EXHIBIT E

                          [FORM OF] SUBSIDIARY GUARANTY


                  This  GUARANTY  is entered  into as of February 1, 2001 by the
undersigned  (each a  "GUARANTOR",  and  together  with any future  Subsidiaries
executing  this  Guaranty,   being  collectively   referred  to  herein  as  the
"GUARANTORS")  in favor of and for the  benefit  of Bank of  America,  N.A.,  as
Administrative  Agent for and  representative of (in such capacity herein called
the "GUARANTIED PARTY") the several financial  institutions (the "LENDERS") from
time to time party to the Credit Agreement referred to below and any Hedge Bank,
and for the benefit of the other Beneficiaries (as hereinafter defined).

                             PRELIMINARY STATEMENTS

         A.       Levi Strauss & Co., a Delaware corporation (the "BORROWER"),
has entered into that certain  Credit  Agreement,  dated as of February 1, 2001,
with the Lenders,  the several financial  institutions  party thereto as Co-Lead
Arrangers and Joint Book Managers,  the financial  institution  party thereto as
Syndication  Agent,  the financial  institution  party thereto as  Documentation
Agent,  and  Guarantied  Party,  as  Administrative  Agent for the Lenders (said
Credit  Agreement,  as it  may  hereafter  be  amended,  amended  and  restated,
supplemented  or  otherwise  modified  from  time to  time,  being  the  "CREDIT
AGREEMENT"; the terms defined therein being used herein as therein defined).

         B.       The Borrower and Levi Strauss & Co. Financial Services, S.A.,
a Belgian corporation,  or any successor thereto  ("FINSERV"),  may from time to
time enter,  or may from time to time have entered,  into one or more Hedge Bank
Hedge Agreements in accordance with the terms of the Credit Agreement, and it is
desired that the  obligations  of the Borrower and FinServ  under the Hedge Bank
Hedge Agreements,  including, without limitation, the obligation of the Borrower
and FinServ to make  payments  thereunder in the event of early  termination  or
close out thereof,  together  with all  obligations  of the  Borrower  under the
Credit Agreement and the other Loan Documents, be guarantied hereunder until the
payment in full of all Obligations under the Credit Agreement and the other Loan
Documents  (other than the Hedge Bank Hedge  Agreements),  the  cancellation  or
expiration of all Letters of Credit and the termination of the Commitments.

         C.       The Guarantied Party, the Lenders, and each Hedge Bank for
which the  Guarantied  Party has received the notice  required by Section  17(c)
hereof are sometimes referred to herein as "BENEFICIARIES".

         D.       A portion of the proceeds of the Advances may be advanced to
the Guarantors, and thus the Guarantied Obligations (as hereinafter defined) are
being  incurred  for and will  inure to the  benefit  of the  Guarantors  (which
benefits are hereby acknowledged).

         E.       It is a condition precedent to the initial extensions of
credit by the Lenders under the Credit Agreement that the Borrower's obligations
thereunder be guarantied by the Guarantors.

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         F.       The Guarantors are willing irrevocably and unconditionally to
guaranty such obligations of the Borrower.

                  NOW,  THEREFORE,  based upon the  foregoing and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,  and in order to induce the  Lenders and the  Guarantied  Party to
enter  into the Credit  Agreement  and to induce  Hedge  Banks to enter into the
Hedge Bank Hedge Agreements, the Guarantors hereby agree as follows:

         1.       Guaranty.  (a) In order to induce  the  Lenders  to extend
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credit to the Borrower  pursuant to the Credit  Agreement and the entry by Hedge
Banks into the Hedge Bank Hedge Agreements, the Guarantors jointly and severally
irrevocably and unconditionally  guaranty, as primary obligors and not merely as
sureties, the due and punctual payment in full of all Guarantied Obligations (as
hereinafter defined) when the same shall become due, whether at stated maturity,
by acceleration,  demand or otherwise  (including  amounts that would become due
but  for the  operation  of the  automatic  stay  under  Section  362(a)  of the
Bankruptcy  Code, 11 U.S.C. ss. 362(a)).  The term  "GUARANTIED  OBLIGATIONS" is
used herein in its most comprehensive sense and includes any and all Obligations
of the Borrower and all obligations of the Borrower and FinServ under Hedge Bank
Hedge Agreements,  now or hereafter made, incurred or created,  whether absolute
or contingent,  liquidated or unliquidated,  whether due or not due, and however
arising under or in connection with the Credit  Agreement,  the Hedge Bank Hedge
Agreements, this Guaranty and the other Loan Documents,  including those arising
under successive  borrowing  transactions under the Credit Agreement which shall
either  continue the Obligations of the Borrower or from time to time renew them
after they have been satisfied;  PROVIDED,  HOWEVER,  that  obligations  arising
under or in connection with the Hedge Bank Hedge  Agreements shall be Guarantied
Obligations  only until the payment in full of all Obligations  under the Credit
Agreement  and the  other  Loan  Documents  (other  than the  Hedge  Bank  Hedge
Agreements),  the  cancellation  or  expiration of all Letters of Credit and the
termination of the Commitments.

