0001104659-11-029668.txt : 20110517 0001104659-11-029668.hdr.sgml : 20110517 20110517165121 ACCESSION NUMBER: 0001104659-11-029668 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20110402 FILED AS OF DATE: 20110517 DATE AS OF CHANGE: 20110517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPREME INDUSTRIES INC CENTRAL INDEX KEY: 0000350846 STANDARD INDUSTRIAL CLASSIFICATION: TRUCK & BUS BODIES [3713] IRS NUMBER: 751670945 STATE OF INCORPORATION: DE FISCAL YEAR END: 1225 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08183 FILM NUMBER: 11852167 BUSINESS ADDRESS: STREET 1: P O BOX 237 STREET 2: 2581 EAST KERCHER ROAD CITY: GOSHEN STATE: IN ZIP: 46528 BUSINESS PHONE: 5746423070 MAIL ADDRESS: STREET 1: P O BOX 237 STREET 2: 2581 EAST KERCHER ROAD CITY: GOSHEN STATE: IN ZIP: 46528 FORMER COMPANY: FORMER CONFORMED NAME: EXPLORATION SURVEYS INC DATE OF NAME CHANGE: 19850813 10-Q 1 a11-9374_110q.htm QUARTERLY REPORT PURSUANT TO SECTIONS 13 OR 15(D)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 2, 2011

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-8183

SUPREME INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Delaware		75-1670945
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2581 E. Kercher Rd., P.O. Box 237, Goshen, Indiana		46528
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (574) 642-3070

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer o

Non-accelerated filer o		Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock ($.10 Par Value)		Outstanding at May 04, 2011
Class A		12,683,640
Class B		1,716,937

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SUPREME INDUSTRIES, INC.

CONTENTS

		Page No.
PART I. FINANCIAL INFORMATION

ITEM 1.	Financial Statements.	1

	Consolidated Balance Sheets	1

	Consolidated Statements of Operations	3

	Consolidated Statements of Cash Flows	4

	Notes to Consolidated Financial Statements	5

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	9

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk.	18

ITEM 4.	Controls and Procedures.	18

PART II. OTHER INFORMATION

ITEM 1.	Legal Proceedings.	19

ITEM 1A.	Risk Factors.	19

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	19

ITEM 3.	Defaults Upon Senior Securities.	19

ITEM 4.	Reserved.	19

ITEM 5.	Other Information.	19

ITEM 6.	Exhibits.	21

SIGNATURES

INDEX TO EXHIBITS

EXHIBITS

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Supreme Industries, Inc. and Subsidiaries

Consolidated Balance Sheets

	April 2,		December 25,
	2011		2010
	(Unaudited)
ASSETS

Current assets:
Cash and cash equivalents	$	155,998	$	1,050,047
Investments	934,636		1,208,831
Accounts receivable, net	30,790,985		21,305,281
Inventories	52,953,024		35,676,353
Other current assets	10,606,698		9,203,427

Total current assets	95,441,341		68,443,939

Property, plant and equipment, at cost	79,124,171		78,815,303
Less, Accumulated depreciation and amortization	46,528,538		45,760,412

Property, plant and equipment, net	32,595,633		33,054,891

Other assets	36,438		38,624

Total assets	$	128,073,412	$	101,537,454

See accompanying notes to consolidated financial statements.

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Supreme Industries, Inc. and Subsidiaries

Consolidated Balance Sheets, Concluded

	April 2,		December 25,
	2011		2010
	(Unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Current maturities of long-term debt	$	29,316,266	$	25,874,365
Trade accounts payable	36,128,971		11,571,902
Accrued income taxes	1,039,005		1,040,096
Other accrued liabilities	10,101,707		10,347,567

Total current liabilities	76,585,949		48,833,930

Long-term debt	754,525		770,847

Total liabilities	77,340,474		49,604,777

Stockholders’ equity	50,732,938		51,932,677

Total liabilities and stockholders’ equity	$	128,073,412	$	101,537,454

See accompanying notes to consolidated financial statements.

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Supreme Industries, Inc. and Subsidiaries

Consolidated Statements of Operations (Unaudited)

	Three Months Ended
	April 2,			March 27,
	2011			2010

Net sales	$	68,399,974		$	46,042,270
Cost of sales	61,876,822			42,195,969
Gross profit	6,523,152			3,846,301

Selling, general and administrative expenses	7,311,407			5,560,620
Other income	(60,753		)	(188,363		)
Operating loss	(727,502		)	(1,525,956		)

Interest expense	279,858			493,772
Loss from continuing operations before income taxes	(1,007,360		)	(2,019,728		)

Income tax expense	—			—
Loss from continuing operations	(1,007,360		)	(2,019,728		)

Discontinued operations
Operating income from discontinued motorhome operations, net of tax	—			5,204
Operating loss of discontinued Oregon operations, net of tax	(357,139		)	(393,884		)
Net loss	$	(1,364,499	)	$	(2,408,408	)
Loss Per Share:
Loss from continuing operations	$	(0.07	)	$	(0.14	)
Loss from discontinued operations	(0.03		)	(0.03		)
Net loss	$	(0.10	)	$	(0.17	)
Shares used in the computation of loss per share:
Basic	14,360,917			14,256,540
Diluted	14,360,917			14,256,540

See accompanying notes to consolidated financial statements.

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Supreme Industries, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

	Three Months Ended
	April 2,			March 27,
	2011			2010
Cash flows from operating activities:
Net loss	$	(1,364,499	)	$	(2,408,408	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	768,126			987,683
Provision for losses on doubtful receivables	46,065			50,339
Stock-based compensation expense	153,786			139,144
Losses on sale of property, plant and equipment, net	—			10,784
Changes in operating assets and liabilities	(3,901,593		)	7,433,215

Net cash provided by (used in) operating activities	(4,298,115		)	6,212,757

Cash flows from investing activities:
Additions to property, plant and equipment	(308,868		)	(348,623		)
Proceeds from sale of property, plant and equipment	—			604,749
Purchases of investments	—			(940,438		)
Proceeds from sales of investments	277,643			—
Decrease in other assets	2,186			2,186

Net cash used in investing activities	(29,039		)	(682,126		)

Cash flows from financing activities:
Proceeds from revolving line of credit and long-term debt	22,482,981			13,248,877
Repayments of revolving line of credit and long-term debt	(19,057,402		)	(19,901,865		)
Proceeds from exercise of stock options	7,526			—

Net cash provided by (used in) financing activities	3,433,105			(6,652,988		)

Change in cash and cash equivalents	(894,049		)	(1,122,357		)

Cash and cash equivalents, beginning of period	1,050,047			1,222,411

Cash and cash equivalents, end of period	$	155,998		$	100,054

See accompanying notes to consolidated financial statements.

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NOTE 1 - BASIS OF PRESENTATION AND OPINION OF MANAGEMENT

The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all of the information and financial statement disclosures necessary for a fair presentation of consolidated financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, the information furnished herein includes all adjustments necessary to reflect a fair statement of the interim periods reported. All adjustments are of a normal and recurring nature. The December 25, 2010 consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. References to “we,” “us,” “our,” “its,” “Supreme,” or the “Company” refer to Supreme Industries, Inc. and its subsidiaries.

The Company has adopted a 52- or 53-week fiscal year ending the last Saturday in December. The results of operations for the three months ended April 2, 2011 and March 27, 2010 are for 14- and 13-week periods, respectively.

NOTE 2 — DISCONTINUED OPERATIONS

Effective December 25, 2010, the Company decided to cease operations at its Woodburn, Oregon manufacturing facility. The Oregon operations were discontinued due to the Company’s decision to exit this unprofitable geographic region. In light of a persistently difficult market and challenging cost structure, the Company is working with customers to meet existing commitments. The amount of Oregon business expected to be retained is insignificant. The Oregon facility and equipment are classified as held for sale as of April 2, 2011 and December 25, 2010.

The 2011 operating results for the Woodburn, Oregon location are classified as discontinued operations, and prior years’ operating results have been reclassified to discontinued operations as follows:

	Three Months Ended
	April 2, 2011			March 27, 2010
Net sales	$	2,820,655		$	2,454,547

Pretax loss from operations	$	(357,139	)	$	(393,884	)

Net loss	$	(357,139	)	$	(393,884	)

In the fourth quarter of 2009, the Company terminated its Silver Crown luxury motorhome product line. This decision was triggered by a significant reduction of new motorhome sales orders and the cancellation of sales orders due to the extremely tight credit markets caused by the economic recession. The Company decided to exit the motorhome product line as part of a plan to focus on core truck, bus and armored products and to reduce overall fixed costs.

The Silver Crown facility in White Pigeon, Michigan is classified as held for sale as of April 2, 2011 and December 25, 2010. Any losses incurred in 2011 related to the wind-down of the operations are expected to be insignificant and will be reflected as continuing operations in the 2011 Statement of Operations.

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The 2010 operating results for the Silver Crown division are classified as discontinued operations as follows:

	March 27, 2010
Net sales	$	1,567,977

Pretax income from operations	$	16,391

Net income	$	5,204

NOTE 3 — OTHER COMPREHENSIVE INCOME

Other comprehensive income includes unrealized gains (losses) on hedge activity, net of tax, and unrealized gains (losses) on available-for-sale securities, net of tax. Total comprehensive loss combines net loss and other comprehensive income.

For the three-month periods ended April 2, 2011 and March 27, 2010, total comprehensive loss and other comprehensive income are as follows:

	Three Months Ended
	April 2,			March 27,
	2011			2010
Net loss	$	(1,364,499	)	$	(2,408,408	)
Other comprehensive income	3,448			105,780
Total comprehensive loss	$	(1,361,051	)	$	(2,302,628	)

NOTE 4 — INVENTORIES

Inventories, which are stated at the lower of cost or market with cost determined using the first-in, first-out method, consist of the following:

	April 2,		December 25,
	2011		2010
Raw materials	$	30,422,443	$	18,954,303
Work-in-progress	7,635,285		6,512,602
Finished goods	14,895,296		10,209,448
	$	52,953,024	$	35,676,353

NOTE 5 — FAIR VALUE MEASUREMENT

Generally accepted accounting principles (“GAAP”) define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. GAAP also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

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Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of items:

Investments: The fair values of investments available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs).

The carrying amounts of cash and cash equivalents, accounts receivable, and trade accounts payable approximated fair value as of April 2, 2011 and December 25, 2010, because of the relatively short maturities of these financial instruments. The carrying amount of long-term debt, including current maturities, approximated fair value as of April 2, 2011 and December 25, 2010, based upon terms and conditions available to the Company at those dates in comparison to the terms and conditions of its outstanding long-term debt.

NOTE 6 — REVOLVING LINE OF CREDIT

On October 18, 2010 Supreme Industries, Inc. entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (the “Lender”), which agreement was effective as of September 30, 2010.

On March 24, 2011, the Company entered into a First Amendment to Amended and Restated Credit Agreement (the “First Amendment”). Under the First Amendment, the revolving commitment amount under the Credit Agreement was lowered to $25,000,000, and such revolving commitment amount continues to reduce on a monthly basis beginning April 15, 2011. By August 31, 2011, the revolving commitment amount will be reduced to $11,560,000, unless the Company’s workers compensation letter of credit is returned to the Lender, in which case the revolving commitment amount will only be reduced to $13,560,000. The revolving commitment decreases further to $13,230,000, or $11,230,000 (if the workers compensation letter of credit is returned to the Lender) by November 30, 2011 and is due and payable December 31, 2011. These reductions are intended to be consistent with the Company’s seasonal working capital needs.

Also pursuant to the First Amendment, on March 24, 2011, the Lender agreed to make certain term loans in the aggregate principal amount of $4,000,000, due December 31, 2011, which term loans were funded on March 31, 2011. The First Amendment also contemplates the funding, in the sole discretion of the Lender, of additional term loans in the aggregate principal amount of $3,000,000, to mature December 31, 2011, with funding occurring no earlier than the second quarter. In connection with the First Amendment, certain mortgages and deeds of trust were executed on additional real property to secure the revolving line of credit and term loans.

Under the First Amendment, the minimum tangible net worth requirements and the minimum EBITDA requirements were revised, and the Company was in compliance at April 2, 2011 and expects to remain in compliance with such covenant requirements.

As of April 2, 2011, the Company had unused credit capacity of approximately $7.7 million under its Credit Agreement. Interest on outstanding borrowings under the revolving line of credit and the term loan was based on the bank’s prime rate or LIBOR depending on the pricing option selected and the Company’s leverage ratio, as defined in the Credit Agreement resulting in an effective rate of 5.75% and 5.09% at April 2, 2011 and December 25, 2010, respectively.

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Additional events of default were added by the First Amendment. These additional events of default included: (i) the Company’s failure to receive a $3,000,000 payment from a required sale-leaseback transaction involving the Company’s California manufacturing facility, sale of real estate, or the issuance of subordinated debt or equity capital by May 2, 2011; (ii) the suspension, withdrawal, termination, or reduction of the Company’s OEM chassis bailment pool; or (iii) the settlements of any claims or causes of action for amounts in excess of any amounts covered by insurance if such excess amounts are in excess of the reserves for such claims or causes of action on March 24, 2011 or the aggregate amount of all settlement payments is in excess of $250,000. None of such additional events of default occurred pursuant to the terms of the Second Amendment (as such term is defined in Item 5 of Part II below).

NOTE 7 - LOSS PER SHARE

The assumed exercise or issuance of 251,725 and 230,055 shares for the three-month periods ending April 2, 2011 and March 27, 2010, respectively, relating to stock plans were not included in the computation of diluted loss per share as inclusion of these shares in the respective periods would have been antidilutive.

NOTE 8 - STOCK-BASED COMPENSATION

The following table summarizes the activity for the unvested restricted stock units and restricted stock for the three months ended April 2, 2011:

			Weighted -
			Average
	Number of		Grant Date
	Shares		Fair Value
Unvested, December 25, 2010	24,584		$	3.32
Granted	—		n/a
Vested	(13,042	)	4.16
Unvested, April 2, 2011	11,542		$	2.36

The total fair value of the shares vested during the three months ended April 2, 2011 was $54,305.

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A summary of the status of the Company’s outstanding stock options as of April 2, 2011, and changes during the three months ended April 2, 2011, are as follows:

			Weighted -
			Average
	Number of		Exercise
	Shares		Price
Outstanding, December 25, 2010	1,204,715		$	3.83
Granted	—		n/a
Exercised	(5,300	)	1.42
Expired	—		n/a
Forfeited	(2,650	)	1.42
Outstanding, April 2, 2011	1,196,765		$	3.85

As of April 2, 2011, outstanding options had an intrinsic value of $142,603 and a weighted-average remaining contractual life of 4.31 years.

Total unrecognized compensation expense related to all share-based awards outstanding at April 2, 2011, was approximately $447,077 and is to be recorded over a weighted average contractual life of 2.05 years.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Company Overview

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.

The Company utilizes a nationwide direct sales and distribution network consisting of approximately 40 bus distributors, a limited number of truck equipment distributors, and approximately 1,000 commercial truck dealers. The Company’s manufacturing and service facilities are located in eight states across the continental United States allowing us to meet the needs of customers across all of North America. Additionally, the Company’s significant customer goodwill, strong brand recognition, extensive product offerings, bailment chassis arrangements, and product innovation competitively positions Supreme in the markets we serve.

The Company and its product offerings are affected by various factors which include, but are not limited to, economic conditions, interest rate fluctuations, volatility in the supply chain of vehicle chassis, and the availability of credit and financing to the Company, our vendors, dealers, or end users. The Company’s business is also affected by the availability and costs of certain raw materials that serve as significant components of its product offerings. The Company’s risk factors are disclosed in Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 25, 2010 (see Item 1A which follows).

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Management Changes

As previously announced, the Company introduced a new President, the third in its history, and the following senior management changes:

· Robert W. Wilson, President and Chief Operating Officer of the Company and President and Chief Executive Officer of the Company’s wholly-owned operating subsidiary, Supreme Indiana Operations, Inc. (“Supreme Indiana”), announced his retirement. He will remain a member of the Board of Directors, and he will work with the Company to support a successful transition in leadership as an advisor to the Board on Special Projects.

· Herbert M. Gardner, the Chairman of the Board and Chief Executive Officer of the Company and the Chairman of the Board of Supreme Indiana, will continue as Chairman of the Board of both entities, but he has relinquished the role of Chief Executive Officer of the Company. He will be actively involved in supporting the transition of management.

· Kim Korth, President and owner of IRN Inc., a leading consulting firm in the vehicle and transportation industry, has been appointed President and Chief Executive Officer of the Company and Supreme Indiana. Ms. Korth brings over 25 years of industry experience, and her firm has been working with the Company for the last year. Ms. Korth has been added to the Company’s Board of Directors.

· Matthew W. Long has been appointed Chief Financial Officer and Treasurer of the Company effective April 18, 2011. He succeeds Jeffery D. Mowery as Chief Financial Officer and Treasurer, but Mr. Mowery remains Vice President — Finance of the Company. Mr. Long recently served as Treasurer of CTS Corporation (“CTS”) since 2003, a publicly traded company located in Elkhart, Indiana. Prior to being at CTS, he served in a variety of accounting positions for Emerson Electric, General Housewares/Chicago Cutlery, and United Technologies. He is a member of the American Institute of Certified Public Accountants and received both his Bachelor of Science and his Masters of Business Administration from Indiana University.

Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and related notes thereto elsewhere in this document and pertain to continuing operations unless otherwise noted.

Overview

For the quarter ended April 2, 2011, Supreme continued to experience increased demand for its products as evidenced by an increase in sales of approximately 49% quarter over quarter. Major fleet customers have returned to the market, and Supreme was awarded a significant share of their business. Our sales backlog continued to grow during the first quarter of 2011 and totaled a record $133 million at quarter end compared with $68 million a year ago.

Gross profit improved by approximately 71% during the quarter ended April 2, 2011 as compared with the corresponding period in 2010. Despite the improved sales and gross profit, the Company experienced a loss from continuing operations of $1.0 million. Following the Company’s historic pattern, significant additional costs were incurred in the first quarter of 2011 to support the Company’s large fleet runs. Additionally, the Company experienced considerably higher than historical levels of general and administrative expenses. The charges, totaling $0.6 million, consisted of legal defense costs, bank refinancing expenses, and certain consulting fees and other costs related to our profit improvement initiatives.

