Amendment No. 1 To The Credit Agreement

Exhibit 10.58(a)


AMENDMENT NO. 1 TO THE

CREDIT AGREEMENT


AMENDMENT NO. 1 TO THE CREDIT AGREEMENT dated as of August 30, 2004 (this " Amendment" ) among LEVI STRAUSS & CO., a Delaware corporation (the " Borrower" ), the banks, financial institutions and other institutional lenders party to the Credit Agreement referred to below (collectively, the " Lenders" ) and BANK OF AMERICA, N.A., as administrative agent (the " Administrative Agent" ) for the Lenders.


PRELIMINARY STATEMENTS :

(1) The Borrower, the Lenders and the Administrative Agent have entered into a Credit Agreement dated as of September 29, 2003 (the " Credit Agreement" ). Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement.

(2) The Borrower has proposed to sell its Dockersae and Slatesae business worldwide (including, without limitation, all or any portion of the Dockersae and Slatesae receivables, inventory and intangible assets (including Dockersae and Slatesae IP Rights)) (the " Transaction" ) and has requested that the Required Lenders agree to amend certain covenants contained in Article 7 of the Credit Agreement to permit the Transaction and to amend certain other provisions of the Credit Agreement, including to clarify Section 2.06(b), in each case as provided herein.


(3) The Required Lenders are, on the terms and conditions stated below, willing to grant the request of the Borrower and the Borrower and the Required Lenders have agreed to amend the Credit Agreement as hereinafter set forth.


Section 1. Amendments to Credit Agreement. The Credit Agreement is, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 2 of this Amendment, hereby amended as follows:

(a) Section 1.01 of the Credit Agreement is amended by:

(i) Adding to the definition of " Class" , immediately at the end thereof, " and, in the case of Loans outstanding on and after the Amendment No. 1 Effective Date, whether such Loans are Tranche A-l Loans, Tranche A-2 Loans, Tranche B-l Loans or Tranche B-2 Loans."

(ii) Deleting the definition of " Consolidated Fixed Charge Coverage Ratio" .

(iii) Replacing the definition of " Maturity Date" in its entirety with the following definition:


" Maturity Date" means (i) with respect to the Tranche A-l Loans and Tranche B-l Loans from and after the date (if any) on which the Dockersae Transaction is consummated, September 29, 2009, and (ii) with respect to the Tranche A-l Loans and Tranche B-l Loans so long as the Dockersae Transaction has not been consummated and with respect to the Tranche A-2 Loans and Tranche B-2 Loans, September 29, 2009, provided that, in the case of this clause (ii), (A) if the 2006 Notes Refinancing Condition has not been met in accordance with the provisions set forth in Section 2.06(b), the Maturity Date will be August 1, 2006 and (B) if the 2008 Notes Refinancing Condition has not been met in accordance with the provisions set forth in Section 2.06(b), the Maturity Date will be October 15, 2007.

(iv) Replacing the definition of " Tranche A Loans" in its entirety with the following definition:


" Tranche A Loans" means the Tranche A-l Loans and the Tranche A-2 Loans.

(v) Replacing the definition of " Tranche B Loans" in its entirety with the following definition:

" Tranche B Loans" means the Tranche B-l Loans and the Tranche B-2 Loans.


(vi) Adding the following definitions, which shall be inserted in correct alphabetical order:

" Amendment No. 1" means Amendment No. 1 dated as of August 30, 2004 to this Agreement.

" Amendment No. 1 Effective Date" means the effective date of Amendment No. 1.


" Applicable Prepayment Premium" means, with respect to any prepayment of Tranche A-l Loans or Tranche B-l Loans, a prepayment premium equal to:


(a) so long as the Dockersae Transaction has not been consummated, (i) if such prepayment is made during the period from and including the Amendment No. 1 Effective Date to and including March 31, 2006, zero (it


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being understood that any prepayment during such period shall be subject to payment of the applicable Make- Whole Premium), (ii) if such prepayment is made during the period from and including April 1, 2006 to and including September 30, 2006, an amount equal to 3% of the aggregate principal amount of such Loans prepaid, (iii) if such prepayment is made during the period from and including October 1, 2006 to and including September 30, 2007, an amount equal to 2% of the aggregate principal amount of such Loans prepaid, and (iv) if such prepayment is made on or after October 1, 2007, zero; and


(b) from and after the date (if any) on which the Dockersae Transaction is consummated, (i) if such prepayment is made during the period from and including the Amendment No. 1 Effective Date to and including March 31, 2007, zero (it being understood that any prepayment during such period shall be subject to payment of the applicable Make-Whole Premium), (ii) if such prepayment is made during the period from and including April 1, 2007 to and including June 30, 2007, an amount equal to 8% of the aggregate principal amount of such Loans prepaid, (iii) if such prepayment is made during the period from and including July 1, 2007 to and including September 30, 2007, an amount equal to 7% of the aggregate principal amount of such Loans prepaid, (iv) if such prepayment is made during the period from and including October 1, 2007 to and including March 31, 2008, an amount equal to 6% of the aggregate principal amount of such Loans prepaid, (v) if such prepayment is made during the period from and including April 1, 2008 to and including September 30, 2008, an amount equal to 2% of the aggregate principal amount of such Loans prepaid, and (vi) if such prepayment is made on or after October 1, 2008, zero.

