance reasonably satisfactory to Agent, from a commercial bank acceptable to Agent (in its sole discretion) in an amount equal to 105% of the then existing Letter of Credit Usage (it being understood that the Letter of Credit fee and all usage charges set forth in the Agreement will continue to accrue while the Letters of Credit are outstanding and that any such fees that accrue must be an amount that can be drawn under any such standby letter of credit).

 

“Letter of Credit Disbursement” means a payment made by Issuing Lender or Underlying Issuer pursuant to a Letter of Credit.

 

“Letter of Credit Usage” means, as of any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit.

 

“LIBOR Deadline” has the meaning specified therefor in Section 2.12(b)(i) of the Agreement.

 

“LIBOR Notice” means a written notice in the form of Exhibit L-1.

 

“LIBOR Option” has the meaning specified therefor in Section 2.12(a) of the Agreement.

 

“LIBOR Rate” means the rate per annum rate appearing on Bloomberg L.P.’s (the “Service”) Page BBAM1/(Official BBA USD Dollar Libor Fixings) (or on any successor or substitute page of such Service, or any successor to or substitute for such Service) 2 Business Days prior to the commencement of the requested Interest Period, for a term and in an amount comparable to the Interest Period and the amount of the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan or as a continuation of a LIBOR Rate 

 

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Loan or as a conversion of a Base Rate Loan to a LIBOR Rate Loan) by Borrowers in accordance with the Agreement, which determination shall be conclusive in the absence of manifest error.

 

“LIBOR Rate Loan” means each portion of an Advance that bears interest at a rate determined by reference to the LIBOR Rate.

 

“LIBOR Rate Margin” means, as of any date of determination (with respect to any portion of the outstanding Advances on such date that is a LIBOR Rate Loan), the applicable margin set forth in the following table that corresponds to the most recent Excess Availability Calculation; provided, however, that for the period from the Closing Date through the date Agent receives the Excess Availability Calculation in respect of the testing period ending December 31, 2011, the LIBOR Rate Margin shall be at the margin in the row styled “Level II”:

 

	
Level
    	
 
    	
Excess Availability Calculation
    	
 
    	
Base Rate Margin
    
	
I
    	
 
    	
If Excess Availability is greater than or equal to $20,000,000
    	
 
    	
2.25%
    
	
II
    	
 
    	
If Excess Availability is less than $20,000,000 but greater than or   equal to $10,000,000
    	
 
    	
2.50%
    
	
III
    	
 
    	
If Excess Availability is less than $10,000,000
    	
 
    	
2.75%
    

 

Except as set forth in the foregoing proviso, the LIBOR Rate Margin shall be based upon the most recent Excess Availability Calculation, which will be calculated as of the end of each Fiscal Quarter.  Except as set forth in the foregoing proviso, the LIBOR Rate Margin shall be re-determined quarterly on the first day of the month following the date of delivery to Agent of the certified calculation of Excess Availability pursuant to Section 5.1 of the Agreement; provided, however, that if Borrowers fails to provide such certification when such certification is due, the LIBOR Rate Margin shall be set at the margin in the row styled “Level III” as of the first day of the month following the date on which the certification was required to be delivered until the date on which such certification is delivered (on which date (but not retroactively), without constituting a waiver of any Default or Event of Default occasioned by the failure to timely deliver such certification, the LIBOR Rate Margin shall be set at the margin based upon the calculations disclosed by such certification).  In the event that the information regarding the Excess Availability contained in any certificate delivered pursuant to Section 5.1 of the Agreement is shown to be inaccurate, and such inaccuracy, if corrected, would have led to the application of a higher LIBOR Rate Margin for any period (a “LIBOR Rate Period”) than the LIBOR Rate Margin actually applied for such LIBOR Rate Period, then (a) Borrowers shall immediately deliver to Agent a correct certificate for such LIBOR Rate Period, (b) the LIBOR Rate Margin shall be determined as if the correct LIBOR Rate Margin (as set forth in the table above) were applicable for such LIBOR Rate Period, and (c) Borrowers shall immediately deliver to Agent full payment in respect of the accrued additional interest and Letter of Credit fees as a result of such increased LIBOR Rate Margin for such LIBOR Rate Period, which payment shall be promptly applied by Agent to the affected Obligations.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), security interest, or other security arrangement and any other preference, priority, or preferential arrangement of any kind or nature whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.

 

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“Loan Account” has the meaning specified therefor in Section 2.9 of the Agreement.

 

“Loan Documents” means the Agreement, any Borrowing Base Certificate, the Blocked Account Agreement, the Control Agreements, the Fee Letter, the Guaranty, the Intercompany Subordination Agreement, the Letters of Credit, the Mortgages, the Patent Security Agreement, the Security Agreement, the Trademark Security Agreement, the ALLY Intercreditor Agreement, any note or notes executed by any Borrower in connection with the Agreement and payable to any member of the Lender Group, any letter of credit application or letter of credit agreement entered into by any Borrower in connection with the Agreement, and any other instrument or agreement entered into, now or in the future, by Parent or any of its Subsidiaries and any member of the Lender Group in connection with the Agreement.

 

“Loan Party” means any Borrower or any Guarantor.

 

“Local Account” has the meaning specified therefor in Section 6.11 of the Agreement.

 

“Margin Stock” as defined in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time.

 

“Master Blocked Account” means account number 4122213630 established in the name of Supreme Indiana at Wells Fargo which is subject to a Blocked Account Agreement in favor of Agent.

 

“Material Adverse Change” means (a) a material adverse change in the business, operations, results of operations, assets, liabilities or financial condition of Parent and its Subsidiaries, taken as a whole, (b) a material impairment of Parent’s and its Subsidiaries’ ability to perform their obligations under the Loan Documents to which they are parties or of the Lender Group’s ability to enforce the Obligations or realize upon the Collateral, or (c) a material impairment of the enforceability or priority of Agent’s Liens with respect to the Collateral as a result of an action or failure to act on the part of Parent or its Subsidiaries.

 

“Material Contract” means, with respect to any Person, all contracts or agreements, (a) the loss of which could reasonably be expected to result in a Material Adverse Change and/or (b) that are required to be publicly disclosed in accordance with applicable law, including, without limitation, that certain Ford Authorized Converter Pool Agreement, dated as of November 1, 2010, by and between Supreme Indiana and Ford Motor Company and the GM Converters Agreement.

 

“Maturity Date” has the meaning specified therefor in Section 3.3 of the Agreement.

 

“Maximum Letter of Credit Amount” means an amount equal to $5,000,000.

 

“Maximum Revolver Amount” means $45,000,000, decreased by the amount of reductions in the Revolver Commitments made in accordance with Section 2.4(c) of the Agreement.

 

“Moody’s” has the meaning specified therefor in the definition of Cash Equivalents.

 

“Mortgage Policy” has the meaning specified therefor in Schedule 3.1(v).

 

“Mortgages” means, individually and collectively, one or more mortgages, deeds of trust, or deeds to secure debt, executed and delivered by a Loan Party in favor of Agent, in form and substance reasonably satisfactory to Agent, that encumber the Real Property Collateral.

 

“Net Cash Proceeds” means:

 

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(a)           with respect to any sale or disposition by a Loan Party of assets or with respect to any Casualty Event, the amount of cash proceeds received (directly or indirectly) from time to time (whether as initial consideration or through the payment of deferred consideration) by or on behalf of Parent or its Subsidiaries, in connection therewith after deducting therefrom only (i) the amount of any Indebtedness secured by any Permitted Lien on any asset (other than (A) Indebtedness owing to Agent or any Lender under the Agreement or the other Loan Documents and (B) Indebtedness assumed by the purchaser of such asset) which is required to be, and is, repaid in connection with such sale or disposition or such Casualty Event, (ii) reasonable fees, commissions, and expenses related thereto and required to be paid by Parent or such Subsidiary in connection with such sale or disposition or such Casualty Event and (iii) taxes paid or payable to any taxing authorities by Parent or such Subsidiary in connection with such sale or disposition or such Casualty Event, in each case to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash, actually paid or payable to a Person that is not an Affiliate of Parent or any of its Subsidiaries, and are properly attributable to such transaction or Casualty Event; and

 

(b)           with respect to the issuance or incurrence of any Indebtedness by Parent or any of its Subsidiaries, or the issuance by Parent or any of its Subsidiaries of any shares of its Stock, the aggregate amount of cash received (directly or indirectly) from time to time (whether as initial consideration or through the payment or disposition of deferred consideration) by or on behalf of Parent or such Subsidiary in connection with such issuance or incurrence, after deducting therefrom only (i) reasonable fees, commissions, and expenses related thereto and required to be paid by Parent or such Subsidiary in connection with such issuance or incurrence, (ii) taxes paid or payable to any taxing authorities by Parent or such Subsidiary in connection with such issuance or incurrence, in each case to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash, actually paid or payable to a Person that is not an Affiliate of Parent or any of its Subsidiaries, and are properly attributable to such transaction.

 

“Net Liquidation Percentage” means the percentage of the book value of Borrowers’ Inventory that is estimated to be recoverable in an orderly liquidation of such Inventory net of all associated costs and expenses of such liquidation, such percentage to be as determined from time to time by an appraisal company selected by Agent.