As previously described, we have restructured our senior management team, identified areas of additional improvements, implemented new processes, and will continue to focus on increasing our gross margins and reducing our operating costs. Significant strategic decisions included:

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· Closed the Oregon manufacturing facility thereby consolidating our bus production into Indiana;

· Eliminated low margin and low volume product lines;

· Promoted a general manager to run our underperforming Pennsylvania facility;

· Reduced headcount in selected areas of the business; and

· Reduced the selling prices of assets held for sale of certain idled facilities to reflect the current depressed market conditions which will further facilitate the sales of these properties to improve cash flow.

Having taken the above-described actions, we believe that we are better positioned to restore profitability in the near term. We also continue to look for opportunities to make our operations leaner and more profitable. In our efforts to rebound from the severe recession and maintain our position as one of the strongest companies in our industry, we continue to implement our strategies of cost containment, production efficiencies, revenue enhancement, market expansion, and product diversification.

Net Sales

Net sales for the three months ended April 2, 2011 increased $22.4 million, or 48.7%, to $68.4 million as compared with $46.0 million for the three months ended March 27, 2010. The following table presents the components of net sales and the changes from period to period:

	Three Months Ended
($000’s omitted)	April 2, 2011		March 27, 2010		Change
Specialized vehicles:
Trucks	$	45,961	$	21,826	$	24,135		110.6	%
Buses	16,093		18,254		(2,161		)	-11.8	%
Armored vehicles	5,763		5,009		754			14.9	%
	67,817		45,089		22,728			50.4	%
Composites	583		953		(370		)	-38.9	%
	$	68,400	$	46,042	$	22,358		48.6	%

The truck division sales increase of $24.1 million, or 111%, for the quarter was primarily attributable to increased fleet shipments and, to a lesser extent, an improved retail truck market. We continued to experience improved backlog for trucks and believe that we are well-positioned to benefit from favorable industry forecasts.

Our StarTrans bus division experienced lower demand, resulting in a decrease in sales of $2.2 million, or 44%, for the quarter. The decrease was due in part to the reduced availability of funding available from the 2009 federal economic stimulus plan which had enabled state and local transit authorities to purchase new units. We anticipate 2011 sales to remain comparable to 2010, or decrease slightly, due to contracts expiring and the uncertainty of the availability of federal funds for transit vehicles.

The armored vehicles division continued to experience good demand with a revenue increase of $0.8 million, or 15%, as compared to the first quarter of 2010. The increase was primarily the result of our contract with the U.S. Department of State (DOS) to produce armored Suburbans for embassies abroad. We believe that the DOS business will remain steady during 2011, and we are encouraged by the positive response we are receiving from other governmental agencies regarding our armored product offerings and quality. The cash-in-transit and other armored vehicles are well positioned to enable us to increase revenues as we continue into 2011.

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The composites division revenues represent sales of fiberglass reinforced plywood and other fiberglass products. The decrease for the quarter of $0.4 million was due to less demand for our fiberglass reinforced plywood product.

Cost of sales and gross profit

Gross profit increased by $2.7 million, or 71.1%, to $6.5 million for the three months ended April 2, 2011, as compared with $3.8 million for the three months ended March 27, 2010. The following table presents the components of cost of sales as a percentage of net sales and the changes from period to period:

	Three Months Ended
	April 2, 2011		March 27, 2010		Percent Change
Material	60.2	%	55.9	%	4.3	%
Direct Labor	13.9		14.7		(0.8	)
Overhead	14.3		18.2		(3.9	)
Delivery	2.1		2.8		(0.7	)
Cost of sales	90.5		91.6		(1.1	)
Gross profit	9.5	%	8.4	%	1.1	%

Material — Material cost as a percentage of net sales increased by 4.3% for the three months ended April 2, 2011 as compared with the corresponding period in 2010. The increase in the material percentage was due in part to a higher mix of fleet units shipped by our truck division. Fleet units historically have a higher material cost as a percentage of net sales but require less direct labor than customized retail trucks. Additionally, the retail truck and bus markets continued to experience a competitive pricing environment.

As the general economic environment begins to show signs of improvement, the potential for future raw material cost increases remains a major concern for certain commodities (including but not limited to aluminum, steel, and wood). We closely monitor all major commodities and periodically review the financial stability of our primary vendors. The Company will continue to address certain raw material cost escalations by also increasing the price of our products as necessary and as our markets will accept them.

Direct Labor — Direct labor as a percentage of net sales decreased by 0.8% for the three months ended April 2, 2011 as compared with the corresponding period in 2010. The decrease in the direct labor percentage was due to efficiencies gained by producing increased quantities of similar fleet units. Fleet units typically are less customized than special-purpose retail trucks and require fewer direct labor hours to produce.

Overhead — Manufacturing overhead as a percentage of net sales decreased by 3.9% for the three months ended April 2, 2011 as compared with the corresponding period in 2010. The overall overhead percentage declined due to the fixed nature of certain overhead expenses that do not fluctuate with sales volume changes.

Delivery — Delivery as a percentage of net sales decreased by 0.7% for the three months ended April 2, 2011, as compared with the corresponding period in 2010. The Company continues to explore more cost-effective delivery methods to mitigate the adverse impact of ongoing high fuel costs.

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Selling, general and administrative expenses

Selling, general and administrative (“G&A”) expenses increased by $1.7 million, or 30.4%, to $7.3 million for the three months ended April 2, 2011, as compared with $5.6 million for the three months ended March 27, 2010. The following table presents selling and G&A expenses as a percentage of net sales and the changes from period to period:

	Three Months Ended
($000’s omitted)	April 2, 2011				March 27, 2010				Change
Selling expenses	$	2,438	3.6	%	$	1,921	4.2	%	$	517	-0.6	%
G&A expenses	4,874		7.1		3,639		7.9		1,235		-0.8
Total	$	7,312	10.7	%	$	5,560	12.1	%	$	1,752	-1.4	%

Selling expenses — Selling expenses as a percentage of net sales decreased 0.6% for the three months ended April 2, 2011, as compared with the corresponding periods in 2010. This reflects the steps taken over the course of the year that increased the productivity and effectiveness of our sales and marketing resources, including rigorous analysis and refinement of our market targeting and positioning. The overall increase in dollars for the period was primarily attributable to higher payroll related expenses resulting from the improvement in the sales volume.

G&A expenses — G&A expenses as a percentage of sales decreased 0.8% for the three months ended April 2, 2011 as compared with the corresponding period in 2010. The increased expense of $1.2 million was primarily attributable to a variety of restructuring, refinancing, and profit improvement initiatives including the costs to engage several consulting firms. The Company also incurred increased legal fees resulting from a lawsuit the Company is vigorously contesting. Additionally, as a result of changes in senior management, payroll and related benefits increased quarter over quarter.

Other income

For the three months ended April 2, 2011, other income was $0.1 million as compared with $0.2 million for the three months ended March 27, 2010. Other income consisted of rental income, gain or loss on sale of assets, and other miscellaneous income received by the Company.

Interest expense

Interest expense was $0.3 million for the three months ended April 2, 2011 compared with $0.5 million for the three months ended March 27, 2010. A reduction in chassis interest expense was partially attributable to measures implemented to improve bailment chassis inventory management. The Company continuously monitors the age of consigned chassis with the objective of minimizing chassis interest expense. The bank interest expense reflected lower debt levels. This was somewhat offset by higher (performance-based) pricing provisions under our bank credit facility as recent operating losses triggered an increase in interest rates.

Income taxes

For the quarters ended April 2, 2011 and March 27, 2010 the Company recorded deferred tax assets for the net operating losses generated. The Company fully utilized its federal net operating loss carryback benefits during its 2009 tax year, for which refunds have subsequently been received. The ultimate realization of these deferred tax assets is dependent upon future taxable income. Given the accumulated net operating losses in the prior three years, it is currently more likely than not that these deferred tax assets will not be realized. Accordingly, after consideration of these factors, the Company provided a valuation allowance for the deferred tax assets net of the deferred tax liabilities expected. The valuation allowance does not impact the Company’s ability to utilize its net operating loss carryforwards to offset taxable earnings in the future.

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Net loss from continuing operations

Net loss from continuing operations decreased by $1.0 million to $1.0 million (-1.5% of net sales) for the three months ended April 2, 2011 from a net loss of $2.0 million (-4.3% of net sales) for the three months ended March 27, 2010.

Discontinued Operations

The Company decided to discontinue its Oregon operations in December of 2010 and its Silver Crown luxury motorhome business during the fourth quarter of 2009. The Company has reclassified prior period results accordingly as discontinued operations for the two operations. The Oregon operations were ceased in the first quarter of 2011 due to the Company’s decision to exit this unprofitable geographic region. The after tax loss from the discontinued operations related to our Oregon operations was $0.4 million for both periods ended April 2, 2011 and March 27, 2010. The Silver Crown operations were terminated as a result of the unprecedented tight credit markets caused by the severe economic recession which led to a significant reduction of new motorhome orders and the cancellation of existing orders. The after tax income from discontinued operations related to our Silver Crown recreational vehicle division was $5 thousand for the period ended March 27, 2010.

Basic and diluted loss per share

The following table presents basic and diluted loss per share and the changes from period to period:

	Three Months Ended
	April 2, 2011			March 27, 2010			Change
Basic and diluted net loss per share:
Loss from continuing operations	$	(0.07	)	$	(0.14	)	$	0.07
Loss from discontinued operations	(0.03		)	(0.03		)	—
Net loss	$	(0.10	)	$	(0.17	)	$	0.07

Liquidity and Capital Resources

Cash Flows

The Company’s primary sources of liquidity have been cash flows from operating activities and borrowings under a credit facility entered into by Supreme Indiana Operations, Inc., the Company’s wholly-owned subsidiary, and certain of its affiliates. Principal uses of cash have been to fund recent operating losses, support working capital needs, meet debt service requirements, and fund capital expenditure needs.

Operating activities

Cash flows from operations represent the net loss sustained, in the reported periods adjusted for non-cash charges and changes in operating assets and liabilities. Operating activities used $4.3 million of cash for the three months ended April 2, 2011 as compared with cash provided of $6.2 million for the three months ended March 27, 2010. During the 2011 first quarter, our net loss, adjusted for depreciation and amortization, unfavorably impacted cash flows by $0.6 million. Cash used by operating activities was unfavorably impacted by a $17.3 million increase in inventories due to higher production levels to support the increased backlog and the increased sales volume and an increase in accounts receivable totaling $9.5 million due to the improved sales volume. This was offset by a $24.6 million increase in trade accounts payable. The Company’s asset management continued to improve as our cash flow cycle was reduced by approximately 19 days, or 29%, when compared with the prior year quarter.

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Investing activities

Cash used by investing activities was $29,000 for the three months ended April 2, 2011 as compared with cash used of $0.7 million for the three months ended March 27, 2010. During the first three months of 2011, the Company received $0.3 million of insurance claim reimbursements from its wholly-owned captive insurance subsidiary and had capital expenditures totaling $0.3 million, which consisted primarily of replacement equipment.

Financing activities

Financing activities provided $3.4 million of cash for the three months ended April 2, 2011 as compared with cash used of $6.7 million for the three months ended March 27, 2010. Pursuant to the First Amendment, on March 24, 2011, the Lender agreed to make certain term loans in the aggregate principal amount of $4,000,000, due December 31, 2011 which was funded on March 31, 2011. Because of our focus on restoring profitability and reducing debt, the Company’s Board of Directors suspended paying cash dividends effective as of February 16, 2009. Future dividends will be subject to business conditions, the Company’s financial position, and requirements for working capital, property, plant, and equipment expenditures, and other corporate purposes.

Capital Resources

On October 18, 2010 Supreme Industries, Inc. entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (the “Lender”) which agreement was effective as of September 30, 2010.

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Summary of Liquidity and Capital Resources

The Company’s primary capital requirements are to support working capital demands, meet its debt service obligations, and finance capital expenditure requirements. The Company has a substantial asset collateral base and a strong equity position which management believes adequately supports the outstanding revolving line of credit arrangement or would support an alternative facility. Management is pursuing an alternative facility. The Company maintains a substantial working capital surplus during the first half of each year due to elevated inventories and trade accounts receivable related to large fleet runs. The Company expects to reduce the working capital surplus during the second half of the year as customer collections related to the fleet runs provide cash flow necessary to reduce the obligations under the Credit Agreement. Additionally, the Company is executing on plans to sell certain idled assets, which if completed, will provide additional liquidity. The funds collected would be used to pay down the Company’s obligations on the Credit Agreement.

Management believes based on its operating projections and sale of idle assets that it should have available funds necessary to allow the Company to meet the payment requirements related to its existing Credit Agreement and to continue to operate. The Company’s cash management system and revolving line of credit are designed to maintain zero cash balances and, accordingly, checks outstanding in excess of bank balances are classified as additional borrowings under the revolving line of credit.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of its financial position and results of operations are based upon the Company’s consolidated condensed financial statements which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The Company’s significant accounting policies are discussed in Note 1 of the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 25, 2010. In management’s opinion, the Company’s critical accounting policies include revenue recognition, allowance for doubtful accounts, excess and obsolete inventories, inventory relief, accrued insurance, and accrued warranty.

Revenue Recognition — The Company generally recognizes revenue when products are shipped to the customer. Revenue on certain customer requested bill and hold transactions is recognized after the customer is notified that the products have been completed according to customer specifications, have passed all of the Company’s quality control inspections, and are ready for delivery based on established delivery terms.

Allowance for Doubtful Accounts — The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. If the financial conditions of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required which would adversely affect our future operating results.

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Excess and Obsolete Inventories — The Company must make estimates regarding the future use of raw materials, chassis, and finished products, and provide for obsolete or slow-moving inventories. If actual product life cycles, product demand, and/or market conditions are less favorable than those projected by management, additional inventory write-downs may be required which would adversely affect future operating results.

Inventory Relief — For monthly and quarterly financial reporting, cost of sales is recorded and inventories are relieved by the use of standard bills of material adjusted for scrap and other estimated factors affecting inventory relief. Because of our large and diverse product line and the customized nature of each order, it is difficult to place full reliance on the bills of material for accurate relief of inventories. Although the Company continues to refine the process of creating accurate bills of materials, manual adjustments (which are based on estimates) are necessary to assure correct relief of inventories for products sold. The calculations to estimate costs not captured in the bill of materials take into account the customized nature of products, historical inventory relief percentages, scrap variances, and other factors which could impact inventory relief.

The accuracy of the inventory relief is not fully known until physical inventories are conducted at each of the Company’s locations. We conduct semi-annual physical inventories at a majority of our locations and schedule them in a manner that provides coverage in each of our calendar quarters. We have invested significant resources in our continuing effort to improve the physical inventory process and accuracy of our inventory accounting system.

Accrued Insurance - The Company has a self-insured retention against product liability claims with insurance coverage over and above the retention. The Company is also self-insured for a portion of its employee medical benefits and workers’ compensation. Product liability claims are routinely reviewed by the Company’s insurance carrier, and management routinely reviews other self-insurance risks for purposes of establishing ultimate loss estimates. In addition, management must determine estimated liability for claims incurred but not reported. Such estimates, and any subsequent changes in estimates, may result in adjustments to our operating results in the future.

The Company utilizes a wholly-owned small captive insurance company to insure certain of its business risks. Certain risks, traditionally self-insured by the Company and its subsidiaries, are insured by the captive insurance subsidiary. The captive insurance subsidiary helps the Company manage its risk exposures and, under the Internal Revenue Code, the net underwriting income of such small captive insurance subsidiary is not taxable.

Accrued Warranty — The Company provides limited warranties for periods of up to five years from the date of retail sale. Estimated warranty costs are accrued at the time of sale and are based upon historical experience.

Forward-Looking Statements

This report contains forward-looking statements, other than historical facts, which reflect the view of management with respect to future events. When used in this report, words such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” and similar expressions, as they relate to the Company or its plans or operations, identify forward-looking statements. Such forward-looking statements are based on assumptions made by, and information currently available to, management. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that the expectations reflected in such forward-looking statements are reasonable, and it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from such expectations include, without limitation, an economic slowdown in the specialized vehicle industry, limitations on the availability of chassis on which the Company’s products are dependent, availability of raw materials, raw material cost increases, and severe interest rate increases. Furthermore, the Company can provide no assurance that such raw material cost increases can be passed on to its customers through implementation of price increases for the Company’s products. The forward-looking statements contained herein reflect the current view of management with respect to future events and are subject to those factors and other risks, uncertainties, and assumptions relating to the operations, results of operations, cash flows, and financial position of the Company. The Company assumes no obligation to update the forward-looking statements or to update the reasons actual results could differ from those contemplated by such forward-looking statements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There has been no material change from the information provided in the Company’s Annual Report on Form 10-K, “Item 7A: Quantitative and Qualitative Disclosures About Market Risk,” for the year ended December 25, 2010.

ITEM 4. CONTROLS AND PROCEDURES.

a. Evaluation of Disclosure Controls and Procedures.

In connection with the preparation of this Form 10-Q, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective as of April 2, 2011.

b. Changes in Internal Control over Financial Reporting.

There has been no change in the Company’s internal control over financial reporting during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company continues to take action to assure compliance with the internal controls, disclosure controls, and other requirements of the Sarbanes-Oxley Act of 2002. Management, including the Company’s Chief Executive Officer and Chief Financial Officer, cannot guarantee that the internal controls and disclosure controls will prevent all possible errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of a control system have been met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be relative to their costs. Because of the inherent limitations in all control systems, no system of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company will be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the controls.

The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may be inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in any cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company is subject to various investigations, claims, and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities. Each of these matters is subject to various uncertainties, and it is possible that some of these matters may be resolved unfavorably to the Company. The Company has established accruals for matters that are probable and reasonably estimable. Management believes that any liability that may ultimately result from the resolution of these matters in excess of accruals and amounts provided by insurance coverage will not have a material adverse effect on the consolidated financial position or results of operations of the Company.

