Document:

EXECUTION COPY
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                               LEVI STRAUSS & CO.

                                  $498,975,000

                   $380,000,000 11 5/8% Senior Notes Due 2008
                 125,000,000 Euro Dollars 11 5/8% Senior Notes Due 2008

                               PURCHASE AGREEMENT
                                                              New York, New York
                                                                January 12, 2001

Salomon Smith Barney Inc.
Banc of America Securities LLC
Scotia Capital (USA) Inc.
Chase Securities Inc.
Banc One Capital Markets, Inc.

As Representatives of the Initial Purchasers
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York  10013

Ladies and Gentlemen:

                 Levi  Strauss & Co., a  corporation  organized  under the laws
of  Delaware  (the  "Company"),  proposes  to  issue  an  sell  to  the  several
parties named in Schedule I hereto (the "Initial Purchasers"), for whom you (the
"Representatives")are  acting as representatives,  $380,000,000 principal amount
of its 11 5/8% Senior Notes Due 2008 (the "Dollar Notes") and  125,000,000  euro
dollars  principal amount of its 11 5/8% Senior Notes due 2008 (the "Euro Notes"
and together with the Dollar Notes, the "Securities").  The Securities are to be
issued  under two  indentures,  one with regard to the Dollar Notes and one with
regard to the Euro Notes (the "Indentures"),  both dated as of January 18, 2001,
between the Company and Citibank,  N.A., as trustee (the "Trustee").  The Dollar
Notes  and the  Euro  Notes  each  have the  benefit  of a  Registration  Rights
Agreement (together,  the "Registration Rights Agreements"),  each dated January
18, 2001, between the Company and the Initial Purchasers,  pursuant to which the
Company has agreed to register the Securities under the Act subject to the terms
and conditions therein specified.  To the extent there are no additional parties
listed on  Schedule I other than you,  the term  Representatives  as used herein
shall mean you as the  Initial  Purchasers,  and the terms  Representatives  and
Initial  Purchasers  shall mean  either the  singular  or plural as the  context
requires. The use of the neuter in this Agreement shall include the feminine and
masculine wherever appropriate. Certain terms used herein are defined in Section
17 hereof.

                 The  sale of  the Securities to the Initial  Purchasers will be
made without  registration  of  the  Securities  under the  Act in reliance upon
exemptions from the registration requirements of the Act.

                 In connection with the sale of the Securities, the Company  has
 prepared a preliminary offering  memorandum,  dated October 3, 2000 (as amended
 or supplemented at the Execution Time,  including any and all exhibits  thereto
 and  any  information  incorporated  by  reference  therein,  the  "Preliminary
 Memorandum"), and a final offering memorandum, dated January 12, 2001 (as

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amended or supplemented  at the Execution  Time,  including any and all exhibits
thereto  and any  information  incorporated  by  reference  therein,  the "Final
Memorandum").  Each of the Preliminary  Memorandum and the Final Memorandum sets
forth certain information concerning the Company and the Securities. The Company
hereby confirms that it has authorized the use of the Preliminary Memorandum and
the Final  Memorandum,  and any amendment or supplement  thereto,  in connection
with the offer and sale of the  Securities  by the  Initial  Purchasers.  Unless
stated  to the  contrary,  references  herein  to the  Final  Memorandum  at the
Execution  Time  are not  meant  to  include  any  information  incorporated  by
reference therein subsequent to the Execution Time, and any references herein to
the  terms  "amend",  "amendment"  or  "supplement"  with  respect  to the Final
Memorandum  shall be deemed to refer to and include any information  filed under
the Exchange Act  subsequent  to the  Execution  Time which is  incorporated  by
reference therein.

                  1.  Representations and Warranties.  The Company represents
                      ------------------------------
and warrants to each Initial Purchaser as set forth below in this Section 1.

                  (a) The Preliminary  Memorandum,  at the date thereof, did not
         contain any untrue  statement  of a material  fact or omit to state any
         material fact necessary to make the statements therein, in the light of
         the  circumstances  under which they were made, not misleading.  At the
         Execution  Time  and on the  Closing  Date (as  defined  in  Section  3
         hereof),  the Final Memorandum did not, and will not (and any amendment
         or supplement thereto, at the date thereof and at the Closing Date will
         not),  contain any untrue statement of a material fact or omit to state
         any material  fact  necessary to make the  statements  therein,  in the
         light of the circumstances  under which they were made, not misleading;
         provided, however, that the Company makes no representation or warranty
         -----------------
         as to the  information  contained  in or omitted  from the  Preliminary
         Memorandum  or the Final  Memorandum,  or any  amendment or  supplement
         thereto, in reliance upon and in conformity with information  furnished
         in writing to the  Company  by or on behalf of the  Initial  Purchasers
         through the Representatives specifically for inclusion therein.

                  (b) Neither the Company,  nor any of its  Affiliates,  nor any
         person   acting  on  its  or  their  behalf  (other  than  the  Initial
         Purchasers,  as to whom  the  Company  makes no  representations)  has,
         directly  or  indirectly,  made  offers  or sales of any  security,  or
         solicited offers to buy any security,  under  circumstances  that would
         require the registration of the Securities under the Act.

                  (c) Neither the Company,  nor any of its  Affiliates,  nor any
         person   acting  on  its  or  their  behalf  (other  than  the  Initial
         Purchasers,  as to whom  the  Company  makes  no  representations)  has
         engaged in any form of  general  solicitation  or  general  advertising
         (within the meaning of Regulation  D) in  connection  with any offer or
         sale of the Securities in the United States.

                  (d) The  Securities  satisfy  the  eligibility requirements of
         Rule 144A(d)(3) under the Act.

                  (e) Neither the Company,  nor any of its  Affiliates,  nor any
         person   acting  on  its  or  their  behalf  (other  than  the  Initial
         Purchasers,  as to whom  the  Company  makes  no  representations)  has
         engaged in any directed selling efforts with respect to the Securities,
         and  each  of  them  has  complied   with  the  offering   restrictions
         requirements  of  Regulation S. Terms used in this  paragraph  have the
         meanings given to them by Regulation S.

                  (f) The Company has been  advised by The Portal  Market of the
         NASD that both the Dollar Notes and the Euro Notes have been designated
         Portal-eligible securities in accordance with the rules and regulations
         of the NASD and the Company  has  applied to

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         have  the Dollar  Notes and  the Euro  Notes  listed on the  Luxembourg
         Stock  Exchange and has been advised by  the Luxembourg  Stock Exchange
         that both the Dollar Notes and the Euro Notes are eligible for approval
         subject to notice of  issuance and  the Company's  compliance with  the
         rules and  regulations  of that exchange.

                  (g) The  Company  is  not,  and  after  giving  effect  to the
         offering and sale of the Securities and the application of the proceeds
         thereof  as  described  in  the  Final   Memorandum  will  not  be,  an
         "investment  company" within the meaning of the Investment Company Act,
         without  taking  account of any exemption  arising out of the number of
         holders of the Company's securities.

                  (h) The Company is subject to and in full  compliance with the
         reporting  requirements  of Section 13 or Section 15(d) of the Exchange
         Act.

                  (i) The  Company  has not paid or agreed to pay to any  person
         any compensation  for soliciting  another to purchase any securities of
         the Company (except as contemplated by this Agreement).

                  (j) The Company has not taken,  directly  or  indirectly,  any
         action designed to or that would constitute or that might reasonably be
         expected to cause or result in, under the  Exchange  Act or  otherwise,
         the  stabilization  or manipulation of the price of any security of the
         Company to facilitate the sale or resale of the Securities.

                  (k) Each of the  Company  and its  subsidiaries  has been duly
         incorporated  or organized and is validly  existing as a corporation or
         other  valid  legal  entity  in good  standing  under  the  laws of the
         jurisdiction  in which it is chartered or organized with full corporate
         or company power and authority to own or lease, as the case may be, and
         to operate its  properties and conduct its business as described in the
         Final  Memorandum,  and is duly  qualified  to do business as a foreign
         corporation  or other valid legal entity and is in good standing  under
         the laws of each jurisdiction which requires such qualification, except
         in  jurisdictions  in which the failure to be so  qualified or to be in
         good standing has not had and would not  reasonably be expected to have
         a Material Adverse Effect. For purposes of this Agreement,  a "Material
         Adverse Effect" shall mean a material  adverse effect on, or a material
         adverse change in, the condition  (financial or otherwise),  prospects,
         earnings,  business or properties of the Company and its  subsidiaries,
         taken as a whole.

                  (l)  All the  outstanding  shares  of  capital  stock  of each
         subsidiary  have been duly and  validly  authorized  and issued and are
         fully paid and nonassessable, and, except as otherwise set forth in the
         Final Memorandum and other than the Company's subsidiaries in Japan and
         Turkey, all outstanding shares of capital stock of the subsidiaries are
         owned  by  the  Company   either   directly  or  through  wholly  owned
         subsidiaries  free and clear of any perfected  security interest or any
         other security interests, claims, liens or encumbrances.

                  (m) The Company's  authorized equity  capitalization is as set
         forth in the Final  Memorandum,  and the Voting Trust Agreement entered
         into as of April 15, 1996 among the Voting Trustees and stockholders of
         the  Company  conforms  in all  material  respects  to the  description
         thereof contained in the Final Memorandum.

                  (n) The statements in the Final  Memorandum under the headings
         "Important Federal Income Tax Considerations",  "Description of Notes",
         "Exchange   Offer;   Registration   Rights",    "Business--Trademarks",
         "Business--Legal Proceedings" and "Risk Factors--Our success depends on
         the  continued  protection  of our  trademarks  and  other  proprietary
         intellectual  property  rights",  insofar as such statements  summarize
         legal matters, agreements,

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         documents  or  proceedings discussed   therein,  are, in all  materiaL
         respects, accurate and fair  summaries  of such legal  matters,
         agreements,  documents or proceedings.

                  (o) This  Agreement  has been duly  authorized,  executed  and
         delivered by the Company; the Indentures have been duly authorized and,
         assuming  due  authorization,  execution  and  delivery  thereof by the
         Trustee,  when executed and delivered by the Company,  will  constitute
         legal, valid and binding instruments enforceable against the Company in
         accordance  with  their  terms  (subject,  as  to  the  enforcement  of
         remedies,  to  applicable   bankruptcy,   reorganization,   insolvency,
         moratorium or other laws  affecting  creditors'  rights  generally from
         time to time in  effect  and to  general  principles  of  equity);  the
         Securities   have  been  duly   authorized,   and,  when  executed  and
         authenticated  in accordance  with the provisions of the Indentures and
         delivered  to and paid for by the  Initial  Purchasers,  will have been
         duly  executed  and  delivered by the Company and will  constitute  the
         legal,  valid and binding  obligations  of the Company  entitled to the
         benefits of the applicable Indenture (subject, as to the enforcement of
         remedies,  to applicable  bankruptcy,  insolvency,  moratorium or other
         laws affecting  creditors' rights generally from time to time in effect
         and to general  principles  of  equity);  and the  Registration  Rights
         Agreements  have been duly  authorized,  executed and  delivered by the
         Company and, assuming due authorization, execution and delivery thereof
         by the other  parties  thereto,  constitute  legal,  valid and  binding
         instruments  enforceable  against the Company in accordance  with their
         terms  (subject,  as to the  enforcement  of  remedies,  to  applicable
         bankruptcy,  reorganization,   insolvency,  moratorium  or  other  laws
         affecting  creditors'  rights generally from time to time in effect and
         to general principles of equity).

                  (p) No consent, approval, authorization,  filing with or order
         of any court or  governmental  agency or body is required in connection
         with the transactions  contemplated  herein or in the Indentures or the
         Registration  Rights Agreements,  except such as will be obtained under
         the Act and the Trust Indenture Act in connection with the transactions
         contemplated by the Registration  Rights  Agreements and such as may be
         required under the blue sky or securities  laws of any  jurisdiction in
         connection with the transactions contemplated by this Agreement and the
         Registration Rights Agreements.

                  (q) Neither the execution and delivery of the Indentures, this
         Agreement or the Registration Rights Agreements,  the issue and sale of
         the Securities,  nor the  consummation of any other of the transactions
         herein or therein contemplated, nor the fulfillment of the terms hereof
         or thereof will conflict  with,  result in a breach or violation of, or
         imposition  of any lien,  charge or  encumbrance  upon any  property or
         assets of the Company or any of its  subsidiaries  pursuant to, (i) the
         charter or by-laws of the Company or any of its subsidiaries;  (ii) the
         terms of any indenture,  contract, lease, mortgage, deed of trust, note
         agreement,  loan agreement or other agreement,  obligation,  condition,
         covenant or instrument to which the Company or any of its  subsidiaries
         is a party or bound or to which any of their  respective  properties is
         subject; or (iii) any statute, law, rule, regulation,  judgment,  order
         or decree  applicable to the Company or any of its  subsidiaries of any
         court,  regulatory  body,  administrative  agency,  governmental  body,
         arbitrator or other authority of the United States or any state thereof
         having jurisdiction over the Company, any of its subsidiaries or any of
         their respective properties or to the Company's knowledge, any statute,
         law,  rule,  regulation,  judgment,  order or decree  applicable to the
         Company  or any of its  subsidiaries  of any  court,  regulatory  body,
         administrative agency, governmental body, arbitrator or other authority
         outside of the United States having jurisdiction over the Company,  any
         of its subsidiaries or any of their respective properties, except, with
         respect to (x) clause (ii) and (y) any statute, law, rule,  regulation,
         judgment,  order or  decree  applicable  to the  Company  or any of its
         subsidiaries  of any court,  regulatory  body,  administrative  agency,
         governmental body,  arbitrator or other authority outside of the United
         States described in clause (iii) as to which

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         the Company  has  no  knowledge, for conflicts, violations, breaches or
         impositions that  would  not reasonably be expected to have a Material
         Adverse Effect.

                  (r)  The  consolidated  historical  financial  statements  and
         schedules of the Company and its consolidated  subsidiaries included in
         the Final  Memorandum  present  fairly  in all  material  respects  the
         financial  condition,  results  of  operations  and  cash  flows of the
         Company  as of the dates and for the  periods  indicated,  comply as to
         form with the applicable  accounting  requirements  of the Act and have
         been  prepared  in  conformity  with  generally   accepted   accounting
         principles  applied  on  a  consistent  basis  throughout  the  periods
         involved  (except  as  otherwise  noted  therein);   and  the  selected
         financial  data  set  forth  under  the  caption  "Selected  Historical
         Consolidated  Financial  Information"  in the Final  Memorandum  fairly
         present,  on the basis stated in the Final Memorandum,  the information
         included therein.

                  (s) No action,  suit or  proceeding  by or before any court or
         governmental agency,  authority or body or any arbitrator involving the
         Company or any of its  subsidiaries or its or their property is pending
         or, to the best  knowledge  of the Company,  threatened  that (i) could
         reasonably  be  expected  to  have a  material  adverse  effect  on the
         performance  of this  Agreement,  the  Indentures  or the  Registration
         Rights  Agreements,  or the  consummation  of  any of the  transactions
         contemplated hereby or thereby; or (ii) could reasonably be expected to
         have  a  Material   Adverse   Effect,   whether  or  not  arising  from
         transactions in the ordinary course of business, except as set forth in
         or contemplated in the Final Memorandum  (exclusive of any amendment or
         supplement thereto).

                  (t) The Company  and each of its  subsidiaries  own,  lease or
         license all such  properties  as are  necessary to the conduct of their
         respective operations as presently conducted.

                  (u) Neither the Company nor any  subsidiary is in violation or
         default of (i) any  provision of its charter or bylaws;  (ii) the terms
         of any  indenture,  contract,  lease,  mortgage,  deed of  trust,  note
         agreement,  loan agreement or other agreement,  obligation,  condition,
         covenant or  instrument to which it is a party or bound or to which its
         property is  subject;  or (iii) any  statute,  law,  rule,  regulation,
         judgment,  order or  decree  applicable  to the  Company  or any of its
         subsidiaries  of any court,  regulatory  body,  administrative  agency,
         governmental  body,  arbitrator or other authority having  jurisdiction
         over  the  Company  or such  subsidiary  or any of its  properties,  as
         applicable,  other than such  violations or defaults the  occurrence of
         which  would not  reasonably  be  expected  to have a Material  Adverse
         Effect,  whether or not arising from the  transactions  in the ordinary
         course of business.

                  (v) Arthur Andersen, LLP, who have certified certain financial
         statements  of  the  Company  and  its  consolidated  subsidiaries  and
         delivered  their  report  with  respect  to  the  audited  consolidated
         financial  statements and schedules  included in the Final  Memorandum,
         are independent  public  accountants with respect to the Company within
         the  meaning  of  the  Act  and  the  applicable  published  rules  and
         regulations thereunder.

                  (w) To the Company's knowledge, there are no material stamp or
         other issuance or transfer  taxes or duties or other  material  similar
         fees or charges  required to be paid in  connection  with the execution
         and  delivery of this  Agreement or the issuance or sale by the Company
         of the Securities.

                  (x) The  Company  has filed all  foreign,  federal,  state and
         local  tax  returns  that are  required  to be  filed or has  requested
         extensions  thereof (except in any case in which the failure so to file
         would not have a  Material  Adverse Effect, whether or not arising from

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         transactions in the ordinary course of business, except as set forth in
         or contemplated in the Final  Memorandum (exclusive of any amendment or
         supplement  thereto) and has paid  all taxes  required to be paid by it
         and any other  assessment,  fine  or penalty  levied against it, to the
         extent that any of the  foregoing  is due and  payable,  except for any
         such tax or other assessment,  fine  or penalty that is currently being
         contested  in good  faith or as  would   not  have a  Material  Adverse
         Effect,  whether or not  arising  from   transactions  in the  ordinary
         course of  business,  except as set   forth in or  contemplated  in the
         Final Memorandum (exclusive of any amendment or supplement thereto).

