Bridge Credit Agreement

EXHIBIT 10.2


EXECUTION COPY


BRIDGE CREDIT AGREEMENT


among


LEVI STRAUSS & CO.
as Borrower


THE FINANCIAL INSTITUTIONS PARTY HERETO
as Co-Syndication Agents


THE FINANCIAL INSTITUTION PARTY HERETO
as Documentation Agent


and


THE FINANCIAL INSTITUTIONS PARTY HERETO
as Banks


and


BANK OF AMERICA, N.A.,
as Administrative Agent for Banks


and


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


dated as of January 31, 2000


TABLE OF CONTENTS
Page
ARTICLE I


DEFINITIONS


1.1 Defined Terms.......................................................................................... 1 1.2 Other Interpretive Provisions..........................................................................26 1.3 Accounting Principles..................................................................................27


ARTICLE II


THE CREDITS


2.1 Amounts and Terms of Commitments; the Credit...........................................................27 2.2 Notes; Loan Accounts...................................................................................28 2.3 Procedure for Borrowing................................................................................28 2.4 Conversion and Continuation Elections..................................................................29 2.5 Lender Bridge Letters of Credit........................................................................30 2.6 Derivative/FX Contracts................................................................................36 2.7 Voluntary Termination or Reduction of Aggregate Bridge Commitment; Voluntary Prepayments...............37 2.8 Mandatory Prepayments and Reductions of Aggregate Bridge Commitment....................................38 2.9 Repayment; Scheduled Reductions of Aggregate Bridge Commitment.........................................40 2.10 Interest...............................................................................................40 2.11 Fees...................................................................................................41 2.12 Computation of Fees and Interest.......................................................................42 2.13 Payments by Company....................................................................................43 2.14 Payments by the Banks to Administrative Agent..........................................................44 2.15 Sharing of Payments, etc...............................................................................44


ARTICLE III


TAXES, YIELD PROTECTION AND ILLEGALITY


3.1 Taxes..................................................................................................45 3.2 Illegality.............................................................................................46 3.3 Increased Costs and Reduction of Return................................................................47 3.4 Funding Losses.........................................................................................48 3.5 Inability to Determine Rates...........................................................................48 3.6 Reserves on Offshore Rate Loans........................................................................48 3.7 Certificates of Banks..................................................................................49 3.8 Substitution of Banks..................................................................................49 3.9 Survival...............................................................................................49


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TABLE OF CONTENTS
(continued)


Page


ARTICLE IV


CONDITIONS PRECEDENT


4.1 Condition to Closing...................................................................................49 4.2 Conditions to Each Borrowing, Issuance of Lender Bridge Letter of Credit and execution of Lender
Derivative/FX Contract.................................................................................53 4.3 Conditions Subsequent..................................................................................53


ARTICLE V


REPRESENTATIONS AND WARRANTIES


5.1 Organization, Powers, Good Standing, Business, Ownership of Subsidiaries and Capitalization............54 5.2 Authorization of Borrowing, etc........................................................................54 5.3 Financial Condition....................................................................................55 5.4 Title to Properties; Liens.............................................................................56 5.5 Litigation; Adverse Facts..............................................................................56 5.6 Payment of Taxes.......................................................................................56 5.7 Materially Adverse Agreements; Performance.............................................................56 5.8 Governmental Regulation................................................................................57 5.9 ERISA Compliance.......................................................................................57 5.10 Environmental Matters..................................................................................57 5.11 Compliance With Laws...................................................................................58 5.12 Regulation U...........................................................................................58 5.13 Disclosure.............................................................................................58 5.14 Matters Relating to Collateral.........................................................................58 5.15 Intangible Assets......................................................................................59 5.16 Insurance..............................................................................................59 5.17 Year 2000..............................................................................................59 5.18 Solvency...............................................................................................60


ARTICLE VI


AFFIRMATIVE COVENANTS


6.1 Financial Statements and Other Reports.................................................................60 6.2 Corporate Existence, etc...............................................................................63 6.3 Compliance With Laws, etc..............................................................................64 6.4 Compliance with Agreements.............................................................................64 6.5 Payment of Taxes and Claims............................................................................64 6.6 Maintenance of Properties; Insurance...................................................................64 6.7 Inspection.............................................................................................65


