TAX DISAFFILIATION AGREEMENT
 
 BETWEEN
 
 THE LIMITED, INC.,
 ON BEHALF OF ITSELF
 AND THE MEMBERS
  OF THE LIMITED GROUP
 
 AND
 
 XYZ CO.
 ON BEHALF OF ITSELF
 AND THE MEMBERS
 OF THE XYZ GROUP
 
 
 
 
<PAGE> 2
 
 TAX DISAFFILIATION AGREEMENT
 
 
 This Agreement is entered into as of the 19th day of May, …….
between The Limited Inc. ("The Limited"), a Delaware corporation, on behalf of
itself and the members of The Limited Group, and XYZ Co.
("XYZ "), a Delaware corporation, on behalf of itself and the
members of the XYZ Group.
 
 

IL DOCUMENTO È INCOMPLETO, A RICHIESTA SARÀ INVIATA UNA COPIA COMPLETA (artt.17 ss Cod.Deont.)

STUDIO

MISURACA & Associati/Associates

Studio Legale

Law Firm

www.smaf-legal.com

Il documento manca di molte parti, lo studio legale SMAF invia su gentile richiesta una completa copia a titolo di prestazione professionale a pagamento ex artt.17 ss. Cod. Deont. Forense / The document has missing parts; please, consider SMAF law firm allowed to send a you a payable copy according to Italian Forensic Deontology Code.

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 W I T N E S S E T H:
 
 WHEREAS, pursuant to the tax laws of various jurisdictions, certain
members of the XYZ Group, as defined below, presently file
certain tax returns on an affiliated, consolidated, combined, unitary, fiscal
unit or other group basis (including as permitted by Section 1501 of the
Internal Revenue Code of 1986, as amended (the "Code")) with certain members of
The Limited Group, as defined below (each such group, a "Consolidated Group");
 
 WHEREAS, The Limited and XYZ intend to distribute to
its shareholders all of the XYZ common stock held by The Limited
(the "Distribution");
 
 WHEREAS, The Limited and XYZ desire to set forth
their agreement on the rights and obligations of The Limited, XYZ &
..... and the members of The Limited Group and the XYZ Group,
respectively, with respect to the handling and allocation of federal, state and
local taxes incurred in taxable periods beginning prior to the Distribution
Date, as defined below, and various other tax matters;
 
 NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties agree as follows:
 
 
<PAGE>  3
 
 1. DEFINITIONS
 
 (a) As used in this Agreement:
 
 "XYZ Combined State Tax Liability" shall mean, with
respect to any taxable year and any jurisdiction, an amount of Combined State
Taxes determined in accordance with the principles set forth in the definition
of XYZ Federal Tax Liability; provided, however, that (i) such
amount shall also include any actual income, franchise or similar state or local
tax liability (a "State Liability") owed in a jurisdiction (a "Combined
Jurisdiction") in which a member of the XYZ Group files tax
returns with a member of The Limited Group, on a consolidated, combined or
unitary basis, to the extent such liability exceeds the liability that would
have been owed had no member of the XYZ Group been included in
such returns, except to the extent attributable to the recognition of The
Limited's excess loss account with respect to the stock of XYZ 
as a result of the Distribution, and (ii) such amount shall be reduced to the
extent that, in any Combined Jurisdiction, the State Liability of The Limited
Consolidated Group is less than the liability that would have been owed had no
member of the XYZ Group been included in the returns of such
Combined Jurisdiction.
 
 "XYZ Federal Tax Liability" shall mean, with respect
to any taxable year, the sum of the XYZ Group's Federal Tax
liability and any interest, penalties and other additions to such taxes for such
taxable year, computed as if the XYZ Group were not and never
were part of The Limited Consolidated Group, but rather were a separate
affiliated group of corporations filing a consolidated federal income tax return
pursuant to Section 1501 of the Code, provided, however, that transactions with
members of The Limited Group shall be reflected according to the provisions of
the consolidated return regulations promulgated under the Code governing
intercompany transactions, and that the Distribution will trigger any deferred
amounts, excess loss accounts or similar items. Such computation shall be made
(A) without regard to the income, deductions (including net operating loss and
capital loss deductions) and credits in any year of any member of The Limited
Consolidated Group that is not a member of the XYZ Group, (B) by
taking account of any Tax Asset of the XYZ Group in accordance
with Section 3(c)(iii) hereof, (C) with regard to net operating loss and capital
loss carryforwards and carrybacks and minimum tax credits from earlier years of
the XYZ Group, but without regard to any such carryforward from
a tax period (or portion thereof) ending on or before September 27, 1996, date
of the initial public offering of XYZ , and arising solely due to
treating the XYZ Group as if it were never part of The Limited
Consolidated Group, (D) as though the highest rate of tax specified
 