 

“North Carolina Real Estate” means the real property and improvements with a street address of 400 Airport Drive, Wilson, NC 27894 in which David L. Huffstetler, as Trustee, has been granted a Deed of Trust for the benefit of JPMorgan Chase Bank, N.A. (successor to Bank One, Indiana, N.A.) to secure certain Permitted Indebtedness relating to a certain Reimbursement and Pledge Agreement dated May 11, 2000 executed in connection with a Reimbursement Note dated May 11, 2000 in an initial principal amount of $2,536.987

 

“Obligations” means (a) all loans (including the Advances (inclusive of Protective Advances and Swing Loans)), debts, principal, interest (including any interest that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), reimbursement or indemnification obligations with respect to Reimbursement Undertakings or with respect to Letters of Credit (irrespective of whether contingent), premiums, liabilities (including all amounts charged to the Loan Account pursuant to the Agreement), obligations (including indemnification obligations), fees (including the fees provided for in the Fee Letter), Lender Group Expenses (including any fees or expenses that accrue after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), guaranties, and all covenants and duties of any other kind and description owing by any Loan Party pursuant to or evidenced by the Agreement or any of the other Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all other expenses or other amounts that any Borrower is required to pay or reimburse by the Loan Documents or by law or otherwise in connection with the Loan Documents, (b) all debts, liabilities, or obligations (including reimbursement obligations, irrespective of 

 

20

 

whether contingent) owing by any Borrower or any other Loan Party to an Underlying Issuer now or hereafter arising from or in respect of Underlying Letters of Credit, and (c) all Bank Product Obligations.  Any reference in the Agreement or in the Loan Documents to the Obligations shall include all or any portion thereof and any extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.

 

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the Treasury.

 

“Originating Lender” has the meaning specified therefor in Section 13.1(e) of the Agreement.

 

“Overadvance” has the meaning specified therefor in Section 2.5 of the Agreement.

 

“Parent” has the meaning specified therefor in the preamble to the Agreement.

 

“Participant” has the meaning specified therefor in Section 13.1(e) of the Agreement.

 

“Patent Security Agreement” has the meaning specified therefor in the Security Agreement.

 

“Patriot Act” has the meaning specified therefor in Section 4.18 of the Agreement.

 

“Payoff Date” means the first date on which all of the Obligations are paid in full and the Revolver Commitments of the Lenders are terminated.

 

“Permitted Bill and Hold Agreement” means an agreement executed by an applicable Account Debtor and a Borrower, on terms and conditions reasonably satisfactory to Agent, by which title and risk of ownership relating to a particular vehicle unit passes from such Borrower to such Account Debtor once (a) the assembly relating to the particular vehicle unit has been completed by such Borrower, (b) such unit has passed all applicable quality control inspections of such Borrower and (c) such Borrower has invoiced the applicable Account Debtor for such unit.

 

“Permitted Discretion” means a determination made in the exercise of reasonable (from the perspective of a secured lender) business judgment.

 

“Permitted Dispositions” means:

 

(a)           sales, abandonment, or other dispositions of Equipment that is substantially worn, damaged, or obsolete in the ordinary course of business,

 

(b)           sales of Inventory to buyers in the ordinary course of business,

 

(c)           the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of the Agreement or the other Loan Documents,

 

(d)           the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,

 

(e)           the granting of Permitted Liens,

 

(f)            the sale or discount, in each case without recourse, of Accounts arising in the ordinary course of business, but only in connection with the compromise or collection thereof,

 

21

 

(g)           any involuntary loss, damage or destruction of property,

 

(h)           any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property,

 

(i)            the leasing or subleasing of assets of Parent or its Subsidiaries in the ordinary course of business,

 

(j)            the sale or issuance of Stock (other than Prohibited Preferred Stock) of Parent,

 

(k)           the lapse of registered patents, trademarks and other intellectual property of Parent and its Subsidiaries to the extent not economically desirable in the conduct of their business and so long as such lapse is not materially adverse to the interests of the Lenders,

 

(l)            the making of a Restricted Junior Payment that is expressly permitted to be made pursuant to the Agreement,

 

(m)          the making of a Permitted Investment,

 

(n)           dispositions and/or leases of any Real Property listed on Schedule R-2 and of any Equipment situated thereon, and

 

(o)           dispositions of assets (other than Accounts, intellectual property, licenses, Stock of Subsidiaries of Parent, or Material Contracts) not otherwise permitted in clauses (a) through (m) above so long as made at fair market value and the aggregate fair market value of all assets disposed of in all such dispositions since the Closing Date (including the proposed disposition) would not exceed $500,000.

 

“Permitted Holders” means either of Herbert Gardner or William Barrett, individually.

 

“Permitted Indebtedness” means:

 

(a)           Indebtedness evidenced by the Agreement or the other Loan Documents, as well as Indebtedness owed to Underlying Issuers with respect to Underlying Letters of Credit,

 

(b)           Indebtedness set forth on Schedule 4.19 and any Refinancing Indebtedness in respect of such Indebtedness,

 

(c)           Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in respect of such Indebtedness,

 

(d)           endorsement of instruments or other payment items for deposit,

 

(e)           Indebtedness consisting of (i) unsecured guarantees incurred in the ordinary course of business with respect to surety and appeal bonds, performance bonds, bid bonds, appeal bonds, completion guarantee and similar obligations; (ii) unsecured guarantees arising with respect to customary indemnification obligations to purchasers in connection with Permitted Dispositions; and (iii) unsecured guarantees with respect to Indebtedness of Parent or one of its Subsidiaries, to the extent that the Person that is obligated under such guaranty could have incurred such underlying Indebtedness,

 

(f)            Indebtedness incurred in the ordinary course of business under performance, surety, statutory, and appeal bonds,

 

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(g)           Indebtedness owed to any Person providing property, casualty, liability, or other insurance to Parent or any of its Subsidiaries, so long as the amount of such Indebtedness is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the year in which such Indebtedness is incurred and such Indebtedness is outstanding only during such year,

 

(h)           the incurrence by Parent or its Subsidiaries of Indebtedness under Hedge Agreements that are incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign currency risks associated with Parent’s and its Subsidiaries’ operations and not for speculative purposes,

 

(i)            Indebtedness incurred in respect of credit cards, credit card processing services, debit cards, stored value cards, purchase cards (including so-called “procurement cards” or “P-cards”), or Cash Management Services, in each case, incurred in the ordinary course of business,

 

(j)            unsecured Indebtedness of Parent owing to former employees, officers, or directors (or any spouses, ex-spouses, or estates of any of the foregoing) incurred in connection with the repurchase by Parent of the Stock of Parent that has been issued to such Persons, so long as (i) no Default or Event of Default has occurred and is continuing or would result from the incurrence of such Indebtedness, (ii) the aggregate amount of all such Indebtedness outstanding at any one time does not exceed $250,000 and (iii) such Indebtedness is subordinated to the Obligations on terms and conditions reasonably acceptable to Agent,

 

(k)           Indebtedness composing Permitted Investments,

 

(l)            Indebtedness of Supreme Indiana deemed to exist under the California Lease by reason of the California Lease being classified as a capital lease for GAAP purposes (but only to the extent such Indebtedness arises pursuant to the California Lease as it is in effect as of May 12, 2011, and not including any amendments or modifications thereto made without the prior written consent of the Agent),

 

(m)          Outstanding unpaid loans or advances made by ALLY to or for the account of Supreme Indiana under an ALLY Loan Agreement (“ALLY Advances”) in an aggregate unpaid amount not to exceed at any time $25,750,000, to pay for the restricted purchase of Pool Units, but only so long as such ALLY Advances are used solely to pay 100% (and not any lesser portion) of the purchase price of Pool Units, and

 

(n)           so long as no Event of Default has occurred and is continuing or would result therefrom, any other unsecured Indebtedness in an aggregate principal amount not exceeding $500,000 at any time outstanding.

 

“Permitted Intercompany Advances” means loans made by a Loan Party to another Loan Party, so long as the parties thereto are party to the Intercompany Subordination Agreement.

 

“Permitted Investments” means:

 

(a)           Investments in cash and Cash Equivalents,

 

(b)           Investments in negotiable instruments deposited or to be deposited for collection in the ordinary course of business,

 

(c)           advances made in connection with purchases of goods or services in the ordinary course of business,

 

(d)           Investments received in settlement of amounts due to any Loan Party or any of its Subsidiaries effected in the ordinary course of business or owing to any Loan Party or any of its Subsidiaries 

 

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as a result of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or enforcement of any Lien in favor of a Loan Party or its Subsidiaries,

 

(e)           Investments owned by any Loan Party or any of its Subsidiaries on the Closing Date and set forth on Schedule P-1,

 

(f)            guarantees permitted under the definition of Permitted Indebtedness,

 

(g)           Permitted Intercompany Advances,

 

(h)           Stock or other securities acquired in connection with the satisfaction or enforcement of Indebtedness or claims due or owing to a Loan Party or its Subsidiaries (in bankruptcy of customers or suppliers or otherwise outside the ordinary course of business) or as security for any such Indebtedness or claims,

 

(i)            deposits of cash made in the ordinary course of business to secure performance of operating leases,

 

(j)            non-cash loans to employees, officers, and directors of Parent or any of its Subsidiaries for the purpose of purchasing Stock in Parent so long as the proceeds of such loans are used in their entirety to purchase such stock in Parent,

 

(k)           Investments in the form of capital contributions and the acquisition of Stock made by any Loan Party in any other Loan Party (other than capital contributions to or the acquisition of Stock of Parent),

 

(l)            Investments resulting from entering into (i) Bank Product Agreements or (ii) agreements relative to Indebtedness that is permitted under clause (h) of the definition of Permitted Indebtedness, and

 

(m)          so long as no Event of Default has occurred and is continuing or would result therefrom, any other Investments in an aggregate amount not to exceed $100,000 during the term of the Agreement.