                  (y) No labor  problem or  dispute  with the  employees  of the
         Company or any of its subsidiaries exists or is threatened or imminent,
         and  the  Company  is not  aware  of any  existing  or  imminent  labor
         disturbance  by the  employees  of  any  of  its  or its  subsidiaries'
         principal  suppliers,  contractors  or customers  that in any such case
         could have a Material  Adverse  Effect,  whether  or not  arising  from
         transactions in the ordinary course of business, except as set forth in
         or contemplated in the Final Memorandum  (exclusive of any amendment or
         supplement thereto).

                  (z) The  Company and each of its  subsidiaries  are insured by
         insurers of recognized financial responsibility against such losses and
         risks  and  in  such  amounts  as  are  prudent  and  customary  in the
         businesses  in which they are engaged;  all  policies of insurance  and
         fidelity  or  surety   bonds   insuring  the  Company  or  any  of  its
         subsidiaries  or  their  respective  businesses,   assets,   employees,
         officers and  directors  are in full force and effect;  the Company and
         its  subsidiaries are in compliance with the terms of such policies and
         instruments  in all  material  respects;  except  as  would  not have a
         Material  Adverse Effect,  there are no claims by the Company or any of
         its  subsidiaries  under any such policy or  instrument as to which any
         insurance company is denying liability or defending under a reservation
         of rights clause;  and neither the Company nor any such  subsidiary has
         any  reason to believe  that it will not be able to renew its  existing
         insurance  coverage  as and when  such  coverage  expires  or to obtain
         similar  coverage from similar insurers as may be necessary to continue
         its business at a cost that would not have a Material  Adverse  Effect,
         whether or not arising  from  transactions  in the  ordinary  course of
         business,  except  as  set  forth  in  or  contemplated  in  the  Final
         Memorandum (exclusive of any amendment or supplement thereto).

                  (aa) No subsidiary  of the Company is currently  contractually
         prohibited,  directly or  indirectly,  from paying any dividends to the
         Company,  from  making  any  other  distribution  on such  subsidiary's
         capital  stock,  from  repaying to the Company any loans or advances to
         such  subsidiary  from the  Company  or from  transferring  any of such
         subsidiary's  property or assets to the Company or any other subsidiary
         of the Company,  except as described  in or  contemplated  by the Final
         Memorandum  or the  Company's  Bridge  Credit  Agreement,  with Bank of
         America, N.A. as administrative agent and collateral agent, dated as of
         January 31, 2000, as amended,  the Company's  Amended and Restated 1999
         180 Day Credit Agreement,  with Bank of America, N.A. as administrative
         agent and collateral  agent,  dated as of January 31, 2000, as amended,
         the Company's Amended and Restated 1997 364 Day Credit Agreement,  with
         Bank of America,  N.A. as  administrative  agent and collateral  agent,
         dated as of January 31, 2000, as amended, and the Company's 1997 Second
         Amended and Restated Credit  Agreement,  with Bank of America,  N.A. as
         administrative agent and collateral agent dated as of January 31, 2000,
         as amended (the "Existing Bank Credit Facilities").

                  (bb) The Company and its  subsidiaries  possess all  licenses,
         certificates,   permits   and  other   authorizations   issued  by  the
         appropriate federal,  state or foreign regulatory authorities necessary
         to conduct  their  respective  businesses,  other  than such  licenses,
         certificates,  permits or other authorizations, the failure of which to
         possess would not have a Material

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         Adverse Effect, and neither the Company nor  any  such  subsidiary  has
         received  any  notice of  proceedings  relating  to the  revocation  or
         modification of any such   certificate,  authorization or permit which,
         singly or in the aggregate,  if the subject of an unfavorable decision,
         ruling or finding,  would have  a Material  Adverse Effect,  whether or
         not arising  from  transactions   in the  ordinary  course of business,
         except  as  set  forth  in or   contemplated  in the  Final  Memorandum
         (exclusive of any amendment or supplement thereto).

                  (cc) The  Company  and  each of its  subsidiaries  maintain  a
         system of internal accounting controls sufficient to provide reasonable
         assurance  that  (i)  transactions  are  executed  in  accordance  with
         management's general or specific authorizations;  (ii) transactions are
         recorded as necessary to permit preparation of financial  statements in
         conformity  with  generally  accepted  accounting   principles  and  to
         maintain asset  accountability;  and (iii) the recorded  accountability
         for assets is compared with the existing assets at reasonable intervals
         and appropriate action is taken with respect to any differences.

                  (dd) In the  ordinary  course  of its  business,  the  Company
         periodically reviews the effect of applicable foreign,  federal,  state
         and local laws and  regulations  relating  to the  protection  of human
         health and safety,  the environment or hazardous or toxic substances or
         wastes,  pollutants  or  contaminants  ("Environmental  Laws")  on  the
         business,   operations   and   properties   of  the   Company  and  its
         subsidiaries,  in the  course  of which  it  identifies  and  evaluates
         associated costs and liabilities  (including,  without limitation,  any
         capital or operating  expenditures  required for  clean-up,  closure of
         properties  or  compliance  with  Environmental  Laws,  or any  permit,
         license or approval,  any related  constraints on operating  activities
         and any potential  liabilities to third parties);  on the basis of such
         review, the Company has reasonably concluded that such associated costs
         and liabilities would not, singly or in the aggregate,  have a Material
         Adverse  Effect,  whether  or  not  arising  from  transactions  in the
         ordinary course of business,  except as set forth in or contemplated in
         the  Final  Memorandum   (exclusive  of  any  amendment  or  supplement
         thereto).

                  (ee) Except as would not have a Material Adverse Effect,  each
         of the Company and its subsidiaries  has fulfilled its obligations,  if
         any, under the minimum  funding  standards of Section 302 of the United
         States  Employee  Retirement  Income  Security Act of 1974,  as amended
         ("ERISA"), and the regulations and published interpretations thereunder
         with  respect to each "plan" (as  defined in Section  3(3) of ERISA and
         such regulations and published  interpretations)  in which employees of
         the Company and its  subsidiaries  are eligible to participate and each
         such plan is in compliance in all material  respects with the presently
         applicable  provisions  of ERISA  and such  regulations  and  published
         interpretations; the Company and its subsidiaries have not incurred any
         unpaid  liability to the Pension Benefit  Guaranty  Corporation  (other
         than for the payment of premiums in the ordinary course) or to any such
         plan under Title IV of ERISA.

                  (ff) The  subsidiaries  listed on Annex A attached  hereto are
         the only  significant  subsidiaries  of the  Company as defined by Rule
         l-02 of Regulation S-X under the Act (the "Subsidiaries").

                  (gg) The Company and its subsidiaries own, possess, license or
         have other rights to use, on  reasonable  terms,  all  patents,  patent
         applications,   trade  and  service  marks  (including  the  Levi's(R),
         Dockers(R)   and   Slates(R)   trademarks),   trade  and  service  mark
         registrations,  trade names, copyrights,  licenses,  inventions,  trade
         secrets,   technology,   know-how  and  other   intellectual   property
         (collectively,  the "Intellectual  Property") necessary for the conduct
         of the  Company's  business  as now  conducted  free  and  clear of any
         material security interests,  claims, liens or encumbrances,  except as
         would  not  have  a  Material  Adverse  Effect  or as set  forth  in or
         contemplated in (i) the Final Memorandum (exclusive of any amendment or

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         supplement  thereto) or (ii) the Existing Bank Credit  Facilities,  and
         none  of the  Intellectual  Property,  to  the  best  knowledge  of the
         Company,  conflicts with the valid  trademark,  trade name,  copyright,
         patent,  patent  right or  intangible  asset of any other Person to the
         extent that such conflict has or would have a Material Adverse Effect.

                  Any  certificate  signed by any  officer  of the  Company  and
 delivered  to the  Representatives  or counsel  for the Initial  Purchasers  in
 connection with the offering of the Securities shall be deemed a representation
 and warranty by the Company,  as to matters  covered  thereby,  to each Initial
 Purchaser.

                  2.  Purchase and Sale. Subject to the terms and conditions and
                      -----------------
in  reliance  upon the  representations  and  warranties  herein set forth,  the
Company  agrees to sell to each Initial  Purchaser,  and each Initial  Purchaser
agrees, severally and not jointly, to purchase from the Company:

                  (a) at a purchase  price of 96.337%  of the  principal  amount
         thereof,  plus accrued  interest,  if any, from January 18, 2001 to the
         Closing Date,  the principal  amount of Dollar Notes set forth opposite
         such Initial Purchaser's name on Schedule I hereto, and

                  (b) at a purchase  price of 96.873%  of the  principal  amount
         thereof,  plus accrued  interest,  if any, from January 18, 2001 to the
         Closing  Date,  the principal  amount of Euro Notes set forth  opposite
         such Initial Purchaser's name on Schedule I hereto.

                  3.  Delivery  and  Payment.  Delivery  of and  payment for the
                      ----------------------
Securities shall be made at 10:00 A.M., New York City time, on January 18, 2001,
or at such time on such later date (not later than three Business Days after the
foregoing date) as the Representatives shall designate,  which date and time may
be  postponed  by agreement  between the  Representatives  and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing  Date").  Delivery of the Securities
shall be made to the  Representatives for the respective accounts of the several
Initial Purchasers against payment by the several Initial Purchasers through the
Representatives  of the  purchase  price  thereof  to or upon  the  order of the
Company by wire transfer  payable in same-day funds to the account  specified by
the Company.  Delivery of the Dollar Notes shall be made through the  facilities
of The  Depository  Trust  Company and  delivery of the Euro Notes shall be made
through the  facilities of the  Euroclear  System and  Clearstream,  Luxembourg,
unless the Representatives shall otherwise instruct.

                  4.  Offering by Initial Purchasers.  Each Initial Purchaser,
                      ------------------------------
severally and not jointly, represents and warrants to and agrees with the
Company that:

                  (a) It has not  offered  or sold,  and will not offer or sell,
         any Securities except (i) to those persons it reasonably believes to be
         qualified  institutional buyers (as defined in Rule 144A under the Act)
         and that, in connection  with each such sale, it has taken or will take
         reasonable  steps to ensure that the  purchaser of such  Securities  is
         aware that such sale is being made in reliance on Rule 144A; or (ii) in
         accordance with the restrictions set forth in Exhibit A hereto.

                  (b) Neither it nor any person acting on its behalf has made or
         will make  offers or sales of the  Securities  in the United  States by
         means  of any  form of  general  solicitation  or  general  advertising
         (within the meaning of Regulation D) in the United States.

                  5.  Agreements. The Company agrees with each Initial Purchaser
                      ----------
that:

                  (a) The Company will furnish to each Initial  Purchaser and to
         counsel for the Initial Purchasers,  without charge,  during the period
         referred to in paragraph (c) below, as many

                                       8

<PAGE>

         copies of the Final Memorandum and any amendments and supplements there
         to as you may reasonably request.

                  (b) The  Company  will  not  amend  or  supplement  the  Final
         Memorandum,  other than by filing documents under the Exchange Act that
         are  incorporated  by  reference  therein,  without  the prior  written
         consent of the Representatives;  provided,  however, that, prior to the
                                          --------   -------
         completion  of the  distribution  of  the  Securities  by  the  Initial
         Purchasers (as determined by the Initial Purchasers),  the Company will
         not file any document  under the Exchange Act that is  incorporated  by
         reference  in the  Final  Memorandum  unless,  prior  to such  proposed
         filing,  the Company has furnished the  Representatives  with a copy of
         such  document  for  their  review  and the  Representatives  have  not
         reasonably  objected to the filing of such  document.  The Company will
         promptly advise the  Representatives  when any document filed under the
         Exchange Act that is incorporated by reference in the Final  Memorandum
         shall have been filed with the Commission.

                  (c) If at any time prior to the  completion of the sale of the
         Securities   by  the  Initial   Purchasers   (as   determined   by  the
         Representatives),  any  event  occurs  as a result  of which  the Final
         Memorandum,  as then amended or supplemented,  would include any untrue
         statement  of a  material  fact or  omit to  state  any  material  fact
         necessary  to  make  the  statements  therein,  in  the  light  of  the
         circumstances  under  which they were made,  not  misleading,  or if it
         shall be  necessary  to amend or  supplement  the Final  Memorandum  to
         comply with  applicable  law, the Company  promptly (i) will notify the
         Representatives  of any such event; (ii) subject to the requirements of
         paragraph  (b)  of  this  Section  5,  will  prepare  an  amendment  or
         supplement  that will correct such statement or omission or effect such
         compliance;  and (iii) will supply any  supplemented  or amended  Final
         Memorandum  to the  several  Initial  Purchasers  and  counsel  for the
         Initial  Purchasers  without  charge  in  such  quantities  as you  may
         reasonably request.

                  (d)  The  Company  will  arrange,   if   necessary,   for  the
         qualification  of the  Securities  for sale by the  Initial  Purchasers
         under  the laws of such  jurisdictions  in the  United  States  and the
         European Union as the Representatives may reasonably designate and will
         maintain such qualifications in effect so long as required for the sale
         of the  Securities;  provided  that in no event  shall the  Company  be
                              --------
         obligated to qualify to do business in any jurisdiction where it is not
         now so qualified or to take any action that would subject it to service
         of process in suits,  other than those  arising out of the  offering or
         sale of the  Securities,  in any  jurisdiction  where  it is not now so
         subject.  The Company will promptly advise the  Representatives  of the
         receipt  by  the  Company  of  any  notification  with  respect  to the
         suspension  of the  qualification  of the  Securities  for  sale in any
         jurisdiction  or the  initiation or  threatening  of any proceeding for
         such purpose.

                  (e) The  Company  will  not,  and will not  permit  any of its
         Affiliates (other than the Initial  Purchasers,  as to whom the Company
         makes no covenant) to, resell,  under  circumstances that would require
         the  registration of the Securities  under the Act, any Securities that
         have been acquired by any of them.

                  (f) Neither the Company, nor any of its Affiliates (other than
         the Initial Purchasers,  as to whom the Company makes no covenant), nor
         any person acting on its or their behalf will,  directly or indirectly,
         make  offers or sales of any  security,  or  solicit  offers to buy any
         security,  under  circumstances  that would require the registration of
         the Securities under the Act.

                  (g) Neither the Company, nor any of its Affiliates (other than
         the Initial Purchasers,  as to whom the Company makes no covenant), nor
         any person acting on its or their behalf

                                       9

<PAGE>

         will engage in any form of general solicitation or general  advertising
         (within the  meaning  of  Regulation  D) in  connection  with  any
         offer or sale of the Securities in the United States.

                  (h)  So  long  as  any  of  the  Securities  are   "restricted
         securities"  within the meaning of Rule  144(a)(3)  under the Act,  the
         Company  will,  during any period in which it is not  subject to and in
         compliance  with  Section 13 or 15(d) of the  Exchange Act or it is not
         exempt from such reporting  requirements  pursuant to and in compliance
         with Rule 12g3-2(b)  under the Exchange Act,  provide to each holder of
         such  restricted  securities  and to  each  prospective  purchaser  (as
         designated  by such  holder) of such  restricted  securities,  upon the
         request  of such  holder  or  prospective  purchaser,  any  information
         required to be provided by Rule 144A(d)(4) under the Act. This covenant
         is intended to be for the benefit of the holders,  and the  prospective
         purchasers  designated  by  such  holders,  from  time  to time of such
         restricted securities.

                  (i) Neither the Company,  nor any of its  Affiliates,  nor any
         person  acting  on its or their  behalf  will  engage  in any  directed
         selling efforts with respect to the  Securities,  and each of them will
         comply with the offering  restrictions  requirements  of  Regulation S.
         Terms  used  in this  paragraph  have  the  meanings  given  to them by
         Regulation S.

                  (j) The Company will  cooperate with the  Representatives  and
         use its best  efforts to (i) permit the Dollar Notes to be eligible for
         clearance and  settlement  through The Depository  Trust Company,  (ii)
         permit the Euro  Notes to be  eligible  for  clearance  and  settlement
         through the  Euroclear  System and  Clearstream,  Luxembourg  and (iii)
         cause  both the  Dollar  Notes and the Euro  Notes to be  approved  for
         listing on the Luxembourg Stock Exchange.

                  (k) The Company will not offer, sell,  contract to sell, grant
         any other  option to purchase  or  otherwise  dispose  of,  directly or
         indirectly,  or  announce  the  offering  of,  or  file a  registration
         statement for, any debt securities  issued or guaranteed by the Company
         or any of its  direct  or  indirect  subsidiaries,  or  enter  into any
         agreement to do any of the foregoing (other than (x) the Securities and
         the New Securities (as defined in the Registration  Rights Agreements),
         (y) pursuant to any credit facility  permitted under the Indentures and
         (z)  purchase  money  debt  and  any  other  non-capital  markets  debt
         permitted  under the  Indentures) for a period of 90 days from the date
         the Securities are issued without the prior written  consent of Salomon
         Smith Barney Inc.

                  (l) The Company  will not take,  directly or  indirectly,  any
         action designed to or that would constitute or that might reasonably be
         expected to cause or result in, under the  Exchange  Act or  otherwise,
         the  stabilization  or manipulation of the price of any security of the
         Company to facilitate the sale or resale of the Securities.

                  (m) The Company will not, at any time prior to the  expiration
         of three  years  after the  Closing  Date,  be or  become  an  open-end
         investment  company,  unit investment trust or face-amount  certificate
         company that is or is required to be registered  under Section 8 of the
         Investment  Company  Act,  and  will  not  be or  become  a  closed-end
         investment  company  required  to  be  registered  but  not  registered
         thereunder.