 
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<PAGE> 4
 
in subsection (b) of Section 11 of the Code (or any other similar rates
applicable to specific types of income) were the only rates set forth in that
subsection, and with other similar adjustments as described in Section 1561 of
the Code, (E) reflecting the positions, elections and accounting methods used by
The Limited in preparing the consolidated federal income tax return for The
Limited Consolidated Group, (F) by not permitting the XYZ Group
any compensation deductions arising in respect of any exercise of options on The
Limited stock by, or the issuance or vesting of The Limited restricted stock to,
any employee of the XYZ Group prior to the Distribution Date,
and (G) without regard to gain attributable to the recognition of The Limited's
excess loss account with respect to the stock of XYZ and
XYZ 's excess loss account with respect to stock of its
subsidiaries as a result of the Distribution.
 
 "XYZ Group" shall mean, at any time, XYZ &
..... and any direct or indirect corporate subsidiaries of XYZ 
that would be eligible to join with XYZ , with respect to Federal
Taxes, in the filing of a consolidated federal income tax return and, with
respect to Combined State Taxes, in the filing of a consolidated, combined or
unitary income or franchise tax return, including any predecessors thereto.
 
 "XYZ Tax Liability" shall mean, with respect to any
taxable year, the sum of XYZ Combined State Tax Liability and
XYZ Federal Tax Liability.
 
 "After-Tax Amount" shall mean an additional amount necessary to
reflect the hypothetical tax consequences of the receipt or accrual of any
payment, using the maximum statutory rate (or rates, in the case of an item that
affects more than one tax) applicable to the recipient of such payment for the
relevant year, reflecting for example, the effect of the deductions available
for interest paid or accrued and for taxes such as state and local income taxes.
 
 "Combined State Tax" means, with respect to each state or local
taxing jurisdiction, any income, franchise or similar tax payable to such state
or local taxing jurisdiction in which a member of the XYZ Group
files tax returns with a member of The Limited Group, on a consolidated,
combined or unitary basis for purposes of such income or franchise tax.
 
 "Contingent Redemption Agreement" means the contingent stock
redemption agreement, dated January 26, 1996, entered into among The Limited,
Leslie H. Wexner and The Wexner Children's Trust.
 
 
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<PAGE> 5
 
 "Distribution" shall mean the Exchange Offer and the Spin-Off as
described in the Offering Circular-Prospectus dated April 15, 1998.
 
 "Distribution Date" shall mean the date on which the Distribution
shall be effected.
 
 "Federal Tax" shall mean any tax imposed under Subtitle A of the
Code and any related interest or penalty imposed under Subtitle F of the Code.
 
 "Final Determination" shall mean (i) with respect to Federal Taxes,
a "determination" as defined in Section 1313 (a) of the Code or execution of an
Internal Revenue Service Form 870AD and, with respect to taxes other than
Federal Taxes, any final determination of liability in respect of a tax that,
under applicable law, is not subject to further appeal, review or modification
through proceedings or otherwise, (ii) any final disposition of a tax issue by
reason of the expiration of a statute of limitations or (iii) the payment of tax
by The Limited with respect to any item disallowed or adjusted by any taxing
authority where The Limited determines in good faith that no action should be
taken to recoup such payment.
 
 "IRS" shall mean the Internal Revenue Service.
 
 "Post-Distribution Tax Period" means (i) any tax period beginning
and ending after the Distribution Date and (ii) with respect to a tax period
that begins before and ends after the Distribution Date, such portion of the tax
period that commences on the day immediately after the Distribution Date.
 
 "Pre-Distribution Tax Period" means (i) any tax period beginning and
ending before or on the Distribution Date and (ii) with respect to a period that
begins before and ends after the Distribution Date, such portion of the tax
period ending on and including the Distribution Date.
 