" Citigroup" means Citigroup Global Markets Inc.


" Comparable Treasury Issue" means, with respect to any Tranche B Loans to be prepaid, the United States Treasury security selected by the Administrative Agent as having a maturity date comparable to the Make-Whole Termination Date then applicable to such Tranche B Loans and that would be utilized, at the time of selection and in accordance with customary financial practice, in evaluating yields on new issues of corporate debt with a maturity date comparable to such Make-Whole Termination Date.


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" Consolidated Senior Secured Leverage Ratio" means, as of any date of determination, the ratio of (a) the sum, without duplication, of (i) all Indebtedness of the Borrower and its Subsidiaries on a consolidated basis that would (or would be required to) appear as liabilities on a consolidated balance sheet (" Balance Sheet Indebtedness" ) of the Borrower and its Subsidiaries in accordance with GAAP as of such date and (ii) any Guarantees by the Borrower or any of its Subsidiaries of any Balance Sheet Indebtedness of another Person, in the case of each of clause (i) and (ii), that is secured by a Lien on any property, assets or revenues of the Borrower or any of its Subsidiaries to (b) Pro Forma Consolidated EBITDA for the four Fiscal Quarters most recently ended for which the Borrower is required to have delivered financial statements pursuant to Section 6.01 (a) or (b).

" Dockersae Proceeds" means cash payments (including any cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) received by the Borrower or any of its Subsidiaries from the Dockersae Transaction, less (a) transaction costs, fees and expenses payable in connection with the Dockersae Transaction (including any fees paid in connection with any amendments to financing arrangements to give effect thereto); and (b) income taxes reasonably estimated to be paid in cash as a result of any gain recognized in connection with the Dockersae Transaction.

" Dockersae Transaction" means the Disposition by the Borrower or any of its Subsidiaries in one or more transactions of all or any part of the Dockersae and Slatesae business worldwide (including, without limitation, the Disposition of all Dockersae and Slatesae receivables, inventory and intangible assets (including Dockersae and Slatesae IP Rights) and the entry into and performance of a transition services agreement or similar agreement).


" Make-Whole Period" means, on any date,


(a) in the case of the Tranche A-l Loans and the Tranche B-l Loans, (i) so long as the Dockersae Transaction has not been consummated, the period from and including the Amendment No. 1 Effective Date to and


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including (A) if the 2006 Notes Refinancing Condition has not been met in accordance with the provisions in Section 2.06(b) on or prior to March 31, 2006, March 31, 2006, and (B) if the 2006 Notes Refinancing Condition has been met in accordance with the provisions in Section 2.06(b) on or prior to March 31, 2006, March 31, 2007 and (ii) from and after the date (if any) on which the Dockersae Transaction is consummated, the period from and including the Amendment No. 1 Effective Date to and including March 31, 2007; and

(b) in the case of the Tranche A-2 Loans and the Tranche B-2 Loans, (i) if at any time on or prior to March 31, 2006 the 2006 Notes Refinancing Condition applicable to the Tranche A-2 Loans and the Tranche B-2 Loans has not been met in accordance with Section 2.06(b), the period from and including the Amendment No. 1 Effective Date to and including March 31, 2006, (ii) if at any time after March 31, 2006 the 2006 Notes Refinancing Condition applicable to the Tranche A-2 Loans and the Tranche B-2 Loans has not been met in accordance with Section 2.06(b), the period from and including May 1, 2006 to but excluding the Maturity Date with respect to the Tranche A-2 Loans and Tranche B-2 Loans and (iii) if at any time the 2006 Notes Refinancing Condition applicable to the Tranche A-2 Loans and the Tranche B-2 Loans has been met in accordance with Section 2.06(b), the period from and including the date the 2006 Notes Refinancing Condition applicable to the Tranche A-2 Loans and the Tranche B-2 Loans is met in accordance with Section 2.06(b) to and including March 31, 2007.

For purposes of this definition, the 2006 Notes Refinancing Condition will be deemed to have been met only upon receipt by the Administrative Agent of written notice from the Borrower of its effectiveness.

" Make-Whole Termination Date" means, with respect to any Loans on any date, the last day of the Make-Whole Period applicable to such Loans on such date.