                  Each Guarantor acknowledges that a portion of the Advances may
be advanced  to it, that  Letters of Credit may be issued for the benefit of its
business and that the  Guarantied  Obligations  are being  incurred for and will
inure to its benefit.

                  Any interest on any portion of the Guarantied Obligations that
accrues after the  commencement  of any  proceeding,  voluntary or  involuntary,
involving the bankruptcy, insolvency, receivership,  reorganization, liquidation
or arrangement of the Borrower or FinServ (or, if interest on any portion of the
Guarantied  Obligations  ceases to accrue by  operation  of law by reason of the
commencement  of said  proceeding,  such  interest as would have accrued on such
portion of the Guarantied Obligations if said proceeding had not been commenced)
shall be included in the Guarantied  Obligations  because it is the intention of
each Guarantor and the Guarantied Party that the Guarantied  Obligations  should
be  determined  without  regard to any rule of law or order that may relieve the
Borrower or FinServ of any portion of such Guarantied Obligations.

                  In  the  event  that  all  or any  portion  of the  Guarantied
Obligations is paid, the obligations of each Guarantor hereunder shall continue
and remain in

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full  force and effect or be  reinstated,  as the case may be, in the event that
all or any  part of such  payment(s)  is  rescinded  or  recovered  directly  or
indirectly from the Guarantied  Party or any other  Beneficiary as a preference,
fraudulent transfer or otherwise, and any such payments that are so rescinded or
recovered shall constitute Guarantied Obligations.

                  Subject to the other  provisions  of this  Section 1, upon the
failure of the Borrower or FinServ to pay any of the Guarantied Obligations when
and as the same shall become due, each  Guarantor will upon demand pay, or cause
to be paid,  in  cash,  to the  Guarantied  Party  for the  ratable  benefit  of
Beneficiaries,  an  amount  equal  to the  aggregate  of the  unpaid  Guarantied
Obligations.

                  (b)  Anything  contained  in  this  Guaranty  to the  contrary
notwithstanding,  the obligations of each Guarantor under this Guaranty shall be
limited to a maximum aggregate amount equal to the largest amount that would not
render its obligations  hereunder subject to avoidance as a fraudulent  transfer
or  conveyance  under  Section 548 of Title 11 of the United  States Code or any
applicable  provisions of comparable  state law  (collectively,  the "FRAUDULENT
TRANSFER  LAWS"),  in each case after giving effect to all other  liabilities of
such Guarantor,  contingent or otherwise, that are relevant under the Fraudulent
Transfer  Laws  (specifically  excluding,   however,  any  liabilities  of  such
Guarantor (i) in respect of  intercompany  indebtedness to the Borrower or other
affiliates  of the  Borrower  to the  extent  that  such  indebtedness  would be
discharged in an amount equal to the amount paid by such Guarantor hereunder and
(ii) under any guaranty which contains a limitation as to maximum amount similar
to that set forth in this Section 1(b),  pursuant to which the liability of such
Guarantor  hereunder  is  included  in the  liabilities  taken  into  account in
determining  such maximum amount) and after giving effect as assets to the value
(as determined under the applicable  provisions of the Fraudulent Transfer Laws)
of any rights to subrogation, reimbursement,  indemnification or contribution of
such  Guarantor  pursuant  to  applicable  law or  pursuant  to the terms of any
agreement.

                  (c) Each  Guarantor  under this  Guaranty,  and each guarantor
under other  guaranties,  if any, relating to the Credit Agreement (the "RELATED
GUARANTIES") that contain a contribution  provision similar to that set forth in
this Section 1(c),  together desire to allocate among themselves  (collectively,
the  "CONTRIBUTING   GUARANTORS"),   in  a  fair  and  equitable  manner,  their
obligations arising under this Guaranty and the Related Guaranties. Accordingly,
in the event any  payment  or  distribution  is made on any date by a  Guarantor
under this Guaranty or a guarantor under a Related Guaranty, each such Guarantor
or such other  guarantor  shall be entitled to a  contribution  from each of the
other  Contributing  Guarantors in the maximum amount  permitted by law so as to
maximize  the  aggregate   amount  of  the   Guarantied   Obligations   paid  to
Beneficiaries.