 "Prime" shall mean, the rate announced from time to time as "prime"
by BankOne, Columbus, Ohio, as its prime rate with respect to the applicable
currency.
 
 "Referee" is defined in Section 16.
 
 "Return" shall mean any tax return, statement, report or form
(including estimated tax returns and reports, extension requests and forms, and
information returns and reports) required to be filed with any taxing authority.
 
 
 
 4
<PAGE> 6
 
 "Tax Asset" shall mean any net operating loss, net capital loss,
investment tax credit, foreign tax credit, charitable deduction or any other
credit or tax attribute that could be carried forward or back to reduce taxes
(including without limitation deductions and credits related to alternative
minimum taxes).
 
 "Tax Packages" shall mean one or more packages of information, that
are (i) reasonably necessary for the purpose of preparing tax Returns of The
Limited Consolidated Group with respect to any Pre-Distribution Tax Period, or
of the XYZ Group with respect to any Post-Distribution Tax
Period and (ii) completed in all material respects in accordance with the
standards that The Limited has established for its subsidiaries.
 
 "Tax Proceeding" shall mean any tax audit, dispute or proceeding
(whether administrative or judicial).
 
 "The Limited Consolidated Group" shall mean The Limited and each
direct and indirect corporate subsidiary, including the XYZ 
Group that is eligible to join with The Limited in the filing of (i) for Federal
Tax purposes, a consolidated federal income tax return, and (ii) for Combined
State Tax Purposes, a Combined State Tax Return.
 
 "The Limited Group" shall mean, at any time, The Limited and each of
its direct and indirect corporate subsidiaries other than those subsidiaries
that are members of the XYZ Group.
 
 (b) Any term used in this Agreement which is not defined in this
Agreement shall, to the extent the context requires, have the meaning assigned
to it in the Code or the applicable Treasury regulations thereunder or in
comparable provisions of applicable law.
 
 2. ADMINISTRATIVE AND COMPLIANCE MATTERS.
 
 (a) Sole Tax Sharing Agreement. Any and all existing Tax sharing
agreements or arrangements, written or unwritten, between any member of The
Limited Group and any member of the XYZ Group shall be
terminated as of the effective date of this Agreement. As of the date of this
Agreement, neither the members of the XYZ Group nor the members
of The Limited Group shall have any further rights or liabilities thereunder,
and this Agreement shall be the sole tax sharing agreement between the members
of the XYZ Group and the members of The Limited Group.
Notwithstanding the foregoing, if any such termination is not binding on any
taxing authority, the XYZ Group shall hold the affected member
of The Limited Group harmless against any adverse effect which would
 
 
 5
<PAGE> 7
 
have been avoided if such termination had been given effect by such taxing
authority.
 
 (b) Designation of Agent. Each member of the XYZ 
Group hereby irrevocably authorizes and designates The Limited, as its agent,
coordinator, and administrator, for the purpose of taking any and all actions
(including the execution of waivers of applicable statutes of limitation)
necessary or incidental to the filing of any Return, any amended Return, or any
claim for refund (even where an item or Tax Asset giving rise to an amended
Return or refund claim arises in a Post-Distribution Tax Period), credit or
offset of tax or any other proceedings, and for the purpose of making payments
to, or collecting refunds from, any taxing authority, in each case relating only
to any Pre- Distribution Tax Period. The Limited Group covenants to XYZ
 that it shall be responsible to see that all such administrative matters
relating thereto shall be handled promptly and appropriately.
 