" Make-Whole Premium" means, with respect to any Loan on any date of prepayment,


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(x) in the case of a Tranche A Loan, the present value, as determined by the Borrower and certified by a Responsible Officer of the Borrower to the Administrative Agent, of (A) all required interest payments due on such Tranche A Loan from the date of prepayment through and including the Make-Whole Termination Date applicable to such Tranche A Loan on the date of prepayment (excluding accrued interest) (assuming that the interest rate applicable to all such interest payments is the sum of the Eurodollar Rate applicable to Tranche A Loans having an Interest Period of three months commencing on the third Business Day prior to the date of such prepayment (the " Three-Month Eurodollar Rate" ) plus 6.875%) plus (B) the Applicable Prepayment Premium (if any) that would be due if such prepayment were made on the day after such Make-Whole Termination Date, in each case discounted to the date of prepayment on a quarterly basis (assuming a 360-day year and actual days elapsed) at a rate equal to the sum of the Three-Month Eurodollar Rate plus 0.50%, and


(y) in the case of a Tranche B Loan, the present value, as determined by the Borrower and certified by a Responsible Officer of the Borrower to the Administrative Agent, of (A) all required interest payments due on such Tranche B Loan from the date of prepayment through and including the Make-Whole Termination Date applicable to such Tranche B Loan on the date of prepayment (excluding accrued interest), plus (B) the Applicable Prepayment Premium (if any) that would be due if such prepayment were made on the day after such Make-Whole Termination Date, in each case discounted to the date of prepayment on a quarterly basis (assuming a 30-day month and actual days elapsed) at a rate equal to the sum of the Treasury Rate on the date of prepayment plus 0.50%.

" Net Dockersae Proceeds" means Dockersae Proceeds less an amount of cash as determined by the Borrower in its discretion not in excess of $100,000,000.


" Net Indebtedness" as of any date means the aggregate principal amount of Third Party Indebtedness on such date less the amount of cash and Cash Equivalents of the Borrower and its Subsidiaries on such date.

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" Pro Forma Consolidated EBITDA" means, for any period (a " measurement period" ), for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to (a) Consolidated Net Income for such period, plus (b) without duplication, the sum of the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period, (ii) the provision for federal, state, local and foreign income taxes for such period, (iii) the amount of depreciation and amortization expense for such period, (iv) all nonoperating expense (excluding nonoperating expense, if any, constituting Restructuring Charges (as defined below) of the Borrower and its Subsidiaries for such period minus all nonoperating income (excluding nonoperating income, if any, constituting reversals of Restructuring Charges) of the Borrower and its Subsidiaries for such period, (v) all restructuring and restructuring related charges incurred by the Borrower and its Subsidiaries during such period (" Restructuring Charges" ) minus the aggregate amount of cash payments made during such period by the Borrower and its Subsidiaries in respect of Restructuring Charges (other than (x) cash payments made prior to May 31, 2004 in respect of Restructuring Charges and (y) an aggregate of up to $100,000,000 of Restructuring Charges incurred on or after May 31, 2004 to the extent paid in cash and which the Borrower has notified the Administrative Agent that it will exclude for purposes of Section 7.18 in any Fiscal Quarter) and (vi) any loss and all expenses relating to the Dockersae Transaction for such period, minus (c) without duplication, any gain relating to the Dockersae Transaction for such period to the extent included in calculating such Consolidated Net Income; provided that (i) from and after the consummation of the Dockersae Transaction, Pro Forma Consolidated EBITDA for any Fiscal Quarter included in such measurement period and ending prior to or immediately after such consummation shall be deemed to be 75% of Pro Forma Consolidated EBITDA for purposes of any calculation of Pro Forma Consolidated EBITDA and (ii) for purposes of Section 7.19(d), if the Borrower shall have consummated a Merger or an Asset Sale (in each case as defined in Section 7.19) during any measurement period, Pro Forma Consolidated EBITDA shall be determined on a pro forma basis as if such Merger or Asset Sale had occurred on the first day of such measurement period.


" Pro Forma Fixed Charges Coverage Ratio" means the " Consolidated Fixed Charges Coverage Ratio" as defined in that certain U.S. Dollar Indenture dated as of January 18, 2001 between the Borrower and Wilmington Trust Company (as successor to Citibank, N.A.) as trustee.

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" Third Party Indebtedness" means Indebtedness of the Borrower or any of its Subsidiaries owed to any Person other than the Borrower or any of its Subsidiaries.


" Tranche A-1 Loans" means the Loans made by the Lenders to the Borrower pursuant to Section 2.01(a) and with respect to which the Lender holding such Loans on the Amendment No. 1 Effective Date shall have executed Amendment No. 1.