 

“Permitted Liens” means

 

(a)           Liens granted to, or for the benefit of, Agent to secure the Obligations,

 

(b)           Liens for unpaid taxes, assessments, or other governmental charges or levies that either (i) are not yet delinquent or (ii) do not have priority over Agent’s Liens and the underlying taxes, assessments, or charges or levies are the subject of Permitted Protests,

 

(c)           judgment Liens arising solely as a result of the existence of judgments, orders, or awards that do not constitute an Event of Default under Section 8.3 of the Agreement,

 

(d)           Liens set forth on Schedule P-2; provided, however, that to qualify as a Permitted Lien, any such Lien described on Schedule P-2 shall only secure the Indebtedness that it secures on the Closing Date and any Refinancing Indebtedness in respect thereof,

 

(e)           the interests of lessors under operating leases and non-exclusive licensors under license agreements,

 

24

 

(f)                                    purchase money Liens or the interests of lessors under Capital Leases to the extent that such Liens or interests secure Permitted Purchase Money Indebtedness and so long as (i) such Lien attaches only to the asset purchased or acquired and the proceeds thereof and (ii) such Lien only secures the Indebtedness that was incurred to acquire the asset purchased or acquired or any Refinancing Indebtedness in respect thereof,

 

(g)                                 Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of business and not in connection with the borrowing of money, and which Liens either (i) are for sums not yet delinquent or (ii) are the subject of Permitted Protests,

 

(h)                                 Liens on amounts deposited to secure Parent’s and its Subsidiaries’ obligations in connection with worker’s compensation or other unemployment insurance,

 

(i)                                     Liens on amounts deposited to secure Parent’s and its Subsidiaries’ obligations in connection with the making or entering into of bids, tenders, or leases in the ordinary course of business and not in connection with the borrowing of money,

 

(j)                                     Liens on amounts deposited to secure Parent’s and its Subsidiaries’ reimbursement obligations with respect to surety or appeal bonds obtained in the ordinary course of business,

 

(k)                                  with respect to any Real Property, easements, rights of way, and zoning restrictions that do not materially interfere with or impair the use or operation thereof,

 

(l)                                     non-exclusive licenses of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,

 

(m)                               Liens that are replacements of Permitted Liens to the extent that the original Indebtedness is the subject of permitted Refinancing Indebtedness and so long as the replacement Liens only encumber those assets that secured the original Indebtedness,

 

(n)                                 rights of setoff or bankers’ liens upon deposits of cash in favor of banks or other depository institutions, solely to the extent incurred in connection with the maintenance of such deposit accounts in the ordinary course of business,

 

(o)                                 Liens granted in the ordinary course of business on the unearned portion of insurance premiums securing the financing of insurance premiums to the extent the financing is permitted under the definition of Permitted Indebtedness,

 

(p)                                 Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods,

 

(q)                                 Liens on the ALLY Collateral securing only ALLY Advances permitted by clause (m) of the definition of Permitted Indebtedness; provided however, notwithstanding the foregoing, the ALLY Pledged Funds shall not exceed $500,000 at any one time outstanding, and

 

(r)                                    other Liens which do not secure Indebtedness for borrowed money or letters of credit and as to which the aggregate amount of the obligations secured thereby does not exceed $250,000.

 

“Permitted Preferred Stock” means and refers to any Preferred Stock issued by Parent (and not by one or more of its Subsidiaries) that is not Prohibited Preferred Stock.

 

25

 

“Permitted Protest” means the right of Parent or any of its Subsidiaries to protest any Lien (other than any Lien that secures the Obligations), taxes (other than payroll taxes or taxes that are the subject of a United States federal tax lien), or rental payment, provided that (a) a reserve with respect to such obligation is established on Parent’s or its Subsidiaries’ books and records in such amount as is required under GAAP, (b) any such protest is instituted promptly and prosecuted diligently by Parent or its Subsidiary, as applicable, in good faith, and (c) Agent is satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of Agent’s Liens.

 

“Permitted Purchase Money Indebtedness” means, as of any date of determination, Purchase Money Indebtedness incurred after the Closing Date in an aggregate principal amount outstanding at any one time not in excess of $250,000.

 

“Person” means natural persons, corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.

 

“Pool Unit” means a new motor vehicle chassis (a) for which ALLY provides Supreme Indiana a loan or advance solely to pay 100% of the purchase price owed GM for the restricted purchase of such new motor vehicle chassis, (b) to which there have been made or attached no Accessions, improvements, changes, additions, conversions, alterations, or modifications since the delivery of such Pool Unit to Supreme Indiana by GM, and (c) for which the Agreed Release Amount has not been paid.  A “Pool Unit” does not include for any purpose any Accessions attached to or otherwise physically united with such Pool Unit.

 

“Preferred Stock” means, as applied to the Stock of any Person, the Stock of any class or classes (however designated) that is preferred with respect to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Stock of any other class of such Person.

 

“Prohibited Preferred Stock” means any Preferred Stock that by its terms is mandatorily redeemable or subject to any other payment obligation (including any obligation to pay dividends, other than dividends of shares of Preferred Stock of the same class and series payable in kind or dividends of shares of common stock) on or before a date that is less than 1 year after the Maturity Date, or, on or before the date that is less than 1 year after the Maturity Date, is redeemable at the option of the holder thereof for cash or assets or securities (other than distributions in kind of shares of Preferred Stock of the same class and series or of shares of common stock).

 

“Projections” means Parent’s and its Subsidiaries’ forecasted (a) balance sheets, (b) profit and loss statements, and (c) cash flow statements, all prepared on a consolidated basis consistent with Parent’s historical financial statements, together with appropriate supporting details and a statement of underlying assumptions.

 

“Pro Rata Share” means, as of any date of determination:

 

(a)                                  with respect to a Lender’s obligation to make Advances and right to receive payments of principal, interest, fees, costs, and expenses with respect thereto, (i) prior to the Revolver Commitments being terminated or reduced to zero, the percentage obtained by dividing (A) such Lender’s Revolver Commitment, by (B) the aggregate Revolver Commitments of all Lenders, and (ii) from and after the time that the Revolver Commitments have been terminated or reduced to zero, the percentage obtained by dividing (A) the outstanding principal amount of such Lender’s Advances by (B) the outstanding principal amount of all Advances,

 

26

 

(b)                                 with respect to a Lender’s obligation to participate in Letters of Credit and Reimbursement Undertakings, to reimburse the Issuing Lender, and right to receive payments of fees with respect thereto, (i) prior to the Revolver Commitments being terminated or reduced to zero, the percentage obtained by dividing (A) such Lender’s Revolver Commitment, by (B) the aggregate Revolver Commitments of all Lenders, and (ii) from and after the time that the Revolver Commitments have been terminated or reduced to zero, the percentage obtained by dividing (A) the outstanding principal amount of such Lender’s Advances by (B) the outstanding principal amount of all Advances; provided, however, that if all of the Advances have been repaid in full and Letters of Credit remain outstanding, Pro Rata Share under this clause shall be determined based upon subclause (i) of this clause as if the Revolver Commitments had not been terminated or reduced to zero and based upon the Revolver Commitments as they existed immediately prior to their termination or reduction to zero, and

 

(c)                                  with respect to all other matters as to a particular Lender (including the indemnification obligations arising under Section 15.7 of the Agreement), (i) prior to the Revolver Commitments being terminated or reduced to zero, the percentage obtained by dividing (A) such Lender’s Revolver Commitment by (B) the aggregate amount of Revolver Commitments of all Lenders, and (ii) from and after the time that the Revolver Commitments have been terminated or reduced to zero, the percentage obtained by dividing (A) the outstanding principal amount of such Lender’s Advances by (B) the outstanding principal amount of all Advances; provided, however, that if all of the Advances have been repaid in full and Letters of Credit remain outstanding, Pro Rata Share under this clause shall be determined based upon subclause (i) of this clause as if the Revolver Commitments had not been terminated or reduced to zero and based upon the Revolver Commitments as they existed immediately prior to their termination or reduction to zero.

 

“Protective Advances” has the meaning specified therefor in Section 2.3(d)(i) of the Agreement.

 

“Purchase Money Indebtedness” means Indebtedness (other than the Obligations, but including Capitalized Lease Obligations), incurred at the time of, or within 20 days after, the acquisition of any fixed assets for the purpose of financing all or any part of the acquisition cost thereof.

 

“Qualified Cash” means, as of any date of determination, the amount of unrestricted cash and Cash Equivalents of Parent and its Subsidiaries that is in Deposit Accounts or in Securities Accounts, or any combination thereof, and which such Deposit Account or Securities Account is the subject of a Control Agreement and is maintained by a branch office of the bank or securities intermediary located within the United States.

 

“Real Property” means any estates or interests in real property now owned or hereafter acquired by Parent or its Subsidiaries and the improvements thereto.

 

“Real Property Collateral” means the Real Property identified on Schedule R-1 and any Real Property hereafter acquired by Parent or its Subsidiaries.

