LEVI STRAUSS & CO
10-Q, EX-10.4, 2000-09-29
APPAREL & OTHER FINISHD PRODS OF FABRICS & SIMILAR MATL
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LEVI STRAUSS & CO.

                                 FIRST AMENDMENT
            TO 1997 SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND
                                 LIMITED WAIVER


     This FIRST AMENDMENT TO 1997 SECOND AMENDED AND RESTATED  CREDIT  AGREEMENT
AND LIMITED WAIVER (this  "AMENDMENT")  is dated as of July 31, 2000 and entered
into by and among Levi Strauss & Co., a Delaware  corporation  ("COMPANY");  the
financial  institutions party hereto ("BANKS");  Bank of America,  N.A. as Agent
for Banks  ("AGENT");  and Bank of America,  N.A. as Collateral  Agent for Banks
("COLLATERAL  AGENT"),  and is made with  reference  to that certain 1997 Second
Amended and Restated Credit  Agreement dated as of January 31, 2000 (the "CREDIT
AGREEMENT"),  by and among Company;  Banks; the several  financial  institutions
party thereto as Senior  Managing  Agents;  the several  financial  institutions
party  thereto as Managing  Agents;  the several  financial  institutions  party
thereto as Co-Agents; Agent; and Collateral Agent. Capitalized terms used herein
without  definition  shall  have the same  meanings  herein  as set forth in the
Credit Agreement.

                                    RECITALS

     WHEREAS,  Company  and Banks  desire to amend the Credit  Agreement  as set
forth below; and

     WHEREAS,  Company has requested  Banks to waive  certain  provisions of the
Credit Agreement as set forth below.

     NOW,  THEREFORE,  in  consideration  of the  premises  and the  agreements,
provisions and covenants herein contained, the parties hereto agree as follows:

     SECTION 1.        AMENDMENTS TO THE CREDIT AGREEMENT

     1.1      AMENDMENTS TO ARTICLE VI:  AFFIRMATIVE COVENANTS

     A.       Section 6.1(a)(vii) of the Credit Agreement is hereby amended to
read in its entirety as follows:

     "(A) As soon as practicable and in any event no later than 10  Business
Days after the end of each fiscal  month,  or more  frequently  if  requested by
Agent,  a  report  setting  forth  (w) the  aggregate  Termination  Value of all
Derivative/FX  Contracts  to  which  Company  or  FinServ  is a  party,  (x) the
aggregate  Termination  Value  for  each  Derivative/FX  Lender  of  all  Lender
Derivative/FX  Contracts  to which  such  Derivative/FX  Lender  and  Company or
FinServ is a party, (y) all Derivative/FX  Contracts to which Company or FinServ
is a party, and (z) all other outstanding  unsecured  Indebtedness of Company or
any of its  Subsidiaries  (including  any  letters of

                                       1

<PAGE>

credit (other than Lender  Letters of Credit)  issued for the benefit of Company
and its  Subsidiaries)  incurred in  accordance  with  Section  7.1(r),  and (B)
promptly upon  request,  any other  information  concerning  such  Derivative/FX
Contracts reasonably requested by Agent."

     B.       Section  6.11(c) of the Credit  Agreement  is hereby  amended by
deleting the  phrase  "the date that is 60 days  after the  Closing  Date"
contained therein and substituting the phrase "August 31, 2000" therefor.

     1.2      AMENDMENTS TO ARTICLE VII:  NEGATIVE COVENANTS

     A.       Section 7.1 of the Credit  Agreement  is hereby  amended by (i)
deleting the word "and" at the end of Section 7.1(s) thereof,  (ii)  renumbering
Section  7.1(t)  thereof as Section 7.1(u) and (iii) adding a new Section 7.1(t)
thereto as follows:

              "Indebtedness   between   Company   and  any  of  its Subsidiaries
or between any of Company's  Subsidiaries arising from purchases of inventory or
raw materials in the ordinary course of business; and"

     B.       Section 7.3(m) of the Credit Agreement is hereby amended to read
in its entirety as follows:

              "Dispositions  of accounts receivable  to collection agencies  or,
in the case of  accounts  receivable  of  Foreign  Subsidiaries,  to  collection
agencies or other third parties,  provided the aggregate face amount of all such
accounts receivable does not exceed $2,000,000."