On January 21, 2009, The Armored Group (“TAG”) filed a complaint against the Company in the Superior Court of the State of Arizona in and for the County of Maricopa alleging breach of oral contract, unjust enrichment, and other claims which complaint was removed to the United States District Court for the District of Arizona. Among other claims, TAG alleges that, under either an oral agreement between it and the Company or the claim of unjust enrichment, the Company has an obligation to pay to TAG a 10% commission on all sales of armored vehicles to the United States Department of State under a contract with the United States Department of State providing for up to $98,000,000 in sales. As of April 2, 2011, sales of armored vehicles to the United States Department of State under this contract were approximately $34,000,000. The Company filed a Motion for Summary Judgment which was denied by the trial court on October 6, 2010. A jury trial has been set for July 5, 2011. The Company has instructed its attorneys to vigorously contest TAG’s claims through trial if necessary. However, due to the inherent nature of litigation, the ultimate outcome of this case (whether by jury trial or otherwise) is uncertain and unpredictable.

ITEM 1A. RISK FACTORS.

For a discussion of those “Risk Factors” affecting the Company, you should carefully consider the “Risk Factors” discussed in Part I, under “Item 1A: Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 25, 2010, which is herein incorporated by reference.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. RESERVED.

ITEM 5. OTHER INFORMATION.

On May 12, 2011, the Company and its subsidiaries entered into a Second Amendment to Amended and Restated Credit Agreement and Amendment to Security Agreements (the “Second Amendment”) with JPMorgan Chase Bank, N.A. (the “Lender”).

Pursuant to the Second Amendment, Lender consented to the sale and concurrent leaseback by Supreme Indiana Operations, Inc. (“Supreme Indiana”) of its California manufacturing facility (the “California Real Estate”) to BFG2011 Limited Liability Company (“Purchaser”) (the “Sale Leaseback Transaction”).

In connection with the Sale Leaseback Transaction, Lender agreed to execute and deliver releases of its mortgage liens on the California Real Estate. Lender also agreed to (i) lower the amount of net proceeds required to be obtained from the Sale Leaseback Transaction from $3,000,000 to $2,800,000 and (ii) extend the date required to enter into the Sale Leaseback Transaction from May 2, 2011 to May 12, 2011.

On March 24, 2011, Supreme Indiana entered into an Option Agreement (the “Option Agreement”) pursuant to which Supreme Indiana granted Barrett Gardner Associates, Inc. (“Barrett Gardner”), an entity which is owned by

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Messrs. William J. Barrett and Herbert M. Gardner, each a director of the Company, the right to purchase the California Real Estate. On May 12, 2011, Barrett Gardner assigned the Option Agreement to Purchaser. Purchaser is owned by Supreme Indiana, which received an equity interest in Purchaser as a portion of the purchase price, and Messrs. William J. Barrett, Herbert M. Gardner and Edward L. Flynn, each a director of the Company. In connection with the Sale Leaseback Transaction, the Company received a fairness opinion issued by a third party consultant stating that the proposed transactions were fair from a financial point of view to the shareholders of the Company.

In accordance with the Option Agreement, Supreme Indiana and Purchaser entered into a Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate dated May 3, 2011 (as amended by that certain Amendment to Escrow Instructions dated as of the closing date, the “Purchase Agreement”) in which Purchaser agreed to purchase the California Real Estate for $4,100,000 comprised of the following amounts: (a) a $100,000 deposit made pursuant to the Option Agreement, (b) $3,000,000 paid in cash at the closing, (c) a grant to Supreme Indiana of the equity interest in Purchaser described above valued at $495,000, and (d) a credit in the amount of $505,000 based on the lack of brokerage commissions and the nature of the transaction. Supreme Indiana paid the closing costs associated with the transaction, including the escrow fees, transfer taxes, title policies and other transaction costs. Supreme Indiana has provided Purchaser with an agreement to indemnify Purchaser from losses, damages and claims arising from the condition of the California Real Estate at closing and a breach by Supreme Indiana of its representations and warranties; Supreme Indiana’s indemnity obligations survive the closing of the sale.

Concurrently with the closing of the sale of the California Real Estate to Purchaser, Supreme Indiana leased from Purchaser the California Real Estate for a term of twenty years pursuant to that certain Air Commercial Real Estate Association Standard Industrial/Commercial Single-Tenant Lease dated as of the closing date (the “Lease”). The base rent for the first five years of the term is $24,000 per month. Base rent will be adjusted after the fifth year of the term to bring the base rent to fair market value and based on any increases in Purchaser’s financing costs. The Lease is a triple net lease, and Supreme Indiana is responsible for all costs relating to the leased premises. Supreme Indiana was granted a purchase option and right of first refusal with respect to the California Real Estate through April 30, 2016. In addition, Supreme Indiana was granted a one time right of first offer with respect to the California Real Estate that continues until the expiration of the lease term.

Due to the Company’s continuing involvement in the California Real Estate, the Sale Leaseback Transaction was not recognized as a sale of the property. It is instead being accounted for as a financing transaction, and the Company has recorded the receipt of cash and the related obligation.

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ITEM 6. EXHIBITS.

Exhibits:

Exhibit 3.1		Certificate of Incorporation of the Company, filed as Exhibit 3(a) to the Company’s Registration Statement on Form 8-A, filed with the Commission on September 18, 1989, and incorporated herein by reference.
Exhibit 3.2		Certificate of Amendment of Certificate of Incorporation of the Company filed with the Secretary of State of Delaware on June 10, 1993 filed as Exhibit 3.2 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 1993, and incorporated herein by reference.
Exhibit 3.3		Certificate of Amendment of Certificate of Incorporation of the Company filed with the Secretary of State of Delaware on May 29, 1996 filed as Exhibit 3.3 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 1996, and incorporated herein by reference.
Exhibit 3.4		Amended and Restated Bylaws of the Company dated May 7, 2008, filed as Exhibit 3.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on May 7, 2008, and incorporated herein by reference.
Exhibit 10.1*		First Amendment to Amended and Restated Credit Agreement dated March 24, 2011, by and between the Company and its subsidiaries and JPMorgan Chase Bank, N.A.
Exhibit 10.2*		Inventory Loan and Security Agreement by and between Supreme Indiana Operations, Inc. and Ally Bank dated March 4, 2011.
Exhibit 10.3*		Inventory Loan and Security Agreement by and between Supreme Indiana Operations, Inc. and Ally Financial, Inc. dated March 4, 2011.
Exhibit 10.4*		Guaranty Agreement by and between Supreme Indiana Operations, Inc. and Ally Bank dated March 4, 2011.
Exhibit 10.5*		Guaranty Agreement by and between Supreme Indiana Operations, Inc. and Ally Financial, Inc. dated March 4, 2011.
Exhibit 10.6*		Credit Balance Agreement by and between Supreme Indiana Operations, Inc. and Ally Financial, Inc. dated March 21, 2011.
Exhibit 10.7*		Option Agreement by and between Supreme Indiana Operations, Inc. and Barrett Gardner Associates, Inc. dated March 24, 2011.
Exhibit 31.1*		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2*		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1*		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2*		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SUPREME INDUSTRIES, INC.


	By:	/s/ Kim Korth
DATE: May 17, 2011	Kim Korth
	President and Chief Executive Officer

	By:	/s/ Matthew W. Long
DATE: May 17, 2011	Matthew W. Long
	Chief Financial Officer

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INDEX TO EXHIBITS

Exhibit Number		Description of Document

Exhibit 3.1		Certificate of Incorporation of the Company, filed as Exhibit 3(a) to the Company’s Registration Statement on Form 8-A, filed with the Commission on September 18, 1989, and incorporated herein by reference.
Exhibit 3.2		Certificate of Amendment of Certificate of Incorporation of the Company filed with the Secretary of State of Delaware on June 10, 1993 filed as Exhibit 3.2 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 1993, and incorporated herein by reference.
Exhibit 3.3		Certificate of Amendment of Certificate of Incorporation of the Company filed with the Secretary of State of Delaware on May 29, 1996 filed as Exhibit 3.3 to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 1996, and incorporated herein by reference.
Exhibit 3.4		Amended and Restated Bylaws of the Company dated May 7, 2008, filed as Exhibit 3.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on May 7, 2008, and incorporated herein by reference.
Exhibit 10.1*		First Amendment to Amended and Restated Credit Agreement dated March 24, 2011, by and between the Company and its subsidiaries and JPMorgan Chase Bank, N.A.
Exhibit 10.2*		Inventory Loan and Security Agreement by and between Supreme Indiana Operations, Inc. and Ally Bank dated March 4, 2011.
Exhibit 10.3*		Inventory Loan and Security Agreement by and between Supreme Indiana Operations, Inc. and Ally Financial, Inc. dated March 4, 2011.
Exhibit 10.4*		Guaranty Agreement by and between Supreme Indiana Operations, Inc. and Ally Bank dated March 4, 2011.
Exhibit 10.5*		Guaranty Agreement by and between Supreme Indiana Operations, Inc. and Ally Financial, Inc. dated March 4, 2011.
Exhibit 10.6*		Credit Balance Agreement by and between Supreme Indiana Operations, Inc. and Ally Financial, Inc. dated March 21, 2011.
Exhibit 10.7*		Option Agreement by and between Supreme Indiana Operations, Inc. and Barrett Gardner Associates, Inc. dated March 24, 2011.
Exhibit 31.1*		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2*		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1*		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2*		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*Filed herewith.

EX-10.1 2 a11-9374_1ex10d1.htm EX-10.1

Exhibit 10.1

FIRST AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT

THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of March 24, 2011 (the “Effective Date”), is executed by JPMORGAN CHASE BANK, N.A., a national banking association (“Chase”), SUPREME INDIANA OPERATIONS, INC., a Delaware corporation (“SIOperations”), SUPREME TRUCK BODIES OF CALIFORNIA, INC., a California corporation (“STBCalifornia”), SUPREME NORTHWEST, L.L.C., a Texas limited liability company (“SNorthwest”), SUPREME CORPORATION OF TEXAS, a Texas corporation (“SCTexas”), SUPREME MID-ATLANTIC CORPORATION, a Texas corporation (“SMid-Atlantic”), SUPREME INDUSTRIES, INC., a Delaware corporation (“SIndustries”), and SUPREME/MURPHY TRUCK BODIES, INC., SUPREME INDIANA MANAGEMENT, INC., SUPREME STB, LLC, SC TOWER STRUCTURAL LAMINATING, INC. and SILVER CROWN, LLC (collectively with SIOperations, STBCalifornia, SNorthwest, SCTexas, SMid-Atlantic, and SIndustries, each of the foregoing are referred to in this Amendment as a “Guarantor;” and collectively as the “Guarantors”). SIOperations, STBCalifornia, SNorthwest, SCTexas, SMid-Atlantic, and SIndustries are each sometimes referred to in this Amendment as a “Borrower” and are collectively referred to in this Amendment as the “Borrowers.”

Recitals

1. The Borrowers, the Guarantors and Chase are parties to an Amended and Restated Credit Agreement, dated as of September 30, 2010 (the “Credit Agreement”).

2. Events of Default have occurred and remain uncured, including the following (collectively, the “Existing Defaults”): (a) SIndustries and its Subsidiaries failed to achieve the Minimum Required EBITDA, as required by Section 6.12(a) of the Credit Agreement, for the Test Periods ending October 23, 2010, November 20, 2010, December 25, 2010, January 22, 2011, and February 19, 2011; (b) As of December 25, 2010, and thereafter to the Effective Date, SIndustries and its Subsidiaries failed to maintain a Tangible Net Worth of not less than $57,500,000, as required by Section 6.12(b) of the Credit Agreement; (c) the Borrowers failed to deliver the compliance certificates required by Section 5.01(c) of the Credit Agreement concurrently with their delivery of the Financial Statements for the Fiscal Months ending October 23, 2010 and November 20, 2010; and (d) the Financial Statements delivered by the Borrowers for the Fiscal Months ending October 23, 2010 and November 20, 2010 failed to provide consolidating financial data as require by Section 5.01(b) of the Credit Agreement.

3. Pursuant to one or more agreements, ALLY Financial Inc. and ALLY Bank (collectively, “ALLY”) provide loans or other credit advances to SIOperations which finance acquisition by SIOperations of a pool of vehicle chassis which assures that motor vehicle chassis are available for purchase by SIOperations’ customers prior to upfitting, conversion and accessorization by SIOperations (the “ALLY Facility”). The obligations of SIOperations to ALLY are guaranteed by SIndustries. SIOperations, in consultation with its accounting professionals, has advised Chase that in SIOperations’ judgment these advances by ALLY under the ALLY Facility are not liabilities of SIOperations for the purposes of GAAP and do not qualify as “Indebtedness”. Notwithstanding such determination by the Borrowers, the Borrowers

have requested that Chase agree to amend the Credit Agreement to explicitly allow the obligations of SIOperations and SIndustries under the ALLY Facility and to allow collateralization of the obligations of SIOperations to ALLY with the pledge of cash and a Lien on real estate located in Griffin, Georgia owned by SIOperations, all subject to the terms and limitations set forth in, or to the Credit Agreement by, this Amendment.

4. In addition, the Borrowers request Chase (a) waive the Existing Defaults, (b) amend the financial covenants in Section 6.12 of the Credit Agreement, and (c) make the Term Loans (as defined in the Credit Agreement, as amended by this Amendment).

Agreement

NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements herein, and each act performed and to be performed hereunder, Chase, the Borrowers and the Guarantors agree as follows:

1. Definitions. Except as otherwise expressly stated in this Amendment, all terms used in this Amendment that are defined in the Credit Agreement and that are not otherwise defined in this Amendment, shall have the same meanings in this Amendment as are ascribed to them in the Credit Agreement.

2. Amendments to the Credit Agreement. Effective as of the Effective Date, the Credit Agreement is amended as follows:

(a) Amended Definitions. Section 1.01 of the Credit Agreement is amended so that each of the following defined terms is amended and, as so amended, restated in its entirety to read as follows:

“Applicable Rate” means, for any day, from and after the First Amendment Effective Date, (a) with respect to any CBFR Loan, a rate equal to 2.5% per annum; (ii) with respect to any Eurodollar Loan, a rate equal to 4.5% per annum; and (iii) with respect to the commitment fees payable pursuant to Section 2.11(a) of this Agreement, a fee equal to 0.50% per annum.

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

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

“EBITDA” means, for any period, Net Income for such period plus (a) without duplication and to the extent deducted in determining Net Income for such period,

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

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

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

“LC Release” means the return to the Lender of the Workers Comp Letter of Credit by The Travelers Insurance Company for cancellation, with no drafts having been made thereon.

“Revolving Commitment” means the commitment of the Lender to make Revolving Loans, as such commitment may be reduced from time to time pursuant to Section 2.08. During each time period identified in the table below under the column entitled “Time Period”, the amount of the Revolving Commitment is the amount set forth adjacent to such time period under the column entitled “Revolving Commitment”.

Time Period		Revolving Commitment

Beginning on the First Amendment Effective Date and continuing through and including April 14, 2011		$25,000,000

Beginning on April 15, 2011 through and including May 14, 2011		$24,500,000

Beginning on May 15, 2011 through and including June 14, 2011		$24,390,000

Beginning on June 15, 2011 through and including July 14, 2011		$21,280,000

Beginning on July 15, 2011 through and including August 30, 2011		$21,170,000

Beginning on August 31, 2011 and continuing through and including September 29, 2011		$11,560,000 (or if the LC Release shall have occurred, $13,560,000)

Beginning on September 30, 2011 and continuing through and including October 30, 2011		$11,450,000 (or if the LC Release shall have occurred, $13,450,000)

Beginning on October 31, 2011 and continuing through and including November 29, 2011		$11,340,000 (or if the LC Release shall have occurred, $13,340,000)

Beginning on November 30, 2011 and continuing thereafter until the Maturity Date		$11,230,000 (or if the LC Release shall have occurred, $13,230,000)

On the Maturity Date and thereafter

zero dollars ($0)

“SIO Revolving Commitment” means the commitment of the Lender to make Revolving Loans pursuant to Section 2.01(b), as such commitment may be reduced from time to time pursuant to Section 2.08. The Amount of the SIO Revolving Commitment shall, at all times, be equal to the Revolving Commitment.

(b) New Definitions. Section 1.01 of the Credit Agreement is amended to add each the following new defined terms in the appropriate alphabetical position:

“Accessions” means all accessions, as such term is defined by the UCC, attached to or otherwise physically united with a Pool Unit after possession of the Pool Unit is delivered to SIOperations.

“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 SIOperations for the acquisition or obtaining of such 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.

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

“ALLY Advances” has the meaning ascribed to such term in Section 6.01(h).

“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 Facility” means any agreement or arrangement now or hereafter existing pursuant to which loans or other advances are or are to be made by ALLY to SIOperations which fund SIOperations acquiring or otherwise obtaining motor vehicle chassis prior to upfitting, conversion and accessorization of such motor vehicle chassis by SIOperations or other Borrowers, whether such arrangement is a loan, financing, bailment, consignment or other title retention arrangement.

“ALLY Intercreditor Agreement” means an Intercreditor Agreement executed by ALLY, the Lender, and the Loan Parties, a copy of which is attached to this Agreement as Exhibit D, as the same may be amended, restated, or otherwise modified from time to time.

“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).

“Appraisal” means a written statement setting forth an opinion of the market value of the real estate and all buildings, structures and other improvements on the real estate that (i) has been independently and impartially prepared by a qualified appraiser directly engaged by the Lender or its agent, (ii) complies with all applicable federal and state laws and regulations dealing with appraisals or valuations of real property, and (iii) has been reviewed as to form and content and approved by the Lender, in its reasonable judgment

“California Real Estate” means the real property and improvements with street addresses of 22201 and 22135 Alessandro Blvd., Moreno Valley, CA 92553, which property is more particularly described on Exhibit B to the First Amendment.

“Demonstration Unit” means a motor vehicle chassis that satisfies both of the following requirements: (a) a Loan Party has added Accessions 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 are not subject to a contract for the purchase between such Loan Party, as seller, and a bona fide purchaser for value, as buyer.

“First Amendment” means a First Amendment to Amended and Restated Credit Agreement, dated as of March 24, 2011, executed by the Lender, the Borrowers and the other Loan Parties.

“First Amendment Effective Date” means March 24, 2011.

“First Mortgage” has the meaning ascribed to such term in Section 4.04.

“Georgia Real Estate” means the real property and improvements with a street address of 3127 Ethridge Mill Road, Griffin, Georgia, which property is more particularly described on Exhibit C to the First Amendment.

“GM” means General Motors Company, a Delaware corporation, its successors and assigns.

