exv10w6



 







EXHIBIT 10.6




AMENDMENT NO. 6

TO

CREDIT AGREEMENT




     THIS AMENDMENT is entered into effective as of the 23rd day of June, 2005, by and between
WINLAND ELECTRONICS, INC., a Minnesota corporation (the “Borrower”) and M&I MARSHALL & 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

	 	Marshall & Ilsley Bank
	 	Winland
	 	Electronics, Inc.
	 
	 	 	 	 	 	 
	By

	 	/s/ Doug Pudvah
	 	By
	 	/s/ Jennifer A. Thompson
	 

	 	     Doug Pudvah
	 	 	 	     Jennifer A. Thompson
	 

	 	     Its Vice President
	 	 	 	     Its Chief Financial Officer
	 
	 	 	 	 	 	 
	By

	 	/s/ John W. Howard, Jr.	 	 	 	 
	 

	 	     John W. Howard	 	 	 	 
	 

	 	     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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