 

“Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

 

“Refinancing Indebtedness” means refinancings, renewals, or extensions of Indebtedness so long as:

 

(a)                                  such refinancings, renewals, or extensions do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, or extended, other than by the amount of premiums paid

 

27

 

thereon and the fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto,

 

(b)                                 such refinancings, renewals, or extensions do not result in a shortening of the average weighted maturity (measured as of the refinancing, renewal, or extension) of the Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions that, taken as a whole, are or could reasonably be expected to be materially adverse to the interests of the Lenders,

 

(c)                                  if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension must include subordination terms and conditions that are at least as favorable to the Lender Group as those that were applicable to the refinanced, renewed, or extended Indebtedness, and

 

(d)                                 the Indebtedness that is refinanced, renewed, or extended is not recourse to any Person that is liable on account of the Obligations other than those Persons which were obligated with respect to the Indebtedness that was refinanced, renewed, or extended.

 

“Reimbursement Undertaking” has the meaning specified therefor in Section 2.11(a) of the Agreement.

 

“Related Fund” means, with respect to any Lender that is an investment fund, any other investment fund that invests in commercial loans and that is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

 

“Remedial Action” means all actions taken to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (c) restore or reclaim natural resources or the environment, (d) perform any pre-remedial studies, investigations, or post-remedial operation and maintenance activities, or (e) conduct any other actions with respect to Hazardous Materials required by Environmental Laws.

 

“Replacement Lender” has the meaning specified therefor in Section 2.13(b) of the Agreement.

 

“Report” has the meaning specified therefor in Section 15.16 of the Agreement.

 

“Required Availability” means that the sum of (a) Excess Availability, plus (b) Qualified Cash equals or exceeds $8,000,000.

 

“Required Lenders” means, at any time, Lenders whose aggregate Pro Rata Shares (calculated under clause (c) of the definition of Pro Rata Shares) exceed 50%; provided, however, that at any time there are 2 or more Lenders, “Required Lenders” must include at least 2 Lenders.

 

“Restricted Junior Payment” means to (a) declare or pay any dividend or make any other payment or distribution on account of Stock issued by any Loan Party (including any payment in connection with any merger or consolidation involving Parent) or to the direct or indirect holders of Stock issued by a Loan Party in their capacity as such (other than dividends or distributions payable in Stock (other than Prohibited Preferred Stock) issued by Parent), or (b) purchase, redeem, or otherwise acquire or retire for value (including in connection with any merger or consolidation involving any Loan Party) any Stock issued by any Loan Party.

 

28

 

“Revolver Commitment” means, with respect to each Lender, its Revolver Commitment, and, with respect to all Lenders, their Revolver Commitments, in each case as such Dollar amounts are set forth beside such Lender’s name under the applicable heading on Schedule C-1 or in the Assignment and Acceptance pursuant to which such Lender became a Lender under the Agreement, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions of Section 13.1 of the Agreement.

 

“Revolver Usage” means, as of any date of determination, the sum of (a) the amount of outstanding Advances, plus (b) the amount of the Letter of Credit Usage.

 

“Sanctioned Entity” means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, or (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.

 

“Sanctioned Person” means a person named on the list of Specially Designated Nationals maintained by OFAC.

 

“S&P” has the meaning specified therefor in the definition of Cash Equivalents.

 

“SEC” means the United States Securities and Exchange Commission and any successor thereto.

 

“Securities Account” means a securities account (as that term is defined in the Code).

 

“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute.

 

“Security Agreement” means a security agreement, dated as of even date with the Agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by Borrowers and Guarantors to Agent.

 

“Settlement” has the meaning specified therefor in Section 2.3(e)(i) of the Agreement.

 

“Settlement Date” has the meaning specified therefor in Section 2.3(e)(i) of the Agreement.

 

“Solvent” means, with respect to any Person on a particular date, that, at fair valuations, the sum of such Person’s assets is greater than all of such Person’s debts.

 

“Stock” means all shares, options, warrants, interests, participations, or other equivalents (regardless of how designated) of or in a Person, whether voting or nonvoting, including common stock, preferred stock, or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).

 

“Subsidiary” of a Person means a corporation, partnership, limited liability company, or other entity in which that Person directly or indirectly owns or controls the shares of Stock having ordinary voting power to elect a majority of the board of directors (or appoint other comparable managers) of such corporation, partnership, limited liability company, or other entity.

 

“Supreme Indiana” means Supreme Indiana Operations, Inc., a Delaware corporation.

 

“Sweep Instruction” has the meaning specified therefor in Section 5.18(a) of the Agreement.

 

29

 

“Swing Lender” means WFCF or any other Lender that, at the request of Borrowers and with the consent of Agent agrees, in such Lender’s sole discretion, to become the Swing Lender under Section 2.3(b) of the Agreement.

 

“Swing Loan” has the meaning specified therefor in Section 2.3(b) of the Agreement.

 

“Tax Lender” has the meaning specified therefor in Section 14.2(a) of the Agreement.

 

“Taxes” means any taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein with respect to such payments and all interest, penalties or similar liabilities with respect thereto; provided, however, that Taxes shall exclude (a) any tax imposed on the net income or net profits of any Lender or any Participant (including any branch profits taxes), in each case imposed by the jurisdiction (or by any political subdivision or taxing authority thereof) in which such Lender or such Participant is organized or the jurisdiction (or by any political subdivision or taxing authority thereof) in which such Lender’s or such Participant’s principal office is located in each case as a result of a present or former connection between such Lender or such Participant and the jurisdiction or taxing authority imposing the tax (other than any such connection arising solely from such Lender or such Participant having executed, delivered or performed its obligations or received payment under, or enforced its rights or remedies under the Agreement or any other Loan Document); (b) taxes resulting from a Lender’s or a Participant’s failure to comply with the requirements of Section 16(c) or (d) of the Agreement; and (c) any United States federal withholding taxes that would be imposed on amounts payable to a Foreign Lender based upon the applicable withholding rate in effect at the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), except that Taxes shall include (i) any amount that such Foreign Lender (or its assignor, if any) was previously entitled to receive pursuant to Section 16(a) of the Agreement, if any, with respect to such withholding tax at the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), and (ii) additional United States federal withholding taxes that may be imposed after the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), as a result of a change in law, rule, regulation, order or other decision with respect to any of the foregoing by any Governmental Authority.

 

“Trademark Security Agreement” has the meaning specified therefor in the Security Agreement.

 

“Trigger Period” means any period (a) commencing on the day that an Event of Default occurs or Excess Availability is less than an amount equal to 15% of the Maximum Revolver Amount and (b) continuing until no Event of Default has existed and Excess Availability has been greater than or equal to an amount equal to 15% of the Maximum Revolver Amount at all times for two consecutive months.

 

“Underlying Issuer” means Wells Fargo or one of its Affiliates.

 

“Underlying Letter of Credit” means a Letter of Credit that has been issued by an Underlying Issuer.

 

“United States” means the United States of America.

 

“Unused Revolver Fee Margin” means, as of any date of determination under Section 2.10(b) of the Agreement, the applicable per annum rate set forth in the following table that corresponds to the most recent Daily Balance of the Revolver Usage:

 

	
Most Recent Daily Balance of Revolver Usage
    	
 
    	
Unused Revolver
   Fee Margin
    	
 
    
	
Greater than or equal to   $25,000,000
    	
 
    	
0.375
    	
%
    

 

30

 

	
Most Recent Daily Balance of Revolver Usage
    	
 
    	
Unused Revolver
   Fee Margin
    	
 
    
	
Less than $25,000,000
    	
 
    	
0.500
    	
%
    

 

“Voidable Transfer” has the meaning specified therefor in Section 17.8 of the Agreement.

 

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking association.

 

“WFCF” means Wells Fargo Capital Finance, LLC, a Delaware limited liability company.

 

“Winding Down Entities” has the meaning specified therefor in Section 6.18 of the Agreement.

 

31

 

 

Schedule 3.1

 

The obligation of each Lender to make its initial extension of credit provided for in the Agreement is subject to the fulfillment, to the satisfaction of each Lender (the making of such initial extension of credit by any Lender being conclusively deemed to be its satisfaction or waiver of the following), of each of the following conditions precedent:

 

(a)                                  the Closing Date shall occur on or before September 14, 2011;

 

(b)                                 Agent shall have received a letter duly executed by each Borrower and each Guarantor authorizing Agent to file appropriate financing statements in such office or offices as may be necessary or, in the opinion of Agent, desirable to perfect the security interests to be created by the Loan Documents;

 

(c)                                  Agent shall have received evidence that appropriate financing statements have been duly filed in such office or offices as may be necessary or, in the opinion of Agent, desirable to perfect the Agent’s Liens in and to the Collateral, and Agent shall have received searches reflecting the filing of all such financing statements;

 

(d)                                 Agent shall have received each of the following documents, in form and substance satisfactory to Agent, duly executed, and each such document shall be in full force and effect:

 

(i)                                     the Control Agreements,

 

(ii)                                  the Blocked Account Agreements,

 

(iii)                               the Security Agreement,

 

(iv)                              the Patent Security Agreement,

 

(v)                                 the Trademark Security Agreement,

 

(vi)                              a disbursement letter executed and delivered by Administrative Borrower, on behalf of Borrowers, to Agent regarding the extensions of credit to be made on the Closing Date, the form and substance of which is satisfactory to Agent,

 

(vii)                           the Fee Letter,

 

(viii)                        the ALLY Intercreditor Agreement,

 

(ix)                                the Guaranty,

 

(x)                                   the Mortgages,

 

(xi)                                the Intercompany Subordination Agreement,

 

(xii)                             a Borrowing Base Certificate prepared as of a date that is no more than 45 days prior to the Closing Date, and

 