                  (n) The Company agrees to pay the costs and expenses  relating
         to the following matters: (i) the preparation of the Indentures and the
         Registration Rights Agreements,  the issuance of the Securities and the
         fees of the Trustee; (ii) the preparation,  printing or reproduction of
         the Preliminary  Memorandum and Final  Memorandum and each amendment or
         supplement to either of them; (iii) the printing (or  reproduction) and
         delivery  (including  postage,  air  freight  charges  and  charges for
         counting and packaging) of such copies of the

                                       10

<PAGE>

         Preliminary  Memorandum  and Final  Memorandum,  and all  amendments or
         supplements  to either of them,  as may,  in each case,  be  reasonably
         requested  for use in  connection  with  the  offering  and sale of the
         Securities; (iv) the preparation,  printing,  authentication,  issuance
         and delivery of certificates for the Securities, including any stamp or
         transfer taxes in connection with the original issuance and sale of the
         Securities;  (v) the  printing (or  reproduction)  and delivery of this
         Agreement,  any  blue  sky  memorandum  and  all  other  agreements  or
         documents  printed (or reproduced) and delivered in connection with the
         offering of the Securities;  (vi) any  registration or qualification of
         the Securities for offer and sale under the securities or blue sky laws
         of the several states  (including  filing fees and the reasonable  fees
         and  expenses of counsel for the  Initial  Purchasers  relating to such
         registration  and  qualification);  (vii)  admitting the Securities for
         trading in The Portal  Market of the NASD and on the  Luxembourg  Stock
         Exchange;  (viii) the  transportation and other expenses incurred by or
         on behalf of Company  representatives  in connection with presentations
         to prospective purchasers of the Securities; (ix) the fees and expenses
         of the  Company's  accountants  and the fees and  expenses  of  counsel
         (including  local and special  counsel)  for the  Company;  and (x) all
         other costs and expenses  incident to the performance by the Company of
         its obligations hereunder.  It is understood,  however, that, except as
         provided  in this  Section,  and  Sections 7 and 8 hereof,  the Initial
         Purchasers will pay all of their own costs and expenses,  including the
         fees of their counsel, Cravath, Swaine & Moore.

                  6.  Conditions to the  Obligations of the Initial  Purchasers.
                      ---------------------------------------------------------
The  obligations of the Initial  Purchasers to purchase the Securities  shall be
subject to the accuracy of the representations and warranties on the part of the
Company  contained  herein at the  Execution  Time and the Closing  Date, to the
accuracy of the statements of the Company made in any  certificates  pursuant to
the provisions  hereof,  to the  performance  by the Company of its  obligations
hereunder and to the following additional conditions:

                  (a) The  Company  shall have  requested  and caused  Wachtell,
         Lipton,  Rosen & Katz,  counsel  for the  Company,  to  furnish  to the
         Representatives  its opinion,  dated the Closing Date and  addressed to
         the Representatives, to the effect that:

                           (i)  the  Indentures   have  been  duly   authorized,
                  executed  and  delivered,  and,  assuming  due  authorization,
                  execution and delivery by the Trustee, constitute legal, valid
                  and  binding  instruments  enforceable  against the Company in
                  accordance with their terms (subject, as to the enforcement of
                  remedies,    to   applicable    bankruptcy,    reorganization,
                  insolvency,  moratorium  or other  laws  affecting  creditors'
                  rights  generally  from time to time in effect  and to general
                  principles of equity, including, without limitation,  concepts
                  of materiality,  reasonableness,  good faith and fair dealing,
                  regardless of whether  considered in a proceeding in equity or
                  at law); the Securities have been duly and validly  authorized
                  and, when executed and  authenticated  in accordance  with the
                  provisions of the  Indentures and delivered to and paid for by
                  the Initial  Purchasers under this Agreement,  will constitute
                  legal,  valid and binding  obligations of the Company entitled
                  to  the  benefits  of  the  Indentures  (subject,  as  to  the
                  enforcement   of   remedies,    to   applicable    bankruptcy,
                  reorganization, insolvency, moratorium or other laws affecting
                  creditors' rights generally from time to time in effect and to
                  general principles of equity,  including,  without limitation,
                  concepts of materiality,  reasonableness,  good faith and fair
                  dealing,  regardless of whether  considered in a proceeding in
                  equity or at law); the  Registration  Rights  Agreements  have
                  been duly authorized, executed and delivered and, assuming due
                  authorization,  execution  and  delivery by the other  parties
                  thereto,  constitute  legal,  valid  and  binding  instruments
                  enforceable against the Company in accordance with their terms
                  (subject,  as to the  enforcement  of remedies,  to applicable
                  bankruptcy,  reorganization,  insolvency,  moratorium or other
                  laws affecting

                                       11

<PAGE>

                  creditors'  rights  generally  from  time  to time  in  effect
                  and to general principles of equity, including,  without
                  limitation, concepts of materiality, reasonableness,
                  good faith and fair dealing, regardless of whether considered
                  in a proceeding in equity or at law); and the statements set
                  forth  under the heading "Description of Notes" and "Exchange
                  Offer;  Registration Rights" in the Final  Memorandum, insofar
                  as such  statements  purport to  summarize  certain provisions
                  of the  Securities,  the  Indentures  and  the  Registration
                  Rights Agreements,   provide,  in  all  material  respects,
                  a  fair  summary  of  such provisions;

                           (ii) the statements in the Final Memorandum under the
                  heading "Important Federal Income Tax Considerations", insofar
                  as  such  statements  summarize  legal  matters,   agreements,
                  documents or proceedings  discussed therein,  are accurate and
                  fair summaries of such legal matters, agreements, documents or
                  proceedings;

                           (iii) such  counsel has acted as special  counsel for
                  the Company in connection with the  transactions  contemplated
                  by the Purchase Agreement,  and does not and has not acted for
                  the Company as regular outside counsel for litigation,  ERISA,
                  antitrust,  intellectual  property,  commercial,  corporate or
                  other  matters,  and  has  participated  in  conferences  with
                  officers  and  other   representatives  of  the  Company,  and
                  representatives and counsel to the Initial Purchasers,  all of
                  whom  participated in the preparation of the Final Memorandum,
                  at which conferences the contents of the Final Memorandum were
                  discussed,  and, although it has not  independently  verified,
                  and is not passing upon and assumes no responsibility for, the
                  accuracy,  completeness or fairness of, or otherwise verified,
                  the statements  made in, the Final  Memorandum,  no facts have
                  come to its attention  which lead it to believe that the Final
                  Memorandum  (other than the financial  statements  and related
                  notes thereto and the other  financial,  statistical,  reserve
                  and  accounting  data  included  in or omitted  from the Final
                  Memorandum,  all as to which it expresses no opinion),  on the
                  date  thereof  or at the  Closing  Date  contained  an  untrue
                  statement  of a  material  fact or omitted to state a material
                  fact  necessary in order to make the  statements  therein,  in
                  light of the  circumstances  under  which they were made,  not
                  misleading;

                           (iv)  this   Agreement  has  been  duly   authorized,
                  executed and delivered by the Company;

                           (v)  neither  the   execution  and  delivery  of  the
                  Indentures,   this  Agreement  or  the   Registration   Rights
                  Agreements,  the  issue  and sale of the  Securities,  nor the
                  consummation  of any  other  of  the  transactions  herein  or
                  therein contemplated,  nor the fulfillment of the terms hereof
                  or thereof will conflict with, result in a breach or violation
                  of, or imposition of any lien,  charge or encumbrance upon any
                  property  or asset of the  Company or any of its  subsidiaries
                  pursuant to, (i) the charter or by-laws of the  Company;  (ii)
                  the terms of the Company's  Existing  Bank Credit  Facilities,
                  including any covenant  contained  therein;  or (iii) any law,
                  rule  or  regulation  of  the  United  States   applicable  to
                  securities  transactions or the General Corporation Law of the
                  State of Delaware;

                           (vi) assuming the accuracy of the representations and
                  warranties  and  compliance  with  the  agreements   contained
                  herein,  no registration of the Securities  under the Act, and
                  no  qualification  of an indenture  under the Trust  Indenture
                  Act,  is  required  for the  offer  and  sale  by the  Initial
                  Purchasers  of the  Securities in the manner  contemplated  by
                  this Agreement; and

                                       12

<PAGE>

                           (vii) the Company is not and,  after giving effect to
                  the offering and sale of the Securities and the application of
                  the proceeds  thereof as  described  in the Final  Memorandum,
                  will  not  be  an  "investment  company"  as  defined  in  the
                  Investment Company Act without taking account of any exemption
                  arising  out  of  the  number  of  holders  of  the  Company's
                  securities.

                  In  rendering  such  opinion,  such counsel may rely (A) as to
matters  involving the  application of laws of any  jurisdiction  other than the
States of Delaware and New York or the Federal laws of the United States, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel  of  good  standing  whom  they  believe  to be  reliable  and  who  are
satisfactory  to counsel  for the Initial  Purchasers;  and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the  Company  and  public   officials.   Such  opinion  may  contain   customary
assumptions, exceptions, limitations, qualifications and comments. References to
the Final  Memorandum  in this Section 6(a) include any  amendment or supplement
thereto at the Closing Date.

                  (b) The  Company  shall have  requested  and caused  Albert F.
         Moreno,  Esq.,  Senior  Vice  President  and  General  Counsel  for the
         Company,  to  furnish to the  Representatives  his  opinion,  dated the
         Closing Date and addressed to the Representatives, to the effect that:

                           (i) each of the Company and the  subsidiaries  listed
                  on Annex A (individually, a "Subsidiary" and collectively, the
                  "Subsidiaries") has been duly incorporated or organized and is
                  validly  existing as a corporation or other valid legal entity
                  in good standing under the laws of the  jurisdiction  in which
                  it is chartered or organized,  with full  corporate or company
                  power and  authority to own or lease,  as the case may be, and
                  to  operate  its   properties  and  conduct  its  business  as
                  described in the Final Memorandum, and is duly qualified to do
                  business as a foreign  corporation or other valid legal entity
                  and is in good  standing  under the laws of each  jurisdiction
                  which requires such qualification,  except in jurisdictions in
                  which the failure to be so qualified or to be in good standing
                  has not had and would not  reasonably  be  expected  to have a
                  Material Adverse Effect;

                           (ii) all the  outstanding  shares of capital stock of
                  the  Company  and each  Subsidiary  have been duly and validly
                  authorized  and issued  and are fully paid and  nonassessable,
                  and, except as otherwise set forth in the Final Memorandum and
                  other than the Company's subsidiaries in Japan and Turkey, all
                  outstanding  shares of capital stock of the  Subsidiaries  are
                  owned by the Company  either  directly or through wholly owned
                  subsidiaries free and clear of any perfected security interest
                  and, to the knowledge of such counsel,  after due inquiry, any
                  other security interests, claims, liens or encumbrances;

                           (iii) the Company's authorized equity  capitalization
                  is as set forth in the Final Memorandum;

                           (iv) to the best knowledge of such counsel,  there is
                  no pending or  threatened  action,  suit or  proceeding  by or
                  before any court or governmental agency,  authority or body or
                  any   arbitrator   involving   the   Company  or  any  of  its
                  subsidiaries  or its or their  property that is not adequately
                  disclosed  in the  Final  Memorandum,  except in each case for
                  such  proceedings  that,  if  the  subject  of an  unfavorable
                  decision,  ruling  or  finding  would  not  singly  or in  the
                  aggregate, result in a Material Adverse Effect;

                           (v) such counsel has no reason to believe that at the
                  Execution  Time and on the Closing  Date the Final  Memorandum
                  contained or contains any untrue statement

                                       13

<PAGE>

                  of a material  fact or omitted or omits to state any  material
                  fact necessary to make the statements therein, in the light of
                  the  circumstances  under which they were made, not misleading
                  (in each case,  other than the financial  statements and other
                  financial  information  contained  therein,  as to which  such
                  counsel need express no opinion);

                           (vi) assuming the accuracy of the representations and
                  warranties  of the  Initial  Purchasers  in  Section 4 of this
                  Agreement, no consent, approval, authorization, filing with or
                  order of any court or governmental  agency or body is required
                  in connection with the transactions  contemplated herein or in
                  the Indentures and the Registration Rights Agreements,  except
                  such as will be obtained under the Act and the Trust Indenture
                  Act in connection  with the  transactions  contemplated by the
                  Registration  Rights  Agreements  and such as may be  required
                  under the blue sky or securities  laws of any  jurisdiction in
                  connection   with  the   transactions   contemplated  by  this
                  Agreement  and the  Registration  Rights  Agreements  and such
                  other  approvals  (specified  in such  opinion)  as have  been
                  obtained; and

                           (vii)  neither  the  execution  and  delivery  of the
                  Indentures,   this  Agreement  or  the   Registration   Rights
                  Agreements,  the  issue  and sale of the  Securities,  nor the
                  consummation  of any  other  of  the  transactions  herein  or
                  therein contemplated,  nor the fulfillment of the terms hereof
                  or thereof will conflict with, result in a breach or violation
                  of, or imposition of any lien,  charge or encumbrance upon any
                  property  or asset of the  Company or any of its  subsidiaries
                  pursuant  to, (i) the charter or by-laws of the Company or any
                  of  its  subsidiaries;   (ii)  the  terms  of  any  indenture,
                  contract, lease, mortgage, deed of trust, note agreement, loan
                  agreement or other agreement, obligation,  condition, covenant
                  or instrument to which the Company or any of its  subsidiaries
                  is a party  or  bound  or to  which  any of  their  respective
                  properties  is  subject;  or (iii)  any  statute,  law,  rule,
                  regulation,  judgment,  order  or  decree  applicable  to  the
                  Company or any of its  subsidiaries  of any court,  regulatory
                  body, administrative agency,  governmental body, arbitrator or
                  other  authority  of the  United  States or any state  thereof
                  having jurisdiction over the Company,  any of its subsidiaries
                  or any of their  respective  properties or to the knowledge of
                  such counsel, any statute,  law, rule,  regulation,  judgment,
                  order  or  decree  applicable  to  the  Company  or any of its
                  subsidiaries  of any court,  regulatory  body,  administrative
                  agency,  governmental  body,  arbitrator  or  other  authority
                  outside  of the United  States  having  jurisdiction  over the
                  Company,  any of its  subsidiaries or any of their  respective
                  properties,  except,  with  respect to (x) clause (ii) and (y)
                  any statute, law, rule, regulation,  judgment, order or decree
                  applicable  to the Company or any of its  subsidiaries  of any
                  court,  regulatory body,  administrative agency,  governmental
                  body,  arbitrator  or other  authority  outside  of the United
                  States  described in clause (iii) as to which such counsel has
                  no  knowledge,   for   conflicts,   violations,   breaches  or
                  impositions  that would not  reasonably  be expected to have a
                  Material Adverse Effect.

                  In  rendering  such  opinion,  such counsel may rely (A) as to
matters  involving the  application of laws of any  jurisdiction  other than the
States of Delaware and California or the Federal laws of the United  States,  to
the extent he deems proper and  specified in such  opinion,  upon the opinion of
other  counsel of good  standing  whom he believes  to be  reliable  and who are
satisfactory  to counsel  for the Initial  Purchasers;  and (B) as to matters of
fact,  to the  extent he deems  proper,  on  certificates  of other  responsible
officers of the Company and public officials. Such opinion may contain customary
assumptions, exceptions, limitations, qualifications and comments. References to
the Final  Memorandum  in this Section 6(a) include any  amendment or supplement
thereto at the Closing Date.

                                       14

<PAGE>

                  (c) The  Representatives  shall have  received  from  Cravath,
         Swaine & Moore,  counsel for the Initial  Purchasers,  such  opinion or
         opinions,  dated the Closing Date and addressed to the Representatives,
         with  respect  to  the  issuance  and  sale  of  the  Securities,   the
         Indentures,  the Registration  Rights Agreements,  the Final Memorandum
         (as  amended or  supplemented  at the Closing  Date) and other  related
         matters as the Representatives may reasonably require,  and the Company
         shall have furnished to such counsel such documents as they request for
         the purpose of enabling them to pass upon such matters.

                  (d) The Company shall have furnished to the  Representatives a
         certificate of the Company,  signed by the Chief Financial  Officer and
         the  Treasurer,  dated the Closing Date, to the effect that the signers
         of such certificate have carefully  examined the Final Memorandum,  any
         amendment or supplement to the Final  Memorandum and this Agreement and
         that:

                           (i) the representations and warranties of the Company
                  in  this  Agreement  are  true  and  correct  in all  material
                  respects on and as of the Closing Date with the same effect as
                  if made on the Closing  Date,  and the Company has complied in
                  all material  respects with all the  agreements  and satisfied
                  all the  conditions  on its part to be  performed or satisfied
                  hereunder at or prior to the Closing Date; and

                           (ii)  since  the  date of the most  recent  financial
                  statements included in the Final Memorandum  (exclusive of any
                  amendment or supplement  thereto),  there has been no material
                  adverse  change in the  condition  (financial  or  otherwise),
                  prospects, earnings, business or properties of the Company and
                  its  subsidiaries,  taken as a whole,  whether or not  arising
                  from  transactions in the ordinary course of business,  except
                  as  set  forth  in or  contemplated  by the  Final  Memorandum
                  (exclusive of any amendment or supplement thereto).