 (c) Pre-Distribution Tax Period Returns. The Limited will prepare,
consistently with past practice and applicable law and with the assistance of
the XYZ Group, the consolidated Federal Tax Returns and Combined
State Tax Returns of The Limited Consolidated Group for all Pre- Distribution
Tax Periods. The Limited shall have the right with respect to such Returns to
determine (i) the manner in which such returns, documents or statements shall be
prepared and filed, including, without limitation, the manner in which any item
of income, gain, loss, deduction or credit shall be reported, (ii) whether any
extensions should be requested, and (iii) the elections that will be made by any
member of The Limited Group or the XYZ Group. In addition, with
respect to all Pre-Distribution Tax Periods, The Limited shall have the right to
(i) contest, compromise or settle any adjustment or deficiency proposed,
asserted or assessed as a result of any audit of any Return filed by The Limited
Consolidated Group, (ii) file, prosecute, compromise or settle any claim for
refund, and (iii) determine whether any refunds to which The Limited
Consolidated Group may be entitled shall be received by way of refund or credit
against the tax liability of The Limited Consolidated Group. No later than 60
days after the Distribution Date, XYZ shall prepare and deliver
to The Limited Tax Packages that include information of XYZ 
Group for the Pre-Distribution Tax Period that includes the Distribution Date.
In addition, if The Limited decides to make the election referred to in section
(d) below, XYZ shall prepare and deliver to The Limited Tax
Packages that include information of XYZ Group for the tax
period beginning immediately after the Distribution Date no later than 60 days
after the end of such tax period.
 
 
 
 6
<PAGE> 8
 
 (d) Allocation. The Limited may, at its option, elect and
XYZ shall join The Limited in electing (if necessary) to ratably
allocate items (other than extraordinary items) of the XYZ Group
in accordance with relevant provisions of the Treasury Regulations Section
1.1502-76. If The Limited exercises its option to make the election, each member
of the XYZ Group will provide a statement stating its consent to
such election as required under the regulations.
 
 (e) Separate State Tax Returns and Post-Distribution Tax Period Returns
of XYZ Group. XYZ shall be solely responsible
for the preparation and filing of its separate state and local tax Returns and
its Returns for all Post-Distribution Tax Periods.
 
 3. TAX SHARING.
 
 (a) General. For each taxable year of The Limited Consolidated Group
during which income, loss or credit against tax of the XYZ Group
are includible in the consolidated Federal Tax return of The Limited
Consolidated Group, XYZ shall pay to The Limited an amount equal
to the XYZ Federal Tax Liability, and for each taxable period
during which income, loss or credit against tax of any member of the XYZ
 Group are includible in a return relating to a Combined State Tax,
XYZ shall pay The Limited an amount equal to the XYZ &
..... Combined State Tax Liability for such taxable period, each as shown on the
Pro Forma Returns (as defined in paragraph (c) below).
 
 (b) Estimated Payments. The Limited shall determine the amount of
the estimated tax installment of the XYZ Federal Tax Liability
(corresponding to The Limited's estimated Federal Tax installment) with respect
to a taxable year in which the XYZ Group is part of The Limited
Consolidated Group (whether or not such payment is made prior to the
Distribution), as determined under the principles of Section 3(a) of this
Agreement. The Limited shall provide XYZ with notice of such
estimated tax determination for Federal Tax no later than 10 days before the
date such corresponding installment payment is due. XYZ shall,
within 5 days of receipt of such determination (but in no event earlier than 5
days prior to the due date of The Limited's corresponding estimated tax
payment), review the notice of determination and pay to The Limited the amount
so determined. The Limited shall determine under provisions of applicable law
the amount of the estimated tax installment of the XYZ Combined
State Tax Liability (corresponding to the relevant estimated Combined State Tax
installment) with respect to a taxable year in which the XYZ 
Group is part of The Limited Consolidated Group (whether or not such payment is
 
 
  7
<PAGE> 9
 
made prior to the Distribution), as determined under the principles of Section
3(a) of this Agreement. The Limited shall provide XYZ with
notice of such estimated tax determination for Combined State Tax no later than
10 days before the date such corresponding installment payment is due.
XYZ shall, within 5 days of receipt of such determination (but
in no event earlier than 5 days prior to the due date of The Limited's
corresponding estimated tax payment), review the notice and pay to The Limited
or The Limited shall pay to the XYZ , as appropriate, the amount
so determined in accordance with Section 9 hereof.
 
 (c) Payment of Taxes at Year-End.
 
 (i) Not later than 5 days after the due date (including all
applicable and valid extensions) for The Limited Consolidated Group's
consolidated Federal Tax return, The Limited shall deliver to XYZ &
..... a pro forma Federal Tax return (a "Pro Forma Federal Return") of the
XYZ Group reflecting the XYZ Federal Tax
Liability. Not later than 30 days after the due date for each Combined State Tax
return, The Limited shall deliver to XYZ the relevant pro forma
Combined State Tax return (each a "Pro Forma Combined State Return" and together
with the Pro Forma Federal Return, the "Pro Forma Returns") of the XYZ &
..... Group reflecting the relevant XYZ Combined State Tax
Liability. The Pro Forma Returns shall be prepared in good faith in a manner
generally consistent with past practice. Each Pro Forma Return shall be
delivered together with a statement showing a calculation of the amount to be
paid pursuant to section (3)(c)(ii) below.
 