(xiii)                          a letter, in form and substance reasonably satisfactory to Agent, from JPMorgan Chase Bank, N.A. (“Existing Lender”) to Agent respecting the amount necessary to repay in full all

 

1

 

of the obligations of each Borrower and its Subsidiaries owing to Existing Lender and obtain a release of all of the Liens existing in favor of Existing Lender in and to the assets of such Borrower and its Subsidiaries, together with termination statements and other documentation evidencing the termination by Existing Lender of its Liens in and to the properties and assets of such Borrower and its Subsidiaries and respecting the cash collateralization of all existing letters of credit issued under the Existing Credit Facility;

 

(e)                                  Agent shall have received a certificate from the Secretary of each Borrower (i) attesting to the resolutions of such Borrower’s Board of Directors authorizing its execution, delivery, and performance of this Agreement and the other Loan Documents to which such Borrower is a party, (ii) authorizing specific officers of such Borrower to execute the same, and (iii) attesting to the incumbency and signatures of such specific officers of such Borrower;

 

(f)                                    Agent shall have received copies of each Borrower’s Governing Documents, as amended, modified, or supplemented to the Closing Date, certified by the Secretary of such Borrower;

 

(g)                                 Agent shall have received a certificate of status with respect to each Borrower, dated within 10 Business Days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such Borrower, which certificate shall indicate that such Borrower is in good standing in such jurisdiction;

 

(h)                                 Agent shall have received certificates of status with respect to each Borrower, each dated within 30 days of the Closing Date, such certificates to be issued by the appropriate officer of the jurisdictions (other than the jurisdiction of organization of such Borrower) in which its failure to be duly qualified or licensed would constitute a Material Adverse Change, which certificates shall indicate that such Borrower is in good standing in such jurisdictions;

 

(i)                                     Agent shall have received a certificate from the Secretary of each Guarantor (i) attesting to the resolutions of such Guarantor’s Board of Directors authorizing its execution, delivery, and performance of the Loan Documents to which such Guarantor is a party, (ii) authorizing specific officers of such Guarantor to execute the same and (iii) attesting to the incumbency and signatures of such specific officers of Guarantor;

 

(j)                                     Agent shall have received copies of each Guarantor’s Governing Documents, as amended, modified, or supplemented to the Closing Date, certified by the Secretary of such Guarantor;

 

(k)                                  Agent shall have received a certificate of status with respect to each Guarantor, dated within 10 Business Days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such Guarantor, which certificate shall indicate that such Guarantor is in good standing in such jurisdiction;

 

(l)                                     Agent shall have received certificates of status with respect to each Guarantor, each dated within 30 days of the Closing Date, such certificates to be issued by the appropriate officer of the jurisdictions (other than the jurisdiction of organization of such Guarantor) in which its failure to be duly qualified or licensed would constitute a Material Adverse Change, which certificates shall indicate that such Guarantor is in good standing in such jurisdictions;

 

(m)                               Agent shall have received certificates of insurance, together with the endorsements thereto, as are required by Section 5.6, the form and substance of which shall be satisfactory to Agent;

 

(n)                                 Agent shall have received Collateral Access Agreements with respect to the locations set forth on Schedule 4.28;

 

2

 

(o)                                 Agent shall have received an opinion of Borrowers’ counsel in form and substance reasonably satisfactory to Agent;

 

(p)                                 Borrowers shall have the Required Availability after giving effect to the initial extensions of credit hereunder and the payment of all fees and expenses required to be paid by Borrowers on the Closing Date under this Agreement or the other Loan Documents;

 

(q)                                 Agent shall have completed its business, legal, and collateral due diligence, including (i) a collateral audit and review of each Borrower’s and its Subsidiaries’ books and records and verification of such Borrower’s representations and warranties to Lender Group, the results of which shall be satisfactory to Agent, and (ii) an inspection of each of the locations where each Borrower’s and its Subsidiaries’ Inventory is located, the results of which shall be satisfactory to Agent;

 

(r)                                    Agent shall have completed (i) Patriot Act searches, OFAC/PEP searches and customary individual background checks for each Borrower, and (ii) OFAC/PEP searches and customary individual background searches for each Borrower’s senior management and key principals, and each Guarantor, in each case, the results of which shall be satisfactory to Agent;

 

(s)                                  Agent shall have received an appraisal of the Net Liquidation Percentage applicable to each Borrower’s and its Subsidiaries’ Inventory, the results of which shall be reasonably satisfactory to Agent;

 

(t)                                    Agent shall have received a set of Projections of Parent and its Subsidiaries for the 3 year period following the Closing Date (on a year by year basis, and for the 1 year period following the Closing Date, on a month by month basis), in form and substance (including as to scope and underlying assumptions) satisfactory to Agent;

 

(u)                                 Borrowers shall have paid all Lender Group Expenses incurred in connection with the transactions evidenced by this Agreement;

 

(v)                                 Agent shall have received (i) appraisals of the Real Property Collateral reasonably satisfactory to Agent and (ii) mortgagee title insurance policies (or marked commitments to issue the same) for the Real Property Collateral issued by a title insurance company satisfactory to Agent (each a “Mortgage Policy” and, collectively, the “Mortgage Policies”) in amounts satisfactory to Agent assuring Agent that the Mortgages on such Real Property Collateral are valid and enforceable first priority mortgage Liens on such Real Property Collateral free and clear of all defects and encumbrances except Permitted Liens, and the Mortgage Policies otherwise shall be in form and substance reasonably satisfactory to Agent;

 

(w)                               Agent shall have received copies of each of the ALLY Documents, together with a certificate of the Secretary of the Administrative Borrower certifying each such document as being a true, correct, and complete copy thereof;

 

(x)                                   Parent and each of its Subsidiaries shall have received all licenses, approvals or evidence of other actions required by any Governmental Authority or other third party in connection with the execution and delivery by Parent or its Subsidiaries of the Loan Documents or with the consummation of the transactions contemplated thereby, which licenses, approvals or evidence shall be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority which would restrain, prevent or otherwise impose adverse conditions on the execution and delivery by Parent or its Subsidiaries of the Loan Documents and/or the consummation of the transactions contemplated thereby;

 

3

 

(y)                                 Agent shall have received internal credit approval to consummate the transactions contemplated by the Loan Documents; and

 

(z)                                   all other documents and legal matters in connection with the transactions contemplated by this Agreement shall have been delivered, executed, or recorded and shall be in form and substance satisfactory to Agent.

 

4

 

Schedule 4.1(b)

 

Capitalization of Borrowers

 

	
 
    	
 
    	
 
    	
 
    	
Number of
    	
 
    	
Class of
    	
 
    	
Percentage of
    	
 
    	
Certificate
    	
 
    
	
Owner
    	
 
    	
Issuer
    	
 
    	
Shares/Units
    	
 
    	
Interests
    	
 
    	
Class Owned
    	
 
    	
Nos.
    	
 
    
	
Supreme   Industries, Inc.
    	
 
    	
Supreme   Indiana Operations, Inc.
    	
 
    	
1,000 Shares
    	
 
    	
common
    	
 
    	
100%
    	
 
    	
2
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Supreme   Mid-Atlantic Corporation
    	
 
    	
1,000 Shares
    	
 
    	
common
    	
 
    	
100%
    	
 
    	
2
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Supreme   Truck Bodies of California, Inc.
    	
 
    	
1,000 Shares
    	
 
    	
common
    	
 
    	
100%
    	
 
    	
2
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Supreme   Corporation of Texas
    	
 
    	
1,000 Shares
    	
 
    	
common
    	
 
    	
100%
    	
 
    	
2
    	
 
    

 

1

 

Schedule 4.1(c)

 

Capitalization of Borrowers’ Subsidiaries

 

	
 
    	
 
    	
 
    	
 
    	
Number of
    	
 
    	
Class of
    	
 
    	
Percentage of
    	
 
    	
Certificate
    	
 
    
	
Owner
    	
 
    	
Issuer
    	
 
    	
Shares/Units
    	
 
    	
Interests
    	
 
    	
Class Owned
    	
 
    	
Nos.
    	
 
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Supreme   Northwest, L.L.C.
    	
 
    	
100 Units
    	
 
    	
limited   liability company membership interest
    	
 
    	
100%
    	
 
    	
4
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Silver   Crown, LLC
    	
 
    	
1,000 Units
    	
 
    	
limited   liability company membership interest
    	
 
    	
100%
    	
 
    	
2
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Supreme\Murphy   Truck Bodies, Inc.
    	
 
    	
1,000 Shares
    	
 
    	
common
    	
 
    	
100%
    	
 
    	
2
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
SC   Tower Structural Laminating, Inc.
    	
 
    	
1,000 Shares
    	
 
    	
common
    	
 
    	
100%
    	
 
    	
2
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supreme   Truck Bodies of California, Inc.
    	
 
    	
Supreme   STB, LLC
    	
 
    	
1,000 Units
    	
 
    	
limited   liability company membership interest
    	
 
    	
100%
    	
 
    	
2
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Supreme   Indiana Management, Inc.
    	
 
    	
1,000 Shares
    	
 
    	
common
    	
 
    	
100%
    	
 
    	
2
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supreme   Industries, Inc.
    	
 
    	
Supreme   Insurance Company, Inc.
    	
 
    	
1,000 Shares
    	
 
    	
common
    	
 
    	
100%
    	
 
    	
1
    	
 
    

 

1

 

Schedule 4.6(a)

 

States of Organization

 

	
Entity
    	
 
    	
State of Organization
    
	
Supreme   Industries, Inc.
    	