                  (e) At the Execution Time and at the Closing Date, the Company
         shall have requested and caused Arthur Andersen,  LLP to furnish to the
         Representatives  letters,  dated  respectively as of the Execution Time
         and as of the Closing Date, in form and substance  satisfactory  to the
         Representatives,  confirming  that  they  are  independent  accountants
         within the meaning of the Act and the Exchange  Act and the  respective
         applicable rules and regulations adopted by the Commission  thereunder,
         that they have  performed a review of the unaudited  interim  financial
         information of the Company for the  nine-month  period ended August 27,
         2000 and as at August 27, 2000 and stating in effect that:

                           (i) in their opinion the audited financial statements
                  and financial  statement schedules included or incorporated in
                  the Final Memorandum and reported on by them comply as to form
                  in  all  material  respects  with  the  applicable  accounting
                  requirements  of the  Exchange  Act and the related  rules and
                  regulations  adopted by the Commission  thereunder  that would
                  apply to the Final  Memorandum if the Final  Memorandum were a
                  prospectus  included in a  registration  statement on Form S-1
                  under the Act;

                           (ii)  on  the  basis  of  a  reading  of  the  latest
                  unaudited  financial  statements made available by the Company
                  and its subsidiaries; their limited review, in accordance with
                  the  standards   established   under   Statement  on  Auditing
                  Standards   No.  71,  of  the  unaudited   interim   financial
                  information  for the  nine-month  period ended August 27, 2000
                  and as at  August  27,  2000,  as  indicated  in their  report
                  included or incorporated in the Final Memorandum; carrying out
                  certain  specified  procedures  (but  not  an  examination  in
                  accordance with generally  accepted auditing  standards) which
                  would not  necessarily  reveal  matters of  significance  with
                  respect

                                       15

<PAGE>

                  to the  comments  set forth in such  letter;  a reading of the
                  minutes  of the meetings of the  stockholders,  directors  and
                  executive,  audit and  personnel committees  of the  Company
                  and the  Subsidiaries;  and  inquiries  of  certain officials
                  of the Company who have  responsibility  for financial and
                  accounting matters  of the  Company  and its  subsidiaries  as
                  to  transactions  and events subsequent to November 28, 1999,
                  nothing came to their  attention  which caused them to believe
                  that:

                                 (1)   any   unaudited   financial   statements
                           included or incorporated  in the  Final  Memorandum
                           do not  comply  in form in all material respects with
                           applicable accounting  requirements and with the
                           related rules and regulations adopted by the
                           Commission with respect to financial  statements
                           included or incorporated in quarterly reports on
                           Form 10-Q under the Exchange Act; and said unaudited
                           financial statements are not in conformity  with
                           generally accepted accounting principles applied on a
                           basis substantially consistent with that of the
                           audited financial statements included or incorporated
                           in the Final Memorandum;

                                 (2)   with respect to the period  subsequent to
                           August 27, 2000, there were any  changes,  at a
                           specified  date not more than five days prior to the
                           date of the letter,  in the long-term  debt of the
                           Company and its  subsidiaries  or capital  stock of
                           the Company or decreases in the stockholders' deficit
                           of the Company as compared with the amounts shown on
                           the August 27, 2000  consolidated  balance  sheet
                           included or incorporated in the Final Memorandum, or
                           for the period from August 28, 2000 to such specified
                           date there were any decreases,  as compared with the
                           corresponding  period in the preceding quarter in net
                           sales,  gross profit,  operating income,  interest
                           expense, income before taxes or in total or per share
                           amounts  of net  income  of the  Company  and its
                           subsidiaries,  except in all  instances  for changes
                           or  decreases set forth in such letter, in which case
                           the letter shall be accompanied by an  explanation by
                           the Company as to the  significance  thereof unless
                           said explanation is not deemed necessary by the
                           Representatives; or

                                 (3) the  information  included in response to
                           Regulation  S-K, Item 301 (Selected  Financial Data),
                           Item 402 (Executive  Compensation) and  Item  503(d)
                           (Ratio  of  Earnings  to  Fixed  Charges)  is not in
                           conformity with the disclosure requirements of
                           Regulation S-K; and

                           (iii) they have  performed  certain  other  specified
                  procedures as a result of which they  determined  that certain
                  information of an accounting,  financial or statistical nature
                  (which is  limited to  accounting,  financial  or  statistical
                  information derived from the general accounting records of the
                  Company  and  its   subsidiaries)   set  forth  in  the  Final
                  Memorandum,  including  the  information  set forth  under the
                  captions  "Summary",  "Risk  Factors",   "Selected  Historical
                  Consolidated Financial Information",  "Management's Discussion
                  and Analysis of Financial Condition and Results of Operations"
                  and  "Business"  in  the  Final  Memorandum,  the  information
                  included  in the  "Management's  Discussion  and  Analysis  of
                  Financial  Condition  and Results of  Operations"  included or
                  incorporated in the Company's  Quarterly Reports on Form 10-Q,
                  incorporated in the Final Memorandum and information  included
                  in the Company's  Current Reports on Form 8-K, dated September
                  19, 2000, June 6, 2000, January 10, 2000 and January 11, 2000,
                  incorporated   in  the  Final   Memorandum   agrees  with  the
                  accounting  records  of  the  Company  and  its  subsidiaries,
                  excluding any questions of legal interpretation.

                                       16

<PAGE>

                  References  to the  Final  Memorandum  in  this  Section  6(e)
         include  any  amendment  or  supplement  thereto  at  the  date  of the
         applicable  letter.  It is understood that the letter dated the Closing
         Date will include audited financial statements for the Company's fiscal
         year ending November 26, 2000.

                  (f) Subsequent to the Execution Time or, if earlier, the dates
         as of which information is given in the Final Memorandum  (exclusive of
         any amendment or supplement thereto), there shall not have been (i) any
         change or decrease  specified  in the letter or letters  referred to in
         paragraph (e) of this Section 6; or (ii) any change, or any development
         involving  a  prospective   change,   in  or  affecting  the  condition
         (financial or otherwise),  prospects,  earnings, business or properties
         of the Company and its subsidiaries,  taken as a whole,  whether or not
         arising from transactions in the ordinary course of business, except as
         set forth in or contemplated in the Final Memorandum  (exclusive of any
         amendment  or  supplement  thereto)  the  effect of which,  in any case
         referred  to in clause (i) or (ii) above,  is, in the sole  judgment of
         the Representatives,  so material and adverse as to make it impractical
         or inadvisable to market the  Securities as  contemplated  by the Final
         Memorandum (exclusive of any amendment or supplement thereto).

                  (g)   The   Securities   shall   have   been   designated   as
         Portal-eligible securities in accordance with the rules and regulations
         of the NASD, all filings necessary for the listing of the Securities on
         the  Luxembourg  Stock  Exchange shall have been made by the Company or
         its  counsel,  neither the  Company  nor its  listing  agent shall have
         received  notice that the  Securities  are not  eligible for listing or
         that  the  Securities  will  not  be  listed  on the  Luxembourg  Stock
         Exchange,  the  application  for the listing of the  Securities  on the
         Luxembourg  Stock  Exchange  shall  not  have  been  denied,   and  the
         Securities  shall be eligible for clearance and settlement  through The
         Depository  Trust  Company,  in the case of the Dollar  Notes,  and the
         Euroclear System and Clearstream,  Luxembourg,  in the case of the Euro
         Notes.

                  (h)  Subsequent  to the Execution  Time,  there shall not have
         been any decrease in the rating of any of the Company's debt securities
         by any "nationally  recognized  statistical  rating  organization"  (as
         defined for  purposes of Rule 436(g) under the Act) or any notice given
         of any  intended or  potential  decrease in any such rating  (including
         notice of an adverse  change in the  outlook  for such  rating) or of a
         possible change in any such rating that does not indicate the direction
         of the possible change.

                  (i) Prior to the Closing Date, the Company shall have
         furnished to the Representatives such further information, certificates
         and documents as the Representatives may reasonably request.

                  If any of the conditions specified in this Section 6 shall not
have been  fulfilled  in all  material  respects  when and as  provided  in this
Agreement,  or if  any of the  opinions  and  certificates  mentioned  above  or
elsewhere in this  Agreement  shall not be in all material  respects  reasonably
satisfactory  in form and substance to the  Representatives  and counsel for the
Initial Purchasers, this Agreement and all obligations of the Initial Purchasers
hereunder  may be canceled  at, or at any time prior to, the Closing Date by the
Representatives.  Notice of such  cancellation  shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.

                  The documents  required to be delivered by this Section 6 will
 be delivered at the office of counsel for the Initial  Purchasers,  at Cravath,
 Swaine & Moore, 825 Eighth Avenue, New York, NY 10019, on the Closing Date.

                                       17

<PAGE>

                  7.  Reimbursement  of Expenses.  If the sale of the Securities
                      --------------------------
provided for herein is not consummated  because any condition to the obligations
of the  Initial  Purchasers  set forth in  Section  6 hereof  is not  satisfied,
because  of any  termination  pursuant  to  Section  10 hereof or because of any
refusal,  inability  or  failure  on the  part of the  Company  to  perform  any
agreement  herein or comply with any provision  hereof other than by reason of a
default by any of the Initial Purchasers, the Company will reimburse the Initial
Purchasers  severally  through  Salomon  Smith  Barney  Inc.  on demand  for all
out-of-pocket  expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection  with the proposed  purchase
and sale of the Securities.

                  8.  Indemnification and Contribution. (a) The Company agrees
                      --------------------------------
to indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial  Purchaser and each person who controls any
Initial  Purchaser  within the  meaning of either  the Act or the  Exchange  Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become  subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation,  at common law or otherwise,
insofar as such losses,  claims,  damages or liabilities  (or actions in respect
thereof)  arise out of or are based upon any untrue  statement or alleged untrue
statement of a material fact contained in the Preliminary Memorandum,  the Final
Memorandum  (or in any  supplement  or  amendment  thereto)  or any  information
provided by the Company to any holder or  prospective  purchaser  of  Securities
pursuant to Section 5(h), or in any amendment thereof or supplement  thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein,  in the light of the  circumstances  under  which they were
made, not misleading,  and agrees to reimburse each such  indemnified  party, as
incurred,  for any  legal  or  other  expenses  reasonably  incurred  by them in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability or action;  provided,  however, that the Company will not be liable in
                      --------   -------
any such case to the  extent  that any such  loss,  claim,  damage or  liability
arises  out of or is based upon any such  untrue  statement  or  alleged  untrue
statement or omission or alleged omission made in the Preliminary  Memorandum or
the Final  Memorandum,  or in any amendment  thereof or supplement  thereto,  in
reliance  upon and in  conformity  with  written  information  furnished  to the
Company by or on behalf of any Initial  Purchasers  through the  Representatives
specifically for inclusion  therein;  and provided further,  however,  that with
                                          -------- -------   -------
respect to any  untrue  statement  or  omission  of a material  fact made in the
Preliminary  Memorandum,  the indemnity agreement contained in this Section 8(a)
shall not inure to the  benefit of any  Initial  Purchaser  from whom the person
asserting any such loss,  claim,  damage or liability  purchased the  Securities
concerned in any initial resale of the Securities by the Initial  Purchaser,  to
the extent  that any such  loss,  claim,  damage or  liability  of such  Initial
Purchaser occurs under the circumstance where it shall have been determined by a
court of competent jurisdiction by final and nonappealable judgment that (i) the
untrue  statement or omission of a material  fact  contained in the  Preliminary
Memorandum  was  corrected  in  the  Final  Memorandum,  (ii)  the  Company  had
previously  furnished copies of the Final  Memorandum to the Initial  Purchasers
and (iii) such loss, claim, damage or liability results from the fact that there
was not sent or given to such person at or prior to the written  confirmation of
the sale of such Securities to such person, a copy of the Final Memorandum. This
indemnity  agreement will be in addition to any liability  which the Company may
otherwise have.

                  (b) Each Initial Purchaser severally and not jointly agrees to
 indemnify and hold  harmless the Company,  each of its  directors,  each of its
 officers, and each person who controls the Company within the meaning of either
 the Act or the Exchange Act, to the same extent as the foregoing indemnity from
 the  Company to each  Initial  Purchaser,  but only with  reference  to written
 information  relating to such Initial Purchaser  furnished to the Company by or
 on behalf of such Initial  Purchaser through the  Representatives  specifically
 for inclusion in the Preliminary  Memorandum or the Final Memorandum (or in any
 amendment or supplement thereto).  This indemnity agreement will be in addition
 to any liability which any Initial Purchaser may otherwise

                                       18

<PAGE>

 have.  The  Company  acknowledges  that the  statements  set  forth in the last
 paragraph of the cover page regarding the delivery of the Securities and, under
 the heading  "Plan of  Distribution",  (i) the list of Initial  Purchasers  and
 their  respective  participation  in the  sale  of  the  Securities;  (ii)  the
 sentences  related to  concessions  and  reallowances;  and (iii) the paragraph
 related to stabilization,  syndicate covering  transactions and penalty bids in
 the  Preliminary  Memorandum  and the  Final  Memorandum,  constitute  the only
 information  furnished in writing by or on behalf of the Initial Purchasers for
 inclusion in the  Preliminary  Memorandum  or the Final  Memorandum  (or in any
 amendment or supplement thereto).

                  (c) Promptly after receipt by an indemnified  party under this
Section 8 of notice of the commencement of any action,  such  indemnified  party
will, if a claim in respect thereof is to be made against the indemnifying party
under  this  Section  8,  notify  the  indemnifying  party  in  writing  of  the
commencement  thereof;  but the failure so to notify the indemnifying  party (i)
will not relieve it from liability  under  paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying  party of substantial rights and defenses;
and (ii) will  not,  in any  event,  relieve  the  indemnifying  party  from any
obligations to any indemnified party other than the  indemnification  obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to  appoint  counsel  of the  indemnifying  party's  choice at the  indemnifying
party's  expense  to  represent  the  indemnified  party in any action for which
indemnification  is  sought  (in which  case the  indemnifying  party  shall not
thereafter  be  responsible  for the fees and expenses of any  separate  counsel
retained  by the  indemnified  party or  parties  except  as set  forth  below);
provided,  however,  that such counsel shall be reasonably  satisfactory  to the
--------   -------
indemnified party.  Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified  party in an action,  the indemnified party
shall have the right to employ separate counsel  (including local counsel),  and
the  indemnifying  party shall bear the reasonable  fees,  costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest;  (ii) the actual or potential  defendants  in, or targets of, any such
action include both the  indemnified  party and the  indemnifying  party and the
indemnified  party  shall  have  reasonably  concluded  that  there may be legal
defenses  available to it and/or other  indemnified  parties which are different
from or  additional  to those  available to the  indemnifying  party;  (iii) the
indemnifying  party shall not have employed counsel  reasonably  satisfactory to
the  indemnified  party to represent the  indemnified  party within a reasonable
time after notice of the  institution of such action;  or (iv) the  indemnifying
party shall  authorize the indemnified  party to employ separate  counsel at the
expense of the indemnifying  party. An indemnifying  party will not, without the
prior  written  consent of the  indemnified  parties,  settle or  compromise  or
consent to the entry of any judgment  with respect to any pending or  threatened
claim,  action,  suit or  proceeding  in  respect  of which  indemnification  or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or  potential  parties to such claim or action)  unless such  settlement,
compromise  or consent  includes an  unconditional  release of each  indemnified
party from all liability arising out of such claim,  action, suit or proceeding.
The indemnifying  party shall not, in connection with any one action or separate
but substantially  similar or related actions in the same  jurisdiction  arising
out of the same general  allegations  or  circumstances,  be liable for fees and
expenses of more than one  separate  law firm of  attorneys  (in addition to any
local counsel) for all indemnified  parties and all such fees and expenses shall
be reimbursed as incurred. Such firm shall be designated by Salomon Smith Barney
Inc. in the case of the parties indemnified  pursuant to Section 8(a) and by the
Company in the case of  parties  indemnified  pursuant  to  Section  8(b).  Each
indemnified  party  shall  use all  reasonable  efforts  to  cooperate  with the
indemnifying party in the defense of any such action or claim.

                  (d) In the event that the indemnity  provided in paragraph (a)
 or (b) of this Section 8 is unavailable to or  insufficient to hold harmless an
 indemnified  party for any  reason,  the  Company  and the  Initial  Purchasers
 severally agree to contribute to the aggregate losses, claims, damages and

                                       19

<PAGE>

 liabilities   (including  legal  or  other  expenses   reasonably  incurred  in
connection  with  investigating  or defending same)  (collectively  "Losses") to
which the Company and one or more of the  Initial  Purchasers  may be subject in
such proportion as is appropriate to reflect the relative  benefits  received by
the Company on the one hand and by the Initial  Purchasers on the other from the
offering of the Securities; provided, however, that in no case shall any Initial
                            --------  -------
Purchaser  (except  as may  be  provided  in any  agreement  among  the  Initial
Purchasers  relating to the offering of the  Securities) be responsible  for any
amount  in excess of the  purchase  discount  or  commission  applicable  to the
Securities  purchased by such Initial  Purchaser  hereunder.  If the  allocation
provided by the  immediately  preceding  sentence is unavailable for any reason,
the  Company and the  Initial  Purchasers  severally  shall  contribute  in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and of the Initial  Purchasers
on the other in connection  with the  statements or omissions  which resulted in
such Losses, as well as any other relevant  equitable  considerations.  Benefits
received  by the Company  shall be deemed to be equal to the total net  proceeds
from the offering  (after  deducting  discounts and  commissions  to the Initial
Purchasers, but before deducting expenses) received by it, and benefits received
by the  Initial  Purchasers  shall be deemed  to be equal to the total  purchase
discounts  and  commissions  in each  case set  forth on the  cover of the Final
Memorandum.  Relative  fault shall be  determined  by reference  to, among other
things, whether any untrue or any alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information
provided by the Company on the one hand or the Initial  Purchasers on the other,
the intent of the parties and their  relative  knowledge,  access to information
and  opportunity  to correct or prevent such untrue  statement or omission.  The
Company and the Initial Purchasers agree that it would not be just and equitable
if  contribution  were  determined by pro rata allocation or any other method of
allocation which does not take account of the equitable  considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be  entitled  to  contribution  from any person who was not guilty of such
fraudulent  misrepresentation.  For  purposes of this Section 8, each person who
controls  an  Initial  Purchaser  within  the  meaning  of either the Act or the
Exchange  Act and each  director,  officer,  employee  and  agent of an  Initial
Purchaser shall have the same rights to contribution as such Initial  Purchaser,
and each person who controls the Company within the meaning of either the Act or
the Exchange  Act and each  officer and  director of the Company  shall have the
same  rights  to  contribution  as the  Company,  subject  in  each  case to the
applicable terms and conditions of this paragraph (d).