                  2. Guaranty Absolute;  Continuing Guaranty. The obligations of
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each   Guarantor   hereunder  are   irrevocable,   absolute,   independent   and
unconditional and shall not be affected by any circumstance  which constitutes a
legal or equitable discharge of a guarantor or surety other than payment in full
of the  Guarantied  Obligations.  In  furtherance  of the  foregoing and without
limiting the generality  thereof,  each Guarantor agrees that: (a) this Guaranty
is a guaranty of payment when due and not of collectibility;  (b) the Guarantied
Party may enforce this Guaranty upon the occurrence of an Event of Default under
the Credit  Agreement  notwithstanding  the existence of any dispute between the
Borrower or FinServ and any

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Beneficiary  with respect to the existence of such event; (c) the obligations of
each  Guarantor  hereunder are  independent  of the  obligations of the Borrower
under the Loan  Documents or of the  Borrower  and FinServ  under the Hedge Bank
Hedge  Agreements  and the  obligations  of any other  Guarantor  and a separate
action or actions may be brought and prosecuted  against each Guarantor  whether
or not any action is brought against the Borrower,  FinServ or any of such other
Guarantors  and  whether  or not the  Borrower  or FinServ is joined in any such
action  or  actions;  and  (d) a  payment  of a  portion,  but not  all,  of the
Guarantied  Obligations by one or more Guarantors shall in no way limit, affect,
modify or abridge the  liability of such or any other  Guarantor for any portion
of the  Guarantied  Obligations  that  has not been  paid.  This  Guaranty  is a
continuing  guaranty and shall be binding upon each Guarantor and its successors
and  assigns,  and each  Guarantor  irrevocably  waives any right to revoke this
Guaranty as to future transactions giving rise to any Guarantied Obligations.

                  3. Actions by Beneficiaries.  Any Beneficiary may from time to
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time,   without  notice  or  demand  and  without   affecting  the  validity  or
enforceability of this Guaranty or giving rise to any limitation,  impairment or
discharge of any Guarantor's liability hereunder, (a) renew, extend,  accelerate
or  otherwise  change  the  time,  place,  manner  or  terms of  payment  of the
Guarantied Obligations, (b) settle, compromise,  release or discharge, or accept
or refuse any offer of performance  with respect to, or  substitutions  for, the
Guarantied  Obligations or any agreement relating thereto and/or subordinate the
payment of the same to the  payment of any other  obligations,  (c)  request and
accept other guaranties of the Guarantied Obligations and take and hold security
for the payment of this  Guaranty or the  Guarantied  Obligations,  (d) release,
exchange, compromise,  subordinate or modify, with or without consideration, any
security for payment of the Guarantied Obligations,  any other guaranties of the
Guarantied  Obligations,  or any other  obligation of any Person with respect to
the Guarantied Obligations,  (e) enforce and apply any security now or hereafter
held by or for the benefit of any Beneficiary in respect of this Guaranty or the
Guarantied  Obligations  and  direct  the order or manner  of sale  thereof,  or
exercise  any  other  right  or  remedy  that  Guarantied  Party  or  the  other
Beneficiaries, or any of them, may have against any such security, as Guarantied
Party in its discretion may determine consistent with the Credit Agreement,  the
Hedge Bank Hedge  Agreements and any applicable  security  agreement,  including
foreclosure on any such security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially  reasonable,
and (f) exercise any other rights available to the Guarantied Party or the other
Beneficiaries,  or any of them, under the Loan Documents or the Hedge Bank Hedge
Agreements.

                  4. No  Discharge.  This  Guaranty and the  obligations  of the
                     -------------
Guarantors  hereunder shall be valid and enforceable and shall not be subject to
any  limitation,  impairment  or discharge for any reason (other than payment in
full  of  the  Guarantied  Obligations),   including,  without  limitation,  the
occurrence of any of the following,  whether or not any Guarantor shall have had
notice or  knowledge  of any of them:  (a) any  failure  to assert or enforce or
agreement not to assert or enforce, or the stay or enjoining, by order of court,
by operation of law or otherwise,  of the exercise or enforcement  of, any claim
or  demand  or any  right,  power  or  remedy  with  respect  to the  Guarantied
Obligations  or any  agreement  relating  thereto,  or with respect to any other
guaranty of or security for the payment of the Guarantied  Obligations,  (b) any
waiver or modification of, or any consent to departure from, any of the terms or
provisions of the Credit Agreement,  any of the other Loan Documents,  the Hedge
Bank Hedge Agreements or any agreement or instrument  executed pursuant thereto,
or of any other  guaranty or security for the

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Guarantied  Obligations,  (c)  the  Guarantied  Obligations,  or  any  agreement
relating  thereto,   at  any  time  being  found  to  be  illegal,   invalid  or
unenforceable in any respect,  (d) the application of payments received from any
source to the payment of  indebtedness  other than the  Guarantied  Obligations,
even though Guarantied Party or the other  Beneficiaries,  or any of them, might
have  elected  to  apply  such  payment  to any  part  or all of the  Guarantied
Obligations,  (e) any  failure to perfect or continue  perfection  of a security
interest in any collateral which secures any of the Guarantied Obligations,  (f)
any defenses, set-offs or counterclaims which the Borrower or FinServ may assert
against the  Guarantied  Party or any  Beneficiary  in respect of the Guarantied
Obligations,  including but not limited to failure of  consideration,  breach of
warranty,  payment,  statute  of  frauds,  statute  of  limitations,  accord and
satisfaction and usury, and (g) any other act or thing or omission,  or delay to
do any  other act or thing,  which may or might in any  manner or to any  extent
vary  the  risk of a  Guarantor  as an  obligor  in  respect  of the  Guarantied
Obligations.