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TABLE OF CONTENTS
(continued)


Page 6.8 Use of Proceeds........................................................................................65 6.9 Execution of Guaranty and Collateral Documents by Additional Subsidiaries..............................66 6.10 Compliance with ERISA..................................................................................67 6.11 Post Closing Actions...................................................................................67 6.12 Transfer of Receivables................................................................................69


ARTICLE VII


NEGATIVE COVENANTS


7.1 Indebtedness; Derivative/FX Contracts..................................................................69 7.2 Limitation on Liens and Negative Pledges...............................................................72 7.3 Dispositions...........................................................................................74 7.4 Fundamental Changes....................................................................................75 7.5 Use of Proceeds........................................................................................75 7.6 Leverage Ratio.........................................................................................76 7.7 Interest Coverage Ratio................................................................................77 7.8 Minimum Consolidated EBITDA............................................................................78 7.9 Change in Business.....................................................................................78 7.10 ERISA..................................................................................................78 7.11 Investments............................................................................................79 7.12 Restricted Payments....................................................................................80 7.13 Operating Lease Obligations............................................................................80 7.14 Transactions with Affiliates...........................................................................80 7.15 Amendments of Documents Relating to Indebtedness and Receivables.......................................80 7.16 Consolidated Capital Expenditures......................................................................81 7.17 Materially Adverse Agreements..........................................................................81 7.18 Limitations on Upstreaming.............................................................................81 7.19 Change in Auditors.....................................................................................82 7.20 Restricted Subsidiaries................................................................................82


ARTICLE VIII


EVENTS OF DEFAULT


8.1 Event of Default.......................................................................................82 8.2 Remedies...............................................................................................85 8.3 Rights Not Exclusive...................................................................................85


ARTICLE IX


ADMINISTRATIVE AGENT; COLLATERAL AGENT


9.1 Appointment and Authorization..........................................................................86


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TABLE OF CONTENTS
(continued)
Page 9.2 Delegation of Duties...................................................................................86 9.3 Liability of Administrative Agent or Collateral Agent..................................................86 9.4 Reliance by Administrative Agent and Collateral Agent..................................................87 9.5 Notice of Default......................................................................................87 9.6 Credit Decision; Disclosure of Information by Administrative Agent and Collateral Agent................88 9.7 Indemnification of Administrative Agent and Collateral Agent...........................................88 9.8 Administrative Agent in Individual Capacity............................................................89 9.9 Successor Administrative Agent.........................................................................89 9.10 Successor Collateral Agent.............................................................................90 9.11 Withholding Tax........................................................................................90 9.12 Co-Syndication Agents; Documentation Agent.............................................................92 9.13 Collateral Documents, Guaranties and Intercreditor Agreement...........................................92


ARTICLE X


MISCELLANEOUS


10.1 Amendments and Waivers.................................................................................93 10.2 Notices................................................................................................94 10.3 No Waiver; Cumulative Remedies.........................................................................94 10.4 Costs and Expenses.....................................................................................95 10.5 Company's Indemnification..............................................................................95 10.6 Payments Set Aside.....................................................................................96 10.7 Successors and Assigns.................................................................................96 10.8 Assignments, Participations, etc.......................................................................96 10.9 Confidentiality........................................................................................98 10.10 Set-off................................................................................................99 10.11 Notification of Addresses, Lending Offices, etc........................................................99 10.12 Counterparts...........................................................................................99 10.13 Severability...........................................................................................99 10.14 No Third Parties Benefited.............................................................................99 10.15 Change in Accounting Principles.......................................................................100 10.16 Governing Law and Jurisdiction........................................................................100 10.17 Interpretation........................................................................................100 10.18 Representation of Banks...............................................................................101 10.19 Waiver of Jury Trial..................................................................................101