                  9.  Default by an Initial Purchaser. If any one or more
                      -------------------------------
 Initial Purchasers  shall fail to purchase and pay for any of the Securities
 agreed to be purchased by such Initial Purchaser hereunder and such failure to
 purchase shall constitute a default in the performance of its or their
 obligations under this Agreement, the remaining Initial Purchasers shall be
 obligated  severally to take up and pay for (in  the  respective  proportions
 which  the  principal amount of Securities  set forth opposite their names on
 Schedule I hereto bears to the aggregate principal amount of Securities set
 forth opposite the names of all the remaining  Initial  Purchasers)  the
 Securities  which the  defaulting Initial  Purchaser  or  Initial  Purchasers
 agreed  but  failed  to  purchase;  provided,  however,  that in the event
                                     ---------  -------
 that the aggregate  principal  amount of Securities which the defaulting
 Initial Purchaser or Initial Purchasers agreed but failed to purchase  shall
 exceed 10% of the aggregate  principal  amount of Securities  set forth on
 Schedule I hereto,  the remaining  Initial  Purchasers shall have the right to
 purchase all, but shall not be under any  obligation to purchase any, of the
 Securities,  and if such nondefaulting  Initial Purchasers do not purchase all
 the  Securities,  this  Agreement  will  terminate  without liability to any
 nondefaulting  Initial Purchaser or the Company.  In the event of a default by
 any  Initial  Purchaser  as set forth in this  Section  9, the Closing Date
 shall be postponed for such period,  not  exceeding  five Business Days, as the
 Representatives shall determine in order that the required changes in the Final
 Memorandum  or in any other  documents  or  arrangements  may be effected.
 Nothing  contained in this  Agreement  shall relieve any  defaulting Initial
 Purchaser of its

                                       20

<PAGE>

 liability,  if any, to the Company or any  nondefaulting  Initial Purchaser for
 damages occasioned by its default hereunder.

                  10. Termination.   This   Agreement   shall  be  subject  to
                      -----------
termination in the absolute discretion of the  Representatives,  by notice given
to the Company  prior to delivery of and payment for the  Securities,  if at any
time prior to such time (i)  trading  in  securities  generally  on the New York
Stock  Exchange  or the Nasdaq  National  Market  shall have been  suspended  or
limited or minimum  prices shall have been  established  on such Exchange or the
Nasdaq  National  Market;  (ii) a banking  moratorium  shall have been  declared
either by Federal  or New York  State  authorities;  or (iii)  there  shall have
occurred any outbreak or escalation of  hostilities,  declaration  by the United
States of a national  emergency or war or other calamity or crisis the effect of
which on  financial  markets is such as to make it, in the sole  judgment of the
Representatives,  impracticable  or  inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Final Memorandum (exclusive of
any amendment or supplement thereto).

                  11. Representations and Indemnities to Survive. The respective
                      ------------------------------------------
 agreements,  representations,  warranties,  indemnities and other statements of
 the Company or its officers and of the Initial  Purchasers set forth in or made
 pursuant to this Agreement will remain in full force and effect,  regardless of
 any investigation made by or on behalf of the Initial Purchasers or the Company
 or any of the officers,  directors,  employees,  agents or controlling  persons
 referred to in Section 8 hereof,  and will survive  delivery of and payment for
 the Securities;  provided,  however, that the representations and warranties of
                  --------   -------
 the Company  shall be deemed to be made at the  Execution  Time and the Closing
 Date  only.  The  provisions  of  Sections  7 and 8 hereof  shall  survive  the
 termination or cancellation of this Agreement.

                  12. Notices.  All communications  hereunder will be in writing
                      -------
 and effective  only on receipt,  and, if sent to the  Representatives,  will be
 mailed, delivered or telefaxed to the Salomon Smith Barney Inc. General Counsel
 (fax no.: (212) 816-7912) and confirmed to the General  Counsel,  Salomon Smith
 Barney Inc.  at 388  Greenwich  Street,  New York,  New York 10013,  Attention:
 General  Counsel;  or, if sent to the  Company,  will be mailed,  delivered  or
 telefaxed to (415)  501-7650 and confirmed to it at Levi's Plaza,  1155 Battery
 Street, San Francisco, CA 94111, attention of the Legal Department.

                  13. Successors.  This  Agreement will inure to the benefit of
                      ----------
 and be binding upon the parties hereto and their respective  successors and the
 officers,  directors,  employees, agents and controlling persons referred to in
 Section 8 hereof, and, except as expressly set forth in Section 5(h) hereof, no
 other person will have any right or obligation hereunder.

                  14. Applicable  Law. This  Agreement  will be governed by and
                      ---------------
construed in accordance  with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.

                  15. Counterparts.  This  Agreement  may be executed in one or
                      ------------
more  counterparts,  each of which shall constitute an original and all of which
together shall constitute one and the same instrument.

                  16. Headings.  The section headings used herein are for
                      --------
convenience only and shall not affect the construction hereof.

                  17. Definitions.  The terms which follow, when used in this
                      -----------
Agreement, shall have the meanings indicated.

                                       21

<PAGE>

                  "Act" shall mean the Securities  Act of 1933, as amended,  and
the rules and regulations of the Commission promulgated thereunder.

                  "Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.

                  "Business  Day" shall mean any day other  than a  Saturday,  a
Sunday  or a legal  holiday  or a day on  which  banking  institutions  or trust
companies are authorized or obligated by law to close in the City of New York.

                  "Clearstream, Luxembourg" means Clearstream Banking, S.A.

                  "Commission"   shall   mean  the   Securities   and   Exchange
Commission.

                  "Euroclear  System" means Morgan Guaranty Trust Company of New
 York, Brussels Office, as operator of the Euroclear Clearance System.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
 as  amended,  and the  rules  and  regulations  of the  Commission  promulgated
 thereunder.

                  "Execution  Time"  shall  mean the date  and  time  that  this
 Agreement is executed and delivered by the parties hereto.

                  "Investment Company Act" shall mean the Investment Company Act
 of  1940,  as  amended,  and  the  rules  and  regulations  of  the  Commission
 promulgated thereunder.

                  "NASD"  shall  mean the  National  Association  of  Securities
Dealers, Inc.

                  "Regulation D" shall mean Regulation D under the Act.

                  "Regulation  S" shall mean  Regulation  S under the Act.

                  "Trust  Indenture  Act" shall mean the Trust  Indenture Act of
1939, as amended, and the rules and regulations of the Commission promulgated
thereunder.

                                       22

<PAGE>

                  If the foregoing is in accordance with your  understanding  of
our  agreement,  please  sign and return to us the  enclosed  duplicate  hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
between the Company and the several Initial Purchasers.

                                                 Very truly yours,

                                                 Levi Strauss & Co.

                                                 by
                                                    __________________________
                                                    Name: William B. Chiasson
                                                    Title: Senior Vice President
                                                           and Chief Financial
                                                           Officer

                                       23

<PAGE>

The  foregoing  Agreement is hereby
confirmed and accepted as of the
date first above written.

Salomon Smith Barney Inc.
Banc of America Securities LLC
Scotia Capital (USA) Inc.
Chase Securities Inc.
Banc One Capital Markets, Inc.

By:  Salomon Smith Barney Inc.

by
    ______________________
    Name:
    Title:

For themselves and the other several Initial
Purchasers named in Schedule I to
the foregoing Agreement.

<PAGE>

                                   SCHEDULE I

                                             Principal           Principal
                                             Amount of           Amount of Euro
                                             Dollar Notes         Dollar Notes
Initial Purchasers                           to be Purchased     to be Purchased
------------------                           ---------------     ---------------

Salomon Smith Barney Inc.                    $209,000,000          68,750,000

Banc of America Securities LLC                 64,600,000          21,250,000

Scotia Capital (USA) Inc.                      64,600,000          21,250,000

Chase Securities Inc.                          34,200,000          11,250,000

Banc One Capital Markets, Inc                   7,600,000           2,500,000
                                             ------------         -----------

Total                                        $380,000,000         125,000,000

<PAGE>

                                     Annex A
                            Significant Subsidiaries

Levi Strauss & Co. (Canada) Inc.

Levi Strauss & Co. Europe S.A.

Levi Strauss & Co. Financial Services

Levi Strauss Financial Center Corporation

Levi Strauss Funding Corp.

Levi's Only Stores, Inc.

Levi Strauss (U.K.) Limited

<PAGE>

                                                                       EXHIBIT A

                       Selling Restrictions for Offers and
                       -----------------------------------
                        Sales outside the United States
                        -------------------------------

                  (1)(a) The Securities have not been and will not be registered
under the Act and may not be offered or sold within the United  States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Act or pursuant to an exemption from the  registration  requirements
of the Act.  Each  Initial  Purchaser  represents  and  agrees  that,  except as
otherwise  permitted  by Section  4(a)(i) of the  Agreement  to which this is an
exhibit,  it has  offered and sold the  Securities,  and will offer and sell the
Securities,  (i) as part of their  distribution  at any time; and (ii) otherwise
until 40 days  after  the  later of the  commencement  of the  offering  and the
Closing Date,  only in  accordance  with Rule 903 of Regulation S under the Act.
Accordingly,  each Initial Purchaser  represents and agrees that neither it, nor
any of its  Affiliates  nor any person acting on its or their behalf has engaged
or will engage in any directed  selling  efforts with respect to the Securities,
and  that  it  and  they  have  complied  and  will  comply  with  the  offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that, at
or  prior  to the  confirmation  of sale  of  Securities  (other  than a sale of
Securities  pursuant  to Section  4(a)(i) of the  Agreement  to which this is an
exhibit),  it shall have sent to each distributor,  dealer or person receiving a
selling concession,  fee or other remuneration that purchases Securities from it
during  the  distribution   compliance   period  a  confirmation  or  notice  to
substantially the following effect:

                  "The Securities  covered hereby have not been registered under
                  the U.S.  Securities  Act of 1933 (the  "Act")  and may not be
                  offered or sold  within  the  United  States or to, or for the
                  account  or  benefit  of,  U.S.  persons  (i) as part of their
                  distribution at any time or (ii) otherwise until 40 days after
                  the later of the  commencement of the offering and January 18,
                  2001, except in either case in accordance with Regulation S or
                  Rule 144A under the Act.  Terms  used above have the  meanings
                  given to them by Regulation S."

                  (b) Each Initial  Purchaser also represents and agrees that it
         has not  entered  and will not enter into any  contractual  arrangement
         with  any  distributor   with  respect  to  the   distribution  of  the
         Securities,  except  with  its  Affiliates  or with the  prior  written
         consent of the Company.

                  (c) Terms used in this section have the meanings given to them
         by Regulation S.

                  (2) Each Initial  Purchaser  represents and agrees that (i) it
 has not  offered  or sold,  and prior to the  expiration  of the  period of six
 months  from the  issue  date of the  Securities  will not  offer or sell,  any
 Securities in the United Kingdom, other than to persons whose ordinary business
 it is to buy, hold,  manage or dispose of investments,  whether as principal or
 as agent, for the purpose of their businesses or in circumstances  which do not
 constitute  an offer to the public  within the meaning of the Public  Offers of
 Securities  Regulations 1995 (the "POSR") or the Financial Services Act 1986 of
 the United  Kingdom (the "FSA");  (ii) it has complied and will comply with all
 applicable  provisions of the POSR and the FSA with respect to anything done by
 it in relation to the  Securities  in, from or otherwise  involving  the United
 Kingdom;  and (iii) it has only issued or passed on and will only issue or pass
 on in the United  Kingdom any document  received by it in  connection  with the
 issue of the Securities to a person who is of a kind described in Article 11(3)
 of the Financial  Services Act 1986  (Investment  Advertisements)  (Exemptions)
 Order  1996 (as  amended)  or is a person to whom the  document  may  otherwise
 lawfully be issued or passed on.

                                      A-1LEVI STRAUSS & CO

                   $380,000,000 11 5/8% Senior Notes Due 2008

                         REGISTRATIONS RIGHTS AGREEMENT

                                                              New York, New York
                                                                January 18, 2001

Salomon Smith Barney Inc.
Banc of America Securities LLC
Scotia Capital (USA) Inc.
Chase Securities Inc.
Banc One Capital Markets, Inc.

As Representatives of the Initial Purchasers
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013

Ladies and Gentlemen:

                 Levi Strauss & Co., a corporation  organized under the laws of
Delaware (the "Company"), proposes to issue and sell to certain purchasers (the
"Initial Purchasers"), upon the terms set forth in a purchase agreement of even
date herewith (the "Purchase  Agreement"),  its  $380,000,000 of 11 5/8% Senior
Notes Due 2008 ( the  "Securities")  relating to the initial  placement  of the
Securities (the "Initial Placement"). To induce the Initial Purchasers to enter
into the  Purchase  Agreement  and to satisfy a condition  of your  obligations
thereunder, the Company agrees with you for your benefit and the benefit of the
holders from time to time of the Securities  (including the Initial Purchasers)
(each a "Holder" and, together, the "Holders"), as follows:

                  1.  Definitions. Capitalized terms used herein without
                      -----------
definition shall have the respective meanings set forth in the Purchase
Agreement.  As used in this Agreement, the following capitalized defined terms
shall have the following meanings:

                  "Act" shall mean the Securities  Act of 1933, as amended,  and
the rules and regulations of the Commission promulgated thereunder.

<PAGE>

                  "Affiliate"  of any  specified  person  shall  mean any  other
person that,  directly or indirectly,  is in control of, is controlled by, or is
under  common  control  with,  such  specified  person.  For  purposes  of  this
definition,  control of a person shall mean the power,  direct or  indirect,  to
direct or cause the  direction  of the  management  and  policies of such person
whether by contract or otherwise;  and the terms  "controlling" and "controlled"
shall have meanings correlative to the foregoing.

                  "Broker-Dealer"  shall mean any broker or dealer registered as
such under the Exchange Act.

                  "Business  Day" shall mean any day other  than a  Saturday,  a
Sunday  or a legal  holiday  or a day on  which  banking  institutions  or trust
companies are authorized or obligated by law to close in New York City.

                  "Commission"   shall   mean  the   Securities   and   Exchange
Commission.

                  "Euro Notes" shall mean the Company's euro denominated 11 5/8%
Senior Notes due 2008.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as  amended,  and  the  rules  and  regulations  of the  Commission  promulgated
thereunder.

                  "Exchange Offer Prospectus" shall mean the prospectus included
 in the Exchange Offer Registration Statement, as amended or supplemented by any
 prospectus supplement, with respect to the terms of the offering of any portion
 of the New  Securities  (and,  if the  Company  so  chooses  and to the  extent
 permitted by  applicable  law,  any portion of the  Company's  debt  securities
 offered  in  exchange  for the  Euro  Notes)  covered  by such  Exchange  Offer
 Registration  Statement,  and all  amendments and  supplements  thereto and all
 material incorporated by reference therein.

                                       2

<PAGE>

                  "Exchange  Offer  Registration  Period" shall mean the 180-day
 period following the consummation of the Registered  Exchange Offer,  exclusive
 of any period  during  which any stop order shall be in effect  suspending  the
 effectiveness of the Exchange Offer Registration Statement.

                  "Exchange   Offer   Registration   Statement"   shall  mean  a
 registration statement of the Company on an appropriate form under the Act with
 respect to the Registered Exchange Offer (and, if the Company so chooses and to
 the extent  permitted by applicable  law, with respect to an offer to issue and
 deliver to the holders of the Euro Notes,  in  exchange  for the Euro Notes,  a
 like aggregate principal amount of the Company's debt securities denominated in
 euros),  all  amendments  and  supplements  to  such  registration   statement,
 including  post-effective  amendments  thereto,  in  each  case  including  the
 Exchange  Offer  Prospectus  contained  therein,  all exhibits  thereto and all
 material incorporated by reference therein.

                  "Exchanging  Dealer"  shall mean any Holder (which may include
any Initial  Purchaser) that is a  Broker-Dealer  and elects to exchange for New
Securities  any  Securities  that it acquired for its own account as a result of
market-making  activities or other trading activities (but not directly from the
Company or any Affiliate of the Company).

                  "Holder"  shall  have the  meaning  set forth in the  preamble
hereto.

                  "Indenture"   shall  mean  the   indenture   relating  to  the
 Securities,  dated as of January 18,  2001,  between the Company and  Citibank,
 N.A.,  as trustee,  as the same may be amended from time to time in  accordance
 with the terms thereof.

                  "Initial  Placement"  shall have the  meaning set forth in the
preamble  hereto.  "Initial  Purchaser"  shall have the meaning set forth in the
preamble  hereto.  "Losses"  shall have the  meaning  set forth in Section  6(d)
hereof.

                  "Majority Holders" shall mean the Holders of a majority of the
 aggregate  principal  amount  of  Securities  registered  under a  Registration
 Statement.

                  "Managing  Underwriters"  shall mean the investment  banker or
 investment   bankers  and  manager  or  managers   that  shall   administer  an
 underwritten offering.

                  "New  Securities"  shall mean debt  securities  of the Company
 identical in all material respects to the Securities  (except that the interest
 rate  step-up  provisions  and the transfer  restrictions  shall be modified or
 eliminated,  as  appropriate)  and to be issued under the  Indenture or the New
 Securities Indenture.

                  "New Securities Indenture" shall mean an indenture between the
 Company and the New Securities  Trustee,  identical in all material respects to
 the  Indenture  (except  that the  interest  rate  step-up  provisions  will be
 modified or eliminated, as appropriate).

                  "New  Securities  Trustee" shall mean the Trustee or a bank or
 trust company  reasonably  satisfactory to the Initial  Purchasers,  as trustee
 with respect to the New Securities under the New Securities Indenture.