                  5.  Waivers.   Each  Guarantor  waives,  for  the  benefit  of
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Beneficiaries:  (a) any  right to  require  the  Guarantied  Party or the  other
Beneficiaries,  as a condition of payment or performance by such  Guarantor,  to
(i) proceed against the Borrower or FinServ,  any other guarantor (including any
other Guarantor) of the Guarantied Obligations or any other Person, (ii) proceed
against or exhaust any  security  held from the  Borrower or FinServ,  any other
guarantor of the  Guarantied  Obligations  or any other  Person,  (iii)  proceed
against or have resort to any  balance of any  deposit  account or credit on the
books of any Beneficiary in favor of the Borrower,  FinServ or any other Person,
or (iv) pursue any other remedy in the power of any Beneficiary; (b) any defense
arising by reason of the  incapacity,  lack of  authority or any  disability  or
other  defense of the Borrower or FinServ  including,  without  limitation,  any
defense based on or arising out of the lack of validity or the  unenforceability
of the Guarantied Obligations or any agreement or instrument relating thereto or
by reason of the  cessation of the liability of the Borrower or FinServ from any
cause other than payment in full of the Guarantied Obligations;  (c) any defense
based upon any statute or rule of law which  provides  that the  obligation of a
surety must be neither  larger in amount nor in other  respects more  burdensome
than that of the principal; (d) any defense based upon the Guarantied Party's or
any  other  Beneficiary's  errors  or  omissions  in the  administration  of the
Guarantied  Obligations,  except  behavior  that amounts to gross  negligence or
willful  misconduct;  (e) (i) any principles or provisions of law,  statutory or
otherwise,  that are or might be in conflict with the terms of this Guaranty and
any legal or equitable discharge of such Guarantor's obligations hereunder, (ii)
the benefit of any statute of limitations  affecting such Guarantor's  liability
hereunder or the enforcement hereof,  (iii) any rights to set-offs,  recoupments
and counterclaims,  and (iv) promptness,  diligence and any requirement that any
Beneficiary protect,  secure, perfect or insure any Lien or any property subject
thereto;  (f)  notices,  demands,  presentments,  protests,  notices of protest,
notices of dishonor and notices of any action or inaction,  including acceptance
of this  Guaranty,  notices of default  under the Credit  Agreement,  notices of
default,  close out or early termination under any Hedge Bank Hedge Agreement or
any agreement or instrument related thereto,  notices of any renewal,  extension
or modification of the Guarantied  Obligations or any agreement related thereto,
notices of any extension of credit to the Borrower or FinServ and notices of any
of the  matters  referred to in Sections 3 and 4 hereof and any right to consent
to any thereof;  and (g) to the fullest extent permitted by law, any defenses or
benefits  that may be derived from or afforded by law which limit the  liability
of or exonerate guarantors or sureties,  or which may conflict with the terms of
this Guaranty.

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                  As used in this  paragraph,  any reference to "the  principal"
includes the Borrower and FinServ,  and any reference to "the creditor" includes
the Guarantied Party and each other Beneficiary. In accordance with Section 2856
of the California  Civil Code (a) each  Guarantor  waives any and all rights and
defenses available to it by reason of Sections 2787 to 2855, inclusive, 2899 and
3433 of the California Civil Code,  including,  without limitation,  any and all
rights or defenses such  Guarantor may have by reason of protection  afforded to
the principal with respect to any of the Guarantied Obligations, or to any other
guarantor  of any of the  Guarantied  Obligations  with  respect  to any of such
guarantor's  obligations  under its  guaranty,  in either  case  pursuant to the
antideficiency or other laws of the State of California  limiting or discharging
the principal's indebtedness or such guarantor's obligations, including, without
limitation,  Section 580a,  580b,  580d, or 726 of the California  Code of Civil
Procedure;  and (b) each Guarantor waives all rights and defenses arising out of
an election of remedies by the creditor,  even though that election of remedies,
such as a  nonjudicial  foreclosure  with  respect to security  for a Guarantied
Obligation,   has  destroyed  such   Guarantor's   rights  of  subrogation   and
reimbursement against the principal by the operation of Section 580d of the Code
of Civil  Procedure or  otherwise;  and even though that election of remedies by
the creditor,  such as nonjudicial  foreclosure  with respect to security for an
obligation  of any other  guarantor of any of the  Guarantied  Obligations,  has
destroyed such Guarantor's rights of contribution  against such other guarantor.
No  other  provision  of this  Guaranty  shall  be  construed  as  limiting  the
generality of any of the covenants and waivers set forth in this  paragraph.  As
provided  below,  this Guaranty shall be governed by, and shall be construed and
enforced in accordance with, the internal laws of the State of New York, without
regard to conflicts of laws principles. This paragraph is included solely out of
an  abundance  of caution,  and shall not be  construed  to mean that any of the
above-referenced  provisions of California law are in any way applicable to this
Guaranty or to any of the Guarantied Obligations.