     SECTION 2.        WAIVERS

     2.1      WAIVER OF SECTION 6.1(A)(VII)

              The undersigned Banks,  constituting  Majority Banks under the
Credit  Agreement,  hereby  waive  compliance  with the  provisions  of  Section
6.1(a)(vii) of the Credit Agreement to the extent, and only to the extent,  that
such provisions require Company to deliver the information  described in Section
6.1(a)(vii) from the period  commencing on the Closing Date to and including the
date of this Amendment.

     2.2      WAIVER OF SECTION 6.11(A)(II)

              The undersigned Banks,  constituting  Majority Banks under the
Credit  Agreement,  hereby  waive  compliance  with the  provisions  of  Section
6.11(a)(ii)  of the Credit  Agreement  to the  extent,  and only to the  extent,
necessary  to permit  the sale of the  Property  located at 501  Conestoga  Way,
Henderson,  NV to be consummated on or prior to August 31, 2000 without  causing
Company to be required to deliver the documents described in Section 6.11(a)(ii)
promptly  following  the date that is 90 days after the Closing  Date;  PROVIDED
that, if the sale of such Property is not  consummated on or prior to August 31,
2000, Company shall deliver the documents described in Section 6.11(a)(ii) on or
prior to September 30, 2000.

                                       2

<PAGE>

     2.3      WAIVER OF SECTION 6.11(A)(III)

              The undersigned Banks,  constituting  Majority Banks under the
Credit  Agreement,  hereby  waive  compliance  with the  provisions  of  Section
6.11(a)(iii)  of the Credit  Agreement  to the  extent,  and only to the extent,
necessary  to  permit  the sale of each of the  Properties  located  at (i) 2101
Cypress Avenue, El Paso, TX, (ii) 1800 Stirman Avenue,  Fayetteville,  AR, (iii)
7950 U.S. Highway 25, Florence, KY and (iv) 1001 East Broadway, Morrilton, AR to
be  consummated  on or prior to August 31, 2000  without  causing  Company to be
required to deliver the documents described in Section 6.11(a)(iii) (a) promptly
following the date that is 120 days after the Closing Date for any such Property
with  respect to which no contract of sale has been  entered  into prior to that
date or (b) promptly  following  the date that is 60 days after the execution of
any contract of sale for any such Property if the sale has not been  consummated
on or prior to that date; PROVIDED that, if the sale of any such Property is not
consummated on or prior to August 31, 2000,  Company shall deliver the documents
described in Section 6.11(a)(iii) on or prior to September 30, 2000 with respect
to such Property.

     2.4      LIMITATION OF WAIVER

              Without  limiting the  generality of the provisions of Section
10.1 of the  Credit  Agreement,  the waiver  set forth  herein  shall be limited
precisely  as written and relates  solely to a waiver of  compliance  by Company
with the provisions of Sections 6.1(a)(vii), 6.11(a)(ii) and 6.11(a)(iii) of the
Credit Agreement in the manner and to the extent described above, and nothing in
this  Amendment  shall be deemed to (a)  constitute  a waiver of  compliance  by
Company with respect to (i) Section 6.1(a)(vii),  6.11(a)(ii) or 6.11(a)(iii) of
the Credit Agreement in any other instance or (ii) any other term,  provision or
condition of the Credit Agreement or any other instrument or agreement  referred
to therein or (b) prejudice any right or remedy that Agent,  Collateral Agent or
any Bank may now have or may have in the future under or in connection  with the
Credit Agreement or any other instrument or agreement referred to therein.

     SECTION 3.        COMPANY'S REPRESENTATIONS AND WARRANTIES

              In order to induce Banks to enter into this  Amendment  and to
amend the Credit Agreement in the manner provided herein, Company represents and
warrants  to each Bank that the  following  statements  are  true,  correct  and
complete:

     A.       CORPORATE POWER AND AUTHORITY. Company has all requisite corporate
power  and  authority  to  enter  into  this  Amendment  and to  carry  out  the
transactions  contemplated  by, and perform its  obligations  under,  the Credit
Agreement as amended by this Amendment (the "AMENDED AGREEMENT").

     B.       AUTHORIZATION OF AGREEMENTS.  The execution and delivery of this
Amendment and the performance of the Amended Agreement have been duly authorized
by all necessary corporate action on the part of Company.

