AMENDMENT NO. 6 TO CREDIT AGREEMENT
EXHIBIT 10.6
THIS AMENDMENT is entered into effective as of the 23rd day of June, 2005, by and between
XXXXXXX ELECTRONICS, INC., a Minnesota corporation (the “Borrower”) and M&I XXXXXXXX & ILSLEY BANK,
a banking corporation organized and existing under the laws of Wisconsin (“Bank”).
WHEREAS, Borrower and the Bank have entered into that certain Credit and Security Agreement
dated as of June 30, 2003, as amended (the “Credit Agreement”) pursuant to which Bank has agreed to
provide a revolving credit facility and a term loan facility to Borrower on the terms and
conditions contained therein; and
WHEREAS, Borrower and Bank desire to amend certain provisions of the Credit Agreement.
NOW, THEREFORE, Bank and Borrower hereby agree as follows:
1. Certain Definitions. Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Credit Agreement.
2. Borrowing Base. The definition of “Borrowing Base” as set forth in Section 1.1 of
the Credit Agreement is hereby amended by deleting said definition in its entirety and replacing
the same with the following: “Borrowing Base” means, at any time the lesser of
a. the Maximum Line; or
b. the sum of (i) 80% of Eligible Accounts,
plus (ii) the lesser of (a) 50% of Eligible Inventory, or (b)
1,500,000.00.”
3. Borrowing Base Certificate. The form of Borrowing Base Certificate attached as
Exhibit C to the Credit Agreement is hereby deleted in its entirety and replaced with the form
attached hereto as Exhibit A.
4. Eligible Accounts. Subsection (ix) under the definition of “Eligible Accounts” in
Section 1.1 of the Credit Agreement is hereby deleted in its entirety and replaced with the
following:
(ix) That portion of Accounts owed by an account debtor, regardless of whether
otherwise eligible, which exceeds 15%, or, as to Accounts owed by Select Comfort,
40% (or in any event such lower percentage as Lender may designate upon a
determination by Lender that the quality of any Account has been diminished) of all
Accounts owed by all account debtors.
5. Maturity Date. The definition of Maturity Date as set forth in Section 1.1 of the
Credit Agreement is hereby amended by deleting the date “June 28, 2005,” and replacing it with the
date “June 30, 2006.”
6. Miscellaneous. Except as specifically set forth herein, the Credit Agreement shall
remain in full force and effect, with no other modification or waiver. This Amendment shall be
governed by, and construed in accordance with, the laws of the State of Wisconsin. This Amendment
may be executed in two or more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same agreement. The Borrower hereby restates and
reaffirms its obligation under the Credit Agreement to pay on demand all costs and expenses,
including (without limitation) attorneys’ fees, incurred by the Lender in connection with the
Obligations, this Amendment, the Loan Documents, and any other document or agreement related
hereto, and the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 6 to Credit Agreement to
be executed as of the day and year first written above.
M&I
|
Xxxxxxxx & Xxxxxx Bank | Xxxxxxx | Electronics, Inc. | |||
By
|
/s/ Xxxx Xxxxxx | By | /s/ Xxxxxxxx X. Xxxxxxxx | |||
Xxxx Xxxxxx | Xxxxxxxx X. Xxxxxxxx | |||||
Its Vice President | Its Chief Financial Officer | |||||
By
|
/s/ Xxxx X. Xxxxxx, Xx. | |||||
Xxxx X. Xxxxxx | ||||||
Its Senior Vice President |
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Exhibit C to Credit and Security Agreement
Borrowing Base Certificate
Total | ||||
Accounts Receivable Balance (As of_______) |
$___ | |||
Less: Over 90 days past invoice date |
||||
Cross-Age (> 10% past due, contra, 15% concentration, 40%
Concentration on Select Comfort) |
||||
Other ineligible |
||||
Total Ineligible A/R |
$___ | |||
Eligible Accounts Receivable |
$___ | |||
Available A/R at 80% |
$___ | |||
Inventory Value (As of ) |
$___ | |||
Less: WIP Inventory |
||||
Other ineligible |
||||
Total Ineligible Inventory |
$___ | |||
Eligible Inventory |
$___ | |||
Available Inventory at 50% (capped at $1,500,000) |
$___ | |||
Borrowing Base Availability (before Cap)
Capped at $2,500,000 |
$___ | |||
Borrowing Base Availability (after Cap) |
$___ | |||
Less: Letters of Credit |
||||
Less: Outstanding Advances |
||||
Net Availability |
$___ |
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