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EXHIBIT 10.50
FIFTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT
(RECEIVABLES AND INVENTORY); WAIVER
This Fifth Amendment to Second Amended and Restated Credit Agreement
(Receivables and Inventory); Waiver (this "Amendment") is entered into as of
________________, 1997, among Bank of America National Trust and Savings
Association ("Bank") and GT Bicycles California, Inc. ("GTBC"), Riteway Products
East, Inc. ("East"), Riteway Products North Central, Inc. ("North Central"),
Rite-Way Distributors Central, Inc. ("Central"), Rite-Way Distributors, Inc.
("Distributors"), GT Bicycles, Inc. ("GT"). XXXX, Xxxx, Xxxxx Xxxxxxx, Xxxxxxx,
and Distributors are sometimes hereinafter referred to collectively as
"Borrowers" and individually as a "Borrower."
RECITALS
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A. Bank and Borrowers are parties to that certain Second Amended and
Restated Credit Agreement (Receivables and Inventory) dated as of August 12,
1996, as modified by amendments dated September 15, 1996, October 15, 1996,
October 31, 1996, and February 13, 1997 (as amended, the "Credit Agreement").
B. The parties hereto now desire to amend the Credit Agreement on the
terms and conditions set forth below.
AGREEMENT
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NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. Capitalized terms used but not defined in this
Amendment shall have the meanings ascribed to them in the Credit Agreement.
2. Amendments. The Credit Agreement shall be amended as follows:
(a) Paragraph 8.4 is amended in full to read as follows:
"8.4 EBITDA; Fixed Charge Coverage Ratio. Cause GT to achieve
on a consolidated basis (a) for the fiscal quarter ending June 30, 1997
only, net income from operations (determined without giving effect to
extraordinary or non-recurring gains), plus, to the
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extent deducted in calculating such net income, the sum of (i) income
tax expense, plus (ii) interest expense, plus (iii) depreciation
expense, plus (iv) amortization expense at least equal to Four Million
Eight Hundred Thousand Dollars ($4,8000,000) and (b) for each fiscal
quarter thereafter, a Fixed Charge Coverage Ratio of at least 1.20 to
1.00. This ratio shall be calculated quarterly using the results of the
most recently concluded quarterly accounting period and each of the
three (3) immediately preceding quarterly accounting periods;"
(b) Paragraph 8.6(g) is amended in full to read as follows:
"(g) additional indebtedness for the acquisition of fixed or
capital assets, including capital lease obligations, which does not
exceed an aggregate principal amount for Borrowers and Guarantors of
Seven Million Dollars ($7,000,000) in GT's fiscal year ending 1997 and
Three Million Dollars ($3,000,000) in any fiscal year of GT
thereafter;"
(c) Except as hereby amended, all of the terms and conditions of
the Credit Agreement shall remain in full force and effect.
3. Waiver. Bank hereby waives Borrowers' noncompliance with Paragraph
8.4 of the Credit Agreement for the fiscal quarter ended March 31, 1997. This
waiver is specific in time and in intent and does not constitute, nor should it
be construed as, a waiver of any other right, power or privilege under the
Credit Agreement, or under any agreement, or instrument mentioned in the Credit
Agreement, or as a waiver of any other default of the same or of any other term
or provision of the Credit Agreement.
4. Representations and Warranties. Borrowers represent and warrant to
Bank that: (i) after giving effect to the waiver provided in Paragraph 3 of this
Amendment, no Event of Default under Credit Agreement and no event which, with
notice or lapse of time or both, would become an Event of Default has occurred
and is continuing; (ii) after giving effect to the waiver provided in Paragraph
3 of this Amendment, Borrowers' representations and warranties made under the
Credit Agreement are true as of the date hereof; (iii) the making and
performance by Borrowers of this Amendment have been duly authorized by all
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necessary corporate action; (iv) no consent, approval, authorization, permit, or
license is required in connection with the making or performance of this
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
BANK OF AMERICA NATIONAL GT BICYCLES CALIFORNIA, INC.
TRUST AND SAVINGS ASSOCIATION RITEWAY PRODUCTS EAST, INC.
RITEWAY PRODUCTS NORTH
CENTRAL, INC.
By: RITE-WAY DISTRIBUTORS
---------------------------- CENTRAL, INC.
X.X. Xxxxxx RITE-WAY DISTRIBUTORS, INC.
Title: Vice President GT BICYCLES, INC.
By:
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Xxxxxxx Xxxxxx
Title: President
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