                  6.  Guarantors'  Rights of  Subrogation,  Contribution,  Etc.;
                      ----------------------------------------------------------
Subordination of Other Obligations.  Until the Guarantied Obligations shall have
----------------------------------
been paid in full,  the  Commitments  shall have  terminated  and all Letters of
Credit shall have expired or been  cancelled,  no Guarantor  shall  exercise any
claim, right or remedy,  direct or indirect,  that such Guarantor now has or may
hereafter  have  against the  Borrower,  FinServ or their  respective  assets in
connection  with this  Guaranty  or the  performance  by such  Guarantor  of its
obligations  hereunder,  in each case whether such claim, right or remedy arises
in equity,  under contract,  by statute (including,  without  limitation,  under
California Civil Code Section 2847, 2848 or 2849), under common law or otherwise
and including,  without limitation, (a) any right of subrogation,  reimbursement
or indemnification that such Guarantor now has or may hereafter have against the
Borrower or FinServ,  (b) any right to enforce, or to participate in, any claim,
right or remedy that any  Beneficiary  now has or may hereafter have against the
Borrower or FinServ,  and (c) any benefit of, and any right to  participate  in,
any  collateral  or security  now or  hereafter  held by any  Beneficiary.  Each
Guarantor further agrees that, to the extent the waiver or agreement to withhold
the exercise of its rights of subrogation,  reimbursement,  indemnification  and
contribution  as set forth herein is found by a court of competent  jurisdiction
to be void or voidable for any reason, any rights of subrogation,  reimbursement
or  indemnification  such  Guarantor may have against the Borrower or FinServ or
against  any  collateral  or  security,  and any  rights  of  contribution  such
Guarantor  may have  against  any such  other  guarantor,  shall be  junior  and
subordinate to any rights the Guarantied  Party or the other  Beneficiaries  may
have  against the  Borrower or FinServ,  to all right,  title and  interest  the
Guarantied Party or the other

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Beneficiaries may have in any such collateral or security,  and to any right the
Guarantied  Party  or the  other  Beneficiaries  may  have  against  such  other
guarantor.

                  Any  indebtedness  of the Borrower or FinServ now or hereafter
held by any  Guarantor  is  subordinated  in right of payment to the  Guarantied
Obligations, and any such indebtedness of the Borrower or FinServ to a Guarantor
collected or received by such  Guarantor  after an Event of Default has occurred
and is  continuing,  and  any  amount  paid to a  Guarantor  on  account  of any
subrogation,  reimbursement,  indemnification or contribution rights referred to
in the preceding paragraph when all Guarantied Obligations have not been paid in
full, shall be held in trust for the Guarantied Party on behalf of Beneficiaries
and shall  forthwith  be paid over to the  Guarantied  Party for the  benefit of
Beneficiaries to be credited and applied against the Guarantied Obligations.

                  7.  Expenses.  The Guarantors  jointly and severally  agree to
                      --------
pay, or cause to be paid, on demand,  and to save the  Guarantied  Party and the
other  Beneficiaries  harmless  against  liability  for,  any and all  costs and
expenses  (including  reasonable fees and  disbursements of counsel) incurred or
expended by the Guarantied Party or any other Beneficiary in connection with the
enforcement of or preservation of any rights under this Guaranty.

                  8.  Financial   Condition  of  the  Borrower  or  FinServ.  No
                      -----------------------------------------------------
Beneficiary shall have any obligation, and each Guarantor waives any duty on the
part of any  Beneficiary,  to  disclose  or  discuss  with  such  Guarantor  its
assessment,  or such Guarantor's  assessment,  of the financial condition of the
Borrower or FinServ or any matter or fact relating to the  business,  operations
or condition of the Borrower or FinServ.  Each  Guarantor has adequate  means to
obtain information from the Borrower or FinServ on a continuing basis concerning
the  financial  condition  of the Borrower or FinServ and its ability to perform
its obligations under the Loan Documents and the Hedge Bank Hedge Agreement,  as
the case may be, and each  Guarantor  assumes the  responsibility  for being and
keeping  informed of the  financial  condition of the Borrower or FinServ and of
all  circumstances  bearing  upon  the  risk  of  nonpayment  of the  Guarantied
Obligations.