ARTICLE XI


GENERAL RELEASE


iv


EXHIBIT LIST


Exhibit I.......................................................[FORM OF] NOTICE OF BORROWING


Exhibit II.....................[FORM OF] NOTICE OF EXECUTION OF LENDER DERIVATIVE/FX CONTRACT


Exhibit III.......................................[FORM OF] NOTICE OF CONVERSION/CONTINUATION


Exhibit IV.....................................................................[FORM OF] NOTE


Exhibit V....................................................[FORM OF] COMPLIANCE CERTIFICATE


Exhibit VI......................................[FORM OF] CLOSING DATE CERTIFICATE OF COMPANY


Exhibit VII...........................................[FORM OF] PLEDGE AND SECURITY AGREEMENT


Exhibit VIII...............................................................[FORM OF] GUARANTY


Exhibit IX................................................[FORM OF] ASSIGNMENT AND ACCEPTANCE


Exhibit X......................................................................PRIVITY LETTER


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BRIDGE CREDIT AGREEMENT
-----------------------


This BRIDGE CREDIT AGREEMENT is entered into as of January 31, 2000 among Levi Strauss & Co., a Delaware corporation ("Company"); the several financial
------- institutions from time to time party to this Agreement (collectively "Banks" and
----- individually a "Bank"); the several financial institutions party to this
---- Agreement as Co-Syndication Agents; the financial institution party to this Agreement as Documentation Agent; Bank of America, N.A. as Administrative Agent for Banks; and Bank of America, N.A. as Collateral Agent for Banks.


WHEREAS, Banks have agreed to extend certain credit facilities to Company, the proceeds of which will be used to (a) refinance Company's receivable purchase program, refinance certain uncommitted foreign and domestic lines of credit provided to Company and its Foreign Subsidiaries, and (b) provide financing for working capital and other general corporate purposes of Company and its Subsidiaries, letters of credit and back up credit for certain foreign lines of credit and foreign exchange and other derivative contracts; and


WHEREAS, Company has agreed to secure its Obligations hereunder and under the other Loan Documents by granting to Collateral Agent, on behalf of Banks, a Lien on substantially all of its personal property and certain of its real property (other than Principal Property), including a pledge of 100% of the Capital Stock of certain of its Domestic Subsidiaries and 65% of the Capital Stock of certain of its Foreign Subsidiaries (other than Restricted Subsidiaries); and


WHEREAS, certain of the Domestic Subsidiaries of Company have agreed to guarantee the Obligations hereunder and under the other Loan Documents and to secure their guaranties by granting to Collateral Agent, on behalf of Banks, a Lien on substantially all of their respective personal property and certain of their respective real property (other than Principal Property), including a pledge of 100% of the Capital Stock of certain of their respective Domestic Subsidiaries and 65% of the Capital Stock of certain of their respective Foreign Subsidiaries (other than Restricted Subsidiaries);


NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the parties agree as follows:


ARTICLE I


DEFINITIONS
-----------


1.1 Defined Terms. In addition to the terms defined elsewhere in this
------------- Agreement, the following terms have the following meanings:


"Administrative Agent" means Bank of America, in its capacity as agent
-------------------- for Banks hereunder, and any successor administrative agent pursuant to Section 9.9.


"Administrative Agent-Related Persons" means Administrative Agent and
------------------------------------ any successor administrative agent arising under Section 9.9, together with their respective Affiliates (including, in the case of Bank of America, the Arranger), and the officers, directors, employees, agents, counsel, and attorneys-in-fact of such Persons and Affiliates.


1


"Administrative Agent's Payment Office" means the address for payments
------------------------------------- set forth on the signature page hereto in relation to Administrative Agent or such other address as Administrative Agent may from time to time specify in accordance with Section 10.2.


"Affected Bank" has the meaning specified in Section 3.8.
-------------


"Affiliate" means, as to any Person, any other Person which, directly
--------- or indirectly, is in control of, is controlled by, or is under common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, (a) power to vote 10% or more of the Securities (on a fully diluted basis) of the other Person having ordinary voting power for the election of directors or managing general partners, or (b) to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting Securities, membership interests, by contract, or otherwise.


