EXHIBIT 2
FIRST AMENDMENT TO PARTICIPATION AGREEMENT
This FIRST AMENDMENT TO PARTICIPATION AGREEMENT (this
"Amendment"), dated as of September 30, 1998, is by and among
REEBOK INTERNATIONAL, LTD., as lessee and as guarantor (the
"Lessee"), CREDIT SUISSE LEASING 92A, L.P., as lessor (the
"Lessor"), the Persons named on Schedule I to the hereafter
defined Participation Agreement, as lenders (the "Lenders"),
CREDIT SUISSE FIRST BOSTON, as administrative agent
("Administrative Agent"), FLEET NATIONAL BANK, as documentation
agent ("Documentation Agent") and WACHOVIA BANK, N.A., as
syndication agent ("Syndication Agent"). Capitalized terms used
herein and not otherwise defined shall have the meaning assigned
such term in the Participation Agreement (as defined below).
RECITALS
A. The Lessor, the Lessee, the Lenders, the Administrative
Agent, the Documentation Agent, the Syndication Agent and Credit
Suisse First Boston, as arranger, are parties to that certain
Participation Agreement, dated as of March 27, 1998 (as amended,
restated, supplemented or otherwise modified from time to time,
the "Participation Agreement"); and
B. The parties desire to amend the Participation Agreement
on the terms and conditions set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, the parties hereto agree
as follows:
1. Amendment to the Participation Agreement. (a) Section
5.18(a) of the Participation Agreement is hereby amended
effective as of the date hereof by deleting such section in its
entirety and inserting the following in substitution therefor:
"(A) Indebtedness to EBITDA. Permit the ratio of (i) total
Indebtedness of Lessee and its Subsidiaries on a consolidated
basis at any date during a period set forth below to (ii) EBITDA
of Lessee and its Subsidiaries on a consolidated basis for the
period of four consecutive fiscal quarters most recently ended
prior to such date for which Lessee has delivered the financial
statements contemplated by Section 5.10(a) or (b), as the case
may be, to be greater than the ratio set forth below opposite the
"Test Period" during which such date occurs:
Test Period Ratio
_________ _____
12/31/97 - 03/31/98 3.40 to 1.0
04/01/98 - 06/30/98 3.25 to 1.0
07/01/98 - 12/31/99 3.50 to 1.0
01/01/00 - 03/31/00 3.25 to 1.0
04/01/00 - thereafter 3.00 to 1.0"
(b) Appendix I of the Participation Agreement is hereby
amended effective as of the date hereof by deleting the defined
term "EBITDA" in its entirety and inserting the following in
substitution therefor:
"EBITDA" means for any fiscal period, the Consolidated Net
Income or Consolidated Net Loss, as the case may be, for such
fiscal period, after restoring thereto amounts deducted to (a)
extraordinary losses (or deducting therefrom any amounts included
therein on account of extraordinary gains) and special charges,
(b) depreciation and amortization (including write-offs or
write-downs of amortizable and depreciable items), (c) the amount
of interest expense of the Company and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP, for
such period on the aggregate principal amount of their
consolidated Indebtedness, (d) the amount of tax expense of the
Company and its Subsidiaries, determined on a consolidated basis
in accordance with GAAP, for such period and (e) minority
interests; provided that there shall be restored to Consolidated
Net Income or Consolidated Net Loss for the fiscal quarter ending
on or about March 31, 1998 and for each consecutive fiscal
quarter thereafter though the fiscal quarter ending on or about
December 31, 1999 the amount of any non-recurring charges (not to
exceed $10,000,000 for each such fiscal quarter) attributable to
the re-engineering, start-up and consolidation of European
operations of the Company and its Subsidiaries and the
implementation of global enterprise software."
(c) Appendix I of the Participation Agreement is hereby
further amended effective as of the date hereof by deleting the
defined term "Responsible Officer" in its entirety and inserting
the following in substitution therefor:
"Responsible Officer" means (i) the chief executive officer,
president, executive vice president or the chief operating
officer of the Company, or (ii) with respect to financial
matters, the chief financial officer or the treasurer, or (iii)
solely for purposes of signing Advance Requests, the Assistant
Treasurer or the manager of treasury services of the Company."
2. Except as specifically amended above, the Participation
Agreement and each of the Schedules, Exhibits and Appendices
thereto shall each remain in full force and effect, and the
Participation Agreement and each of the Schedules, Exhibits and
Appendices thereto, as amended by this Amendment, are each hereby
ratified and confirmed in all respects. Without limitation of
the foregoing, (a) the Lessee hereby confirms, reaffirms and
restates the representations and warranties of Lessee set forth
in Section 4.1 of the Participation Agreement, provided that each
reference to the Participation Agreement therein shall be deemed
to be a reference to the Participation Agreement as herein
amended, and (b) the Lessee further represents and warrants that
non Default or Event of Default has occurred and is continuing.
3. This Amendment shall become effective as of September
30, 1998 upon the receipt by the Administrative Agent of a duly
executed counterpart hereto from each of the Lessee, the Lessor
and each of the Participants. Upon the effectiveness of this
Amendment, each reference in (i) the Participation Agreement to
"this Agreement," "hereunder," "hereof," or words of similar
import and (ii) any other Operative Agreement to "the
Participation Agreement" shall, in each case, mean and be a
reference to the Participation Agreement as amended hereby.
4. Section hearings in this Amendment are included herein
for convenience of reference only and shall not constitute a part
of this amendment for any other purpose.
5. This Amendment may be executed in any number of
separate counterparts, each of which shall collectively and
separately constitute one agreement.
6. GOVERNING LAW. THIS AGREEMENT HAS BEEN DELIVERED IN
ACCORDANCE WITH, AND SHALL IN ALL RESPECT BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES OF SUCH STATE,
EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
IN WITNESS WHEREOF, each party hereto has caused this
Amendment to be duly executed and delivered by its proper and
duly authorized officer as of the date first written above.
REEBOK INTERNATIONAL LTD., as Lessee,
Guarantor and Construction Agent
By: /s/Xxx X. Xxxxxxx
CREDIT SUISSE FIRST BOSTON, as Administrative
Agent and as a Lender
By: /s/
By: /s/
CREDIT SUISSE LEASING 92A, L.P., as Lessor
By: /s/
By: /s/
FLEET NATIONAL BANK, as Documentation Agent
and as a Lender
By: /s/
WACHOVIA BANK, N.A., as Syndication Agent and
as a Lender
By: /s/
ABN AMRO BANK N.V., as a Lender
By: /s/
By: /s/
BANCA COMMERCIALE ITALIANA, as a Lender
By: /s/
By: /s/
BANQUE NATIONAL DE PARIS, as a Lender
By: /s/
By: /s/
CITICORP USA, as a Lender
By: /s/
By: /s/