     C.       NO CONFLICT.  The execution and delivery by Company of this Amend-
ment and the performance by Company of the Amended Agreement do not and will not
(i) violate any of its Organization  Documents or any order,  judgment or decree
of any court or other Governmental  Authority binding on Company,  (ii) conflict
with,  result  in a breach  of,  constitute

                                       3

<PAGE>

a default under, or require the  termination  of, any Contractual  Obligation of
Company, except where such conflicts,  breaches,  defaults and terminations,  in
the  aggregate,  would not have a Material  Adverse  Effect,  (iii) result in or
require the creation or imposition of any Lien of any nature whatsoever upon any
of the  properties or assets of Company  (other than pursuant to the  Collateral
Documents)  or (iv)  require any  approval of  stockholders  or any  approval or
consent of any Person under any  Contractual  Obligation of Company except where
the failure to obtain such  approvals and consents  would not, in the aggregate,
have a Material Adverse Effect.

     D.       GOVERNMENTAL CONSENTS.  The execution and delivery by Company of
this Amendment and the  performance  by Company of the Amended  Agreement do not
and will not require any  registration  with,  consent or approval of, or notice
to, or other action to, with or by, any Governmental Authority.

     E.       BINDING OBLIGATION.  This Amendment and the Amended Agreement have
been duly  executed  and  delivered  by Company  and are the  legally  valid and
binding  obligations of Company,  enforceable against Company in accordance with
their  respective  terms,  except as  enforcement  may be limited by bankruptcy,
insolvency,  reorganization,  moratorium or similar laws relating to or limiting
creditors'   rights   generally   or  by   equitable   principles   relating  to
enforceability,  whether  enforcement  is  sought in a  proceeding  at law or in
equity.

     SECTION 4.        MISCELLANEOUS

     A.       REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.

     (i)      On and after the date hereof, each reference in the Credit Agree-
ment to  "this  Agreement",  "hereunder",  "hereof",  "herein"  or words of like
import referring to the Credit  Agreement,  and each reference in the other Loan
Documents to the "Credit  Agreement",  "thereunder",  "thereof" or words of like
import  referring to the Credit  Agreement  shall mean and be a reference to the
Amended Agreement.

     (ii)     Except as specifically amended by this Amendment,  the Credit
Agreement and the other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.

     (iii)    The execution,  delivery and  performance of this Amendment  shall
not, except as expressly  provided herein,  constitute a waiver of any provision
of, or operate as a waiver of any  right,  power or remedy of Agent,  Collateral
Agent  or any  Bank  under,  the  Credit  Agreement  or any  of the  other  Loan
Documents.

     B.       GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN  ACCORDANCE  WITH,  THE  INTERNAL  LAWS OF THE  STATE OF NEW YORK  (INCLUDING
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES.

     C.       COUNTERPARTS;  EFFECTIVENESS. This Amendment may be executed in
any  number  of  counterparts  and  by  different  parties  hereto  in  separate
counterparts, each of which

4

<PAGE>

when so  executed  and  delivered  shall be  deemed  an  original,  but all such
counterparts  together  shall  constitute  but  one  and  the  same  instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single  counterpart so that all signature pages are physically  attached to
the same document. This Amendment shall become effective upon the execution of a
counterpart  hereof by Company  and  Majority  Banks and  receipt by Company and
Agent of written or telephonic  notification of such execution and authorization
of delivery thereof,  except for Section 2.1 hereof which shall become effective
as of January 31, 2000,  Section 2.2 hereof  which shall become  effective as of
April 30, 2000 and Section 2.3 hereof which shall become effective as of May 30,
2000, each upon the happening of the same events.

                  [Remainder of page intentionally left blank]



                                       5

<PAGE>





         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly  executed  and  delivered  by  their  respective  officers  thereunto  duly
authorized as of the date first written above.



                                    LEVI STRAUSS & CO.


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    ABN AMRO BANK N.V.


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    AIMCO CDO SERIES 2000-A


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

<PAGE>



                                    ARCHIMEDES FUNDING III LTD.


                                    By:___________________________
                                    Name:
                                    Title:



                                    ARCHIMEDES FUNDING LLC


                                    By:___________________________
                                    Name:
                                    Title:



                                    BANCA COMMERCIALE ITALIANA LOS ANGELES
                                    FOREIGN BRANCH


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    BANCA MONTE DEI PASCHI DI SIENA SPA


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

<PAGE>



                                    BANK OF AMERICA, N.A., as a Bank


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    THE BANK OF NOVA SCOTIA


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    BANK ONE, N.A.