                  9.  Representations and Warranties.  Each Guarantor makes, for
                      ------------------------------
the benefit of Beneficiaries, each of the representations and warranties made in
the Credit Agreement by the Borrower as to such Guarantor, its assets, financial
condition,  operations,  organization,  legal  status,  business  and  the  Loan
Documents to which it is a party.

                  10. Covenants. Each Guarantor agrees that, so long as any part
                      ---------
of the Guarantied Obligations shall remain unpaid, any Letter of Credit shall be
outstanding  and any Lender  shall have any  Commitment,  such  Guarantor  will,
unless Required Lenders shall otherwise consent in writing,  perform or observe,
and cause its  Subsidiaries to perform or observe,  all of the terms,  covenants
and  agreements  that the Loan  Documents  state that the Borrower is to cause a
Guarantor and such Subsidiaries to perform or observe.


                  11. Set Off. In addition to any other  rights any  Beneficiary
                      -------
may have  under law or in  equity,  if any  amount  shall at any time be due and
owing by a Guarantor to any Beneficiary under this Guaranty, such Beneficiary is
authorized  at any time or from time to time,  without  notice  (any such notice
being expressly waived),  to set off and to appropriate and to

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apply any and all  deposits  (general or special,  including  but not limited to
indebtedness evidence by certificates of deposit,  whether matured or unmatured)
and any other  indebtedness  of such  Beneficiary  owing to a Guarantor  and any
other  property of such  Guarantor held by a Beneficiary to or for the credit or
the  account  of  such  Guarantor  against  and on  account  of  the  Guarantied
Obligations  and  liabilities  of such Guarantor to any  Beneficiary  under this
Guaranty.

                  12.  Discharge of Guaranty Upon Sale of  Guarantor.  If all of
                       ---------------------------------------------
the  stock of a  Guarantor  or any of its  successors  in  interest  under  this
Guaranty  shall  be sold or  otherwise  disposed  of  (including  by  merger  or
consolidation)  in a sale not  prohibited  by the Credit  Agreement or otherwise
consented to by Required  Lenders,  the  obligations  of such  Guarantor or such
successor in interest,  as the case may be,  hereunder  shall  automatically  be
discharged  and released  without any further  action by any  Beneficiary or any
other Person  effective as of the time of such sale;  provided that, if the sale
of such stock  constitutes a disposition  of assets as a condition  precedent to
such discharge and release,  the Guarantied  Party shall have received  evidence
satisfactory  to it that  arrangements  satisfactory  to it have  been  made for
delivery to the  Guarantied  Party of the Net Cash Proceeds (if any) as required
by the Credit Agreement.

                  13.  Amendments  and  Waivers.  No  amendment,   modification,
                       ------------------------
termination or waiver of any provision of this  Guaranty,  and no consent to any
departure by any Guarantor  therefrom,  shall in any event be effective  without
the written  concurrence  of the  Guarantied  Party and, in the case of any such
amendment or modification,  the Guarantors.  Any such waiver or consent shall be
effective only in the specific  instance and for the specific  purpose for which
it was given.

                  14.      Miscellaneous.  It is not necessary for Beneficiaries
                           -------------
to inquire into the capacity or powers of any Guarantor, the Borrower or FinServ
or the  officers,  directors or any agents acting or purporting to act on behalf
of any of them.

                  The rights, powers and remedies given to Beneficiaries by this
Guaranty  are  cumulative  and shall be in  addition to and  independent  of all
rights,  powers and remedies given to  Beneficiaries by virtue of any statute or
rule of law or in any of the Loan Documents or Hedge Bank Hedge Agreement or any
agreement  between  one or more  Guarantors  and one or  more  Beneficiaries  or
between the Borrower or FinServ and one or more  Beneficiaries.  Any forbearance
or failure to exercise,  and any delay by any  Beneficiary  in  exercising,  any
right,  power or remedy  hereunder  shall not  impair any such  right,  power or
remedy or be construed to be a waiver thereof, nor shall it preclude the further
exercise of any such right, power or remedy.

                  In case any  provision in or  obligation  under this  Guaranty
shall be invalid,  illegal or unenforceable in any  jurisdiction,  the validity,
legality and  enforceability of the remaining  provisions or obligations,  or of
such provision or obligation in any other jurisdiction,  shall not in any way be
affected or impaired thereby.

                  THIS   GUARANTY   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 LAWS PRINCIPLES THAT WOULD REQUIRE APPLICATION OF ANOTHER LAW.

                                      E-8

<PAGE>

                  This Guaranty shall inure to the benefit of Beneficiaries and
their respective successors and assigns.