 
    	
Delaware
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Delaware
    
	
Supreme   Mid-Atlantic Corporation
    	
 
    	
Texas
    
	
Supreme   Corporation of Texas
    	
 
    	
Texas
    
	
Supreme   Northwest, L.L.C.
    	
 
    	
Texas
    
	
Supreme   Truck Bodies of California, Inc.
    	
 
    	
California
    
	
Supreme   STB, LLC
    	
 
    	
California
    
	
Supreme   Indiana Management, Inc.
    	
 
    	
Delaware
    
	
SC   Tower Structural Laminating, Inc.
    	
 
    	
Texas
    
	
Supreme\Murphy   Truck Bodies, Inc.
    	
 
    	
North   Carolina
    
	
Silver   Crown, LLC
    	
 
    	
Delaware
    

 

1

 

Schedule 4.6(b)

 

Chief Executive Offices

 

2581 East Kercher Road, Goshen, IN, 46528 (for all Loan Parties)

 

1

 

Schedule 4.6(c)

 

Organizational Identification Numbers

 

	
Entity
    	
 
    	
Organizational ID
    	
 
    	
Tax ID
    
	
Supreme   Industries, Inc.
    	
 
    	
2194699
    	
 
    	
75-1670945
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
3869935
    	
 
    	
20-2007769
    
	
Supreme   Mid-Atlantic Corporation
    	
 
    	
101792500
    	
 
    	
35-1714584
    
	
Supreme   Corporation of Texas
    	
 
    	
44046400
    	
 
    	
74-2283398
    
	
Supreme   Northwest, L.L.C.
    	
 
    	
800264134
    	
 
    	
20-0364574
    
	
Supreme   Truck Bodies of California, Inc.
    	
 
    	
C1270935
    	
 
    	
35-1676396
    
	
Supreme   STB, LLC
    	
 
    	
200635610151
    	
 
    	
26-4120982
    
	
Supreme   Indiana Management, Inc.
    	
 
    	
3869939
    	
 
    	
20-2002978
    
	
SC   Tower Structural Laminating, Inc.
    	
 
    	
139907800
    	
 
    	
35-2015418
    
	
Supreme\Murphy   Truck Bodies, Inc.
    	
 
    	
C-0351217
    	
 
    	
56-1891328
    
	
Silver   Crown, LLC
    	
 
    	
4095168
    	
 
    	
83-0451887
    

 

1

 

Schedule 4.6(d)

 

Commercial Tort Claims

 

None.

 

1

 

 

Schedule 4.7

 

Litigation

 

Summary of Existing and Threatened Lawsuits

 

Zika — (Supreme Mid-Atlantic)

 

A personal injury liability litigation claim whereby Plaintiff alleges that he was injured while using a Supreme-manufactured truck body. This claim is covered by Supreme’s General Liability insurance policy, subject to a $250k deductible. To-date approximately $68k has been paid toward the deductible.

 

Geist — (Supreme Mid-Atlantic)

 

A personal injury liability litigation claim whereby Plaintiff alleges personal injuries while working as a temporary employee at Supreme’s Pennsylvania manufacturing facility. Supreme is aggressively contesting this claim on the grounds that the Plaintiff is covered by the temporary agency’s workers comp policy. If necessary, Supreme’s workers comp policy will cover this claim, subject to a $250k deductible.  To-date approximately $29k of defense costs have been paid.

 

Gendrolis — (Supreme Industries, Inc.)

 

A personal injury liability demand alleging injuries to the Plaintiff as a result of falling out of a Supreme-manufactured truck body. This is a $10M demand which Supreme will aggressively contest on the grounds of poor maintenance of the vehicle in question. Supreme has seen pictures of the poorly-maintained vehicle and will be conducting its own on-site inspection of the vehicle. If this demand turns into a lawsuit, it will be covered by Supreme’s General Liability insurance policy, subject to a $250k deductible.

 

Bus Fire — (Supreme Indiana Operations, Inc.)

 

Supreme was notified on 8/26/11 of a potential claim involving three buses destroyed by fire while at a Supreme customer’s facility. The Supreme-manufactured bus was parked between two other buses and is alleged to have caused the fire due to an electrical malfunction. Supreme has hired a fire investigative agency to perform a thorough investigation as soon as possible. This will be covered by Supreme’s General Liability insurance policy, subject to a $100k deductible.

 

1

 

Schedule 4.12

 

Environmental Matters

 

None.

 

1

 

Schedule 4.13

 

Intellectual Property

 

PATENTS:

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
If Foreign
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Registration,
    	
 
    	
 
    	
 
    
	
Description
    	
 
    	
Application No.
    	
 
    	
Patent No.
    	
 
    	
Country
    	
 
    	
Issue Dates
    	
 
    
	
Armored Booth
    	
 
    	
10/150357
    	
 
    	
6711980
    	
 
    	
 
    	
 
    	
3/30/2004
    	
 
    

 

TRADEMARKS/SERVICEMARKS:

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
If Foreign
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Registration,
    	
 
    	
 
    	
 
    
	
Description
    	
 
    	
Serial No.
    	
 
    	
Registration No.
    	
 
    	
Country
    	
 
    	
Issue Dates
    	
 
    
	
Classic American Trolleys Supreme Corporation
    	
 
    	
75299902
    	
 
    	
2345913
    	
 
    	
 
    	
 
    	
4/25/2000
    	
 
    
	
Iner-City Van
    	
 
    	
73188923
    	
 
    	
1137829
    	
 
    	
 
    	
 
    	
7/15/1980
    	
 
    
	
Kold King
    	
 
    	
78604148
    	
 
    	
3137188
    	
 
    	
 
    	
 
    	
8/29/2006
    	
 
    
	
Startrans
    	
 
    	
78604164
    	
 
    	
3140466
    	
 
    	
 
    	
 
    	
9/5/2006
    	
 
    
	
Supreme — United States
    	
 
    	
73389568
    	
 
    	
1249791
    	
 
    	
 
    	
 
    	
8/30/1983
    	
 
    
	
Tourliner
    	
 
    	
77004022
    	
 
    	
3307935
    	
 
    	
 
    	
 
    	
10/9/2007
    	
 
    
	
Vanscaper
    	
 
    	
78604156
    	
 
    	
3319885
    	
 
    	
 
    	
 
    	
10/23/2007
    	
 
    

 

1

 

Schedule 4.15

 

Deposit Accounts and Securities Accounts

 

	
 
    	
 
    	
Institution
    	
 
    	
 
    	
 
    	
Account
    	
 
    	
 
    
	
Entity
    	
 
    	
Name
    	
 
    	
Address
    	
 
    	
Number
    	
 
    	
Purpose
    
	
Supreme   Industries, Inc.
    	
 
    	
JP Morgan Chase
    	
 
    	
7610   W. Washington St,. Indianapolis, IN 46231
    	
 
    	
000300001068431
    	
 
    	
Checking
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
JP Morgan Chase
    	
 
    	
7610   W. Washington St,. Indianapolis, IN 46231
    	
 
    	
000300001862236
    	
 
    	
Checking - Main
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
JP Morgan Chase
    	
 
    	
PO Box 260164, Baton Rouge, LA 70826-9944
    	
 
    	
000000633224753
    	
 
    	
Controlled Disbursements
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
JP Morgan Chase
    	
 
    	
7610   W. Washington St,. Indianapolis, IN 46231
    	
 
    	
000000628209132
    	
 
    	
Checking – Group Insurance
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
First National Bank of Griffin
    	
 
    	
PO   Box Drawer F, Griffin, GA 30224
    	
 
    	
01084151
    	
 
    	
Checking – Transfer Checks
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
Bank of America
    	
 
    	
PO   Box 31019, Tampa, FL 33631-3019
    	
 
    	
0028-3032-5569
    	
 
    	
Checking - Imprest
    
	
Supreme   Corporation of Texas
    	
 
    	
First National Bank of Cleburne
    	
 
    	
PO   Box 537, Cleburne, TX 76033-0537
    	
 
    	
170274
    	
 
    	
Checking – Transfer Checks
    
	
Supreme   Corporation of Texas
    	
 
    	
First National Bank of Cleburne
    	
 
    	
PO   Box 537, Cleburne, TX 76033-0537
    	
 
    	
170142
    	
 
    	
Checking - Imprest
    
	
Supreme   Mid-Atlantic Corporation
    	
 
    	
Jonestown Bank & Trust Company
    	
 
    	
PO   Box 717, Jonestown, PA 17038-0717
    	
 
    	
522755
    	
 
    	
Checking – Transfer Checks
    
	
Supreme   Mid-Atlantic Corporation
    	
 
    	
Citizens Bank
    	
 
    	
PO   Box 789, Providence, RI 02901-0789
    	
 
    	
11140410
    	
 
    	
Checking - Imprest
    
	
Supreme   Mid-Atlantic Corporation
    	
 
    	
Citizens Bank
    	
 
    	
PO   Box 789, Providence, RI 02901-0789
    	
 
    	
11140437
    	
 
    	
Checking – Transfer Checks
    
	
Supreme   STB, LLC
    	
 
    	
JP Morgan Chase
    	
 
    	
PO Box 659754, San Antonio, TX 78265-9754
    	
 
    	
000000628209140
    	
 
    	
Transfer Account
    

 

1

 

 

Schedule 4.17

 

Material Contracts

 

1998 Stock Option Plan, filed as Exhibit 10.3 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 1998.

 

Amendment No. 1 to the Company’s 1998 Stock Option Plan, filed as Exhibit 10.4 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 1999.