                  "Prospectus"  shall  mean  the  prospectus   included  in  any
 Registration  Statement  (including,  without  limitation,  a  prospectus  that
 discloses information  previously omitted from a prospectus filed as part of an
 effective  registration statement in reliance upon Rule 430A under the Act), as
 amended or supplemented by any prospectus supplement, with respect to the terms
 of the offering of any portion of the Securities or the New Securities  covered
 by such Registration Statement,  and all amendments and supplements thereto and
 all material incorporated by reference therein.

                                       3

<PAGE>

                  "Purchase  Agreement"  shall have the meaning set forth in the
preamble hereto.

                  "Registered  Exchange  Offer" shall mean the proposed offer of
the Company to issue and deliver to the Holders of the  Securities  that are not
prohibited by any law or policy of the  Commission  from  participating  in such
offer, in exchange for the Securities,  a like aggregate principal amount of the
New Securities.

                  "Registration   Statement"   shall  mean  any  Exchange  Offer
Registration  Statement or Shelf  Registration  Statement that covers any of the
Securities or the New Securities  pursuant to the provisions of this  Agreement,
any  amendments  and  supplements  to  such  registration  statement,  including
post-effective  amendments  (in each case  including  the  Prospectus  contained
therein),  all  exhibits  thereto and all  material  incorporated  by  reference
therein.

                  "Securities"  shall have the meaning set forth in the preamble
hereto.

                  "Shelf  Registration"  shall  mean  a  registration   effected
pursuant to Section 3 hereof.

                  "Shelf  Registration  Period"  has the  meaning  set  forth in
Section 3(b) hereof.

                  "Shelf   Registration   Statement"   shall   mean  a   "shelf"
 registration  statement of the Company  pursuant to the provisions of Section 3
 hereof  which  covers  some  or all of the  Securities  or New  Securities,  as
 applicable, on an appropriate form under Rule 415 under the Act, or any similar
 rule that may be adopted by the Commission,  amendments and supplements to such
 registration  statement,  including  post-effective  amendments,  in each  case
 including  the  Prospectus  contained  therein,  all  exhibits  thereto and all
 material incorporated by reference therein.

                  "Trustee"   shall  mean  the  trustee   with  respect  to  the
Securities under the Indenture.

                  "underwriter"  shall mean any  underwriter  of  Securities  in
 connection with an offering thereof under a Shelf Registration Statement.

                  2.  Registered Exchange  Offer.  (a) The Company shall prepare
                      --------------------------
and, not later than 60 days  following the date of the original  issuance of the
Securities,  shall file with the  Commission  the  Exchange  Offer  Registration
Statement with respect to the Registered  Exchange Offer.  The Company shall use
its best efforts to cause the Exchange  Offer  Registration  Statement to become
effective under the Act within 120 days of the date of the original  issuance of
the Securities.

                  (b) Upon the effectiveness of the Exchange Offer  Registration
Statement, the Company shall promptly commence the Registered Exchange Offer, it
being the  objective  of such  Registered  Exchange  Offer to enable each Holder
electing to exchange Securities for New

                                       4

<PAGE>

Securities  (assuming  that such  Holder  is not an  Affiliate  of the  Company,
acquires the New  Securities in the ordinary  course of such Holder's  business,
has no  arrangements  with any person to participate in the  distribution of the
New Securities and is not prohibited by any law or policy of the Commission from
participating  in the  Registered  Exchange  Offer) to trade such New Securities
from and after their receipt without any  limitations or restrictions  under the
Act and without material restrictions under the securities laws of a substantial
proportion of the several states of the United States.

                  (c) In connection with the Registered Exchange Offer, the
Company shall:

                  (i) mail to each Holder a copy of the Prospectus  forming part
         of  the  Exchange  Offer  Registration  Statement,   together  with  an
         appropriate letter of transmittal and related documents;

                  (ii) keep the Registered Exchange Offer open for not less than
         30  Business  Days and not more than 45  Business  Days  after the date
         notice  thereof is mailed to the Holders  (or, in each case,  longer if
         required by applicable law);

                  (iii) use its  reasonable  best  efforts to keep the  Exchange
         Offer Registration Statement continuously  effective,  supplemented and
         amended as required,  under the Act to ensure that it is available  for
         sales of New Securities by Exchanging Dealers during the Exchange Offer
         Registration  Period;  provided  that if any  Initial  Purchaser  holds
                                --------
         Securities  that it  acquired  for  its  own  account  as a  result  of
         market-making  activities or other trading activities (but not directly
         from the Company or any Affiliate of the Company)  after the expiration
         of the Exchange Offer Registration Period, that Initial Purchaser shall
         have the right, for 90 days immediately following the expiration of the
         Exchange Offer Registration Period, to request the Company to prepare a
         prospectus  for  use  by  that  Initial  Purchaser  for  sales  of  New
         Securities,  and the Company shall use its  reasonable  best efforts to
         prepare that prospectus for such use;

                  (iv) utilize the services of a depositary  for the  Registered
         Exchange  Offer with an address in the Borough of Manhattan in New York
         City,  which  may be the  Trustee,  the New  Securities  Trustee  or an
         Affiliate of either of them;

                  (v) permit Holders to withdraw tendered Securities at any time
         prior to the close of business, New York time, on the last Business Day
         on which the Registered Exchange Offer is open;

                  (vi) prior to effectiveness of the Exchange Offer Registration
         Statement,  if  requested  or  required  by the  Commission,  provide a
         supplemental  letter to the  Commission (A) stating that the Company is
         conducting the Registered Exchange Offer in reliance on the position of
         the Commission in Exxon Capital Holdings  Corporation  (pub. avail. May
                           -----------------------------------
         13, 1988) and Morgan Stanley and Co., Inc. (pub.  avail. June 5, 1991);
                       ----------------------------
         and (B)  including  a  representation  that the Company has not entered
         into any

                                       5

<PAGE>

         arrangement  or  understanding  with any person to  distribute  the New
         Securities to be received in the Registered Exchange Offer and that, to
         the  best  of  the  Company's   information  and  belief,  each  Holder
         participating  in the  Registered  Exchange  Offer is acquiring the New
         Securities in the ordinary course of business and has no arrangement or
         understanding with any person to participate in the distribution of the
         New Securities; and

                  (vii)  comply in all respects with all applicable laws.

                  (d) As soon as  practicable  after the close of the Registered
Exchange Offer, the Company shall:

                  (i)  accept  for  exchange  all  Securities  tendered  and not
         validly withdrawn pursuant to the
         Registered Exchange Offer;

                  (ii) deliver to the Trustee for cancelation in accordance with
         Section 4(s) all Securities so accepted for exchange; and

                  (iii)   cause  the  New   Securities   Trustee   promptly   to
         authenticate  and  deliver to each  Holder of  Securities  a  principal
         amount  of  New  Securities  equal  to  the  principal  amount  of  the
         Securities of such Holder so accepted for exchange.

                  (e) Each Holder hereby  acknowledges  and agrees that any such
Holder using the Registered  Exchange Offer to participate in a distribution  of
the New  Securities  (x) could not under  Commission  policy as in effect on the
date of this  Agreement rely on the position of the Commission in Morgan Stanley
                                                                  --------------
and Co., Inc. (pub. avail. June 5, 1991) and Exxon Capital Holdings  Corporation
------------                                 -----------------------------------
(pub.  avail.  May 13,  1988),  as  interpreted  in the  Commission's  letter to
Shearman & Sterling dated July 2, 1993 and similar  no-action  letters;  and (y)
must comply with the  registration and prospectus  delivery  requirements of the
Act in connection with any secondary resale transaction which must be covered by
an effective  registration  statement  containing  the selling  security  holder
information required by Item 507 or 508, as applicable,  of Regulation S-K under
the Act if the resales are of New Securities obtained by such Holder in exchange
for Securities  acquired by such Holder  directly from the Company or one of its
Affiliates.  Accordingly,  each Holder  participating in the Registered Exchange
Offer shall be required to  represent  to the Company  that,  at the time of the
consummation of the Registered Exchange Offer:

                  (i)  any  New  Securities  received  by  such  Holder  will be
         acquired in the ordinary course of business;

                  (ii) such Holder  will have no  arrangement  or  understanding
         with any person to participate in the distribution of the Securities or
         the New Securities within the meaning of the Act; and

                                       6

<PAGE>

                  (iii)  such Holder is not an Affiliate of the Company.

                  (f)  If  any  Initial  Purchaser  determines  that  it is  not
 eligible to participate  in the  Registered  Exchange Offer with respect to the
 exchange of Securities  constituting any portion of an unsold allotment, at the
 request of such Initial Purchaser,  the Company shall issue and deliver to such
 Initial  Purchaser or the person  purchasing New Securities  registered under a
 Shelf  Registration  Statement  as  contemplated  by Section 3 hereof from such
 Initial Purchaser, in exchange for such Securities,  a like principal amount of
 New  Securities.  The  Company  shall use its best  efforts  to cause the CUSIP
 Service  Bureau to issue the same CUSIP numbers for such New  Securities as for
 New Securities issued pursuant to the Registered Exchange Offer.

                  3.  Shelf Registration. (a) If (i) due to any change in law or
                      ------------------
applicable  interpretations  thereof  by the  Commission's  staff,  the  Company
determines upon advice of its outside counsel that it is not permitted to effect
the Registered  Exchange Offer as contemplated by Section 2 hereof; (ii) for any
other reason the Exchange Offer Registration Statement is not declared effective
within  120 days of the  date of  original  issuance  of the  Securities  or the
Registered  Exchange  Offer is not  consummated  within  150 days of the date of
original  issuance of the  Securities;  (iii) any Initial  Purchaser so requests
within 45 days of consummation of the Registered  Exchange Offer with respect to
Securities  that are not  eligible to be  exchanged  for New  Securities  in the
Registered Exchange Offer and that are held by it following  consummation of the
Registered  Exchange Offer; (iv) any Holder (other than an Initial Purchaser) so
requests within 45 days of consummation of the Registered  Exchange Offer on the
basis  that such  Holder  was not  eligible  to  participate  in the  Registered
Exchange  Offer or does not  receive  freely  tradeable  New  Securities  in the
Registered Exchange Offer other than by reason of such Holder being an Affiliate
of the Company (it being  understood  that a requirement to deliver a Prospectus
in connection with market-making activities or other trading shall not result in
the applicable  securities not being "freely tradeable");  or (v) in the case of
any Initial  Purchaser that  participates  in the  Registered  Exchange Offer or
acquires New Securities  pursuant to Section 2(f) hereof, such Initial Purchaser
does not receive  freely  tradeable New  Securities  in exchange for  Securities
constituting  any portion of an unsold  allotment (it being  understood that (x)
the requirement that an Initial  Purchaser  deliver a Prospectus  containing the
information  required  by Item 507 or 508 of  Regulation  S-K  under  the Act in
connection with sales of New Securities acquired in exchange for such Securities
shall result in such New Securities  being not "freely  tradeable";  and (y) the
requirement  that an Exchanging  Dealer deliver an Exchange Offer  Prospectus in
connection  with sales of New  Securities  acquired in the  Registered  Exchange
Offer  in  exchange  for  Securities  acquired  as  a  result  of  market-making
activities or other trading  activities  shall not result in such New Securities
being not "freely  tradeable"),  the Company  shall effect a Shelf  Registration
Statement in accordance with subsection (b) below.

                  (b) (i) The Company shall as promptly as  practicable  (but in
 no event more than 60 days after so  required  or  requested  pursuant  to this
 Section 3), file with the Commission and thereafter  shall cause to be declared
 effective under the Act a Shelf  Registration  Statement  relating to the offer
 and sale of the Securities or the New Securities, as applicable, by the Holders
 thereof  from  time to time in  accordance  with the  methods  of  distribution
 elected by such

                                       7

<PAGE>

 Holders and set forth in such Shelf Registration Statement;  provided, however,
 that no Holder (other than an Initial  Purchaser) shall be entitled to have the
 Securities held by it covered by such Shelf Registration  Statement unless such
 Holder agrees in writing to be bound by all of the provisions of this Agreement
 applicable  to such  Holder;  and  provided  further,  that with respect to New
 Securities  received  by  an  Initial  Purchaser  in  exchange  for  Securities
 constituting any portion of an unsold allotment,  the Company may, if permitted
 by current  interpretations  by the Commission's  staff,  file a post-effective
 amendment  to  the  Exchange  Offer  Registration   Statement   containing  the
 information  required by Item 507 or 508 of Regulation  S-K, as applicable,  in
 satisfaction of its obligations under this subsection with respect thereto, and
 any  such  Exchange  Offer  Registration  Statement,  as so  amended,  shall be
 referred to herein as, and governed by the provisions  herein  applicable to, a
 Shelf Registration Statement.

                  (ii) The Company shall use its reasonable best efforts to keep
the  Shelf  Registration  Statement  continuously  effective,  supplemented  and
amended as required by the Act, in order to permit the  Prospectus  forming part
thereof to be usable by Holders for a period of two years from the Closing  Date
or such  shorter  period  that will  terminate  when all the  Securities  or New
Securities, as applicable, covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement (in any such case, such period
being called the "Shelf Registration  Period").  The Company shall be deemed not
to have  used  its  reasonable  best  efforts  to keep  the  Shelf  Registration
Statement  effective  during the requisite  period if it  voluntarily  takes any
action that would result in Holders of Securities covered thereby not being able
to offer and sell such Securities during that period,  unless (A) such action is
required by  applicable  law; or (B) such action is taken by the Company in good
faith and for valid business  reasons (not including  avoidance of the Company's
obligations  hereunder),  including the acquisition or divestiture of assets, so
long as the  Company  promptly  thereafter  complies  with the  requirements  of
Section  4(k)  hereof,  if  applicable.  The Company is  expressly  permitted to
suspend the effectiveness of the Shelf  Registration  Statement in good faith in
connection with the acquisition or divestiture of assets, so long as the Company
promptly  thereafter  complies with the requirements of Section 4(k) hereof,  if
applicable.

                  4.  Additional Registration Procedures. In connection with any
                      ----------------------------------
Shelf Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply.

                  (a) The Company shall:

                  (i) furnish to you, not less than five  Business Days prior to
         the filing  thereof with the  Commission,  a copy of any Exchange Offer
         Registration Statement and any Shelf Registration  Statement,  and each
         amendment  thereof and each  amendment  or  supplement,  if any, to the
         Prospectus  included therein  (including all documents  incorporated by
         reference   therein  after  the  initial  filing)  and  shall  use  its
         reasonable best efforts to reflect in each such document, when so filed
         with the Commission, such comments as you reasonably propose;

                                       8

<PAGE>

                  (ii)  include the  information  set forth in Annex A hereto on
         the facing page of the Exchange Offer Registration  Statement, in Annex
         B hereto in the forepart of the Exchange Offer  Registration  Statement
         in a section  setting forth details of the Exchange  Offer,  in Annex C
         hereto  in the  underwriting  or plan of  distribution  section  of the
         Prospectus contained in the Exchange Offer Registration Statement,  and
         in Annex D hereto in the letter of  transmittal  delivered  pursuant to
         the Registered Exchange Offer;

                  (iii)  if  requested  by an  Initial  Purchaser,  include  the
         information  required  by  Item  507  or  508  of  Regulation  S-K,  as
         applicable,   in  the  Prospectus   contained  in  the  Exchange  Offer
         Registration Statement; and

                  (iv) in the case of a Shelf  Registration  Statement,  include
         the names of the Holders  that propose to sell  Securities  pursuant to
         the Shelf Registration Statement as selling security holders.

                  (b)  The Company shall ensure that:

                  (i) any Registration  Statement and any amendment  thereto and
         any  Prospectus  forming part thereof and any  amendment or  supplement
         thereto  complies in all material  respects  with the Act and the rules
         and regulations thereunder;

                  (ii) any Registration Statement and any amendment thereto does
         not,  when it  becomes  effective,  contain  an untrue  statement  of a
         material  fact or omit to state a material  fact  required to be stated
         therein or necessary  to make the  statements  therein not  misleading;
         provided,   however,   that  the  Holders  shall  ensure  that  written
         --------    -------
         information  furnished  to the  Company  by or on behalf of any  Holder
         specifically  for  inclusion  in such  Registration  Statement  and any
         amendment thereto,  shall not contain an untrue statement of a material
         fact or omit to state a material fact required to be stated  therein or
         necessary to make the statements therein not misleading; and

                  (iii)  any  Prospectus   forming  part  of  any   Registration
         Statement, and any amendment or supplement to such Prospectus, does not
         include  an  untrue  statement  of a  material  fact or omit to state a
         material fact necessary in order to make the statements therein, in the
         light of the circumstances  under which they were made, not misleading;
         provided,   however,   that  the  Holders  shall  ensure  that  written
         --------    -------
         information  furnished  to the  Company  by or on behalf of any  Holder
         specifically  for  inclusion  in such  Registration  Statement  and any
         amendment thereto,  shall not contain an untrue statement of a material
         fact or omit to state a material fact required to be stated  therein or
         necessary to make the statements therein not misleading.

                  (c) The Company  shall advise you,  the Holders of  Securities
covered by any Shelf Registration  Statement and any Exchanging Dealer under any
Exchange  Offer  Registration  Statement  that has  provided  in  writing to the
Company a  telephone  or  facsimile  number and  address  for  notices,  and, if
requested by you or any such Holder or Exchanging Dealer, shall

                                       9

<PAGE>

confirm such advice in writing  (which  notice  pursuant to clauses (ii) through
(v) hereof  shall be  accompanied  by an  instruction  to suspend the use of the
Prospectus until the Company shall have remedied the basis for such suspension):

                  (i) when a  Registration  Statement and any amendment  thereto
         has been filed with the Commission and when the Registration  Statement
         or any post-effective amendment thereto has become effective;

                  (ii) of any request by the  Commission  for any  amendment  or
         supplement  to the  Registration  Statement  or the  Prospectus  or for
         additional information;

                  (iii) of the  issuance  by the  Commission  of any stop  order
         suspending  the  effectiveness  of the  Registration  Statement  or the
         initiation of any proceedings for that purpose;

                  (iv) of the  receipt by the Company of any  notification  with
         respect  to the  suspension  of  the  qualification  of the  securities
         included  therein for sale in any jurisdiction or the initiation of any
         proceeding for such purpose; and

                  (v) of the  happening of any event that requires any change in
         the Registration  Statement or the Prospectus so that, as of such date,
         the  statements  therein are not  misleading and do not omit to state a
         material  fact  required to be stated  therein or necessary to make the
         statements therein (in the case of the Prospectus,  in the light of the
         circumstances under which they were made) not misleading.