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    BANKERS TRUST COMPANY


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

<PAGE>



                                    BANQUE NATIONALE DE PARIS


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    CAPTIVA III FINANCE LTD.


                                    By:____________________________
                                    Name:
                                    Title:



                                    CAPTIVA IV FINANCE LTD.


                                    By:_____________________________
                                    Name:
                                    Title:



                                    CARIPLO - CASSA DI RISPARMIO DELLE PROVINCIE
                                    LOMBARDE SPA


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

<PAGE>



                                    CIBC INC.


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    CITICORP U.S.A. INCORPORATED


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    COMMERZBANK AG
                                    NEW YORK AND GRAND CAYMAN BRANCHES


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    CYPRESS MANAGEMENT PARTNERSHIP


                                    By:_____________________________
                                    Name:
                                    Title:

<PAGE>



                                    DEUTSCHE BANK AKTIENGESELLSCHAFT,
                                    NEW YORK BRANCH AND/OR CAYMAN ISLANDS
                                    BRANCH


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    FERNWOOD ASSOCIATES L.P.


                                    By:____________________________
                                    Name:
                                    Title:



                                    FIRST HAWAIIAN BANK


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    BANKBOSTON N.A.


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

<PAGE>


                                    FRANKLIN FLOATING RATE TRUST


                                    By:____________________________
                                    Name:
                                    Title:



                                    GALAXY CLO 1999-1, LTD.


                                    By:____________________________
                                    Name:
                                    Title:



                                    GOLDMAN SACHS & COMPANY


                                    By:___________________________
                                    Name:
                                    Title:



                                    THE INDUSTRIAL BANK OF JAPAN, LIMITED


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

<PAGE>



                                    INDOSUEZ CAPITAL FUNDING III LIMITED,
                                    BY INDOSUEZ CAPITAL AS PORTFOLIO ADVISOR


                                    By:_____________________________
                                    Name:
                                    Title:



                                    INDOSUEZ CAPITAL FUNDING IV L.P.,
                                    BY INDOSUEZ CAPITAL AS PORTFOLIO ADVISOR


                                    By:_____________________________
                                    Name:
                                    Title:



                                    INDOSUEZ CAPITAL FUNDING VI LIMITED


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    MELLON BANK, N.A.


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

<PAGE>



                                    MORGAN GUARANTY TRUST COMPANY OF NEW YORK


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    COOPERATIEVE CENTRALE RAIFFEISEN-
                                    BOERENLEENBANK B.A., "RABOBANK NEDERLAND",
                                    NEW YORK BRANCH


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    SALOMON BROTHERS HOLDING COMPANY INC.


                                    By:______________________________
                                    Name:
                                    Title:



                                    THE SANWA BANK, LIMITED


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

<PAGE>



                                    SOCIETE GENERALE NEW YORK BRANCH


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    THE SUMITOMO BANK, LIMITED


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    THE TOKAI BANK LIMITED


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    UBS AG, STAMFORD BRANCH


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

<PAGE>



                                    UNICREDITO ITALIANO S.P.A.


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    WACHOVIA BANK N.A.


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    BANK OF AMERICA, N.A., as Agent


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:



                                    BANK OF AMERICA, N.A., as Collateral Agent


                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

<PAGE>


ACKNOWLEDGED:


BATTERY STREET ENTERPRISES, INC.

By:
   ---------------------------------------------------
Title:
      ------------------------------------------------

LEVI STRAUSS FINANCIAL CENTER
CORPORATION

By:
   ---------------------------------------------------
Title:
      ------------------------------------------------

LEVI STRAUSS FUNDING, LLC

By:
   ---------------------------------------------------
Title:
      ------------------------------------------------

LEVI STRAUSS GLOBAL FULFILLMENT
SERVICES, INC.

By:
   ---------------------------------------------------
Title:
      ------------------------------------------------

LEVI STRAUSS GLOBAL OPERATIONS, INC.

By:
   ---------------------------------------------------
Title:
      ------------------------------------------------

LEVI STRAUSS INTERNATIONAL

By:
   ---------------------------------------------------
Title:
      ------------------------------------------------

LEVI STRAUSS LATIN AMERICA, INC.

By:
   ---------------------------------------------------
Title:
      ------------------------------------------------

LEVI'S ONLY STORES, INC.

By:
   ---------------------------------------------------
Title:
      ------------------------------------------------

NF INDUSTRIES, INC.

By:
   ---------------------------------------------------
Title:
      ------------------------------------------------



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