 (ii) Not later than 15 days after the receipt of each Pro Forma
Return, XYZ shall pay to The Limited, or The Limited shall pay
to XYZ , as appropriate, an amount equal to the difference, if
any, between the XYZ Federal Tax Liability or the XYZ &
..... Combined State Tax Liability, as the case may be, reflected on such Pro
Forma Return for such period and the aggregate amount of the estimated
installments paid with respect thereto pursuant to Section 3(b).
 
 (iii) If a Pro Forma Return reflects a Tax Asset that may under
applicable law be used to reduce a Federal Tax or Combined State Tax liability
of any member of The Limited Group for any taxable period, The Limited shall pay
to XYZ an amount equal to the actual tax saving (which would
include refunds actually received) produced by such Tax Asset at the time such
Tax saving is realized and the future Pro Forma Returns of the XYZ &
..... Group shall be adjusted to reflect such use. The amount of any such tax
saving for any taxable period shall be the amount of the reduction in taxes
payable
 
 
 
 8
<PAGE> 10
 
to a taxing authority with respect to such tax period as compared to the taxes
that would have been payable to a taxing authority with respect to such tax
period in the absence of such Tax Asset.
 
 (iv) In the event that The Limited makes a cash deposit with a
taxing authority in order to stop the running of interest or makes a payment of
tax and correspondingly takes action to recoup such payment (such as suing for a
refund), XYZ shall pay to The Limited an amount equal to
XYZ 's share of the amount so deposited or paid (calculated in a
manner consistent with the determinations provided in this Section 3). Upon
receipt by The Limited of a refund of any amounts paid by it in respect of which
XYZ shall have advanced an amount hereunder, The Limited shall
pay to XYZ the amount of such refund, together with any interest
received by it on such refund. If and to the extent that any claim for refund or
contest based thereupon shall be unsuccessful, the payment by XYZ &
..... under Section 3(c)(iv) shall be credited toward XYZ 's
obligations under this Section 3(c)(iv) and any other payment obligation of
XYZ under Section 3(d) below.
 
 (d) Treatment of Adjustments. If any adjustment is made in a Federal
Tax return of The Limited Group or in a return relating to a Combined State Tax,
after the filing thereof, in which income or loss of the XYZ 
Group (or any member thereof) is included, then at the time of a Final
Determination of the adjustment, XYZ shall pay to The Limited or
The Limited shall pay to XYZ , as the case may be, the difference
between all payments actually made under Section 3 with respect to the taxable
year or period covered by such tax return and all payments that would have been
made under Section 3 taking such adjustment into account, together with any
penalties actually paid and interest for each day until the date of Final
Determination calculated at a rate equal to Prime rate.
 
 (e) Carrybacks From Post-Distribution Years.
 
 (i) The Limited agrees to pay to XYZ the actual tax
benefit received by The Limited Consolidated Group from the use in any Pre-
Distribution Tax Period of a carryback of any Tax Asset of the XYZ &
..... Group from a Post-Distribution Tax Period. Such benefit shall be equal to
the excess of (i) the amount of Federal Taxes, or Combined State Taxes, as the
case may be, that would have been payable (or of the tax refund that would have
been receivable) by The Limited Consolidated Group in the absence of such
carryback over (ii) the amount of Federal Taxes or Combined State Taxes, as the
case may be, actually payable (or of the Tax refund actually receivable) by The
Limited Consolidated Group.
 