                  (d) The  Company  shall use its  reasonable  best  efforts  to
 obtain  the  withdrawal  of  any  order  suspending  the  effectiveness  of any
 Registration  Statement or the qualification of the securities therein for sale
 in any jurisdiction at the earliest possible time.

                  (e) The Company  shall  furnish to each  Holder of  Securities
 covered by any Shelf Registration Statement,  without charge, at least one copy
 of such Shelf Registration Statement and any post-effective  amendment thereto,
 including all material incorporated therein by reference, and, if the Holder so
 requests in writing,  all exhibits thereto (including exhibits  incorporated by
 reference therein).

                  (f) The Company shall,  during the Shelf Registration  Period,
 deliver  to  each  Holder  of  Securities  covered  by any  Shelf  Registration
 Statement,  without  charge,  as many copies of the Prospectus  (including each
 preliminary  Prospectus) included in such Shelf Registration  Statement and any
 amendment or  supplement  thereto as such Holder may  reasonably  request.  The
 Company  consents to the use of the  Prospectus  or any amendment or supplement
 thereto by each of the selling  Holders of Securities  in  connection  with the
 offering and sale of the Securities covered by the Prospectus, or any amendment
 or supplement thereto, included in the Shelf Registration Statement.

                                       10

<PAGE>

                  (g) The Company shall furnish to each Exchanging  Dealer which
so  requests,   without  charge,  at  least  one  copy  of  the  Exchange  Offer
Registration Statement and any post-effective  amendment thereto,  including all
material  incorporated by reference  therein,  and, if the Exchanging  Dealer so
requests in writing,  all exhibits thereto (including  exhibits  incorporated by
reference therein).

                  (h)  The Company shall promptly deliver to each Initial
Purchaser, each Exchanging Dealer and each other person  required  to deliver a
Prospectus  during the Exchange Offer  Registration  Period,  without charge, as
many copies of the  Prospectus  included  in such  Exchange  Offer  Registration
Statement  and any  amendment  or  supplement  thereto  as any such  person  may
reasonably  request.  The Company  consents to the use of the  Prospectus or any
amendment or supplement thereto by any Initial Purchaser,  any Exchanging Dealer
and any such other person that may be required to deliver a Prospectus following
the Registered  Exchange  Offer in connection  with the offering and sale of the
New  Securities  covered  by the  Prospectus,  or any  amendment  or  supplement
thereto, included in the Exchange Offer Registration Statement.

                  (i)  Prior  to the  Registered  Exchange  Offer  or any  other
offering of Securities pursuant to any Registration Statement, the Company shall
arrange,  if  necessary,  for the  qualification  of the  Securities  or the New
Securities  for sale under the laws of such  United  States and  European  Union
jurisdictions  as any Holder shall  reasonably  request and will  maintain  such
qualification in effect so long as required; provided that in no event shall the
                                             --------
Company be obligated to qualify to do business in any  jurisdiction  where it is
not then so qualified or to take any action that would  subject it to service of
process in suits in any such jurisdiction where it is not then so subject.

                  (j) The Company shall cooperate with the Holders of Securities
to facilitate the timely  preparation and delivery of certificates  representing
New  Securities or Securities to be issued or sold pursuant to any  Registration
Statement  free  of any  restrictive  legends  and  in  such  denominations  and
registered in such names as Holders may request.

                  (k)  Upon  the  occurrence  of  any  event   contemplated   by
subsections (c)ii) through (v) above,  the Company shall  promptly  prepare a
post-effective   amendment  to  the  applicable  Registration  Statement  or  an
amendment or  supplement to the related  Prospectus  or file any other  required
document  so  that,  as  thereafter  delivered  to  Initial  Purchasers  of  the
securities included therein, the Prospectus will not include an untrue statement
of a material  fact or omit to state any  material  fact  necessary  to make the
statements  therein,  in the light of the  circumstances  under  which they were
made, not misleading. In such circumstances,  the period of effectiveness of the
Exchange Offer  Registration  Statement  provided for in Section 2 and the Shelf
Registration  Statement  provided  for in Section 3(b) shall each be extended by
the  number of days  from and  including  the date of the  giving of a notice of
suspension  pursuant to Section 4(c) to and  including the date when the Initial
Purchasers,  the Holders of the Securities and any known Exchanging Dealer shall
have received such amended or supplemented Prospectus pursuant to this Section.

                                       11

<PAGE>

                  (l) Not  later  than the  effective  date of any  Registration
Statement,  the Company shall  provide a CUSIP number for the  Securities or the
New Securities, as the case may be, registered under such Registration Statement
and provide the Trustee with printed  certificates  for such  Securities  or New
Securities, in a form eligible for deposit with The Depository Trust Company.

                  (m) The Company  shall  comply with all  applicable  rules and
 regulations  of the  Commission  and  shall  make  generally  available  to its
 security  holders  as soon  as  practicable  after  the  effective  date of the
 applicable   Registration   Statement  an  earnings  statement  satisfying  the
 provisions of Section 11(a) of the Act.

                  (n) The  Company   shall  cause  the  Indenture  or  the  New
 Securities  Indenture,  as the case may be,  to be  qualified  under  the Trust
 Indenture Act in a timely manner.

                  (o) The Company may require  each Holder of  Securities  to be
 sold pursuant to any Shelf Registration Statement to (i) furnish to the Company
 such  information  regarding the Holder and the distribution of such Securities
 as the Company may from time to time  reasonably  require for inclusion in such
 Registration  Statement and (ii) provide the indemnity  contemplated by Section
 6(b).  The Company  may  exclude  from such Shelf  Registration  Statement  the
 Securities  of any Holder that fails to furnish  such  information  or fails to
 provide the indemnity within a reasonable time after receiving such request.

                  (p) In the  case  of any  Shelf  Registration  Statement,  the
 Company   shall  enter  into  such   agreements   (including  if  requested  an
 underwriting  agreement  in  customary  form)  and take all  other  reasonable,
 appropriate  actions in order to expedite or facilitate the registration or the
 disposition of the Securities,  and in connection therewith, if an underwriting
 agreement is entered into, cause the same to contain indemnification provisions
 and  procedures  no less  favorable  than those set forth in Section 6 (or such
 other  provisions  and  procedures  acceptable to the Majority  Holders and the
 Managing  Underwriters,  if any) with respect to all parties to be  indemnified
 pursuant to Section 6.

                  (q)  In the case of any Shelf Registration Statement, the
Company shall:

                  (i) make reasonably available for inspection by the Holders of
         Securities to be registered thereunder,  any underwriter  participating
         in any disposition  pursuant to such  Registration  Statement,  and any
         attorney, accountant or other agent retained by the Holders or any such
         underwriter  all  relevant  financial  and  other  records,   pertinent
         corporate documents and properties of the Company and its subsidiaries;
         provided,  however,  that any information that is designated in writing
         --------   -------
         by the Company,  in good faith, as confidential at the time of delivery
         of such  information  shall be kept  confidential by the Holders or any
         such underwriter, attorney, accountant or agent, unless such disclosure
         is made in  connection  with a court  proceeding or required by law, or
         such information becomes available to the public generally or through a
         third party without an accompanying obligation of confidentiality;  and
         provided further that the Company shall
         -------- -------

                                       12

<PAGE>

be  entitled  to  coordinate  such access to its  financial  and other  records,
corporate  documents  and  properties  in a manner  that  does not  unreasonably
interfere with the business operations of the Company or its subsidiaries;

                  (ii) cause the Company's officers,  directors and employees to
         supply all relevant information  reasonably requested by the Holders or
         any such underwriter,  attorney, accountant or agent in connection with
         any  such  Registration  Statement  as is  customary  for  similar  due
         diligence examinations; provided, however, that any information that is
                                 --------  -------
         designated in writing by the Company, in good faith, as confidential at
         the time of delivery of such information  shall be kept confidential by
         the Holders or any such  underwriter,  attorney,  accountant  or agent,
         unless such disclosure is made in connection with a court proceeding or
         required by law, or such  information  becomes  available to the public
         generally or through a third party without an  accompanying  obligation
         of  confidentiality;  and provided  further  that the Company  shall be
         entitled  to  respond to such  information  requests  in a  coordinated
         fashion such that such requests do not unreasonably  interfere with the
         business operations of the Company or its subsidiaries;

                  (iii) make such  representations and warranties to the Holders
         of Securities  registered  thereunder and the underwriters,  if any, in
         form,  substance  and  scope  as are  customarily  made by  issuers  to
         underwriters  in primary  underwritten  offerings and covering  matters
         including,  but  not  limited  to,  those  set  forth  in the  Purchase
         Agreement;

                  (iv)  obtain  opinions  of counsel to the  Company and updates
         thereof  (which  counsel and  opinions (in form,  scope and  substance)
         shall be reasonably satisfactory to the Managing Underwriters,  if any)
         addressed to each selling Holder and the underwriters, if any, covering
         such  matters as are  customarily  covered  in  opinions  requested  in
         underwritten  offerings  and such other  matters  as may be  reasonably
         requested by such Holders and underwriters;

                  (v) obtain "cold comfort" letters and updates thereof from the
         independent  certified  public  accountants  of the  Company  (and,  if
         necessary,  any other independent  certified public  accountants of any
         subsidiary  of the Company or of any  business  acquired by the Company
         for which financial  statements and financial data are, or are required
         to be,  included  in the  Registration  Statement),  addressed  to each
         selling   Holder   of   Securities   registered   thereunder   and  the
         underwriters,  if any, in customary  form and  covering  matters of the
         type  customarily  covered in "cold comfort" letters in connection with
         primary underwritten offerings; and

                  (vi)  deliver  such  documents  and  certificates  as  may  be
         reasonably   requested  by  the  Majority   Holders  and  the  Managing
         Underwriters,  if any,  including  those to  evidence  compliance  with
         Section  4(k)  and  with  any  customary  conditions  contained  in the
         underwriting agreement or other agreement entered into by the Company.

                                       13

<PAGE>

The actions set forth in clauses (iii),  (iv),  (v) and (vi) of this  subsection
shall be performed at (A) the effectiveness of such  Registration  Statement and
each  post-effective   amendment  thereto;   and  (B)  each  closing  under  any
underwriting or similar agreement as and to the extent required thereunder.

                  (r) If a Registered Exchange Offer is to be consummated,  upon
delivery of the Securities by Holders to the Company (or to such other person as
directed by the Company) in exchange for the New  Securities,  the Company shall
mark, or cause to be marked, on the Securities so exchanged that such Securities
are being  canceled in exchange  for the New  Securities.  In no event shall the
Securities be marked as paid or otherwise satisfied.

                  (s) The Company  will use its  reasonable  best efforts (i) if
 the Securities have been rated prior to the initial sale of such Securities, to
 confirm such ratings will apply to the Securities or the New Securities, as the
 case may be,  covered by a  Registration  Statement;  or (ii) if the Securities
 were not previously  rated,  to cause the Securities  covered by a Registration
 Statement  to be rated  with at least  one  nationally  recognized  statistical
 rating agency,  if so requested by Majority Holders with respect to the related
 Registration Statement or by any Managing Underwriters.

                  (t) In the event that any  Broker-Dealer  shall underwrite any
 Securities or participate as a member of an  underwriting  syndicate or selling
 group or "assist in the distribution"  (within the meaning of the Rules of Fair
 Practice and the By-Laws of the National  Association  of  Securities  Dealers,
 Inc.) thereof,  whether as a Holder of such Securities or as an underwriter,  a
 placement  or  sales  agent  or a broker  or  dealer  in  respect  thereof,  or
 otherwise, assist such Broker-Dealer in complying with the requirements of such
 Rules and By-Laws, including, without limitation, by:

                  (i) if such  Rules or  By-Laws  shall so  require,  engaging a
         "qualified  independent  underwriter"  (as  defined  in such  Rules) to
         participate  in the  preparation  of  the  Registration  Statement,  to
         exercise usual  standards of due diligence with respect thereto and, if
         any portion of the offering contemplated by such Registration Statement
         is an  underwritten  offering or is made  through a placement  or sales
         agent, to recommend the yield of such Securities;

                  (ii) indemnifying any such qualified  independent  underwriter
         to the  extent  of the  indemnification  of  underwriters  provided  in
         Section 6 hereof; and

                  (iii) providing such information to such  Broker-Dealer as may
         be  required  in  order  for  such  Broker-Dealer  to  comply  with the
         requirements of such Rules.

                  (u) The Company shall use its reasonable  best efforts to take
 all other steps  necessary to effect the  registration of the Securities or the
 New Securities, as the case may be, covered by a Registration Statement.

                                       14

<PAGE>

                  5.  Registration Expenses. The Company shall bear all expenses
                      ---------------------
incurred in connection with the performance of its obligations under Sections 2,
3 and 4 hereof  and,  in the event of any  Shelf  Registration  Statement,  will
reimburse the Holders for the reasonable fees and  disbursements  of one firm or
counsel  designated by the Majority Holders to act as counsel for the Holders in
connection  therewith,  and,  in the  case of any  Exchange  Offer  Registration
Statement,  will reimburse the Initial  Purchasers  for the reasonable  fees and
disbursements of counsel acting in connection therewith.

                  6.  Indemnification and Contribution. (a) The Company agrees
                      --------------------------------
to indemnify and hold harmless each Holder of Securities or New Securities, as
the case may be, covered by any Registration Statement (including each Initial
Purchaser  and,  with  respect to any  Prospectus  delivery as  contemplated  in
Section 4(h) hereof, each Exchanging Dealer), the directors, officers, employees
and agents of each such  Holder and each  person who  controls  any such  Holder
within the  meaning of either the Act or the  Exchange  Act  against any and all
losses, claims,  damages or liabilities,  joint or several, to which they or any
of them may become  subject  under the Act, the Exchange Act or other Federal or
state statutory law or regulation,  at common law or otherwise,  insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based  upon any untrue  statement  or alleged  untrue  statement  of a
material fact contained in the Registration  Statement as originally filed or in
any amendment thereof, or in any preliminary Prospectus or the Prospectus, or in
any amendment thereof or supplement  thereto,  or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements  therein not misleading,  and
agrees to reimburse each such indemnified  party, as incurred,  for any legal or
other expenses  reasonably  incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,  however,
that the  Company  will not be  liable in any case to the  extent  that any such
loss, claim,  damage or liability arises out of or is based upon any such untrue
statement  or alleged  untrue  statement  or omission or alleged  omission  made
therein in reliance upon and in conformity with written information furnished to
the  Company  by or on  behalf of any such  Holder  specifically  for  inclusion
therein;  and  provided  further,  however,  that  with  respect  to any  untrue
statement or omission of a material fact made in a preliminary  Prospectus,  the
indemnity  agreement  contained  in this  Section  6(a)  shall  not inure to the
benefit  of any  person  to the  extent  that any such  loss,  claim,  damage or
liability of such person occurs under the circumstance  where it shall have been
determined  by a court of  competent  jurisdiction  by final  and  nonappealable
judgment that (i) the untrue  statement or omission of a material fact contained
in the  preliminary  Prospectus  was corrected in the final  Prospectus or in an
amendment  or  supplement  thereto,  (ii) the Company had  previously  furnished
copies of the final Prospectus, amendment or supplement to such person and (iii)
such loss,  claim,  damage or liability results from the fact that there was not
sent or given by such person at or prior to the written confirmation of the sale
of such  Securities,  a copy of the final  Prospectus,  amendment or supplement.
This indemnity  agreement will be in addition to any liability which the Company
may otherwise have.

                  The Company also agrees to indemnify or contribute as provided
 in Section 6(d) to Losses of each  underwriter of Securities or New Securities,
 as the case may be, registered

                                       15

<PAGE>

 under a Shelf Registration Statement, their directors,  officers,  employees or
 agents and each person who controls such underwriter on substantially  the same
 basis as that of the  indemnification of the Initial Purchasers and the selling
 Holders  provided in this Section  6(a) and shall,  if requested by any Holder,
 enter into an underwriting agreement reflecting such agreement,  as provided in
 Section 4(p) hereof.

                  (b) Each  Holder  of  securities  covered  by a  Registration
 Statement (including each Initial Purchaser and, with respect to any Prospectus
 delivery as  contemplated  in Section  4(h)  hereof,  each  Exchanging  Dealer)
 severally  and not jointly  agrees to indemnify  and hold harmless the Company,
 each of its  directors,  each  of its  officers  who  signs  such  Registration
 Statement and each person who controls the Company within the meaning of either
 the Act or the Exchange Act, to the same extent as the foregoing indemnity from
 the Company to each such Holder, but only with reference to written information
 relating to such Holder furnished to the Company by or on behalf of such Holder
 specifically  for  inclusion  in the  documents  referred  to in the  foregoing
 indemnity.  This indemnity agreement will be in addition to any liability which
 any such Holder may otherwise have.