“Interest Support Payment” means payments to or for the account of any Loan Party made by GM 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.

“Mortgage” means a mortgage or deed of trust, executed by a Loan Party in favor of the Lender (as required by this Agreement or any other Loan Document) and in form and substance acceptable to the Lender in its sole discretion, as the same may be amended, restated or otherwise modified from time to time.

“Pool Unit” means a new motor vehicle chassis (i) for which ALLY provides SIOperations a loan or advance solely to pay 100% of the purchase price owed GM for the purchase of such new motor vehicle chassis, (ii) 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 SIOperations by GM, and (iii) 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.

“Real Estate” has the meaning ascribed to such term in Section 4.04.

“Rhode Island Real Estate” means the real property and improvements with a street address of 135 Douglas Pike, Burrillville, Rhode Island.

“Term Loan” means any of the Term Loans A or Term Loans B extended by the Lender pursuant to Section 2.19.

“Term Loan A” and “Term Loans A” have the meanings ascribed to such terms in Section 2.19.

“Term Loan B” and “Term Loans B” have the meanings ascribed to such terms in Section 2.19.

“Term Loan Borrower” means a Borrower to which Lender makes a Term Loan pursuant to Section 2.19.

“Term Loan Obligations” means, with respect to the Term Loan Borrowers collectively, (i) all principal of and interest arising pursuant to or by virtue of Term Loans A, (ii) all principal and interest arising pursuant to or by virtue of Term Loans B, (iii) all extensions, renewals, amendments, restatements or replacements of Term Loans A and/or Term Loans B, (iv) all costs, expenses and reasonable attorneys’ fees incurred by the Lender in the enforcement or collection of Term Loans A and/or Term Loans B or in the enforcement or foreclosure of any mortgage securing Term Loans A and/or Term Loans B, and (v) all fees and expenses the Term Loan Borrowers are obligated to pay in connection with Term Loans A and/or Term Loans B including without limitation, all appraisal fees, environmental site assessment fees and title insurance premiums and costs. When

used with respect to a single Term Loan Borrower, the term “Term Loan Obligations” means (i) all principal of and interest arising pursuant to or by virtue of Term Loan A made to such Term Loan Borrower, (ii) all principal and interest arising pursuant to or by virtue of Term Loan B made to such Term Loan Borrower, (iii) all extensions, renewals, amendments, restatements or replacements of Term Loan A and/or Term Loan B made to such Term Loan Borrower, (iv) all costs, expenses and reasonable attorneys’ fees incurred by the Lender in the enforcement or collection of such Term Loans or in the enforcement or foreclosure of any mortgage securing such Term Loans, and (v) all fees and expenses such Term Loan Borrower is obligated to pay in connection with the Term Loans made to such Term Loan Borrower, including without limitation, all appraisal fees, environmental site assessment fees and title insurance premiums and costs.

(c) Deletion of Defined Terms. Section 1.01 of the Credit Agreement is amended to delete the defined terms “GMAC” and “GMAC Availability Block.” Further, the Credit Agreement and all other Loan Documents are amended to replace each occurrence of the term “GMAC” (other than references in the defined term “ALLY”) with the term “ALLY.”

(d) Amendment to Section 2.02. Section 2.02 of the Credit Agreement is amended as follows: (i) Section 2.02(a) of the Credit Agreement is amended so that each use of the term “Revolving Loan” is deleted and replaced with the term “Loan”; and (ii) Sections 2.02(b) and (c) of the Credit Agreement are amended so that each use of the term “Revolving Borrowing” is deleted and replaced with the term “Borrowing”; each use of the term “Revolving Borrowings” is deleted and replaced with the term “Borrowings”; each use of the term “Eurodollar Revolving Borrowing” is deleted and replaced with the term “Eurodollar Borrowing”; each use of the term “Eurodollar Revolving Borrowings” is deleted and replaced with the term “Eurodollar Borrowings”; and each use of the term “CBFR Revolving Borrowings” is deleted and replaced with the term “CBFR Borrowings.”

(e) Amendment to Section 2.07(a). Section 2.07(a) of the Credit Agreement is amended and, as so amended, restated in its entirety to read as follows:

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

(f) Amendment to Section 2.07(c). Section 2.07(c) of the Credit Agreement is amended so that each use of the term “Revolving Borrowing” is deleted and replaced with the term “Borrowing”; and each use of the term “Eurodollar Revolving Borrowing” is deleted and replaced with the term “Eurodollar Borrowing”.

(g) Amendment to Section 2.09(a). Section 2.09(a) of the Credit Agreement is amended and, as so amended, restated in its entirety to read as follows:

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

(h) Amendment to Section 2.10(c). All Net Proceeds paid by a Borrower pursuant to Section 2.10(c) shall be applied as set forth in subsections (i), (ii) and (iii) of Section 2.10(c) and after application of such Net Proceeds pursuant to such subsections, all remaining Net Proceeds, if any, shall be applied last to prepay the outstanding principal balance of all Term Loans made to such Borrower.

(i) Amendment to Section 2.10(e). Section 2.10(e) of the Credit Agreement is amended so that each use of the term “Revolving Borrowing” is deleted and replaced with the term “Borrowing”; each use of the term “Eurodollar Revolving Borrowing” is deleted and replaced with the term “Eurodollar Borrowing”; and each use of the term “CBFR Revolving Borrowing” is deleted and replaced with the term “CBFR Borrowing.”

(j) Amendment to Section 2.13(b). Section 2.13(b) of the Credit Agreement is amended so that each use of the term “Revolving Borrowing” is deleted and replaced with the term “Borrowing”; and each use of the term “Eurodollar Revolving Borrowing” is deleted and replaced with the term “Eurodollar Borrowing.”

(k) Addition of Term Loans. The Credit Agreement is amended to add a new Section 2.19 to read in its entirety as follows:

“SECTION 2.19. Term Loan Commitments. Subject to the terms and conditions set forth in this Agreement, including without limitation, Section 4.04:

(a) The Lender agrees to make the following Loans on or after the First Amendment Effective Date (collectively, the “Term Loans A” and each a “Term Loan A”):

(i) A term loan to SIOperations in the principal amount of $1,533,000;

(ii) A term loan to SCTexas in the principal amount of $1,700,000; and

(iii) A term loan to SMid-Atlantic in the principal amount of $767,000.

(b) The Lender has discussed with the Borrowers the possibility of making to the Borrowers the Term Loans B, as identified herein; however, the Lender is not committing as of the First Amendment Effective Date to make the Term Loans B.

The Loan Parties acknowledge and agree that the Lender makes no commitment to make the Term Loans B and has no obligation to make any commitment with respect to the Term Loans B. The Lender may, in its sole judgment and discretion, decide not to commit to making the Term Loans B for no reason whatsoever and no commitment by the Lender to make the Term Loans B shall exist unless and until either the Lender after the First Amendment Effective Date issues to SIOperations, SCTexas and SMid-Atlantic Lender’s written election to make the Term Loans B.

In the event the Lender elects to make the Term Loans B, such Term Loans would be made on or after April 15, 2011 on the following terms (collectively, the “Term Loans B” and each a “Term Loan B”):

(i) A term loan to SIOperations in the principal amount of $1,133,000;

(ii) A term loan to SCTexas in the principal amount of $1,300,000; and

(iii) A term loan to SMid-Atlantic in the principal amount of $567,000.

(c) Principal repaid at any time and from time to time on any Term Loan may not be re-borrowed. Each of the Term Loans A shall be made on the same date and each Term Loan A shall be made in a single advance. If the Lender commits to making the Term Loans B, then each of the Term Loans B shall be made on the same date and each Term Loan B shall be made in a single advance.”

(l) Addition of Section 4.04. The Credit Agreement is amended to add a new Section 4.04 to read in its entirety as follows:

“SECTION 4.04. Conditions Precedent to Each Term Loan. The Obligation of the Lender to make any Term Loan is subject to the satisfaction following conditions on and as of the date of the Borrowing:

(a) All conditions set forth in Section 4.02 shall be satisfied on and as of the date of such Borrowing.

(b) With respect to the Term Loans A:

(i) The Lender shall have received executed and acknowledged Mortgages from each Term Loan Borrower on all real property that is owned by such Term Loan Borrower (collectively, the “Real Estate”) excepting only the Rhode Island Real Estate. Each such Mortgage shall secure all Term Loan Obligations of such Term Loan Borrower (each such Mortgage, a “First Mortgage”).

(ii) The Lender shall have received executed and acknowledged Mortgages from each Term Loan Borrower on all Real Estate excepting only the Georgia Real Estate and the Rhode Island Real Estate, which Mortgages shall secure all Secured Obligations of such Term Loan Borrower excluding such Borrower’s Term Loan Obligations.

(iii) The Lender shall have received mortgagee’s title insurance policies insuring the Lien of the First Mortgages in the amount specified by the Lender on the American Land Title Association form of mortgagee’s title policy, together with such endorsements as the Lender requires. The coverage provided by the title insurance policies shall be subject to no exceptions other than (A) easements and use restrictions and encroachments which do not materially and adversely affect the value or marketability of the Real Estate or the usefulness of the Real Estate in the operations of the Loan Parties, (B) real estate taxes and assessments that are a Lien but are not yet due and payable, and (C) Permitted Encumbrances.

(iv) Each Term Loan Borrower shall have issued to the order of the Lender a promissory note evidencing such Borrower’s Term Loan A, which promissory note is in an amount equal to such Borrower’s Term Loan A and is otherwise in form and substance acceptable to the Lender in its sole discretion.

(c) If the Lender commits and elects to making the Term Loans B as provided in Section 2.19(b), then with respect to the Term Loans B:

(i) All conditions set forth in Section 4.04(b) shall be satisfied on and as of the date of such Borrowing.

(ii) The Borrowers shall have received net cash proceeds in an amount not less than $3,000,000 from (each of the following an “Approved New Capital Transaction”): (A) the sale by SIOperations of the California Real Estate for fair value and the simultaneous leaseback by SIOperations, as tenant, of the California Real Estate, which sale and lease shall comply in all respects to the provisions of Section 6.06; (B) the sale

by any Loan Party of any Real Estate on terms acceptable to the Lender in its sole discretion; or (C) Subordinated Indebtedness or equity capital, in each case on terms acceptable to the Lender in its sole discretion.

(iii) The Lender shall have received Appraisals of the Real Estate, excepting only the Rhode Island Real Estate, in form and substance satisfactory to the Lender.

(iv) The Lender shall have received flood zone certifications that certify that none of the Real Estate, excepting only the Rhode Island Real Estate, lies in a flood plain.

(iv) The Lender shall have received the report or reports of a one or more registered engineers or environmental consultants acceptable to the Lender, confirming that there are no environmental problems associated with the Real Estate, excepting only the Rhode Island Real Estate, except for environmental problems that the Lender in its sole judgment deems not material. The report or reports shall be in form, detail, and substance satisfactory to the Lender.

(v) Each Term Loan Borrower shall have issued to the order of the Lender a promissory note evidencing such Borrower’s Term Loan B, which promissory note is in an amount equal to such Borrower’s Term Loan B and is otherwise in form and substance acceptable to the Lender in its sole discretion.”

(m) Amendment of Section 6.01. Section 6.01 of the Credit Agreement is amended by deleting the word “and” at the end of subsection (f) thereof; replacing the grammatical period at the end of subsection (g) thereof with a semi-colon and adding the word “and” immediately thereafter; and adding the following new subsection (h) to read in its entirety as follows:

“(h) Outstanding unpaid loans or advances made by ALLY to or for the account of SIOperations under an ALLY Facility (“ALLY Advances”) in an aggregate unpaid amount not to exceed at any time $25,750,000, 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. SIOperations shall apply 100% of the proceeds of each Pool Unit first to repay the Agreed Release Amount of such Pool Unit, and, the remainder, if any, to reduce the other ALLY Advances.”

(n) Amendment of Section 6.02. Section 6.02 of the Credit Agreement is amended by deleting the word “and” at the end of subsection (g); replacing the grammatical period at the end of subsection (h) with a semi-colon, and adding the word “and” immediately thereafter; and adding the following new subsection (i) to read in its entirety as follows:

“(i) Liens on the Ally Collateral securing only ALLY Advances permitted by Section 6.01(h); provided however, notwithstanding the foregoing, the ALLY Pledged Funds shall not exceed $500,000 at any one time outstanding. The Lender agrees to subordinate the Lender’s Lien on the Georgia Real Estate to the Lien of Ally on the Georgia Real Estate securing the ALLY Advances pursuant to a subordination agreement in form and substance acceptable to the Lender in its sole judgment reasonably exercised.”

(o) Amendment of Section 6.06. Section 6.06 of the Credit Agreement is amended and, as so amended, restated in its entirety to read as follows:

“Section 6.06. No Loan Party will, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except for (a) any such sale of any fixed or capital assets by any Borrower or any Subsidiary that is made for cash consideration in an amount not less than the fair value of such fixed or capital asset and is consummated within 90 days after such Borrower or such Subsidiary acquires or completes the construction of such fixed or capital asset, and (b) the sale and subsequent leaseback of the California Real Estate so long as such sale and leaseback satisfies the following conditions: (i) the purchase price of the California Real Estate is not less than the fair value; (ii) the purchase price of the California Real Estate is comprised of at least $3,000,0000 in cash consideration; (iii) the Person that acquires the California Real Estate shall enter into a lease of the California Real Estate with a Loan Party, as tenant (“Sale/Leaseback Tenant”); and (iv) if such sale and leaseback is with an Affiliate of any Loan Party, the terms of such sale and such lease shall be on terms and conditions not less favorable to the Sale/Leaseback Tenant than could be obtained on an arm’s-length basis from unrelated third parties.”

(p) Amendment to Section 6.12(b). Section 6.12(b) of the Credit Agreement is amended and, as so amended, restated in its entirety to read as follows:

“(b) Tangible Net Worth. Beginning on First Amendment Effective Date, and at all times thereafter, permit the Tangible Net Worth of SIndustries and its Subsidiaries to be less than $48,000,000.”

(q) New Sections 6.14 and 6.15. The Credit Agreement is amended to add the following Sections 6.14 and 6.15 to read in their entirety as follows:

“SECTION 6.14. The Loan Parties, in the aggregate, shall not at any time (a) have more than 12 Demonstration Units that secure the ALLY Facility, (b) have Demonstration Units that secure the ALLY Facility with an aggregate book value in excess of $436,000.00, or (c) have Demonstration Units for which the outstanding principal amount financed under the ALLY Facility exceeds $340,000.

SECTION 6.15. Beginning on the First Amendment Effective Date and at all times thereafter, no Loan Party shall sell, assign, transfer, lease or otherwise dispose of any asset to Silver Crown, LLC.”

(r) Amendment to Article VII. Article VII of the Credit Agreement is amended by deleting the word “or” at the end of subsection (r), and adding the following new subsections (s), (t) and (u) thereto reading in their entirety as follows:

“(s) The Borrowers shall fail to close and receive all of the cash proceeds of at least one Approved New Capital Transaction on or before May 2, 2011;

(t) ALLY (i) suspends, withdraws or terminates making advances on the ALLY Facility, or (ii) reduces or restricts the availability of funds to SIOperations under the ALLY Facility, or alters the conditions to making advances under the ALLY Facility in a manner that has a material adverse effect on the acquisition of Pool Units by SIOperations; or

(u) Any Loan Party makes a payment in settlement of any causes of action or claims which have been asserted against any of the Loan Parties in excess of amounts that are payable or reimbursable from insurance, unless either (i) such settlement payment is not in excess of the reserves established in accordance with GAAP by such Loan Party prior to the Effective Date with respect thereto, or (ii) the aggregate amount of all settlement payments to be paid by the Loan Parties in settlement of such claim or cause of action (whether in one payment or multiple payments) is less than $250,000;”

(s) Amendment of Minimum Required EBITDA Schedule. The Minimum Required EBITDA Schedule attached to the Credit Agreement is amended and, as so amended, restated in its entirety to read the same as the Minimum Required EBITDA Schedule which accompanies this Amendment.

(t) Addition of Exhibit D. The Credit Agreement is amended to add Exhibit D which accompanies this Amendment as Exhibit D to the Credit Agreement.

3. Waiver of Existing Defaults. Subject to the other terms of this Amendment, including, without limitation, the full satisfaction of all conditions precedent set

forth in Section 7 of this Amendment, Chase waives the Existing Defaults. The waiver set forth in this Section 3 is a one-time waiver, and (a) with respect to the covenant contained in Section 6.12(a) of the Credit Agreement applies only to the failure to achieve the Minimum Required EBITDA for the two-month periods ending October 23, 2010, November 20, 2010 and December 25, 2010, January 22, 2011, and February 19, 2011, (b) with respect to the covenant contained in Section 6.12(b) of the Credit Agreement, applies only to the failure to achieve the minimum required Tangible Net Worth on or prior to Effective Date, and (c) with respect to the failure of the Borrowers to deliver the items required by Sections 5.01(b) and 5.01(c) of the Credit Agreement, applies only to the Borrowers’ failure to deliver such items for Fiscal Months ending prior to Effective Date. The waiver set forth in this Section 3 shall not be deemed to be a waiver by Chase of any other Default or Event of Default under the Credit Agreement or any of the Loan Documents, now existing or hereafter occurring, including any further failure to comply with any of the financial covenants set forth in Section 6.12 of the Credit Agreement or any further failure to comply with the covenants in Sections 5.01(b) and 5.01(c).

4. Consent to Merger. Chase consents to the mergers on or before the Effective Date of each of Supreme Properties North, Inc., Supreme Properties South, Inc., Supreme Properties East, Inc., and Supreme Properties West, Inc. into SIOperations, with SIOperations being the surviving entity of each such merger (the “Mergers”).

5. Representations and Warranties. Each Borrower represents and warrants to Chase as follows:

(a) (i) The execution, delivery and performance of this Amendment and all agreements and documents delivered pursuant hereto by such Borrower have been duly authorized by all necessary corporate action and do not and will not violate any provision of any law, rule, regulation, order, judgment, injunction, or writ presently in effect applying to such Borrower, or its articles of incorporation/organization or by-laws/operating agreement, or result in a breach of or constitute a default under any material agreement, lease or instrument to which such Borrower is a party or by which it or any of its properties may be bound or affected; (ii) no authorization, consent, approval, license, exemption or filing of a registration with any court or governmental department, agency or instrumentality is or will be necessary to the valid execution, delivery or performance by such Borrower of this Amendment and all agreements and documents delivered pursuant hereto; and (iii) this Amendment and all agreements and documents delivered pursuant hereto by such Borrower are the legal, valid and binding obligations of such Borrower, as a signatory thereto, and enforceable against such Borrower in accordance with the terms thereof.