" Tranche A-2 Loans" means the Loans made by the Lenders to the Borrower pursuant to Section 2.01(a) and with respect to which the Lender holding such Loans on the Amendment No. 1 Effective Date shall not have executed Amendment No. 1.

" Tranche B-1 Loans" means the Loans made by the Lenders to the Borrower pursuant to Section 2.01(b) and with respect to which the Lender holding such Loans on the Amendment No. 1 Effective Date shall have executed Amendment No. 1.

" Tranche B-2 Loans" means the Loans made by the Lenders to the Borrower pursuant to Section 2.01(b) and with respect to which the Lender holding such Loans on the Amendment No. 1 Effective Date shall not have executed Amendment No. 1.

" Treasury Rate" means, with respect to any date of prepayment, a rate per annum equal to the quarterly equivalent yield to maturity (assuming a 360-day year and actual days elapsed) of the Comparable Treasury Issue.

(b) Section 2.03 is amended by:

(i) deleting " without premium or penalty" in the first sentence of clause (a) thereof;

(ii) inserting " (x) in the case of any prepayment of a Loan made during a Make-Whole Period, five Business Days prior to any date of prepayment and (y) in the case of any prepayment of a Loan that is not made during a Make-Whole Period," after " 9:00 a.m." in the proviso at the end of clause (a) thereof;


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(iii) replacing, in the second sentence of clause (a), the words " of the other Class" with " of the other Classes" ;


(iv) adding, immediately at the end of the last sentence of clause (a), " and (x) in the case of any prepayment of a Loan made during a Make-Whole Period, the Make-Whole Premium applicable to such Loan as of the date of such prepayment and (y) in the case of any prepayment of a Tranche A-1 Loan or a Tranche B-1 Loan (other than any prepayment covered by the preceding clause (x)), the Applicable Prepayment Premium applicable to such Loan as of the date of such prepayment" ;


(v) replacing the first sentence of clause (b) thereof in its entirety with the following sentence:


" Any voluntary prepayments of the Loans of any Class pursuant to this Section 2.03 shall be applied to prepay ratably the Loans of such Class (on the basis of the aggregate principal amount of Loans of such Class then outstanding)."


(vi) replacing clause (c) thereof in its entirety with " [Intentionally Omitted]" .


(c) Section 2.04 is amended by:


(i) adding the words " (other than the IP Collateral included in the Dispositions made in connection with the Dockersae Transaction in accordance with Section 7.05(p))" after the words " IP Collateral" in clause (a) thereof; and

(ii) replacing each reference to " Prepayment Blockage Period" in clause (a) thereof and clause (d) thereof with " Make-Whole Period" .


(d) To clarify the circumstances in which each of the 2006 Notes Refinancing Condition and the 2008 Notes Refinancing Condition may be satisfied, (i) the first sentence of Section 2.06(b) is amended by adding " , repaid" after the word " refinanced" therein and (ii) the last sentence of Section 2.06(b) is amended by adding " or irrevocably set aside to repay" after the word " repay" therein.

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(e) Section 2.09 is amended by (i) adding " (a)" at the beginning thereof and (ii) adding at the end thereof a new clause (b) as follows:


" (b) (i) If prior to June 30, 2005 the Company publicly announces that it is no longer pursuing a sale of all or any substantial part of the Dockersae business, the Borrower shall, within three Business Days of such announcement, pay each Lender a fee in an amount equal to 0.50% of the aggregate amount of the Loans of such Lender on the announcement date. (ii) If the Dockersae Transaction has not been consummated on or prior to June 30, 2005, the Borrower shall, on such date, pay each Lender a fee in an amount equal to (x) if the Company has paid a fee pursuant to clause (b)(i) above, 0.50% or (y) otherwise, 1.00%, in each case of the aggregate amount of the Loans of such Lender on such date."

(f) Article 6 is amended by adding at the end thereof a new Section 6.15 as follows:


" Section 6.15. Dockersae Proceeds, (a) The Borrower shall apply an amount equal to the Net Dockersae Proceeds to prepay, purchase, repay, redeem, repurchase or otherwise satisfy Third Party Indebtedness, including without limitation as contemplated by Section 6.15(b)."

" (b) In the event that the Borrower irrevocably sets aside funds to repay the 2006 Notes or the 2008 Notes, as applicable, as provided in Section 2.06(b), the Borrower shall thereafter apply such amount or amounts to such purchase, repurchase, redemption, repayment, prepayment or other satisfaction on or prior to the respective maturity date of some or all of the 2006 Notes and the 2008 Notes."


" (c) Until such time as any Net Dockersae Proceeds are applied to prepay, purchase, repay, redeem, repurchase or otherwise satisfy Third Party Indebtedness pursuant to Section 6.15(a), the Net Dockersae Proceeds shall be either (i) held in ...