 

Amendment No. 2 to the Company’s 1998 Stock Option Plan, filed as Exhibit 10.5 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2000.

 

2001 Stock Option Plan, filed as Exhibit 10.6 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2001.

 

Amendment No. 1 to the Company’s 2001 Stock Option Plan, filed as Exhibit 10.7 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2001.

 

2004 Stock Option Plan, filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 effective on August 26, 2004.

 

Amended and Restated 2004 Stock Option Plan filed as Exhibit A to the Company’s Revised Definitive Proxy Statement filed on April 5, 2006.

 

Amendment Number One to the Company’s Amended and Restated 2004 Stock Option Plan dated October 25, 2006, included in the Company’s Definitive Proxy Statement filed on April 2, 2007.

 

Amendment No. Two to the Company’s Amended and Restated 2004 Stock Option Plan dated March 28, 2007, included in the Company’s Definitive Proxy Statement filed on April 2, 2007.

 

Amendment No. 3 to the Company’s Amended and Restated 2004 Stock Option Plan dated March 25, 2008, included in the Company’s Definitive Proxy Statement filed on April 3, 2008.

 

Amendment No. Four to the Company’s Amended and Restated 2004 Stock Option Plan dated August 25, 2009, filed as Exhibit 10.3 to the Company’s quarterly report on Form 10-Q for the quarterly period ended September 26, 2009.

 

Form of Supreme Industries, Inc. Director and Officer Indemnification Agreement, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 6, 2008.

 

Indemnification Agreement by and among Supreme Industries, Inc. and Kim Korth dated February 16, 2011, filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 22, 2011.

 

Special Vehicle Manufacturer Converters Agreement with General Motors Corporation, effective February 29, 2008, between General Motors Corporation and Supreme Corporation, filed as Exhibit 10.11 to the Company’s annual report on Form 10-K for the fiscal year ended December 27, 2008.

 

Ford Authorized Converter Pool Agreement, effective May 1, 2008, among Ford Motor Company, Supreme Corporation and certain subsidiaries, filed as Exhibit 10.12 to the Company’s annual report on Form 10-K for the fiscal year ended December 27, 2008.

 

1

 

Inventory Loan and Security Agreement by and between Supreme Indiana Operations, Inc. and Ally Bank dated March 4, 2011, filed on Form 10-Q for the quarterly period ended April 2, 2011.

 

Inventory Loan and Security Agreement by and between Supreme Indiana Operations, Inc. and Ally Financial, Inc. dated March 4, 2011, filed on Form 10-Q for the quarterly period ended April 2, 2011.

 

Guaranty Agreement by and between Supreme Indiana Operations, Inc. and Ally Bank dated March 4, 2011 filed on Form 10-Q for the quarterly period ended April 2, 2011.

 

Guaranty Agreement by and between Supreme Indiana Operations, Inc. and Ally Financial, Inc. dated March 4, 2011 filed on Form 10-Q for the quarterly period ended April 2, 2011.

 

Credit Balance Agreement by and between Supreme Indiana Operations, Inc. and Ally Financial, Inc. dated March 21, 2011, filed on Form 10-Q for the quarterly period ended April 2, 2011.

 

Option Agreement by and between Supreme Indiana Operations, Inc. and Barrett Gardner Associates, Inc. dated March 24, 2011, filed on Form 10-Q for the quarterly period ended April 2, 2011.

 

Lease dated July 25, 1988, between Supreme Corporation and G-2, Ltd., a Texas limited partnership, relating to Supreme’s Goshen, Indiana facilities, filed as Exhibit 10.22 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 1988.

 

Lease dated July 25, 1988, between Supreme Corporation and G-2, Ltd., a Texas limited partnership, relating to Supreme Corporation’s Griffin, Georgia facilities, filed as Exhibit 10.23 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 1988.

 

Amended and Restated Employment Contract by and among Supreme Industries, Inc. and Herbert M. Gardner dated to be effective January 1, 2005, filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated February 10, 2006.

 

Amended and Restated Employment Contract by and among Supreme Industries, Inc. and William J. Barrett dated to be effective January 1, 2005, filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K dated February 10, 2006.

 

Employment Agreement by and among Supreme Industries, Inc., Supreme Indiana Operations, Inc., and Kim Korth dated to be effective February 1, 2011, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 22, 2011.

 

Addendum Number One to Employment Agreement by and among Supreme Industries, Inc., Supreme Indiana Operations, Inc., and Kim Korth dated to be effective August 1, 2011, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 4, 2011.

 

Addendum Number Two to Employment Agreement by and among Supreme Industries, Inc., Supreme Indiana Operations, Inc., and Kim Korth dated to be effective September 1, 2011, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 7, 2011, and incorporated herein by reference.

 

Air Commercial Real Estate Association Standard Industrial/Commercial Single-Tenant Lease — Net, by and between Supreme Indiana Operations, Inc. and BFG2011 Limited Liability Company, dated May 12, 2011.

 

Memorandum of Lease, Option to Purchase and Right of First Refusal, by Supreme Indiana Operations, Inc., dated May 12, 2011

 

2

 

Civil Settlement Agreement dated May 25, 2011, by and between The Armored Group, LLC and Supreme Indiana Operations, Inc., and Supreme Corporation of Texas, filed as Exhibit 10.3 on Form 10-Q for the quarterly period ended July 2, 2011.

 

Amendment to Civil Settlement Agreement dated June 7, 2011, by and between The Armored Group, LLC and Supreme Indiana Operations, Inc., and Supreme Corporation of Texas, filed as Exhibit 10.4 on Form 10-Q for the quarterly period ended July 2, 2011.

 

3

 

Schedule 4.19

 

Permitted Indebtedness

 

(See also Schedule P-2: Permitted Liens)

 

1. Ally Loan Documents - Aggregate Principal Amount as of September 7, 2011: $16,291,324

 

Guaranty, dated as of March 4, 2011, executed by the Supreme Indiana Operations, Inc. as Guarantor, and accepted by Ally Bank.

 

Guaranty, dated as of March 4, 2011, executed by the Supreme Indiana Operations, Inc., as Guarantor, and accepted by Ally Financial, Inc.

 

Inventory Loan and Security Agreement, dated as of March 4, 2011, executed by Supreme Indiana Operations, Inc., as Manufacturer, and Ally Bank.

 

Inventory Loan and Security Agreement, dated as of March 4, 2011, executed by Supreme Indiana Operations, Inc., as Manufacturer, and Ally Financial, Inc.

 

Credit Balance Agreement, dated as of March 16, 2011, and signed as of March 21, 2011, executed by Supreme Indiana Operations, Inc., as Obligor, and Ally Financial, Inc.

 

Deed to Secure Debt and Security Agreement, dated as of April 15, 2011, by and between Supreme Indiana Operations, Inc. and Ally Financial, Inc.

 

2. Intercompany Note - Aggregate Principal Amount as of Closing Date: $0

 

Master Intercompany Demand Note, to be dated the date of this Agreement, by and among the Loan Parties party thereto.

 

3. North Carolina IRB Documents- Aggregate Principal Amount as of Closing Date: $900,000

 

Loan Agreement dated as of October 1, 2000 between the Wilson County Industrial Facilities and Pollution Control Financing Authority, as Issuer and Supreme\Murphy Truck Bodies, Inc., as Borrower.

 

Promissory Note dated as of October 1, 2000 issued by Supreme\Murphy Truck Bodies, Inc. to the Wilson County Industrial Facilities and Pollution Control Financing Authority in the stated principal amount of $2,500,000.

 

Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated May 11, 2000 among Supreme\Murphy Truck Bodies, Inc., as Grantor, David L. Huffstetler, as Trustee, and Bank One Indiana, N.A., as Beneficiary.

 

Unlimited Continuing Guaranty, dated as of October 11, 2000, executed by Atlantic Sales Corporation in favor of Bank One, Indiana, N.A.

 

Reimbursement and Pledge Agreement, dated October 11, 2000, by and between Supreme\Murphy Truck Bodies, Inc. and Bank One Indiana, N.A.

 

1

 

4. Machinery and Equipment Loan Fund Documents— Aggregate Principal Amount as of Closing Date: $83,150.28

 

Loan Agreement, effective as of April 18, 2006, by and between Supreme Mid-Atlantic Corporation and The Commonwealth of Pennsylvania, acting by and through the Department of Community and Economic Development.

 

Note, effective as of April 18, 2006, executed by Supreme Mid-Atlantic Corporation payable to the Commonwealth of Pennsylvania acting through the Department of Community and Economic Development, in the original principal amount of $325,000.

 

Security Agreement, effective as of April, 2006, between Supreme Mid-Atlantic Corporation and the Commonwealth of Pennsylvania, acting through the Department of Community and Economic Development.

 

Guaranty and Surety Agreement, effective as of April 18, 2006, executed by Supreme Industries, Inc., in favor of the Commonwealth of Pennsylvania, acting by and through the Department of Community and Economic Development.

 

5. Payoff Letter Cash Collateral — Aggregate Principal Amount as of Closing Date: $185,000

 

Cash collateral held in the amount of $185,000 to serve as security and cash collateral for all obligations, liabilities, and indebtedness of any of the Loan Parties now existing or hereafter arising under, pursuant to or in connection with the Credit Card Facility, as defined in the Letter Re: Payoff of Credit Facilities dated the date of this Agreement among JPMorgan Chase Bank, N.A. and the Loan Parties.