(b) Except for Existing Defaults, no Default or Event of Default exists as of the Effective Date under the Credit Agreement or any of the other Loan Documents.

(c) The representations and warranties contained in the Credit Agreement are true and correct in all material respects as of the Effective Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such

representations and warranties were true and correct in all material respects as of such earlier date).

6. Consent and Representations of the Guarantors. Each Guarantor covenants, represents and warrants to Chase as follows:

(a) such Guarantor, by its execution of this Amendment, expressly consents to the execution, delivery and performance by the Borrowers, the other Guarantors and Chase of this Amendment and all agreements, instruments and documents to be delivered pursuant hereto;

(b) such Guarantor agrees that neither the provisions of this Amendment nor any action taken or not taken in accordance with the terms of this Amendment shall constitute a termination, extinguishment, release, or discharge of any of such Guarantor’s obligations under its respective guaranty in Article IX of the Credit Agreement (each of such Guarantors respective guaranty, as the same has been and may hereafter be amended and/or restated from time to time and at any time, being called a “Guaranty”) or provide a defense, set-off, or counterclaim to it with respect to any of such Guarantor’s obligations under its Guaranty or any other Loan Documents;

(d) this Amendment is the legal, valid, and binding obligation of such Guarantor, and enforceable against such Guarantor in accordance with its terms.

7. Conditions. The waiver of the Existing Defaults and the obligation of Chase to execute and to perform this Amendment are subject to full satisfaction of the following conditions precedent on or before the Effective Date:

(a) Chase shall have received from each Loan Party certified resolutions of such Loan Party’s Board of Directors, members or other body authorizing the execution, delivery and performance of this Amendment and the other documents to be delivered by such Loan Party in connection with this Amendment, and the performance of the transactions contemplated by this Amendment.

(b) This Amendment shall have been duly executed by the Borrowers and the Guarantors, and delivered to Chase.

(c) The Grant of Security Interest in form and substance the same as attached to this Amendment as Exhibit A shall have been duly executed and acknowledged by SIOperations and delivered to Chase.

(d) The Borrowers shall have entered into an option agreement pursuant to which one or more Persons (ii) agrees to purchase the California Real Estate (as defined in the Credit Agreement as amended hereby) on or prior to May 2, 2011 for not less than $3,000,000 net cash consideration, and (ii) pays to SIOperations a non-refundable deposit of not less than

$100,000, which shall be paid to Chase as cash collateral (the “Cash Collateral”). The Cash Collateral shall be released by Chase upon consummation of an Approved New Capital Transaction (as defined in the Credit Agreement as amended hereby) on or before May 2, 2011.

(e) The Borrowers shall have delivered to Chase a written commitment which is in all respects satisfactory to Chase in its sole and separate judgment pursuant to which ALLY agrees not to suspend advances under its existing line of credit with SIOperations unless and until a default occurs after the Effective Date under the ALLY Facility .

(f) Chase shall have received copies of all materials resolutions, merger documents, and filings in connection with respect to the Mergers.

(g) Chase shall have received copies of listing agreements for all real estate owned by the Loan Parties.

8. Fees. To the extent not paid on the Effective Date, the Borrowers shall pay all costs and expenses incurred by Chase in connection with the Existing Defaults and in the negotiation, preparation and closing of this Amendment and the other documents, instruments and agreements to be executed and delivered pursuant hereto or in connection with the Term Loans, including appraisal fees, environmental site assessment fees, title insurance premiums and costs, the reasonable fees and out-of-pocket expenses of Baker & Daniels LLP, special counsel to Chase, the reasonable fees and out-of-pocket expenses of special local counsel to Chase, and the reasonable fees and out-of-pocket expenses of LS Associates, LLC, financial consultant to Chase. Failure by the Borrowers to pay in full such fees, costs, premiums, and expenses within 10 days of the delivery by Chase to Borrowers of an invoice for payment for all or any portion of such fees, costs, premiums, and expenses shall be an Event of Default under the Credit Agreement.

9. Release. EACH OF THE BORROWERS AND THE GUARANTORS (EACH INDIVIDUALLY REFERRED TO AS AN “OBLIGOR” AND COLLECTIVELY REFERRED TO AS THE “OBLIGORS”), FOR THEMSELVES AND THEIR RESPECTIVE LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “RELEASING PARTIES”), JOINTLY AND SEVERALLY RELEASES AND DISCHARGES CHASE AND ITS OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS, LEGAL REPRESENTATIVES, SUCCESSORS, AND ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”) FROM ANY AND ALL CLAIMS, DEMANDS, ACTIONS, DAMAGES, CAUSES OF ACTION, AND AFFIRMATIVE DEFENSES WHICH ANY OF THE RELEASING PARTIES HAS ASSERTED OR CLAIMED OR MIGHT NOW OR HEREAFTER ASSERT OR CLAIM AGAINST ALL OR ANY OF THE RELEASED PARTIES, WHETHER KNOWN OR UNKNOWN, ARISING OUT OF, RELATED TO OR IN ANY WAY CONNECTED WITH OR BASED UPON ANY ACT, OMISSION, CIRCUMSTANCE, AGREEMENT, LOAN, EXTENSION OF CREDIT, TRANSACTION, TRANSFER, PAYMENT, EVENT, ACTION, OR OCCURRENCE RELATED TO THE LIABILITIES, THE LOAN DOCUMENTS, OR ANY TRANSACTION CONTEMPLATED THEREBY BETWEEN OR INVOLVING ANY OBLIGOR OR ANY OF THE PROPERTY OF

ANY OBLIGOR, AND ALL OR ANY OF THE RELEASED PARTIES AND WHICH WAS MADE OR EXTENDED OR WHICH OCCURRED AT ANY TIME OR TIMES PRIOR TO THE EFFECTIVE DATE.

10. Binding on Successors and Assigns. All of the terms and provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective successors, assigns and legal representatives.

11. Governing Law; Entire Agreement; Survival; Miscellaneous. This Amendment is a contract made under, and shall be governed by and construed in accordance with, the laws of the State of Indiana applicable to contracts made and to be performed entirely within such state and without giving effect to its choice or conflicts of laws principles. This Amendment constitutes and expresses the entire understanding between the parties with respect to the subject matter hereof, and supersedes all prior agreements and understandings, commitments, inducements or conditions, whether expressed or implied, oral or written. All covenants, agreements, undertakings, representations and warranties made in this Amendment shall survive the execution and delivery of this Amendment. The Credit Agreement, as amended by this Amendment, remains in full force and effect.

12. Amendment of Other Documents. All references to the Credit Agreement in the other Loan Documents shall mean the Credit Agreement, as modified and amended by this Amendment and as it may be further amended, modified, extended, renewed, supplemented and/or restated from time to time and at any time. The other Loan Documents are hereby modified and amended to the extent necessary to conform them to, or to cause them to accurately reflect, the terms of the Credit Agreement, as modified by this Amendment. Except as otherwise expressly provided in this Amendment, all of the terms and provisions of the Credit Agreement and the other Loan Documents, as modified and amended by this Amendment, remain in full force and effect and fully binding on the parties thereto and their respective successors and assigns.

13. Further Assurances. The Borrowers and the Guarantors shall duly execute and deliver, or cause to be executed and delivered, such further instruments and perform or cause to be performed such further acts as may be necessary or proper in the reasonable opinion of Chase to carry out the provisions and purposes of this Amendment.

14. Counterparts. This Amendment may be executed in two or more counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one agreement. In the event any party executes and delivers this Amendment via facsimile, such party hereby agrees that for the purposes of enforcement and all applicable statutes, laws and rules, including, without limitation, the Uniform Commercial Code, rules of evidence and statutes of fraud: (i) the facsimile signature of such party shall constitute a binding signature of such party as a symbol and mark executed and adopted by such party with a present intention to authenticate this Amendment; (ii) the facsimile of this Amendment shall constitute a writing signed by such party; and (iii) the facsimile of this Amendment shall constitute an original of and best evidence of this Amendment.

15. Recitals Incorporated. Chase, the Borrowers, and the Guarantors agree that the Recitals set forth in this Amendment are true and correct.

[signatures on following 1 page]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective authorized signatories.

SUPREME INDUSTRIES, INC.		SUPREME INDIANA OPERATIONS, INC.
As a Borrower and a Guarantor		As a Borrower and a Guarantor


By:	/s/ Kim Korth	By:	/s/ Kim Korth
Kim Korth, President		Kim Korth, President


SUPREME MID-ATLANTIC CORPORATION		SUPREME TRUCK BODIES OF CALIFORNIA, INC.
As a Borrower and a Guarantor		As a Borrower and a Guarantor

By:	/s/ Kim Korth	By:	/s/ Kim Korth
Kim Korth, President		Kim Korth, President


SUPREME CORPORATION OF TEXAS		SUPREME NORTHWEST, L.L.C.
As a Borrower and a Guarantor		As a Borrower and a Guarantor


By:	/s/ Kim Korth	By:	/s/ Kim Korth
Kim Korth, President		Kim Korth, President


SUPREME INDIANA MANAGEMENT, INC.		SC TOWER STRUCTURAL LAMINATING, INC.
As a Guarantor		As a Guarantor

		By:	/s/ Kim Korth
By:	/s/ Kim Korth	Kim Korth, President
Kim Korth, President

SUPREME MURPHY TRUCK BODIES, INC.		SUPREME STB, LLC
As a Guarantor		As a Guarantor


By:	/s/ Kim Korth	By:	/s/ Kim Korth
Kim Korth, President		Kim Korth, President


JPMORGAN CHASE BANK, N.A.		SILVER CROWN, LLC
As the Lender		As a Guarantor


By:	/s/ Michael E. Lewis	By:	/s/ Kim Korth
Michael E. Lewis, Senior Vice President		Kim Korth, President

Minimum Required EBITDA Schedule

Test Period	Minimum Required EBITDA

The fiscal period from and including January 23, 2011 through and including March 26, 2011	$	(1,500,000	)*

The fiscal period from and including February 20, 2011 through and including April 23, 2011	$	(100,000	)*

The fiscal period from and including March 27, 2011 through and including May 21, 2011	$	1,350,000

The fiscal period from and including April 24, 2011 through and including June 25, 2011	$	1,250,000

The fiscal period from and including May 22, 2011 through and including July 23, 2011	$	800,000

The fiscal period from and including June 26, 2011 through and including August 20, 2011	$	1,050,000

The fiscal period from and including July 24, 2011 through and including September 24, 2011	$	950,000

The fiscal period from and including August 21, 2011 through and including October 22, 2011	$	800,000

The fiscal period from and including September 25, 2011 through and including November 19, 2011	$	1,000,000

The fiscal period from and including October 23, 2011 through and including December 24, 2011	$	650,000

*Parenthesis denote a negative number

EXHIBIT A

(Form of Grant of Security Agreement)

GRANT OF SECURITY INTEREST

TRADEMARKS

THIS GRANT OF SECURITY INTEREST (this “Grant”), dated as of March , 2011, is executed by SUPREME INDIANA OPERATIONS, INC., a Delaware corporation, successor by merger to Supreme Corporation, a Texas corporation (“Grantor”), in favor of JPMORGAN CHASE BANK, N.A., a national banking association, with a mailing address for the purposes of this Grant at 1 East Ohio Street, Indianapolis, Indiana (“Lender”).

A. Pursuant to an Amended and Restated Credit Agreement, dated as of September 30, 2010, among Grantor, Supreme Industries, Inc., Supreme Corporation of Texas, Supreme Truck Bodies of California, Inc., Supreme Northwest, L.L.C., Supreme Mid-Atlantic Corporation, and the other Loan Parties party thereto (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) Lender agreed to extend loans and other financial accommodations to Grantor upon the terms and subject to the conditions set forth therein.

B. Grantor adopted, used, and is using the trademarks more particularly described on Schedules 1-A and 1-B annexed to this Grant and made a part of this Grant for all purposes, which trademarks are registered or subject to an application for registration in the United States Patent and Trademark Office (collectively, the “Trademarks”).

C. Grantor entered into a Pledge and Security Agreement, dated as of September 30, 2010, in favor of Lender (as amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”).

D. To secure the payment, performance, and observance of the Secured Obligations (as defined in the Security Agreement), pursuant to the Security Agreement Grantor granted to Lender a security interest in all right, title and interest of Grantor in and to substantially all of the personal property of Grantor, including, without limitation the following collateral (the “Trademark Collateral”): the Trademarks, the goodwill of the business symbolized by the Trademarks, the customer lists and records related to the Trademarks, the applications and registrations of the Trademarks, and any and all causes of action which may exist by reason of infringement the Trademarks, and all proceeds of the foregoing.

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Grantor does hereby further grant to Lender a security interest in the Trademark Collateral to secure the prompt payment, performance and observance of the Secured Obligations (as defined in the Security Agreement).

Grantor does hereby further acknowledge and affirm that the rights and remedies of Lender with respect to the security interest in the Trademark Collateral granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set forth herein.

A-1

IN WITNESS WHEREOF, Grantor has caused this Grant of Security Interest to be executed as of the day and year first above written.

	SUPREME INDIANA OPERATIONS, INC.,
	a Delaware corporation


	By:
	Printed:
	Title;

STATE OF INDIANA	)
		) SS
COUNTY OF		)

The foregoing instrument was acknowledged before me this day of March, 2011, by , the of Supreme Indiana Operations, Inc., on behalf of said corporation, as its duly authorized officer.


		Signed


		(Printed) Notary Public
My commission expires:



My county of residence:

A-2

SCHEDULE 1-A TO GRANT OF SECURITY INTEREST

TRADEMARKS

Trademark	Registration Date	Registration Number
Classic American Trolleys Supreme Corporation	4/25/2000	003156-000007
Iner-City Van	7/15/1980	003156-000002
Kold King	8/29/2006	003156-000011
Startrans	9/5/2006	003156-000013
Supreme - United States	8/30/1983	003156-000005
Supreme - Canada	11/18/2009	003156-000015
Tourliner	10/9/2007	003156-000017
Vanscaper	10/23/2007	003156-000012

SCHEDULE 1-B TO GRANT OF SECURITY INTEREST

TRADEMARK APPLICATIONS

Mark	Application Date	Application No.

None

A-3

EXHIBIT B

(Legal Description of California Real Estate)

The real estate in the State of California, County of Riverside and described as follows:

PARCEL 1:

THAT PORTION OF LOT 2 OF BLOCK 13 OF THE ALESSANDRO TRACT, IN THE CITY OF MORENO VALLEY, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 6 PAGE 13 OF MAPS, RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE EAST LINE OF SAID LOT 2 ALONG THE SOUTH LINE OF THE NORTHERLY RECTANGULAR 60.00 FEET CONVEYED TO THE COUNTY OF RIVERSIDE PER INSTRUMENT NO. 65695, RECORDED JUNE 18, 1971, SAID POINT ALSO SHOWN AS THE NORTHEAST CORNER OF SAID LOT AND DESCRIBED WITH A “FOUND 1” I.P. AND PLASTIC PLUG RCE 13116.. . “ON RECORD OF SURVEY RECORDED IN BOOK 84 PAGE 1, RECORDS OF RIVERSIDE COUNTY CALIFORNIA;

THENCE SOUTH 88° 42’ 32” WEST ALONG THE NORTH LINE OF SAID LOT AS SHOWN ON SAID RECORD OF SURVEY A DISTANCE OF 495.56 FEET; THENCE SOUTH 01° 17’ 29” EAST A DISTANCE OF 80.00 FEET; THENCE SOUTH 56° 38’ 33” WEST A DISTANCE OF 161.29 FEET; THENCE SOUTH 00° 12’ 45” WEST A DISTANCE OF 424.18 FEET; THENCE NORTH 88° 43’ 24” EAST A DISTANCE OF 627.22 FEET TO A POINT ALONG THE EAST LINE OF SAID LOT 2; THENCE NORTH 0° 16’ 40” EAST ALONG SAID EAST LINE A DISTANCE OF 590.05 FEET TO THE POINT OF BEGINNING AND THE END OF THIS DESCRIPTION.

SAID DESCRIPTION IS ALSO KNOWN AS PARCEL 1 OF PARCEL MAP WAIVER/CERTIFICATE OF COMPLIANCE NO. 2114, RECORDED JUNE 23, 1995 AS INSTRUMENT NO. 204095 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.

PARCEL 2:

COMMENCING AT A POINT ON THE EAST LINE OF SAID LOT 2 ALONG THE SOUTH LINE OF THE NORTHERLY RECTANGULAR 60.00 FEET CONVEYED TO THE COUNTY OF RIVERSIDE AS INSTRUMENT NO. 65695, RECORDED JUNE 18, 1971, SAID POINT ALSO SHOWN AS THE NORTHEAST CORNER OF SAID LOT AND DESCRIBED WITH A “FOUND 1” I.P. AND PLASTIC PLUG RCE 13116. . “ON RECORD OF SURVEY RECORDED IN BOOK 84 PAGE 1, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA;

THENCE SOUTH 88° 42’ 32” WEST ALONG THE NORTH LINE OF SAID LOT AS SHOWN ON SAID RECORD OF SURVEY A DISTANCE OF 495.56 FEET; THENCE SOUTH 01° 17’ 29” EAST A DISTANCE OF 80.00 FEET; THENCE SOUTH 56° 38’ 33” WEST A DISTANCE OF 161.29 FEET TO THE POINT OF BEGINNING; THENCE SOUTH 0° 12’ 45” WEST A DISTANCE OF 424.18 FEET; THENCE NORTH 88° 43’ 24” EAST A DISTANCE OF 627.22 FEET TO A POINT ON THE EAST LINE OF SAID LOT 2; THENCE SOUTH 00° 16’ 40” WEST ALONG SAID EAST LINE A DISTANCE OF 656.41 FEET TO THE SOUTHEAST CORNER OF SAID LOT 2; THENCE SOUTH 89° 44’ 11” WEST ALONG THE SOUTH LINE OF SAID LOT 2 A DISTANCE OF 698.00 FEET TO A POINT LYING 624.81 FEET FROM THE SOUTHWEST CORNER OF SAID LOT 2, AS MEASURED ALONG SAID SOUTH LINE; THENCE NORTH 01° 11’ 00”

B-1

WEST A DISTANCE OF 613.83 FEET; THENCE NORTH 88° 43’ 24” EAST A DISTANCE OF 39.84 FEET; THENCE NORTH 00° 26’ 21” WEST A DISTANCE OF 455.44 FEET; THENCE SOUTH 89° 47’ 15” EAST A DISTANCE OF 52.02 FEET TO THE POINT OF BEGINNING AND THE END OF THIS DESCRIPTION.