                  Each   of  the   parties   hereto   hereby   irrevocably   and
unconditionally  submits,  for  itself  and its  property,  to the  nonexclusive
jurisdiction  of any New York State court or Federal  court of the United States
of America  sitting in New York City, and any appellate  court from any thereof,
in any action or  proceeding  arising out of or relating to this Guaranty or any
of the  other  Loan  Documents  to which it is a party,  or for  recognition  or
enforcement of any judgment,  and each of the parties hereto hereby  irrevocably
and  unconditionally  agrees  that all claims in  respect of any such  action or
proceeding  may be heard and  determined in any such New York State court or, to
the fullest extent permitted by law, in such Federal court.  Each of the parties
hereto agrees that a final  judgment in any such action or  proceeding  shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner  provided by law.  Nothing in this Guaranty shall affect any
right  that any  party may  otherwise  have to bring  any  action or  proceeding
relating to this  Guaranty or any of the other Loan  Documents  in the courts of
any jurisdiction.

                  Each of the parties  hereto  irrevocably  and  unconditionally
waives,  to the  fullest  extent  it may  legally  and  effectively  do so,  any
objection  that it may now or hereafter have to the laying of venue of any suit,
action or  proceeding  arising out of or relating to this Guaranty or any of the
other  Loan  Documents  to which it is a party in any New York  State or Federal
court.  Each of the parties  hereto hereby  irrevocably  waives,  to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.

                  Each of the  parties  hereto  irrevocably  waives all right to
trial  by jury in any  action,  proceeding  or  counterclaim  (whether  based on
contract,  tort or otherwise)  arising out of or relating to the Guaranty or the
actions of any Agent,  any  Lender  Party or any Hedge Bank in the  negotiation,
administration, performance or enforcement thereof.

                  15. Additional Guarantors.  The initial Guarantor(s) hereunder
                      ---------------------
shall be such of the  Material  Domestic  Subsidiaries  of the  Borrower  as are
signatories hereto on the date hereof.  From time to time subsequent to the date
hereof,  Subsidiaries of the Borrower may become parties  hereto,  as additional
Guarantors (each an "ADDITIONAL GUARANTOR"),  by executing a counterpart, a form
of which is attached as Exhibit A, of this  Guaranty.  Upon delivery of any such
                        ---------
counterpart  to the  Guarantied  Party,  notice of which is hereby waived by the
Guarantors,  each such Additional Guarantor shall be a Guarantor and shall be as
fully a party hereto as if such Additional  Guarantor were an original signatory
hereof.  Each Guarantor  expressly agrees that its obligations arising hereunder
shall not be  affected  or  diminished  by the  addition or release of any other
Guarantor  hereunder,  nor by any election of the Guarantied  Party not to cause
any Subsidiary of the Borrower to become an Additional Guarantor hereunder. This
Guaranty shall be fully effective as to any Guarantor that is or becomes a party
hereto  regardless  of whether  any other  Person  becomes or fails to become or
ceases to be a Guarantor hereunder.

                  16. Counterparts; Effectiveness. This Guaranty may be executed
                      ---------------------------
in any number of  counterparts  and by the different  parties hereto in separate
counterparts,  each of which when so executed  shall be deemed to be an original
and all of which taken  together shall

                                      E-9

<PAGE>

constitute one and the same agreement.  This Guaranty shall become  effective as
to each Guarantor  upon the execution of a counterpart  hereof by such Guarantor
(whether  or not a  counterpart  hereof  shall have been  executed  by any other
Guarantor)  and  receipt  by the  Guarantied  Party  of  written  or  telephonic
notification of such execution and authorization of delivery  thereof.  Delivery
by telecopier of an executed  counterpart  of a signature  page to this Guaranty
shall be  effective  as  delivery of an original  executed  counterpart  of this
Guaranty.

                  17.      The Guarantied Party as Agent.
                           -----------------------------

                  (a) The  Guarantied  Party  has been  appointed  to act as the
Guarantied  Party  hereunder  by the  Lenders.  The  Guarantied  Party  shall be
obligated, and shall have the right hereunder, to make demands, to give notices,
to exercise or refrain from  exercising any rights,  and to take or refrain from
taking  any  action,  solely in  accordance  with this  Guaranty  and the Credit
Agreement.