 

2

 

Schedule 4.28

 

Locations of Inventory and Equipment

 

See Schedule E-1 and Schedule 6.16, above.

 

1

 

 

Schedule 5.1

 

Deliver to Agent, with copies to each Lender, each of the financial statements, reports, or other items set forth below at the following times in form satisfactory to Agent:

 

	
as soon as available, but in any event within 30 days (45 days in the   case of a month that is the end of one of Parent’s Fiscal Quarters) after the   end of each month during each of Parent’s Fiscal Years,
    	
 
    	
(a) an unaudited consolidated and consolidating balance sheet, income   statement, and statement of cash flow covering Parent’s and its Subsidiaries’   operations during such period, and

 

(b) a Compliance Certificate.
    
	
 
    	
 
    	
 
    
	
as soon as available, but in any event within 90 days after the end   of each of Parent’s Fiscal Years,

 
    	
 
    	
(c) consolidated and consolidating financial statements of Parent and   its Subsidiaries for each such Fiscal Year, audited by independent certified   public accountants reasonably acceptable to Agent and certified, without any   qualifications (including any (i) “going concern” or like qualification   or exception, (ii) qualification or exception as to the scope of such   audit, or (iii) qualification which relates to the treatment or   classification of any item and which, as a condition to the removal of such   qualification, would require an adjustment to such item, the effect of which   would be to cause any noncompliance with the provisions of Section 6.10),   by such accountants to have been prepared in accordance with GAAP (such   audited financial statements to include a balance sheet, income statement,   and statement of cash flow and, if prepared, such accountants’ letter to   management), and

 

(d) a Compliance Certificate.
    
	
 
    	
 
    	
 
    
	
as soon as available, but in any event within 30 days after the start   of each of Parent’s Fiscal Years,
    	
 
    	
(e) copies of Parent’s and its Subsidiaries’ Projections, in form and   substance (including as to scope and underlying assumptions) satisfactory to   Agent, in its Permitted Discretion, for the forthcoming 3 years, year by   year, and for the forthcoming Fiscal Year, month by month, certified by the   chief financial officer of Administrative Borrower as being such officer’s   good faith estimate of the financial performance of Parent and its   Subsidiaries during the period covered thereby.
    
	
 
    	
 
    	
 
    
	
if and when filed by any Loan Party,
    	
 
    	
(f) Form 10-Q quarterly reports, Form 10-K annual reports,   and Form 8-K current reports,

 

(g) any other filings made by any Loan Party with the SEC, and

 

(h) any other information that is provided by any Loan Party to its   shareholders generally.
    
	
 
    	
 
    	
 
    
	
promptly, but in any 
    	
 
    	
(i) notice of such event or condition and a statement of the curative   action that 
    

 

1

 

	
event within 5 days after any Loan Party has knowledge of any event   or condition that constitutes a Default or an Event of Default,
    	
 
    	
Borrowers propose to take with respect thereto.
    
	
 
    	
 
    	
 
    
	
promptly after the commencement thereof, but in any event within 5   days after the service of process with respect thereto on any Loan Party or   any of its Subsidiaries,
    	
 
    	
(j) notice of all actions, suits, or proceedings brought by or   against Parent or any of its Subsidiaries before any Governmental Authority   which reasonably could be expected to result in a Material Adverse Change.
    
	
 
    	
 
    	
 
    
	
upon the request of Agent,
    	
 
    	
(k) any other information reasonably requested relating to the   financial condition of Parent or its Subsidiaries.
    

 

2

 

Schedule 5.2

 

Provide Agent (and if so requested by Agent, with copies for each Lender) with each of the documents set forth below at the following times in form satisfactory to Agent:

 

	
Daily
    	
 
    	
(a) an   Account roll-forward with supporting details supplied from sales journals,   collection journals, credit registers and any other records,

 

(b) notice   of all claims, offsets, or disputes asserted by Account Debtors with respect   to Borrowers’ and their Subsidiaries’ Accounts, and

 

(c) copies   of invoices together with corresponding shipping and delivery documents, and   credit memos together with corresponding supporting documentation, with   respect to invoices and credit memos in excess of an amount determined in the   sole discretion of Agent, from time to time.
    
	
 
    	
 
    	
 
    
	
Monthly   (no later than the 10th day of each month); provided that during any Trigger   Period, the reports described in clauses (d) through (l) shall   be delivered weekly (no later than the 4th day of each week in respect of the   immediately preceding week)
    	
 
    	
(d) a   Borrowing Base Certificate (which, as long as Freightliner Customer Chassis   Corporation (“Freightliner”) maintains UCC financing statement no   10-0012136478 against SIO, shall include an ineligible category for all   inventory or equipment affixed to any vehicle chassis owned by or subject to   a security interest in favor of Freightliner),

 

(e) a   detailed aging, by total, of Borrowers’ Accounts, together with a   reconciliation and supporting documentation for any reconciling items noted   (delivered electronically in an acceptable format, if Borrowers have   implemented electronic reporting),

 

(f) a   detailed calculation of those Accounts that are not eligible for the   Borrowing Base, if Borrowers have not implemented electronic reporting,

 

(g) (i) prior   to Borrowers’ compliance with Section 5.21 of the Agreement, a   detailed Inventory report and (ii) upon Borrowers’ compliance with Section 5.21   of the Agreement, a detailed Inventory system/perpetual report, in each case,   together with a reconciliation to Borrowers’ general ledger accounts   (delivered electronically in an acceptable format, if Borrowers have   implemented electronic reporting),

 

(h) (i) prior   to Borrowers’ compliance with Section 5.21 of the   Agreement, Inventory reports and (ii) upon Borrowers’ compliance   with Section 5.21 of the Agreement, Inventory   system/perpetual reports, in each case, specifying the cost and the wholesale   market value of Borrowers’ and their Subsidiaries’ Inventory, by category,   with additional detail showing additions to and deletions therefrom   (delivered electronically in an acceptable format, if Borrowers have   implemented electronic reporting),

 

(i) a   detailed calculation of Inventory categories that are not eligible for the   Borrowing Base, if Borrowers have not implemented electronic reporting,

 

(j) a   summary aging, by vendor, of Borrowers’ and their Subsidiaries’ accounts   payable and any book overdraft (delivered electronically in an acceptable   format, if Borrowers have implemented electronic reporting) and an aging, by   vendor, of any held checks,

 

(k) a   detailed report regarding Borrowers’ and their Subsidiaries’ cash and Cash   Equivalents, including an indication of which amounts constitute Qualified   Cash, and
    

 

1

 

	
 
    	
 
    	
(l) a   monthly Account roll-forward, in a format acceptable to Agent in its   discretion, tied to the beginning and ending account receivable balances of   Borrowers’ general ledger.
    
	
 
    	
 
    	
 
    
	
Monthly (no later than the 30th day of each month)
    	
 
    	
(m) (i) a reconciliation of Accounts and trade accounts   payable of Borrowers’ general ledger accounts to their monthly financial   statements including any book reserves related to each category and   (ii) upon compliance with Section 5.21 of the Agreement, a   reconciliation of Inventory of Borrowers’ general ledger accounts to their   monthly financial statements including any book reserves related to each   category.
    
	
 
    	
 
    	
 
    
	
Quarterly
    	
 
    	
(n) a report regarding Borrowers’ and their Subsidiaries’   accrued, but unpaid, ad valorem taxes.
    
	
 
    	
 
    	
 
    
	
Annually
    	
 
    	
(o) a detailed list of Borrowers’ and their Subsidiaries’   customers, with address and contact information.
    
	
 
    	
 
    	
 
    
	
Upon request by Agent
    	
 
    	
(p) copies of purchase orders and invoices for Inventory and   Equipment acquired by any Borrower or its Subsidiaries, and

 

(q) such other reports as to the Collateral or the financial   condition of Borrowers and their Subsidiaries, as Agent may reasonably   request.
    

 

2

 

Schedule 6.6

 

Nature of Business

 

Established in 1974 as a truck body manufacturer, Supreme Industries, Inc., through its wholly-owned subsidiary, Supreme Indiana Operations, Inc., is one of the nation’s leading manufacturers of specialized commercial vehicles. The Company engages principally in the production and sale of customized truck bodies, buses, and other specialty vehicles. Building on its expertise in providing both cargo and passenger transportation solutions, the Company’s specialty vehicle offerings include products such as customized armored vehicles and homeland response vehicles.

 

1

 

Schedule 6.16

 

Consignments

 

(as of August 1, 2011)

 

	
Loan Party
    	
 
    	
Names and Addresses
    
	
 
    	
 
    	
 
    
	
Supreme   Indiana Operations, Inc.
    	
 
    	
McCormick   Motors, 1255 W. Market St., Nappanee, IN 46550
   Jordan Ford, 609 E. Jefferson Blvd., Mishawaka, IN 46546
    
	
 
    	
 
    	
Northwest   Ford, 4000 Mannheim Road, Franklin Park, IL 60131
    
	
 
    	
 
    	
Mike   Bass Ford, I-90 Detroit Road, Lorain, OH 44052
    
	
 
    	
 
    	
Harold   Zigler Ford, 2525 Bypass Road, Elkhart, IN 46514
    
	
 
    	
 
    	
American   Fleet Services, 7714 Commerce Park Oval, Independence, OH 44131
    
	
 
    	
 
    	
 
    
	
Supreme   Truck Bodies of California, Inc.
    	
 
    	
Auto   Safety House, 2630 W. Buckeye Road, Phoenix, AZ 85009
    

 

1

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