SAID DESCRIPTION IS ALSO KNOWN AS PARCEL 4 OF PARCEL MAP WAIVER/CERTIFICATE OF COMPLIANCE NO. 2114, RECORDED JUNE 23, 1995 AS INSTRUMENT NO. 204095 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.

PARCEL 3:

AN UNDIVIDED 2/3RDS INTEREST IN AND TO THE FOLLOWING DESCRIBED PROPERTY:

COMMENCING AT A POINT ON THE EAST LINE OF SAID LOT 2 ALONG THE SOUTH LINE OF THE NORTHERLY RECTANGULAR 60.00 FEET CONVEYED TO THE COUNTY OF RIVERSIDE, AS INSTRUMENT NO. 65695 RECORDED JUNE 18, 1971, SAID POINT ALSO SHOWN AS THE NORTHEAST CORNER OF SAID LOT AND DESCRIBED WITH A “FOUND 1” I.P. AND PLASTIC PLUG RCE 13116. . “ON RECORD OF SURVEY RECORDED IN BOOK 84 PAGE 1, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA;

THENCE SOUTH 88° 42’ 32” WEST ALONG THE NORTH LINE OF SAID LOT AS SHOWN ON SAID RECORD OF SURVEY A DISTANCE OF 495.56 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 01° 17’ 29” EAST A DISTANCE OF 80.00 FEET; THENCE SOUTH 56° 38’ 33” WEST A DISTANCE OF 161.29 FEET; THENCE NORTH 89° 47’ 15” WEST A DISTANCE OF 52.02 FEET; THENCE NORTH 47° 36’ 28” EAST A DISTANCE OF 170.77 FEET; THENCE NORTH 01° 17’ 29” WEST A DISTANCE OF 52.00 FEET TO A POINT ON SAID NORTH LINE; THENCE NORTH 88° 42’ 32” EAST ALONG SAID NORTH LINE A DISTANCE OF 60.00 FEET TO THE POINT OF BEGINNING AND THE END OF THIS DESCRIPTION.

SAID DESCRIPTION IS ALSO KNOWN AS PARCEL A OF PARCEL MAP WAIVER/ CERTIFICATE OF COMPLIANCE NO. 2114, RECORDED JUNE 23, 1995 AS INSTRUMENT NO. 204095 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.

B-2

EXHIBIT C

(Legal Description of Georgia Real Estate)

The real estate in the State of Georgia, County of Pike and described as follows:

Tract 14 (Tax Parcel #086 073):

All that tract or parcel of land situate, lying and being in Land Lot 154 of the Second Land District of Pike County, Georgia, containing 1.99 acres, more or less, as shown on plat of survey entitled “Property Survey for Supreme Corporation,” dated February 19, 1994, prepared by G. Tim Conkle, Georgia Registered Land Surveyor, a copy of which said plat of survey is recorded in Plat Book 12, Page 17, in the Office of the Clerk of Superior Court of Pike County, Georgia and, by reference, said plat of survey, together with the metes, bounds, courses and distances as shown thereon, is incorporated herein and made a part of this description; according to said plat of survey, said property is bounded on the North by property now or formerly owned by Supreme Corporation; on the East by U.S. Route No. 341 & 41; on the South by Sells Road, and by property now or formerly owned by Pine Grove Church; and on the West by property now or formerly owned by Supreme Corporation.

TOGETHER WITH:

Tracts E, F & G (Tax Parcel #086 075):

All that tract or parcel of land lying and being in Land Lot 154 of the Second Land District of Pike County, Georgia, and being more particularly described as Tracts “G,” “F” and “E,” as shown on a plat of survey entitled “Subdivision of Property for Slade Realty, Inc.,” prepared by Kenneth E. Presley & Associates, Inc., Georgia Registered Land Surveyor, dated August 21, 1973, revised June 20, 1974, and recorded in Plat Book 4, Page 76, in the Office of the Clerk of Superior Court of Pike County, Georgia, which said plat, together with the metes, bounds, courses and distances as shown thereon, is incorporated herein and made a part of this description.

TOGETHER WITH:

Tracts C & D (Tax Parcel #086 077):

All that tract or parcel of land lying and being in Land Lot 154 of the Second Land District of Pike County, Georgia, containing 10.13 acres, more or less, as shown on plat of survey entitled “Survey for Supreme Corporation,” prepared by Countryland Surveyors, LTD, dated February 11, 2004, which said plat with the metes, bounds, courses, and distances as shown thereon is incorporated herein and made a part hereof.

Said property is more particularly described as follows:

BEGINNING at a point which is shown as the southeast corner of Tract D as shown on plat of survey recorded at Plat Book 4, Page 76, Pike County, Georgia Records, and running the following courses and distances: South 75º25’37” West, a distance of 973.47 feet to the East right-of-way line of Etheridge Mill Road; running thence in a northerly direction along the East right-of-way line of Etheridge Mill Road, a distance of 403.22 feet; thence North 74º00’40” East, a distance of 1,160.85 feet; thence South 02º12’53” West, a distance of 370.79 feet to a point which marks the point of beginning.

C-1

EXHIBIT D

(ALLY Intercreditor Agreement)

Attached.

D-1

EX-10.2 3 a11-9374_1ex10d2.htm EX-10.2

Exhibit 10.2

INVENTORY LOAN AND SECURITY AGREEEMENT

THIS INVENTORY LOAN AND SECURITY AGREEMENT (this “Agreement”) is entered into by and between ALLY Bank, formerly known as GMAC Bank, and Supreme Indiana Operations, Inc. (“Manufacturer”) effective as of the date written below.

Manufacturer acquires chassis and/or vehicles manufactured or distributed by General Motors (“GM”) (all such chassis acquired by Manufacturer from GM being referred to herein as the “Inventory”) for the purpose of upfitting or modifying with special bodies and/or equipment. Manufacturer has requested ALLY Bank, and ALLY Bank agrees, to finance Manufacturer’s acquisition of such Inventory subject to the following terms and conditions.

1. Subject to the provisions of this Agreement, ALLY Bank hereby establishes and commits to make advances (“Advances”) not to exceed the amount of $25,750,000.00 outstanding at any one time (“Maximum Aggregate Advance”). The amount of the Maximum Aggregate Advance will be determined by ALLY Bank from time to time in its sole discretion and ALLY Bank may, in its sole discretion, increase, decrease, change or suspend its obligation to make Advances under this Agreement. The Maximum Aggregate Advance will be an aggregate amount for both ALLY Bank and ALLY Financial. All advances made by ALLY Bank will be pursuant to this commitment, even if they exceed the Maximum Aggregate Advance at the time of the advance. The sum of all advances made from time to time under this Agreement constitutes a single obligation of Manufacturer to ALLY Bank.

Notwithstanding Manufacturer’s obligation to remit certain specified amounts upon sales of Inventory, Manufacturer promises to pay to ALLY Bank upon ALLY Bank’s demand any or all of the principal amounts demanded by ALLY Bank and advanced by ALLY Bank, together with interest from the date of each Advance at the rate designated by ALLY Bank from time to time as applicable under this Agreement, and any other amounts due, owing or payable under this Agreement.

The amount owed by Manufacturer to ALLY Bank shall at any time be the total aggregate Advances made hereunder plus interest and other amounts due hereunder less all repayments thereof to ALLY Bank by Manufacturer or by GM on Manufacturer’s behalf.

Manufacturer agrees that as each item of Inventory is sold (and in any case, upon ALLY Bank’s demand), Manufacturer will, or cause GM to, immediately remit to ALLY Bank the amount advanced by it or which it became obligated to advance on Manufacturer’s behalf (and at ALLY Bank’s request, together with accrued interest thereon, and any other charges due ALLY Bank) less all amounts paid to ALLY Bank by GM, on behalf of Manufacturer, related to the sale of such Inventory. Should Manufacturer or GM fail to so remit any amount due, it will immediately account to ALLY Bank for all proceeds of the sale and remit the same to ALLY Bank or cause GM to remit the same to ALLY Bank. The remittance of proceeds does not relieve Manufacturer of its obligation to pay the full amount due on any item of Inventory.

2. Manufacturer will pay ALLY Bank interest on a monthly basis, as billed, calculated on the amount of advances outstanding from the date of such advance to the date of repayment thereof, at the rate per annum designated by ALLY Bank from time to time as applicable under this Agreement. If the rate is subsequently changed, the rate per annum, commencing on the effective date of such change, will, be such changed rate as to each prior advance hereunder which is outstanding on the effective date for such portion of said period or periods remaining after said effective date.

In no event will the interest rate exceed the maximum rate of interest allowed by New York law in effect at the time it is assessed. ALLY Bank and Manufacturer intend to faithfully comply with applicable usury laws, and this Agreement is to be construed in accordance with this intent. If circumstances cause the actual or imputed interest contracted for, charged, or received to be in excess of the maximum rate of interest allowed by law, Manufacturer will promptly notify ALLY Bank of the circumstance, and ALLY Bank will at its discretion, either refund to Manufacturer or credit the total aggregate Advances of Manufacturer with so much of the imputed interest as will reduce it to an amount one-tenth of one per cent (0.10%) per annum less than the maximum rate of interest allowed by law for the applicable period.

3. Manufacturer will pay annual administrative fees in an amount determined by ALLY Bank from time to time. Such fees will be due and payable on August 1 of each year. The initial fee for the first year of this Agreement is $54,500.00. If additional credit lines are established or Manufacturer’s Maximum Aggregate Advance is increased after August 1 (or, in the first year of this Agreement, after the date of this Agreement), then additional administrative fees may apply.

From time to time, on advance notice by ALLY Bank to Manufacturer of at least 30 days, ALLY Bank may assess, and Manufacturer will pay, other transaction, processing, audit, non-compliance, collateral monitoring, on-site representative, or other administrative fees and expenses in connection with this Agreement.

4. Advances by ALLY Bank must be used exclusively for the purpose of holding or acquiring Inventory as may be acceptable to ALLY Bank. ALLY Bank will advance funds for such purpose in an amount not to exceed the Maximum Aggregate Advance set forth in Paragraph 1, except as provided herein.

5. ALLY Bank may terminate this Agreement: (a) in an Event of Default as defined in Paragraph 8; (b) if ALLY Bank in its judgment believes that advances are not justified due to changes in Manufacturer’s financial condition or other material change in Manufacturer’s business; or (c) if ALLY Bank, in its sole discretion, elects to terminate this Agreement by providing Manufacturer with 60 days prior written notice of such termination. All debts, obligations and remedies existent at the time of any such termination will survive repayment of all Advances made pursuant to this Agreement.

6. To secure collectively the payment by Manufacturer of the amounts due or to become due hereunder, and all other obligations of Manufacturer to ALLY Bank, now existing or

hereafter arising, Manufacturer grants ALLY Bank a security interest in the following property, hereinafter referred to collectively as “Collateral”:

(a) All Inventory now owned or hereafter acquired by Manufacturer, and any replacements, substitutions or accessions, including returns and repossessions;

(b) All reserves or other accounts of Manufacturer now or hereafter held by ALLY Bank or its affiliates;

(c) Any amounts due or to become due to Manufacturer from GM, including, but not limited to factory holdbacks, warranty accounts, rebates, incentives or discounts; and

(d) All proceeds of Collateral described in (a), (b), and (c) above, including, but not limited to, accounts, chattel paper and insurance proceeds.

7. Manufacturer’s possession of Inventory will be exclusively for the purpose of storing, upfitting or modifying with special bodies and/or equipment. Manufacturer will maintain, protect, and secure Collateral and will not use it illegally, improperly or for hire. ALLY Bank at all times has the rights of access to and inspection of all Collateral and the right to examine Manufacturer’s books and records pertaining to Collateral.

Manufacturer will insure the Collateral against all risks in such amounts and with a carrier and deductibles acceptable to ALLY Bank. Any such insurance policy must name ALLY Bank as loss payee and be cancelable only upon 30 days prior written notice to ALLY Bank. Manufacturer will furnish ALLY Bank with proof of such insurance promptly upon request by ALLY Bank. The receipt by ALLY Bank of any insurance proceeds will not release Manufacturer from payment of its obligations hereunder, except to the extent of such proceeds.

Manufacturer, upon the request of ALLY Bank, will execute and deliver to ALLY Bank from time to time such supplemental security agreements, financing statements or mortgages together with further documents as may be reasonably requested by ALLY Bank. Such agreements, mortgages or documents must be in a form as ALLY Bank may in its sole discretion require. Upon ALLY Bank’s request, subject to GM’s cooperation, Manufacturer will deliver applicable Certificates of Title, Certificates of Origin for a vehicle or other similar documents in its possession, if any, and ALLY Bank may retain such documents in its possession until the related Inventory is sold and paid for. Manufacturer authorizes ALLY Bank or any of its officers or employees or agents to execute such documents on Manufacturer’s behalf and to supply any omitted information and correct patent errors in any document executed by Manufacturer.

Manufacturer will keep Collateral free of taxes, liens and encumbrances; and any sum of money that may be paid by ALLY Bank, in its discretion, in release or discharge thereof will be paid by Manufacturer to ALLY Bank on demand as an additional part of the obligation secured hereunder. Absent ALLY Bank’s prior written consent, except for a lien in the Collateral granted to Manufacturer’s senior bank lender, which lien shall be subordinated to

the liens in favor of ALLY Bank pursuant to documentation in form and substance acceptable to ALLY Bank in its sole discretion, Manufacturer will not mortgage, pledge or borrow upon Collateral and will not transfer or otherwise dispose of it except as herein provided.

8. An Event of Default includes any of the following: (a) a default by Manufacturer in the payment or performance of any obligation hereunder or under any other agreement entered into with ALLY Bank; (b) the voluntary institution of a proceeding in bankruptcy, receivership or insolvency by or against Manufacturer or its property or the involuntary institution of such proceeding and the failure by Manufacturer to have such proceeding dismissed within sixty days; (c) an assignment by Manufacturer for the benefit of creditors; (d) the failure of Manufacturer to maintain, in good standing, its agreement governing the sale or transfer of the Inventory by GM to the Manufacturer; (e) a tax lien against the Manufacturer or any of its property; (f) a misrepresentation by Manufacturer for the purpose of obtaining credit or an extension of credit; (g) a failure by Manufacturer to furnish financial information to ALLY Bank at reasonable intervals or to permit ALLY Bank to examine Manufacturer’s books or records; (h) removal of the Inventory from the Manufacturer’s principal business premises without ALLY Bank’s prior written consent; or (i) failure of the Manufacturer to furnish documents to ALLY Bank or any customer of the Manufacturer which is financed by ALLY Bank evidencing the nature of the relationship between the Manufacturer and such customer.

9. Upon the occurrence of an Event of Default as set forth in Paragraph 8 above or if the Collateral is in danger of misuse, loss, seizure or confiscation, or if ALLY Bank deems itself insecure, ALLY Bank may take immediate possession of Collateral without demand, further notice, or legal process. In furtherance thereof, Manufacturer will, if ALLY Bank so requests, assemble Collateral and make it available to ALLY Bank at a reasonable, convenient place designated by ALLY Bank. ALLY Bank has the right, and Manufacturer hereby authorizes and empowers ALLY Bank, to enter upon the premises wherever Collateral may be and remove the same. Manufacturer will pay all expenses and reimburse ALLY Bank for any expenditures, including reasonable attorney’s fees and legal expenses, in connection with ALLY Bank’s exercise of any of its rights and remedies under this Agreement.

Upon the occurrence of an Event of Default, to the extent permitted by law, ALLY Bank may immediately assess a default rate of interest which shall be a rate up to five hundred (500) basis points in excess of the interest rate paid by the Manufacturer immediately prior to the Event of Default.

Upon the occurrence of an Event of Default, ALLY Bank has all of the rights and remedies provided by law, this Agreement, or any other agreement between ALLY Bank and Manufacturer.

10. Unless prohibited by law, ALLY Bank may assess a late charge of up to five percent on any principal or interest obligation that is not paid when it is due and payable for so long as the

past due obligation remains unpaid. This late charge is in addition to interest and other amounts owed under this Agreement.

11. ALLY Bank and Manufacturer agree that this Agreement supersedes and replaces any prior Inventory Loan and Security Agreements and related promissory notes executed by them. Except as otherwise provided or referred to herein, there are no other agreements or understandings, either oral or in writing, between the parties affecting this Agreement or relating to any of the subject matters covered by this Agreement. No agreement between ALLY Bank and Manufacturer which relates to matters covered herein, and no change in, addition to (except the filling in of blank lines), or erasure of any printed portion of this Agreement will be binding unless it is approved in a written agreement executed by a duly authorized representative of each party.

12. This Agreement is binding upon the parties’ successors and assigns provided, however, that Manufacturer has no right of assignment absent prior written consent of ALLY Bank. No transfer, renewal, extension or assignment of this Agreement or any interest hereunder and no loss, damage or destruction of the Collateral will release Manufacturer from the obligation secured hereunder.

13. Any provision hereof prohibited by law is ineffective to the extent of such prohibitions without invalidating the remaining provisions hereof.

14. This Agreement may be signed in counterparts, each of which is deemed an original, and all of which taken together constitute one and the same agreement.

15. ALLY Bank and Manufacturer each waive any and all rights to a trial by jury in any dispute.

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed by its duly authorized representative this 4th day of March, 2011.