"Affiliated Fund" means, with respect to any Bank, a fund that invests
--------------- in commercial loans and is managed by the same investment advisor as such Bank, an Affiliate of such Bank or by an Affiliate of the same investment advisor as such Bank.


"Aggregate Bridge Commitment" means the combined Commitments of Banks.
--------------------------- The initial Aggregate Bridge Commitment is $450,000,000.


"Aggregate Non-Bridge Commitments" means the sum of (a) the Aggregate
-------------------------------- 180 Day Commitment, (b) the Aggregate Commitment (as defined therein) under the Amended and Restated 1997 364 Day Credit Agreement, and (c) the Aggregate Commitment (as defined therein) under the 1997 Second Amended and Restated Credit Agreement.


"Aggregate 180 Day Commitment" means the combined Commitments (as
---------------------------- defined therein) under the Amended and Restated 1999 180 Day Credit Agreement.


"Aggregate Term Commitments" means the sum of (a) the Aggregate
-------------------------- Commitment (as defined therein) under the Amended and Restated 1997 364 Day Credit Agreement, and (b) the Aggregate Commitment (as defined therein) under the 1997 Second Amended and Restated Credit Agreement.


"Aggregate Total Commitments" means the sum of (a) the Aggregate
--------------------------- Bridge Commitment and (b) the Aggregate 180 Day Commitment.


"Agreement" means this Bridge Credit Agreement, as amended,
--------- supplemented, or modified from time to time.


"Amended and Restated 1997 364 Day Credit Agreement" means the Amended
-------------------------------------------------- and Restated 1997 364 Day Credit Agreement dated as of January 31, 2000, between Company, Bank of America, as agent, Bank of America, as collateral agent, and the other lenders parties thereto.


"Amended and Restated 1999 180 Day Credit Agreement" means the Amended
-------------------------------------------------- and Restated 1999 180 Day Credit Agreement dated as of January 31, 2000, between Company,


2


Bank of America, as administrative agent, Bank of America, as collateral agent, and the other lenders parties thereto.


"Applicable Margin" has the meaning specified in Section 2.10.
-----------------


"Arranger" means BancAmerica Securities, Inc., a Delaware corporation.
--------


"Asset Disposition" means the sale by Company or any of its
----------------- Subsidiaries to any Person other than Company or any of its Subsidiaries of (a) any of the stock of any of Company's Subsidiaries, (b) substantially all of the assets of any division or line of business of Company or any of its Subsidiaries, or (c) any other assets (whether tangible or intangible) of Company or any of its Subsidiaries other than Dispositions permitted by Sections 7.3(a), 7.3(c), 7.3(e), 7.3(f), 7.3(g), 7.3(h), and 7.3(m).


"Assignee" has the meaning specified in Section 10.8(a).
--------


"Assignment and Acceptance" means an Assignment and Acceptance
------------------------- substantially in the form of Exhibit IX.
----------


"Availability Period" means the period from the date of this Agreement
------------------- to the close of business of Administrative Agent in San Francisco, California on January 31, 2002.


"Bank" and "Banks" have the meanings specified in the introductory
---- ----- clause hereto; provided that for purposes of any determination made with respect
-------- to Citicorp U.S.A., Inc. under Section 3.2, 3.3, 3.4, 3.5 or 3.6, "Bank" shall be deemed to include Citibank, N.A.


"Bank of America" means Bank of America, N.A.
---------------


"Bankruptcy Code" means Title 11 of the United States Code, entitled
--------------- "Bankruptcy" (11 U.S.C. (S)101, et seq.).
-------


"Base Rate" means, for any day, a fluctuating rate per annum equal to
--------- the higher of (a) the Federal Funds Rate plus 1/2 of 1%, and (b) the rate of
---- interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate." Such rate is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.


"Base Rate Loan" means a Loan that bears interest based on the Base
-------------- Rate.


"Borrower Party" means Company and any of its Material Domestic
-------------- Subsidiaries from time to time party to a Loan D ...