                  (b) The Guarantied Party shall at all times be the same Person
that is the Administrative  Agent under the Credit Agreement.  Written notice of
resignation by the  Administrative  Agent pursuant to Section 7.07 of the Credit
Agreement  shall also constitute  notice of resignation as the Guarantied  Party
under  this  Guaranty;  and  appointment  of a  successor  administrative  agent
pursuant  to  Section  7.07  of  the  Credit  Agreement  shall  also  constitute
appointment  of a  successor  Guarantied  Party  under this  Guaranty.  Upon the
acceptance of any appointment as administrative  agent under Section 7.07 of the
Credit   Agreement  by  a  successor   administrative   agent,   that  successor
administrative  agent  shall  thereupon  succeed to become  vested  with all the
rights,  powers,  privileges and duties of the retiring  Guarantied  Party under
this  Guaranty,  and the retiring  Guarantied  Party under this  Guaranty  shall
promptly  (i)  transfer  to  such  successor  Guarantied  Party  all  sums  held
hereunder,   together  with  all  records  and  other  documents   necessary  or
appropriate  in connection  with the  performance of the duties of the successor
Guarantied Party under this Guaranty, and (ii) take such other actions as may be
necessary or  appropriate  in connection  with the  assignment to such successor
Guarantied  Party of the  rights  created  hereunder,  whereupon  such  retiring
Guarantied Party shall be discharged from its duties and obligations  under this
Guaranty.  After any retiring  Guarantied Party's  resignation  hereunder as the
Guarantied Party, the provisions of this Guaranty shall inure to its benefits as
to any actions taken or omitted to be taken by it under this  Guaranty  while it
was the Guarantied Party hereunder.

                  (c) The Guarantied  Party shall not be deemed to have any duty
whatsoever  with respect to any Hedge Bank until it shall have received  written
notice in form and  substance  satisfactory  to the  Guarantied  Party  from the
Borrower,  a Guarantor  or the Hedge Bank as to the  existence  and terms of the
applicable Hedge Bank Hedge Agreement.


             [The remainder of this page intentionally left blank.]


                                      E-10

<PAGE>


                  IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be duly executed and delivered by its officer  thereunto  duly  authorized as of
the date first written above.

                                           BATTERY STREET ENTERPRISES, INC.

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


                                           Address: --------------------------
                                                    --------------------------
                                                    --------------------------



                                           LEVI STRAUSS FINANCIAL CENTER
                                           CORPORATION

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


                                           Address: --------------------------
                                                    --------------------------
                                                    --------------------------



                                           LEVI STRAUSS FUNDING, LLC

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

                                           Address: --------------------------
                                                    --------------------------
                                                    --------------------------



                                           LEVI STRAUSS GLOBAL FULFILLMENT
                                           SERVICES, INC.

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

                                           Address: --------------------------
                                                    --------------------------
                                                    --------------------------

                                      E-11

<PAGE>



                                           LEVI STRAUSS GLOBAL
                                           OPERATIONS, INC.

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

                                           Address: --------------------------
                                                    --------------------------
                                                    --------------------------



                                           LEVI STRAUSS INTERNATIONAL

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

                                           Address: --------------------------
                                                    --------------------------
                                                    --------------------------



                                           LEVI STRAUSS LATIN AMERICA, INC.

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

                                           Address: --------------------------
                                                    --------------------------
                                                    --------------------------


                                      E-12

<PAGE>



                                           LEVI'S ONLY STORES, INC.

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

                                           Address: --------------------------
                                                    --------------------------
                                                    --------------------------



                                           NF INDUSTRIES, INC.

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

                                           Address: --------------------------
                                                    --------------------------
                                                    --------------------------



ACKNOWLEDGED AND FOR PURPOSES
OF THE WAIVER OF JURY TRIAL SET
FORTH IN SECTION 14 ONLY, AGREED
AS OF THE DATE FIRST WRITTEN ABOVE
Bank of America, N.A., as Administrative Agent

By:_____________________________
Title: ___________________________




E-13

<PAGE>



                                  Exhibit A to

                               Subsidiary Guaranty

                 [Form of] Counterpart for Additional Guarantors


                  This COUNTERPART (this "COUNTERPART"),  dated _______,  _____,
is  delivered  pursuant to Section 15 of the  Guaranty  referred  to below.  The
undersigned hereby agrees that this Counterpart may be attached to the Guaranty,
dated as of January  __, 2001 (as it may be from time to time  amended,  amended
and restated,  supplemented or otherwise  modified,  the  "GUARANTY";  the terms
defined  therein  being used herein as therein  defined),  among the  Guarantors
named  therein  and  Bank  of  America,  N.A.,  as  the  Guarantied  Party.  The
undersigned,  by executing and delivering  this  Counterpart,  hereby becomes an
Additional  Guarantor  under the Guaranty in accordance  with Section 15 thereof
and agrees to be bound by all of the terms thereof.

                  IN  WITNESS   WHEREOF,   the   undersigned   has  caused  this
Counterpart  to be duly  executed and  delivered by its officer  thereunto  duly
authorized as of ______________, ____.

                                           [NAME OF ADDITIONAL GUARANTOR]

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

                                           Address: --------------------------
                                                    --------------------------
                                                    --------------------------





                                      E-1