ALLY BANK		Supreme Indiana Operations, Inc.
		(Manufacturer)

By:	/s/ Michael Kinter	By:	/s/ Kim Korth

	Michael Kinter		Kim Korth
	(Print Name)		(Print Name)

Title:	Assistant Secretary	Title:	President and CEO

Address:	15303 S. 94th Ave.	Address:	2581 E. Kercher Road

	Orland Park, IL 60462		Goshen, IN 46528

EX-10.3 4 a11-9374_1ex10d3.htm EX-10.3

Exhibit 10.3

INVENTORY LOAN AND SECURITY AGREEEMENT

THIS INVENTORY LOAN AND SECURITY AGREEMENT (this “Agreement”) is entered into by and between ALLY FINANCIAL, formerly known as GMAC (“ALLY”), and Supreme Indiana Operations, Inc. (“Manufacturer”) effective as of the date written below.

Manufacturer acquires chassis and/or vehicles manufactured or distributed by General Motors (“GM”) (all such chassis acquired by Manufacturer from GM being referred to herein as the “Inventory”) for the purpose of upfitting or modifying with special bodies and/or equipment. Manufacturer has requested ALLY, and ALLY agrees, to finance Manufacturer’s acquisition of such Inventory subject to the following terms and conditions.

1. Subject to the provisions of this Agreement, ALLY hereby establishes and commits to make advances (“Advances”) not to exceed the amount of $25,750,000.00 outstanding at any one time (“Maximum Aggregate Advance”). The amount of the Maximum Aggregate Advance will be determined by ALLY from time to time in its sole discretion and ALLY may, in its sole discretion, increase, decrease, change or suspend its obligation to make Advances under this Agreement. The Maximum Aggregate Advance will be an aggregate amount for both ALLY and ALLY Bank. All advances made by ALLY will be pursuant to this commitment, even if they exceed the Maximum Aggregate Advance at the time of the advance. The sum of all advances made from time to time under this Agreement constitutes a single obligation of Manufacturer to ALLY.

Notwithstanding Manufacturer’s obligation to remit certain specified amounts upon sales of Inventory, Manufacturer promises to pay to ALLY upon ALLY’s demand any or all of the principal amounts demanded by ALLY and advanced by ALLY, together with interest from the date of each Advance at the rate designated by ALLY from time to time as applicable under this Agreement, and any other amounts due, owing or payable under this Agreement.

The amount owed by Manufacturer to ALLY shall at any time be the total aggregate Advances made hereunder plus interest and other amounts due hereunder less all repayments thereof to ALLY by Manufacturer or by GM on Manufacturer’s behalf.

Manufacturer agrees that as each item of Inventory is sold (and in any case, upon ALLY’s demand), Manufacturer will, or cause GM to, immediately remit to ALLY the amount advanced by it or which it became obligated to advance on Manufacturer’s behalf (and at ALLY’s request, together with accrued interest thereon, and any other charges due ALLY) less all amounts paid to ALLY by GM, on behalf of Manufacturer, related to the sale of such Inventory. Should Manufacturer or GM fail to so remit any amount due, it will immediately account to ALLY for all proceeds of the sale and remit the same to ALLY or cause GM to remit the same to ALLY. The remittance of proceeds does not relieve Manufacturer of its obligation to pay the full amount due on any item of Inventory.

2. Manufacturer will pay ALLY interest on a monthly basis, as billed, calculated on the amount of advances outstanding from the date of such advance to the date of repayment thereof, at

the rate per annum designated by ALLY from time to time as applicable under this Agreement. If the rate is subsequently changed, the rate per annum, commencing on the effective date of such change, will, be such changed rate as to each prior advance hereunder which is outstanding on the effective date for such portion of said period or periods remaining after said effective date.

In no event will the interest rate exceed the maximum rate of interest allowed by New York law in effect at the time it is assessed. ALLY and Manufacturer intend to faithfully comply with applicable usury laws, and this Agreement is to be construed in accordance with this intent. If circumstances cause the actual or imputed interest contracted for, charged, or received to be in excess of the maximum rate of interest allowed by law, Manufacturer will promptly notify ALLY of the circumstance, and ALLY will at its discretion, either refund to Manufacturer or credit the total aggregate Advances of Manufacturer with so much of the imputed interest as will reduce it to an amount one-tenth of one per cent (0.10%) per annum less than the maximum rate of interest allowed by law for the applicable period.

3. Manufacturer will pay annual administrative fees in an amount determined by ALLY from time to time. Such fees will be due and payable on August 1 of each year. The initial fee for the first year of this Agreement is $54,500.00. If additional credit lines are established or Manufacturer’s Maximum Aggregate Advance is increased after August 1 (or, in the first year of this Agreement, after the date of this Agreement), then additional administrative fees may apply.

From time to time, on advance notice by ALLY to Manufacturer of at least 30 days, ALLY may assess, and Manufacturer will pay, other transaction, processing, audit, non-compliance, collateral monitoring, on-site representative, or other administrative fees and expenses in connection with this Agreement.

4. Advances by ALLY must be used exclusively for the purpose of holding or acquiring Inventory as may be acceptable to ALLY. ALLY will advance funds for such purpose in an amount not to exceed the Maximum Aggregate Advance set forth in Paragraph 1, except as provided herein.

5. ALLY may terminate this Agreement: (a) in an Event of Default as defined in Paragraph 8; (b) if ALLY in its judgment believes that advances are not justified due to changes in Manufacturer’s financial condition or other material change in Manufacturer’s business; or (c) if ALLY, in its sole discretion, elects to terminate this Agreement by providing Manufacturer with 60 days prior written notice of such termination. All debts, obligations and remedies existent at the time of any such termination will survive repayment of all Advances made pursuant to this Agreement.

6. To secure collectively the payment by Manufacturer of the amounts due or to become due hereunder, and all other obligations of Manufacturer to ALLY, now existing or hereafter arising, Manufacturer grants ALLY a security interest in the following property, hereinafter referred to collectively as “Collateral”:

(a) All Inventory now owned or hereafter acquired by Manufacturer, and any replacements, substitutions or accessions, including returns and repossessions;

(b) All reserves or other accounts of Manufacturer now or hereafter held by ALLY or its affiliates;

(c) Any amounts due or to become due to Manufacturer from GM, including, but not limited to factory holdbacks, warranty accounts, rebates, incentives or discounts; and

(d) All proceeds of Collateral described in (a), (b), and (c) above, including, but not limited to, accounts, chattel paper and insurance proceeds.

7. Manufacturer’s possession of Inventory will be exclusively for the purpose of storing, upfitting or modifying with special bodies and/or equipment. Manufacturer will maintain, protect, and secure Collateral and will not use it illegally, improperly or for hire. ALLY at all times has the rights of access to and inspection of all Collateral and the right to examine Manufacturer’s books and records pertaining to Collateral.

Manufacturer will insure the Collateral against all risks in such amounts and with a carrier and deductibles acceptable to ALLY. Any such insurance policy must name ALLY as loss payee and be cancelable only upon 30 days prior written notice to ALLY. Manufacturer will furnish ALLY with proof of such insurance promptly upon request by ALLY. The receipt by ALLY of any insurance proceeds will not release Manufacturer from payment of its obligations hereunder, except to the extent of such proceeds.

Manufacturer, upon the request of ALLY, will execute and deliver to ALLY from time to time such supplemental security agreements, financing statements or mortgages together with further documents as may be reasonably requested by ALLY. Such agreements, mortgages or documents must be in a form as ALLY may in its sole discretion require. Upon ALLY’s request, subject to GM’s cooperation, Manufacturer will deliver applicable Certificates of Title, Certificates of Origin for a vehicle or other similar documents in its possession, if any, and ALLY may retain such documents in its possession until the related Inventory is sold and paid for. Manufacturer authorizes ALLY or any of its officers or employees or agents to execute such documents on Manufacturer’s behalf and to supply any omitted information and correct patent errors in any document executed by Manufacturer.

Manufacturer will keep Collateral free of taxes, liens and encumbrances; and any sum of money that may be paid by ALLY, in its discretion, in release or discharge thereof will be paid by Manufacturer to ALLY on demand as an additional part of the obligation secured hereunder. Absent ALLY’s prior written consent, except for a lien in the Collateral granted to Manufacturer’s senior bank lender, which lien shall be subordinated to the liens in favor of ALLY pursuant to documentation in form and substance acceptable to ALLY in its sole discretion, Manufacturer will not mortgage, pledge or borrow upon Collateral and will not transfer or otherwise dispose of it except as herein provided.

8. An Event of Default includes any of the following: (a) a default by Manufacturer in the payment or performance of any obligation hereunder or under any other agreement entered into with ALLY; (b) the voluntary institution of a proceeding in bankruptcy, receivership or insolvency by or against Manufacturer or its property or the involuntary institution of such proceeding and the failure by Manufacturer to have such proceeding dismissed within sixty days; (c) an assignment by Manufacturer for the benefit of creditors; (d) the failure of Manufacturer to maintain, in good standing, its agreement governing the sale or transfer of the Inventory by GM to the Manufacturer; (e) a tax lien against the Manufacturer or any of its property; (f) a misrepresentation by Manufacturer for the purpose of obtaining credit or an extension of credit; (g) a failure by Manufacturer to furnish financial information to ALLY at reasonable intervals or to permit ALLY to examine Manufacturer’s books or records; (h) removal of the Inventory from the Manufacturer’s principal business premises without ALLY’s prior written consent; or (i) failure of the Manufacturer to furnish documents to ALLY or any customer of the Manufacturer which is financed by ALLY evidencing the nature of the relationship between the Manufacturer and such customer.

9. Upon the occurrence of an Event of Default as set forth in Paragraph 8 above or if the Collateral is in danger of misuse, loss, seizure or confiscation, or if ALLY deems itself insecure, ALLY may take immediate possession of Collateral without demand, further notice, or legal process. In furtherance thereof, Manufacturer will, if ALLY so requests, assemble Collateral and make it available to ALLY at a reasonable, convenient place designated by ALLY. ALLY has the right, and Manufacturer hereby authorizes and empowers ALLY, to enter upon the premises wherever Collateral may be and remove the same. Manufacturer will pay all expenses and reimburse ALLY for any expenditures, including reasonable attorney’s fees and legal expenses, in connection with ALLY’s exercise of any of its rights and remedies under this Agreement.

Upon the occurrence of an Event of Default, to the extent permitted by law, ALLY may immediately assess a default rate of interest which shall be a rate up to five hundred (500) basis points in excess of the interest rate paid by the Manufacturer immediately prior to the Event of Default.

Upon the occurrence of an Event of Default, ALLY has all of the rights and remedies provided by law, this Agreement, or any other agreement between ALLY and Manufacturer.

10. Unless prohibited by law, ALLY may assess a late charge of up to five percent on any principal or interest obligation that is not paid when it is due and payable for so long as the past due obligation remains unpaid. This late charge is in addition to interest and other amounts owed under this Agreement.

11. ALLY and Manufacturer agree that this Agreement supersedes and replaces any prior Inventory Loan and Security Agreements and related promissory notes executed by them. Except as otherwise provided or referred to herein, there are no other agreements or understandings, either oral or in writing, between the parties affecting this Agreement or relating to any of the subject matters covered by this Agreement. No agreement between ALLY and Manufacturer which relates to matters covered herein, and no change in, addition

to (except the filling in of blank lines), or erasure of any printed portion of this Agreement will be binding unless it is approved in a written agreement executed by a duly authorized representative of each party.

12. This Agreement is binding upon the parties’ successors and assigns provided, however, that Manufacturer has no right of assignment absent prior written consent of ALLY. No transfer, renewal, extension or assignment of this Agreement or any interest hereunder and no loss, damage or destruction of the Collateral will release Manufacturer from the obligation secured hereunder.

13. Any provision hereof prohibited by law is ineffective to the extent of such prohibitions without invalidating the remaining provisions hereof.

14. This Agreement may be signed in counterparts, each of which is deemed an original, and all of which taken together constitute one and the same agreement.

15. ALLY and Manufacturer each waive any and all rights to a trial by jury in any dispute.

16. This Agreement replaces and supersedes in its entirety the GMAC Master Manufacturer’s Finance Plan Agreement, executed as of March 4, 2011 by and between GMAC and Manufacturer (the “Finance Agreement”) and the parties hereto acknowledge and agree that the Finance Agreement is void and has no further force or effect.

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed by its duly authorized representative this 4th day of March, 2011.

ALLY FINANCIAL		Supreme Indiana Operations, Inc.
		(Manufacturer)

By:	/s/ Michael Kinter	By:	/s/ Kim Korth

	Michael Kinter		Kim Korth
	(Print Name)		(Print Name)

Title:	Assistant Secretary	Title:	President and CEO

Address:	15303 S. 94th Ave.	Address:	2581 E. Kercher Road

	Orland Park, IL 60462		Goshen, IN 46528

EX-10.4 5 a11-9374_1ex10d4.htm EX-10.4

Exhibit 10.4

GUARANTY

Orland Park, Illinois

March 4, 2011

To induce ALLY Bank to extend or continue credit to Supreme Indiana Operations, Inc. (hereinafter, “Manufacturer”), the undersigned entity does hereby unconditionally guarantee the payment of all indebtedness of Manufacturer to ALLY Bank, together with all costs, expenses and attorneys’ fees incurred by ALLY Bank in connection with any default of Manufacturer.

Any liability of the undersigned hereunder shall not be affected by, nor shall it be necessary to procure the consent of the undersigned or give any notice in reference to, any settlement, or variation of terms of any obligation of the Manufacturer, or of a guarantor or any other interested person, by operation of law or otherwise; nor by failure to file, record or register any security document. The undersigned recognizes that ALLY Bank may utilize various means of attempting to verify Manufacturer’s compliance with its credit terms, including periodic collateral checks and examination of books and records, and hereby expressly agrees that such steps re for the sole benefit of ALLY Bank and the adequacy of such checks and examinations shall not be considered as a defense to mitigation of liability hereunder. The undersigned acknowledges and agrees that this guaranty is for a commercial obligation and not a consumer obligation which is primarily for personal, family or household purposes. The undersigned further authorizes ALLY Bank, from time to time, to investigate any financial information provided and to examine or review the undersigned’s credit history (including obtaining credit reports) and agrees to provide ALLY Bank with financial statements in a form satisfactory to ALLY Bank along with all supporting documentation requested by ALLY Bank upon request.

The undersigned does hereby to the extent permitted by applicable law expressly waive and dispense with notice of acceptance of this guaranty, notices of non-payment or non-performance, notice of amount of indebtedness outstanding at any time, protests, demands and prosecution of collection, foreclosure and possessory remedies. The undersigned hereby waives any right to require ALLY Bank to (i) proceed against other persons or Manufacturer, (ii) advise the undersigned of the results of any collateral checks or examinations, (iii) require Manufacturer to comply with its agreement with ALLY Bank, or (iv) proceed against Manufacturer or proceed against or exhaust any security.

This is a continuing guaranty and shall remain in full force and effect until forty-eight (48) hours after receipt by ALLY Bank, at its office designated below, of written notice by the undersigned terminating or modifying same; provided, however, that such notice shall not operate to release the undersigned from liability hereunder with respect to any obligations incurred prior to the effective date of such notice.

Except as noted hereon, ALLY Bank has made no promises to Manufacturer or the undersigned to induce execution of this Guaranty and there are no other agreements or understandings, either oral or in writing, between ALLY Bank and the undersigned affecting this Guaranty.

The obligation of all parties signing this guaranty, where more than one, shall be joint and several.

This guaranty may not be changed orally and shall bind and inure to the benefit of the heirs, administrators, successors and assigns of the undersigned and ALLY Bank, respectively. If any part of this guaranty is not valid or enforceable according to applicable law, all other parts will remain enforceable.

THIS GUARANTY AND THE PERFORMANCE HEREUNDER SHALL BE CONSTRUED AND DETERMINED ACCORDING TO THE LAW OF THE STATE OF NEW YORK.

		GUARANTOR

		Supreme Industries, Inc.


Witness:	/s/ Thomas Beard	By:	/s/ Kim Korth
Address:	2581 E. Kercher Road	Print Name:			Kim Korth
		Title:		President and CEO
	Goshen, IN 46528

Witness:	/s/ Jeffrey Mowery
Address:	2581 E. Kercher Road

	Goshen, IN 46528

On this day of March, 2011, before me personally came and appeared Kim Korth to me known and known by me to be (one of) the person(s) described in and who executed this instrument and acknowledged that (t)he(y) executed the same as guarantor(s).

Accepted:			/s/ Angela K. Wilson
ALLY Bank			Notary Public in and for
15303 94th Ave, Orland Park, IL 60462			Kosciusko
By:			County
/s/ Michael Kinter
Michael Kinter, Assistant Secretary

SIGN IN INK

EX-10.5 6 a11-9374_1ex10d5.htm EX-10.5

Exhibit 10.5

GUARANTY

Orland Park, Illinois

March 4, 2011

To induce ALLY Financial to extend or continue credit to Supreme Indiana Operations, Inc. (hereinafter, “Manufacturer”), the undersigned entity does hereby unconditionally guarantee the payment of all indebtedness of Manufacturer to ALLY Financial, together with all costs, expenses and attorneys’ fees incurred by ALLY Financial in connection with any default of Manufacturer.

Any liability of the undersigned hereunder shall not be affected by, nor shall it be necessary to procure the consent of the undersigned or give any notice in reference to, any settlement, or variation of terms of any obligation of the Manufacturer, or of a guarantor or any other interested person, by operation of law or otherwise; nor by failure to file, record or register any security document. The undersigned recognizes that ALLY Financial may utilize various means of attempting to verify Manufacturer’s compliance with its credit terms, including periodic collateral checks and examination of books and records, and hereby expressly agrees that such steps re for the sole benefit of ALLY Financial and the adequacy of such checks and examinations shall not be considered as a defense to mitigation of liability hereunder. The undersigned acknowledges and agrees that this guaranty is for a commercial obligation and not a consumer obligation which is primarily for personal, family or household purposes. The undersigned further authorizes ALLY Financial, from time to time, to investigate any financial information provided and to examine or review the undersigned’s credit history (including obtaining credit reports) and agrees to provide ALLY Financial with financial statements in a form satisfactory to ALLY Financial along with all supporting documentation requested by ALLY Financial upon request.

The undersigned does hereby to the extent permitted by applicable law expressly waive and dispense with notice of acceptance of this guaranty, notices of non-payment or non-performance, notice of amount of indebtedness outstanding at any time, protests, demands and prosecution of collection, foreclosure and possessory remedies. The undersigned hereby waives any right to require ALLY Financial to (i) proceed against other persons or Manufacturer, (ii) advise the undersigned of the results of any collateral checks or examinations, (iii) require Manufacturer to comply with its agreement with ALLY Financial, or (iv) proceed against Manufacturer or proceed against or exhaust any security.