 
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<PAGE> 11
 
 (ii) If, subsequent to the payment by The Limited Group to
XYZ Group of any amount, there shall be (A) a Final
Determination which results in a disallowance or a reduction of the Tax Asset so
carried back or (B) a reduction in the amount of the benefit realized by The
Limited Consolidated Group from such Tax Asset as a result of a Final
Determination or the use by The Limited Consolidated Group of a Tax Asset of The
Limited Group, the XYZ Group shall repay to The Limited, within
90 days of such event described in (A) or (B) (an "Event" or, collectively the
Events") any amount which would not have been payable to the XYZ 
Group pursuant to this Section 3(e) had the amount of the benefit been
determined in light of the Events. In addition, the XYZ Group
shall hold each member of The Limited Group harmless for any penalty or interest
payable by any member of The Limited Group as a result of any such Event. Any
such amount shall be paid by The XYZ Group within 90 days of the
payment by The Limited Group of any such interest or penalty. Nothing in this
Section 3(e) shall require The Limited to file a claim for refund of Federal
Taxes or Combined States Taxes which The Limited, in its sole discretion,
determined lacks substantial authority, as defined in the Code and the
regulations thereunder.
 
 (iii) Any refunds or credits of tax received by a member of The
Limited Group or the XYZ Group, as the case may be, relating to
a Pre-Distribution Tax Period, to the extent attributable to any item of income,
loss, credit, deduction or other tax attribute of any member of the XYZ
 Group or The Limited Group, respectively, shall be paid by such member
of The Limited Group or the XYZ Group, respectively, to
XYZ or The Limited, respectively, within 90 days of receipt;
provided that no such payment shall be required to the extent such refund or
credit is attributable to (x) a Tax Asset of the XYZ Group or
The Limited Group, respectively, for which payment has previously been made by
The Limited Group or the XYZ Group, respectively, pursuant to
Section 3(c)(iii), 3(e)(1) or 3(e)(iii), or (y) an adjustment for which payment
in respect thereof has previously been made pursuant to Section 3(d).
 
 4. CERTAIN REPRESENTATIONS AND COVENANTS.
 
 (a)(i) XYZ Representations. XYZ and
each member of the XYZ Group represent that, as of the date
hereof, and covenant that on the Distribution Date there is no plan or intention
(A) to liquidate XYZ or to merge or consolidate XYZ &
....., or any member of the XYZ Group conducting an active trade
or business relied upon in connection with the Distribution, with any other
person subsequent to the Distribution, (B) to sell or
 
 
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<PAGE> 12
 
otherwise dispose of any asset (or close any store) of XYZ or
any member of the XYZ Group subsequent to the Distribution,
except in the ordinary course of business, (C) to take any action inconsistent
with the information and representations furnished to the IRS in connection with
the request for a private letter ruling with respect to the Distribution, (D) to
repurchase stock of XYZ in a manner contrary to the requirements
of Revenue Procedure 96-30 or in a manner contrary to the representations made
in connection with the request for a private letter ruling with respect to the
Distribution, or (E) to enter into any negotiations, agreements, or arrangements
with respect to transactions or events (including stock issuances, pursuant to
the exercise of options or otherwise, option grants, capital contributions, or
acquisitions, but not including the Distribution) which may cause the
Distribution to be treated as part of a plan pursuant to which one or more
persons acquire directly or indirectly XYZ stock representing a
"50-percent or greater interest" within the meaning of Section 355(d)(4) of the
Code.
 
 (ii) The Limited Representations. The Limited and each member of The
Limited Group represent that, as of the date hereof, and covenant on the
Distribution Date there is no plan or intention to take any action inconsistent
with the information and representations furnished to the IRS and Davis Polk &
Wardwell in connection with the request for a private letter ruling with respect
to the Distribution, regardless of whether such information and representations
were included in the ruling or pronouncement issued by the IRS.
 
 (iii) XYZ and The Limited Representations. Except
pursuant to the terms of the Contingent Redemption Agreement, each of
XYZ , The Limited and the members of the XYZ 
Group and The Limited Group, respectively, represent that, as of the date
hereof, and covenant that on the Distribution Date, neither XYZ ,
The Limited nor the members of the XYZ Group or The Limited
Group, respectively (as applicable), is aware of any present plan or intention
by the current shareholders of The Limited to sell, exchange, transfer by gift,
or otherwise dispose of any of their stock in, or securities of, The Limited or
XYZ subsequent to the Distribution.
 