                  (c) Promptly after receipt by an indemnified  party under this
Section of notice of the  commencement  of any action,  such  indemnified  party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section, notify the indemnifying party in writing of the commencement
thereof;  but the  failure  so to  notify  the  indemnifying  party (i) will not
relieve it from  liability  under  paragraph  (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in the
forfeiture by the  indemnifying  party of substantial  rights and defenses;  and
(ii) will not, in any event, relieve the indemnifying party from any obligations
to any indemnified party other than the  indemnification  obligation provided in
paragraph (a) or (b) above. The indemnifying  party shall be entitled to appoint
counsel of the indemnifying  party's choice at the indemnifying  party's expense
to represent the indemnified  party in any action for which  indemnification  is
sought (in which case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate  counsel  retained by the  indemnified
party or  parties  except  as set forth  below);  provided,  however,  that such
                                                  --------   -------
counsel   shall  be   reasonably   satisfactory   to  the   indemnified   party.
Notwithstanding  the  indemnifying   party's  election  to  appoint  counsel  to
represent the indemnified  party in an action,  the indemnified party shall have
the  right  to  employ  separate  counsel  (including  local  counsel),  and the
indemnifying  party shall bear the reasonable  fees,  costs and expenses of such
separate counsel if (i) the use of counsel chosen by the  indemnifying  party to
represent  the  indemnified  party would present such counsel with a conflict of
interest;  (ii) the actual or potential  defendants  in, or targets of, any such
action include both the  indemnified  party and the  indemnifying  party and the
indemnified  party  shall  have  reasonably  concluded  that  there may be legal
defenses  available to it and/or other  indemnified  parties which are different
from or  additional  to those  available to the  indemnifying  party;  (iii) the
indemnifying  party shall not have employed counsel  reasonably  satisfactory to
the  indemnified  party to represent the  indemnified  party within a reasonable
time after notice of the  institution of such action;  or (iv) the  indemnifying
party shall  authorize the indemnified  party to employ separate  counsel at the
expense of the indemnifying party. An indemnifying party will not,

                                       16

<PAGE>

 without  the  prior  written  consent  of the  indemnified  parties,  settle or
 compromise  or consent to the entry of any judgment with respect to any pending
 or  threatened  claim,   action,   suit  or  proceeding  in  respect  of  which
 indemnification  or contribution  may be sought  hereunder  (whether or not the
 indemnified  parties are actual or  potential  parties to such claim or action)
 unless such settlement, compromise or consent includes an unconditional release
 of each indemnified party from all liability arising out of such claim, action,
 suit or proceeding.  The  indemnifying  party shall not, in connection with any
 one action or separate but substantially similar or related actions in the same
 jurisdiction  arising out of the same general allegations or circumstances,  be
 liable for fees and  expenses of more than one  separate  law firm of attorneys
 (in  addition to any local  counsel) for all  indemnified  parties and all such
 fees  and  expenses  shall  be  reimbursed  as  incurred.  Such  firm  shall be
 designated by Salomon Smith Barney Inc. in the case of the parties  indemnified
 pursuant to Section 6(a) and by the Company in the case of parties  indemnified
 pursuant to Section  6(b).  Each  indemnified  party  shall use all  reasonable
 efforts to  cooperate  with the  indemnifying  party in the defense of any such
 action or claim.

                  (d) In the event that the indemnity  provided in paragraph (a)
or (b) of this Section is  unavailable  to or  insufficient  to hold harmless an
indemnified party for any reason, then each applicable  indemnifying party shall
have a joint and several  obligation  to  contribute  to the  aggregate  losses,
claims,  damages and liabilities  (including legal or other expenses  reasonably
incurred in  connection  with  investigating  or defending  same)  (collectively
"Losses") to which such  indemnified  party may be subject in such proportion as
is appropriate to reflect the relative  benefits  received by such  indemnifying
party, on the one hand, and such indemnified  party, on the other hand, from the
Initial Placement and the Registration  Statement which resulted in such Losses;
provided, however, that in no case shall any Initial Purchaser or any subsequent
--------  -------
Holder of any Security or New Security be responsible, in the aggregate, for any
amount in excess of the  purchase  discount  or  commission  applicable  to such
Security, or in the case of a New Security,  applicable to the Security that was
exchangeable into such New Security, as set forth on the cover page of the Final
Memorandum, nor shall any underwriter be responsible for any amount in excess of
the underwriting  discount or commission  applicable to the securities purchased
by such  underwriter  under the  Registration  Statement  which resulted in such
Losses.  If the allocation  provided by the  immediately  preceding  sentence is
unavailable for any reason,  the  indemnifying  party and the indemnified  party
shall  contribute in such  proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the
one hand, and such indemnified  party, on the other hand, in connection with the
statements  or  omissions  which  resulted  in such  Losses as well as any other
relevant  equitable  considerations.  Benefits  received by the Company shall be
deemed to be equal to the total net proceeds from the Initial  Placement (before
deducting  expenses)  as set  forth on the cover  page of the Final  Memorandum.
Benefits  received by the Initial  Purchasers shall be deemed to be equal to the
total purchase  discounts and  commissions as set forth on the cover page of the
Final Memorandum,  and benefits received by any other Holders shall be deemed to
be equal to the value of receiving Securities or New Securities,  as applicable,
registered under the Act or selling Securities or New Securities, as applicable,
under a Shelf Registration Statement. Benefits received by any underwriter shall
be deemed to be equal to the total  underwriting  discounts and commissions,  as
set forth on the cover page of the Prospectus

                                       17

<PAGE>

forming a part of the  Registration  Statement  which  resulted in such Losses.
Relative fault shall be determined by reference to, among other things, whether
any alleged untrue statement or omission relates to information provided by the
indemnifying  party, on the one hand, or by the indemnified party, on the other
hand,  the  intent of the  parties  and  their  relative  knowledge,  access to
information  and  opportunity  to correct or prevent  such untrue  statement or
omission.  The  parties  agree  that it  would  not be just  and  equitable  if
contribution  were determined by pro rata allocation  (even if the Holders were
treated as one entity for such purpose) or any other method of allocation which
does not take  account  of the  equitable  considerations  referred  to  above.
Notwithstanding  the  provisions  of this  paragraph  (d), no person  guilty of
fraudulent  misrepresentation  (within the meaning of Section 11(f) of the Act)
shall be  entitled to  contribution  from any person who was not guilty of such
fraudulent  misrepresentation.  For purposes of this  Section,  each person who
controls a Holder  within the meaning of either the Act or the Exchange Act and
each director,  officer,  employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each person who controls the Company
within the meaning of either the Act or the Exchange  Act,  each officer of the
Company who shall have signed the  Registration  Statement and each director of
the Company shall have the same rights to contribution as the Company,  subject
in each case to the applicable terms and conditions of this paragraph (d).

                  (e) The  provisions  of this Section will remain in full force
and effect,  regardless of any investigation made by or on behalf of any Holder
or the  Company  or  any  of the  directors,  officers,  employees,  agents  or
controlling  persons  referred to in this Section hereof,  and will survive the
sale by a Holder of securities covered by a Registration Statement.

                  7.  Underwritten Registrations.  (a)  If any of the Securities
                      --------------------------
or New  Securities,  as the  case  may be,  covered  by any  Shelf  Registration
Statement are to be sold in an underwritten  offering, the Managing Underwriters
shall be selected by the Majority Holders, provided, however, that such Managing
                                           --------  -------
Underwriters must be reasonably satisfactory to the Company.

                  (b) No person may  participate  in any  underwritten  offering
 pursuant to any Shelf Registration Statement,  unless such person (i) agrees to
 sell such  person's  Securities or New  Securities,  as the case may be, on the
 basis  reasonably  provided in any  underwriting  arrangements  approved by the
 persons  entitled  hereunder to approve such  arrangements;  (ii) completes and
 executes  all  questionnaires,  powers of attorney,  indemnities,  underwriting
 agreements  and other  documents  reasonably  required  under the terms of such
 underwriting arrangements; and (iii) agrees to be bound by Section 6(b) hereof.

                  8.  No Inconsistent Agreements. The Company has not, as of the
                      --------------------------
 date hereof,  entered  into,  nor shall it, on or after the date hereof,  enter
 into, any agreement with respect to its securities  that is  inconsistent  with
 the rights  granted  to the  Holders  herein or  otherwise  conflicts  with the
 provisions hereof.

                  9.  Amendments and Waivers.  The provisions of this Agreement,
                      ----------------------
including  the  provisions  of this  sentence,  may not be  amended,  qualified,
modified or supplemented, and

                                       18

<PAGE>

waivers or consents to departures from the provisions  hereof may not be given,
unless the Company has obtained the written consent of the Holders of at least a
majority of the then outstanding  aggregate  principal amount of Securities (or,
after the  consummation  of any  Registered  Exchange  Offer in accordance  with
Section 2 hereof, of New Securities);  provided that, with respect to any matter
                                       --------
that  directly  or  indirectly  affects  the  rights  of any  Initial  Purchaser
hereunder,  the Company  shall  obtain the written  consent of each such Initial
Purchaser  against which such amendment,  qualification,  supplement,  waiver or
consent is to be effective.  Notwithstanding the foregoing (except the foregoing
proviso),  a waiver or consent to  departure  from the  provisions  hereof  with
respect to a matter  that  relates  exclusively  to the rights of Holders  whose
Securities or New  Securities,  as the case may be, are being sold pursuant to a
Registration  Statement  and that does not  directly  or  indirectly  affect the
rights of other Holders may be given by the Majority Holders,  determined on the
basis of  Securities  or New  Securities,  as the case may be, being sold rather
than registered under such Registration Statement.

                  10. Notices. All notices and other communications provided for
                      -------
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier or air courier guaranteeing overnight delivery:

                  (a) if to a Holder,  at the most current address given by such
Holder to the Company in accordance  with the provisions of this Section,  which
address  initially  is, with respect to each Holder,  the address of such Holder
maintained by the Registrar  under the Indenture,  with a copy in like manner to
Salomon Smith Barney Inc.

                  (b) if to you, initially at the respective addresses set forth
in the Purchase Agreement; and

                  (c) if to the Company, initially at its address set forth in
the Purchase Agreement.

                  All such  notices and  communications  shall be deemed to have
been duly given when received.

                  The Initial  Purchasers  or the Company by notice to the other
 parties may designate  additional or different addresses for subsequent notices
 or communications.

                  11. Successors.  This Agreement shall inure to the benefit of
                      ----------
and be  binding  upon  the  successors  and  assigns  of  each  of the  parties,
including,  without  the need for an express  assignment  or any  consent by the
Company thereto,  subsequent  Holders of Securities and the New Securities.  The
Company  hereby agrees to extend the benefits of this Agreement to any Holder of
Securities and the New Securities,  and any such Holder who receives and accepts
any benefits of this Agreement and who is thereafter bound by the obligations of
this Agreement may  specifically  enforce the provisions of this Agreement as if
an original party hereto. Notwithstanding the foregoing, nothing herein shall be
deemed to permit any assignment,  transfer or other disposition of Securities or
New  Securities  in  violation  of the terms of the  Purchase  Agreement  or the
Indenture. Each Holder who receives and accepts any benefits of

                                       19

<PAGE>

 this Agreement will be deemed to agree to be bound by and comply with the terms
 and provisions of this Agreement.

                  12.  Counterparts.  This Agreement may be in signed
                       ------------
counterparts, each of which shall an original and all of which together shall
constitute one and the same agreement.

                  13. Headings.  The headings used herein are for convenience
                      --------
only and shall not affect the construction hereof.

                  14. Applicable Law.  This Agreement shall be governed by and
                      --------------
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York.

                  15. Severability.  In the  event  that any one of more of the
                      ------------
 provisions  contained herein, or the application  thereof in any circumstances,
 is held invalid,  illegal or unenforceable  in any respect for any reason,  the
 validity,  legality  and  enforceability  of any such  provision in every other
 respect and of the remaining provisions hereof shall not be in any way impaired
 or affected thereby, it being intended that all of the rights and privileges of
 the parties shall be enforceable to the fullest extent permitted by law.

                  16. Securities Held by the Company,  etc. Whenever the consent
                      ------------------------------------
or  approval  of  Holders  of a  specified  percentage  of  principal  amount of
Securities  or  New  Securities  is  required   hereunder,   Securities  or  New
Securities,  as  applicable,  held by the  Company  or its  Affiliates  shall be
disregarded and deemed not to be outstanding in determining whether such consent
or approval was given by the Holders of such required percentage.

                                       20

<PAGE>

                  If the foregoing is in accordance with your  understanding  of
our  agreement,  please  sign and return to us the  enclosed  duplicate  hereof,
whereupon this letter and your acceptance  shall  represent a binding  agreement
among the Company and the several Initial Purchasers.

                                                Very truly yours,
                                                Levi Strauss & Co.

                                                by
                                                     --------------------------
                                                     Name:
                                                     Title:

                                       21

<PAGE>

The  foregoing  Agreement is hereby
confirmed and accepted as of the
date first above written.

Salomon Smith Barney Inc.
Banc of America Securities LLC
Scotia Capital (USA) Inc.
Chase Securities Inc.
Banc One Capital Markets, Inc

By: Salomon Smith Barney Inc.

 by
       -----------------------
       Name:
       Title:

For themselves and the other several Initial
Purchasers named in Schedule I to
the Purchase Agreement.

                                       22

<PAGE>

ANNEX A

Each  Broker-Dealer that receives New Securities for its own account pursuant to
the  Exchange  Offer  must  acknowledge  that it will  deliver a  prospectus  in
connection  with any resale of such New  Securities.  The Letter of  Transmittal
states that by so acknowledging and by delivering a prospectus,  a Broker-Dealer
will not be deemed to admit that it is an  "underwriter"  within the  meaning of
the Securities Act. This Prospectus,  as it may be amended or supplemented  from
time to time, may be used by a  Broker-Dealer  in connection with resales of New
Securities  received in  exchange  for  Securities  where such  Securities  were
acquired by such Broker-Dealer as a result of market-making  activities or other
trading activities. The Company has agreed that, starting on the Expiration Date
(as  defined  herein)  and  ending on the close of  business  180 days after the
Expiration Date, it will make this Prospectus available to any Broker-Dealer for
use in connection with any such resale. See "Plan of Distribution".

                                       23

<PAGE>

ANNEX B

Each  Broker-Dealer that receives New Securities for its own account in exchange
for Securities,  where such Securities were acquired by such  Broker-Dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will  deliver a  prospectus  in  connection  with any resale of such New
Securities. See "Plan of Distribution".

                                       24

<PAGE>

ANNEX C

                              PLAN OF DISTRIBUTION

                  Each  Broker-Dealer  that receives New  Securities for its own
account  pursuant to the Exchange Offer must  acknowledge that it will deliver a
prospectus  in  connection  with  any  resale  of  such  New  Securities.   This
Prospectus,  as it may be amended or supplemented from time to time, may be used
by a  Broker-Dealer  in connection  with resales of New  Securities  received in
exchange  for  Securities  where such  Securities  were  acquired as a result of
market-making  activities  or other trading  activities.  The Company has agreed
that,  starting on the  Expiration  Date and ending on the close of business 180
days after the  Expiration  Date,  it will make this  Prospectus,  as amended or
supplemented, available to any Broker-Dealer for use in connection with any such
resale. In addition, until __________,  2001, all dealers effecting transactions
in the New Securities may be required to deliver a prospectus.

                  The Company will not receive any proceeds from any sale of New
 Securities by  brokers-dealers.  New Securities  received by Broker-Dealers for
 their own account  pursuant to the Exchange Offer may be sold from time to time
 in one or more  transactions  in the  over-the-counter  market,  in  negotiated
 transactions,  through  the  writing  of  options  on the New  Securities  or a
 combination of such methods of resale,  at market prices prevailing at the time
 of resale,  at prices  related to such  prevailing  market prices or negotiated
 prices.  Any such resale may be made  directly to  purchasers  or to or through
 brokers or dealers who may receive  compensation  in the form of commissions or
 concessions from any such  Broker-Dealer  and/or the purchasers of any such New
 Securities. Any Broker-Dealer that resells New Securities that were received by
 it for its own account  pursuant to the Exchange Offer and any broker or dealer
 that  participates in a distribution of such New Securities may be deemed to be
 an  "underwriter"  within  the  meaning  of the  Securities  Act and any profit
 resulting  from  any such  resale  of New  Securities  and any  commissions  or
 concessions  received  by any such  persons  may be deemed  to be  underwriting
 compensation under the Securities Act. The Letter of Transmittal states that by
 acknowledging  that  it  will  deliver  and  by  delivering  a  prospectus,   a
 Broker-Dealer  will not be deemed to admit that it is an  "underwriter"  within
 the meaning of the Securities Act.

                  For a period  of 180  days  after  the  Expiration  Date,  the
 Company  will  promptly  send  additional  copies  of this  Prospectus  and any
 amendment or supplement to this Prospectus to any  Broker-Dealer  that requests
 such documents in the Letter of Transmittal.  The Company has agreed to pay all
 expenses  incident to the Exchange Offer (including the expenses of one counsel
 for the Holders of the Securities) other than commissions or concessions of any
 brokers or dealers and will indemnify the holders of the Securities  (including
 any Broker-Dealers)  against certain liabilities,  including  liabilities under
 the Securities Act.

                                       25

<PAGE>

 ANNEX D

 Rider A
 -------

         [ ]      CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO
                  RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10
                  COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
                  THERETO.

                  Name:    _______________________________________
                  Address: _______________________________________
                           _______________________________________

Rider B
-------

If the undersigned is not a  Broker-Dealer,  the undersigned  represents that it
acquired the New  Securities in the ordinary  course of its business,  it is not
engaged in, and does not intend to engage in, a  distribution  of New Securities
and it has no arrangements or understandings with any person to participate in a
distribution of the New Securities.  If the undersigned is a Broker-Dealer  that
will receive New Securities for its own account in exchange for  Securities,  it
represents  that the Securities to be exchanged for New Securities were acquired
by it as a result of  market-making  activities or other trading  activities and
acknowledges  that it will deliver a prospectus in connection with any resale of
such  New  Securities;   however,  by  so  acknowledging  and  by  delivering  a
prospectus,  the  undersigned  will  not  be  deemed  to  admit  that  it  is an
"underwriter" within the meaning of the Securities Act.

                                       26

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