This is a continuing guaranty and shall remain in full force and effect until forty-eight (48) hours after receipt by ALLY Financial, at its office designated below, of written notice by the undersigned terminating or modifying same; provided, however, that such notice shall not operate to release the undersigned from liability hereunder with respect to any obligations incurred prior to the effective date of such notice.

Except as noted hereon, ALLY Financial has made no promises to Manufacturer or the undersigned to induce execution of this Guaranty and there are no other agreements or understandings, either oral or in writing, between ALLY Financial and the undersigned affecting this Guaranty.

The obligation of all parties signing this guaranty, where more than one, shall be joint and several.

This guaranty may not be changed orally and shall bind and inure to the benefit of the heirs, administrators, successors and assigns of the undersigned and ALLY Financial, respectively. If any part of this guaranty is not valid or enforceable according to applicable law, all other parts will remain enforceable.

THIS GUARANTY AND THE PERFORMANCE HEREUNDER SHALL BE CONSTRUED AND DETERMINED ACCORDING TO THE LAW OF THE STATE OF NEW YORK.

		GUARANTOR

		Supreme Industries, Inc.


Witness:	/s/ Thomas Beard	By:	/s/ Kim Korth
Address:	2581 E. Kercher Road	Print Name:			Kim Korth
		Title:		President and CEO
	Goshen, IN 46528

Witness:	/s/ Jeffrey Mowery
Address:	2581 E. Kercher Road

	Goshen, IN 46528

Accepted:		/s/ Angela K. Wilson
ALLY FINANCIAL		Notary Public in and for
15303 94th Ave, Orland Park, IL 60462		Kosciusko
By:		County
/s/ Michael Kinter
Michael Kinter, Assistant Secretary

SIGN IN INK

EX-10.6 7 a11-9374_1ex10d6.htm EX-10.6

Exhibit 10.6

CREDIT BALANCE AGREEMENT

This Credit Balance Agreement (“Agreement”) is between Ally Financial (“Ally”), an entity organized under the laws of Delaware, and Supreme Indiana Operations, Inc. whose address is 2581 Kercher Rd., Goshen, IN 46528 (“Obligor”) and is effective March 16, 2011.

Recitals

Ally has entered or may enter into one or more commercial finance agreement(s) to provide loans, financing, or other credit accommodations to Obligor under which interest accrues and is payable to Ally from time to time (all such agreements by Obligors, including agreements subsequently assigned to Ally by its affiliates, but excluding the Wholesale Agreement, as defined below being the “Finance Agreements”).

Obligor has a substantial interest in the satisfactory performance of the Wholesale Agreement and the Finance Agreements because, among other reasons, Obligor has an obligation (direct or contingent) for repayment of the amounts due.

Obligor wishes to deliver money to Ally to secure indebtedness owed to Ally (including indebtedness subsequently assigned to Ally by an affiliate of Ally) and, pursuant to the terms of this Agreement, to provide a basis for reducing the interest payable to Ally under the Inventory Loan and Security Agreement executed by the Obligor, as may be amended from time to time (the “Wholesale Agreement”) or under any other of the Finance Agreements as more fully set forth in paragraph 5 of this Agreement, but without reducing the principal obligations owed to Ally under any of these agreements, except as outlined in this Agreement. Ally is willing to accommodate that request on the terms and conditions set forth in this Agreement.

Ally and Obligor agree as follows:

Agreement

1. Obligor may, at its election, deliver cash, drafts, checks, electronic monetary credits, or other good funds to Ally to be held as collateral security for Obligor’s obligations under the Wholesale Agreement and Finance Agreements and Ally will hold and account to Obligor for the total of these funds (the “Credit Balance”).

2. Obligor agrees to maintain a Credit Balance of at least $500,000.00 at all times so long as Obligor owes any debt to Ally or until Ally otherwise agrees in writing (the “Minimum Required Balance”).

3. The Credit Balance must be no less than the Minimum Required Balance and that portion of the Credit Balance used to determine the Applicable Interest Credit (as defined below) will be no greater than 25% of the total principal amount (excluding principal amounts owed by Obligor to Ally for financing accommodations provided in connection with vehicles ordered, sold or leased under the delayed payment privilege and/or as fleet vehicles (“Fleet Vehicles”) owed to Ally from time to time for new and used vehicle inventory financed by Ally under the Wholesale Agreement (the “Wholesale Financing”). Although, Fleet Vehicles do not generally qualify for purposes of credit calculations, Ally may, in its sole discretion, permit it in certain limited instances where, for example, the Fleet Vehicles do not represent significant volume or are not readily identifiable.

4. Subject to numbered paragraphs 1 through 3 above, unless otherwise agreed by Ally, Obligor may, on any business day, increase the Credit Balance by any amount of not less than $1,000. Ally will use its best efforts to add increases received by Ally in immediately available funds to the Credit Balance on the same business day or as soon thereafter as practicable. Increases received in other than immediately available funds will be added to the Credit Balance when good funds become available for use by Ally.

5. Subject to numbered paragraphs 1 through 3 above, absent a default under any of the Finance Agreements or Wholesale Agreement, Obligor may, upon written request, require Ally to repay all or a portion of the Credit Balance. Except upon termination of this Agreement or unless otherwise agreed by Ally, the minimum repayment is $1,000. Ally will honor such requests as soon as practicable; however, funds delivered to Ally via check will not be available for repayment for at least ten business days after receipt by Ally of such check and funds delivered to Ally via ACH will not be available for repayment for at least three business days after receipt by Ally of such ACH. Upon any default by Obligor under the Wholesale Agreement or the Finance Agreements, Ally may, in its sole discretion, place all funds in the Credit Balance on administrative hold for up to 3 business days pending Ally’s determination to apply the funds, or any portion thereof, to cure any default or to otherwise reduce any obligations to Ally under the Wholesale Agreement or Finance Agreements. In addition, Ally will have all rights and remedies under the Wholesale Agreement and Finance Agreements and/or applicable law including, without limitation, the right to immediately apply the Credit Balance against any outstanding interest or principal under the Wholesale Agreement or Finance Agreements.

6. Subject to the limitations of paragraph 3 of this Agreement, once each month, Ally will setoff against interest due under the Wholesale Agreement the applicable amount described in the remainder of this paragraph 5 (the “Applicable Interest Credit”). Additionally, at the request of Obligor and at the election of Ally, Ally may apply the Applicable Interest Credit to interest obligations due and owing under Finance Agreements other than the Wholesale Agreement. The Applicable Interest Credit will be determined by multiplying each daily Credit Balance by the then current Wholesale Financing new vehicle rate of interest (less any applicable incentives) less 200 basis points (2.00%), as modified from time to time by Ally in its sole discretion.

If the Applicable Interest Credit exceeds the interest due Ally under the Wholesale Agreement for a particular monthly billing period, the excess will be either carried forward as a credit against interest due Ally under the Wholesale Agreement in subsequent billing periods or applied to interest owed under other Finance Agreements, as determined by Ally in its sole discretion. Unless otherwise agreed by Ally, no Applicable Interest Credit will be applied or will accrue during the pendency of any default under the Wholesale Agreement or any of the Finance Agreements. Upon the termination of the Wholesale Agreement, Applicable Interest Credits will cease to accrue and will cease to be applied, except as may be agreed by Ally in writing.

7. Ally may commingle any Credit Balance with other funds of Ally and use them in the ordinary course of its business.

8. Upon written request of Obligor, Ally may, but is not required to, draw against the Credit Balance to settle any outstanding indebtedness under the Wholesale Agreement or Finance Agreements at any time. This provision does not alter any obligation to pay Ally when and in the amounts required under the Wholesale Agreement or Finance Agreements.

9. Obligor grants Ally a security interest in the Credit Balance and acknowledges and agrees that the Credit Balance constitutes collateral to secure payment and performance of the Wholesale Agreement and Finance Agreements. Ally has rights to the Credit Balance as may be afforded by the Wholesale Agreement and Finance Agreements and/or applicable law. The security interest in the Credit Balance is in addition to any other rights of Ally against the Obligor, including the right of setoff.

10. Ally and Obligor may implement this Agreement by conducting business with the (non-exclusive) use of electronic, computer, digital, or other paperless means, including the good faith reliance on electronic mail, facsimile transmittal, telephonic, or other usual and regular forms of communication (by Ally or other commercial parties) with or without confirmation or authentication of the communication by receipt of an original signature, document, paper, or otherwise.

11. This Agreement must not be assigned by either party without the prior written consent of the other; provided, however, that Ally may assign this Agreement to any affiliate of Ally.

12. Any provision of this Agreement that is prohibited by law is ineffective to the extent of those prohibitions, but does not invalidate the remaining provisions of this Agreement.

13. Subject to numbered paragraphs 1 through 3 above, either party may terminate this Agreement after giving ten days advance written notice to the other. The execution of this Agreement by Ally and Obligor replaces all previously executed agreements between them of substantially similar nature and type, effective the date first above written.

Signed March 21, 2011.

Ally Financial		Supreme Indiana Operations, Inc.
		(Obligor)
By:	/s/ Michael Kinter	By:	/s/ Jeffrey Mowery

Name:	Michael Kinter	Name:	Jeffrey Mowery

Title:	Assistant Secretary	Title:	VP - Finance

EX-10.7 8 a11-9374_1ex10d7.htm EX-10.7

Exhibit 10.7

OPTION AGREEMENT

This OPTION AGREEMENT (this “Agreement”) is made and entered into as of the 24th day of March, 2011 (“Effective Date”), by and between Supreme Indiana Operations, Inc., a Delaware corporation (“Seller”) and Barrett Gardner Associates, Inc. (“Purchaser”).

RECITALS:

A. Seller holds record title to that certain tract of land located in Moreno Valley, Riverside County, California, being more particularly described in Exhibit A attached hereto and the improvements located thereon (the “Option Parcel”) following a merger between Seller and Supreme Properties West, Inc.

B. Purchaser desires to purchase the Option Parcel, and Seller desires to sell the Option Parcel to Purchaser upon the terms, covenants, and conditions set forth in this Agreement.

AGREEMENTS:

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, and subject to all of the following terms, provisions and conditions, Seller and Purchaser agree as follows:

1. Upon the terms and conditions set forth in this Agreement, in consideration for payment of the Option Fee (hereinafter defined), Seller hereby grants to Purchaser, or its designees, the right to purchase all of the Option Parcel (the “Option”). The closing of the sale of the Option Parcel (the “Closing”) to Purchaser must occur on or before April 29, 2011 (the “Closing Date”), unless extended by mutual agreement of the parties hereto with the consent of Chase (as defined below). Notwithstanding the foregoing, Purchaser has the right to extend the Closing Date by up to ninety (90) days upon written notice to Seller delivered prior to the originally-scheduled Closing Date if Purchaser is not able to obtain financing by the originally-scheduled Closing Date.

2. The purchase price for the Option Parcel (“Purchase Price”) shall be based on its appraised value of $4,100,000, of which a minimum of $3,100,000 shall be payable in cash at Closing (the “Cash Portion”), and the balance shall be non-cash consideration in the form of an equity interest granted to Seller at Closing in the purchaser entity, upon terms determined to be fair to Seller pursuant to a fairness opinion to be issued by an independent investment banker engaged by Seller (the “Consultant”). Seller shall bear the closing costs associated with the sale of the Option Parcel to Purchaser.

3. In consideration for the Option, Purchaser shall pay for the benefit of Seller on the Effective Date by wire transfer of immediately available federal funds to JPMorgan Chase Bank, N.A., a national banking association (“Chase”), the sum of $100,000 (the “Option Fee”), which Option Fee shall be held by Chase in escrow to be applied to the Cash Portion of the Purchase Price at Closing. Purchaser acknowledges that the Option Fee must be wired to Chase prior to the closing of the amendment to the Credit Facility (as defined below).

4. Purchaser acknowledges that pursuant to the existing credit facility (the “Credit Facility”) between Chase and Seller, Chase has the right to approve the terms of the sale of the Option Parcel to Purchaser. If Chase does not approve the terms, then (a) Seller has no obligation to sell the Option Parcel to Purchaser and Purchaser has no obligation to purchase the Option Parcel, and (b) Seller shall refund the Option Fee to Purchaser. If Closing does not occur for any reason other than Purchaser’s non-performance or inability to obtain funds in the amount of the Cash Portion of the Purchase Price by the

closing date, then Seller shall refund the Option Fee to Purchaser. Any obligation by Seller to refund the Option Fee to Purchaser shall be subordinate to Seller’s obligations under the Credit Facility

5. At Closing, Seller will enter into a twenty year lease with Purchaser in which Seller leases the entire Option Parcel from Purchaser in an arms length lease transaction on terms determined to be fair to Seller pursuant to a fairness opinion to be issued by the Consultant. Prior to the Closing, Purchaser and Seller shall enter into a purchase and sale agreement governing the sale of the Option Parcel and a lease, both of which shall incorporate the terms set forth in the fairness opinions issued by Consultant.

6. Purchaser shall have the right to assign its rights and obligations under this Agreement upon written notice to Seller delivered at least five (5) days before Closing provided that the assignee expressly assumes Purchaser’s obligations under this Agreement.

7. The illegality, invalidity or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.

8. Any notice, demand or other communication required to be given or to be served upon any party hereunder shall be void and of no effect unless given in accordance with the provisions of this section. All notices, demands or other communications must be in writing and delivered to the person to whom it is directed, either (i) in person or (ii) delivered by a reputable non-electronic delivery service that provides a delivery receipt. Any notice, demand or other communication shall be deemed to have been given and received when delivered to the below stated address of the party to whom it is addressed. All notices, demands and other communications shall be given to the parties hereto at the following addresses:

If to Seller:		Supreme Indiana Operations, Inc.
		2581 Kercher Road
		Goshen, Indiana 46528
		Attn: Jeff Mowery

with a copy to:		Haynes and Boone, LLP
		2323 Victory Avenue, Suite 700
		Dallas, Texas 75219
		Attn: Paul Amiel

If to Purchaser:		Barrett Gardner Associates, Inc.
		636 River Road
		P. O. Box 6199,
		Fair Haven, New Jersey 07704
		Attn: Ann C. W. Green, Vice President

Any party entitled to receive notices hereunder may change the address for notice specified above by giving the other party ten days’ advance written notice of such change of address.

9. This Agreement may not be amended except by written document signed by Seller and Purchaser, is binding on the parties hereto and their respective successors and permitted assigns subject to Section 5.

10. The prevailing party in any legal proceeding regarding this Agreement shall be entitled to recover from the other party all reasonable attorneys’ fees and costs incurred in connection with such proceeding.

11. Time is of the essence of this Agreement.

12. This Agreement may be executed in multiple counterparts, and all such multiple counterparts will constitute but one and the same instrument.

REMAINDER OF PAGE INTENTIONALLY BLANK.

SIGNATURE PAGE(S) FOLLOWS.

IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of date first above written.

SELLER:

SUPREME INDIANA OPERATIONS, INC.


By:		/s/ Kim Korth

Printed:						Kim Korth

Title:				President and Chief Executive Officer


PURCHASER:

BARRETT GARDNER ASSOCIATES, INC.


By:	/s/ Ann C.W. Green

Printed:					Ann C.W. Green

Title:			Secretary

EXHIBIT A

Option Agreement

PARCEL 1:

PARCEL 2:

THENCE SOUTH 88° 42’ 32” WEST ALONG THE NORTH LINE OF SAID LOT AS SHOWN ON SAID RECORD OF SURVEY A DISTANCE OF 495.56 FEET; THENCE SOUTH 01° 17’ 29” EAST A DISTANCE OF 80.00 FEET; THENCE SOUTH 56° 38’ 33” WEST A DISTANCE OF 161.29 FEET TO THE POINT OF BEGINNING; THENCE SOUTH 0° 12’ 45” WEST A DISTANCE OF 424.18 FEET; THENCE NORTH 88° 43’ 24” EAST A DISTANCE OF 627.22 FEET TO A POINT ON THE EAST LINE OF SAID LOT 2; THENCE SOUTH 00° 16’ 40” WEST ALONG SAID EAST LINE A DISTANCE OF 656.41 FEET TO THE SOUTHEAST CORNER OF SAID LOT 2; THENCE SOUTH

89° 44’ 11” WEST ALONG THE SOUTH LINE OF SAID LOT 2 A DISTANCE OF 698.00 FEET TO A POINT LYING 624.81 FEET FROM THE SOUTHWEST CORNER OF SAID LOT 2, AS MEASURED ALONG SAID SOUTH LINE; THENCE NORTH 01° 11’ 00” WEST A DISTANCE OF 613.83 FEET; THENCE NORTH 88° 43’ 24” EAST A DISTANCE OF 39.84 FEET; THENCE NORTH 00° 26’ 21” WEST A DISTANCE OF 455.44 FEET; THENCE SOUTH 89° 47’ 15” EAST A DISTANCE OF 52.02 FEET TO THE POINT OF BEGINNING AND THE END OF THIS DESCRIPTION.

PARCEL 3:

AN UNDIVIDED 2/3RDS INTEREST IN AND TO THE FOLLOWING DESCRIBED PROPERTY:

EX-31.1 9 a11-9374_1ex31d1.htm EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Kim Korth, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Supreme Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 17, 2011	/s/ Kim Korth
	Kim Korth
	Chief Executive Officer

EX-31.2 10 a11-9374_1ex31d2.htm EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Matthew W. Long, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Supreme Industries, Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 17, 2011	/s/ Matthew W. Long
	Matthew W. Long
	Chief Financial Officer

EX-32.1 11 a11-9374_1ex32d1.htm EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Supreme Industries, Inc. (the “Company”) does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended April 2, 2011 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.

DATE: May 17, 2011	/s/ Kim Korth
	Kim Korth
	Chief Executive Officer

The foregoing certification is being furnished as an exhibit to the Form 10-Q pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, is not being filed as part of the Form 10-Q for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

EX-32.2 12 a11-9374_1ex32d2.htm EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

DATE: May 17, 2011	/s/ Matthew W. Long
	Matthew W. Long
	Chief Financial Officer