 (b) XYZ Covenants. XYZ covenants to
The Limited that (i) during the two-year period following the Distribution Date,
neither XYZ nor any member of the XYZ Group
conducting an active trade or business relied upon in connection with the
Distribution, will liquidate, merge or consolidate with any other person, (ii)
during the two-year period following the Distribution Date, XYZ 
will not sell, exchange, distribute or otherwise dispose of its
 
 
 11
<PAGE> 13
 
assets or those of any member of the XYZ Group, or close any of
its stores or those of any member of the XYZ Group, except in
the ordinary course of business, (iii) following the Distribution, XYZ &
..... will, for a minimum of two years, continue the active conduct of the
historic business conducted by XYZ throughout the five year
period prior to the Distribution, (iv) XYZ will not, nor will it
permit any member of the XYZ Group to, take any action
inconsistent with the information and representations furnished to the IRS in
connection with the request for a private letter ruling with respect to the
Distribution, (v) XYZ will not repurchase stock of XYZ &
..... in a manner contrary to the requirements of Revenue Procedure 96-30 or in
a manner contrary to the representations made in connection with the request for
a private letter ruling with respect to the Distribution, (vi) on or after the
Distribution Date, it will not, nor will it permit any member of the XYZ
 Group to make or change any accounting method, change its taxable year,
amend any tax Return or take any tax position on any tax Return, take any other
action, omit to take any action or enter into any transaction that results in
any increased tax liability or reduction of any Tax Asset of The Limited
Consolidated Group or any member thereof in respect of any Pre-Distribution Tax
Period, (vii) during the tax period of the XYZ Group that begins
immediately after the Distribution Date, it will not, nor will it permit any
member of the XYZ Group to, enter into any transaction or take
any other action that is motivated, in whole or in part, by tax considerations,
(viii) during the applicable period provided in Section 355(e)(2)(B) of the Code
with respect to the Distribution, it will not enter into any transaction or make
any change in equity structure (including stock issuances, pursuant to the
exercise of options, option grants or otherwise, capital contributions, or
acquisitions, but not including the Distribution) which may cause the
Distribution to be treated as part of a plan pursuant to which one or more
Persons acquire directly or indirectly XYZ stock representing a
"50-percent or greater interest" within the meaning of Section 355(d)(4) of the
Code, and (ix) it will file federal consolidated returns with its subsidiaries
for the tax period immediately after the Distribution Date.
 
 (c) Exceptions. Notwithstanding the foregoing, XYZ 
and the members of the XYZ Group may take actions inconsistent
with the covenants contained in Section 4(b)(i) through (vii) above, if: 
 
 (i) XYZ obtains a ruling from the IRS to the effect
that such actions will not result in the Distribution being taxable to The
Limited or its shareholders; or
 
 (ii) XYZ obtains an opinion of counsel recognized as
an expert in federal income tax matters and acceptable to The Limited to the
 
 
 12
<PAGE> 14
 
same effect as in Section 4(c)(i), provided such opinion is reasonably
acceptable to The Limited.
 
 (d) Deductions and Certain Taxes Related to Options.
 
 (i) The Limited shall file Returns claiming (x) the tax deductions
attributable to the exercise of options to purchase stock of The Limited or the
vesting of The Limited restricted stock which are held by employees or former
employees of the XYZ Group or (y) any other similar compensation
related tax deductions. The Returns of the Limited Group and the XYZ &
..... Group shall reflect the entitlement of The Limited Group to such
deductions. To the extent such deductions are disallowed because a taxing
authority determines that the XYZ Group should have claimed such
deductions, as consideration for The Limited's issuance of shares of its stock
as a result of an event described in clause (x) of the preceding sentence, the
XYZ Group shall pay to The Limited Group an amount equal to the
tax paid by The Limited Group as a result of such disallowance. Upon the
exercise of any option or the vesting of any restricted stock described in
clause (x), or the occurrence of any other event that would result in a
compensation related tax deduction, as the case may be, the XYZ 
Group (as agent for the Limited Group) shall prepare and file all applicable tax
returns and pay the applicable tax liability under the Federal Insurance
Contributions Act, the Federal Unemployment Tax Act or any state employment tax
law in connection with such event.
 
 (ii) XYZ shall file Returns claiming (x) the tax
deductions attributable to the exercise of options to purchase stock of
XYZ which are held by employees or former employees of The
Limited Group or (y) any other similar compensation related tax deductions. The
Returns of The Limited Group and the XYZ Group shall reflect the
entitlement of The XYZ Group to such deductions. To the extent
such deductions are disallowed because a taxing authority determines that The
Limited Group should have claimed such deductions, as consideration for
XYZ 's issuance of shares of its stock as a result of an event
described in clause (x) of the preceding sentence, The Limited Group shall pay
to The XYZ Group an amount equal to the tax paid by XYZ
 Group as a result of such disallowance. Upon the exercise of any option
described in the immediately preceding clause (x), or the occurrence of any
other event that would result in a compensation related tax deduction, as the
case may be, The Limited Group (as agent for XYZ Group) shall
prepare and file all applicable tax return and pay the applicable tax liability
under the Federal Insurance Contributions Act, the Federal Unemployment Tax Act
or any state employment tax law in connection with the exercise of such an
option.
 
 
  13
<PAGE> 15
 
 5. INDEMNITIES.
 
 (a) XYZ Indemnity. XYZ and each
member of the XYZ Group will jointly and severally indemnify The
Limited and the members of The Limited Group that were members of The Limited
Consolidated Group (that included a member of the XYZ Group)
against and hold them harmless from:
 
 (i) any XYZ Group Tax Liability;
 
 (ii) any liability or damage resulting from a breach by XYZ
 or any member of the XYZ Group of any representation or
covenant made by XYZ herein; and
 
 (iii) all liabilities, costs, expenses (including, without
limitation, reasonable expenses of investigation and attorneys' fees and
expenses), losses, damages, assessments, settlements or judgments arising out of
or incident to the imposition, assessment or assertion of any tax liability or
damage described in (i) or (ii) including those incurred in the contest in good
faith in appropriate proceedings relating to the imposition, assessment or
assertion of any such tax, liability or damage.
 
 (b) The Limited Indemnity. The Limited and each member of The
Limited Group will jointly and severally indemnify XYZ and the
members of the XYZ Group that were members of The Limited
Consolidated Group (that included a member of The Limited Group) against and
hold them harmless from:
 
 (i) any The Limited Group Tax Liability and any tax liability
resulting from the Distribution, other than any such liabilities described in
Section 5(a);
 
 (ii) any liability or damage resulting from a breach by The Limited
or any member of The Limited Group of any representation or covenant made by The
Limited herein; and
 
 (iii) all liabilities, costs, expenses (including, without
limitation, reasonable expenses of investigation and attorneys' fees and
expenses), losses, damages, assessments, settlements or judgments arising out of
or incident to the imposition, assessment or assertion of any tax liability or
damage described in (i) or (ii) including those incurred in the contest in good
faith in appropriate proceedings relating to the imposition, assessment or
assertion of any such tax, liability or damage.
 
 
 
 14
<PAGE> 16
 
If a member of The Limited Group ceases to be a member of The Limited as a
result of a sale of its stock to a third party (whether or not treated as a sale
of stock for tax purposes), such member of The Limited Group shall be released
from its obligations under this Agreement upon such sale and neither The Limited
nor any member of The Limited Group shall have any obligation to indemnify
XYZ or any member of the XYZ Group under Section
5(b)(iii) for any liability or damage attributable to actions taken by such
member after such sale.
 
 (c) Discharge of Indemnity. XYZ , The Limited and the
members of the XYZ Group and The Limited Group, respectively,
shall discharge their obligations under Section 5(a) and 5(b) hereof,
respectively, by paying the relevant amount within 30 days of demand therefor.
After a Final Determination of an obligation of XYZ or any
member of the XYZ Group under Section 5(a), The Limited shall
send a statement to XYZ showing the amount due thereunder. After
a Final Determination of an obligation of The Limited or any member of The
Limited Group under Section 5(b), XYZ shall send a statement to
The Limited showing the amount due thereunder. Calculation mechanics relating to
items described in Section 5(a)(i) are set forth in Section 3(c).
Notwithstanding the foregoing, if either XYZ , The Limited or any
member of the XYZ Group or The Limited Group disputes in good
faith the fact or the amount of its obligation under Section 5(a) or Section
5(b), then no payment of the amount in dispute shall be required until any such
good faith dispute is resolved in accordance with Section 16 hereof; provided,
however, that any amount not paid within 30 days of demand therefor shall bear
interest as provided in Section 9.