TAX MATTERS AGREEMENT
 
 
 THIS TAX MATTERS AGREEMENT (the "Agreement"), dated as of ..... 16,
..... (the "IPO Date"), is entered into between XYZ Inc., a Delaware
corporation ("XYZ"), and YYY Inc., a Delaware corporation,
("YYY").
 
  R E C I T A L S
 ---------------
 
 
 
 
 
 
 
 
 
 
A. XYZ is the common parent corporation of an affiliated group of
corporations which, together with any other corporations which may become
members of such affiliated group, is referred to as the "XYZ Consolidated
Group".
 
 

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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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 B. YYY, if it were not included in the XYZ Consolidated
Group on the date hereof, would be the common parent corporation of an
affiliated group of corporations within the meaning of Section 1504 of the
Internal Revenue Code of 1986, as amended (the "Code"), which, together with any
other corporations which may become members of such affiliated group, is
referred to as the "YYY Consolidated Group".
 
 C. XYZ and YYY desire to set forth in the Agreement their
agreement as to certain matters relating to the inclusion of the YYY
Consolidated Group in the XYZ Consolidated Group, including the allocation of
tax liabilities for years in which the YYY Consolidated Group is so
included, and certain other matters relating to taxes.
 
  1
<PAGE>
 
 The parties agree as follows:
 
 1. Filing of Consolidated Returns and Payment of Consolidated Tax
 --------------------------------------------------------------
Liability.
---------
 
 For all taxable years in which XYZ files consolidated federal
income tax returns (any such return of the XYZ Consolidated Group for any
taxable year, a "XYZ Consolidated Return") and is entitled to include the
YYY Consolidated Group in such returns under Sections 1501-1504, or
successor provisions, of the Code, XYZ shall include the YYY
Consolidated Group in the consolidated federal income tax returns it files as
the common parent corporation of the XYZ Consolidated Group. XYZ,
YYY, and the other members of the XYZ Consolidated Group shall file
any and all consents, elections or other documents and take any other actions
necessary or appropriate to effect the filing of such federal income tax
returns. For all taxable years in which the YYY Consolidated Group is
included in the XYZ Consolidated Group, XYZ shall pay the entire federal
income tax liability of the XYZ Consolidated Group and shall indemnify and
hold harmless YYY against any such liability; provided, however, that
  -------- -------
YYY shall make payments to XYZ or receive payments from XYZ as
provided in the Agreement in settlement of the YYY Consolidated Group's
share of the entire federal income tax liability of the XYZ Consolidated
Group for any taxable year (which term shall throughout the Agreement include
any short taxable year) beginning on or after the IPO Date during which the
YYY Consolidated Group is included in the XYZ Consolidated Group (any
such taxable year, an "Agreement Year" and any taxable year ending on or before
the IPO Date, a "pre-Agreement Year"). For
 
 2
<PAGE>
 
purposes of this Agreement, the YYY Consolidated Group shall be deemed
to have a taxable year beginning on January 1, ..... and ending on the IPO Date
(which year shall be treated as a pre-Agreement Year), and the YYY
Consolidated Group shall be deemed to have a taxable year beginning on the day
after the IPO Date and ending on December 31, ..... (or, if earlier, the date on
which the YYY Consolidated Group's actual taxable year beginning January
1, ..... ends) which year shall be treated as an Agreement Year.
 
 2. Pro Forma YYY Return.
 ----------------------------
 
 For each Agreement Year, XYZ shall prepare a pro forma consolidated
federal income tax return for the YYY Consolidated Group (a "Pro Forma
YYY Return"). Except as otherwise provided herein, the Pro Forma
YYY Return for each Agreement Year shall be prepared as if YYY
filed a consolidated return on behalf of the YYY Consolidated Group for
such taxable year; provided, however, that the Pro Forma YYY Return
shall not include any deduction or other tax benefit attributable to the
exercise of an option to purchase XYZ stock by an employee of YYY (or
its affiliates). The Pro Forma YYY Return shall reflect any carryovers
of net operating losses, net capital losses, excess tax credits, or other tax
attributes from prior Agreement Years' Pro Forma YYY Returns which could
have been utilized by the YYY Consolidated Group (excluding those
attributes carried back pursuant to Section 5 herein) if the YYY
Consolidated Group had never been included in the XYZ Consolidated Group and
all Pro Forma YYY Returns had been actual returns, but otherwise shall
not reflect any tax benefits that arise from any adjustment to a pre-
 
 3
<PAGE>
 
Agreement Year or carryovers of any other tax attributes from a pre-Agreement
Year, regardless of whether such attributes were utilized (on audit or
otherwise) on a tax return of XYZ in a pre-Agreement Year. The Pro Forma
YYY Return shall be prepared in a manner that reflects all elections,
positions, and methods used in the XYZ Consolidated Return that must be
applied on a consolidated basis and otherwise shall be prepared in a manner
consistent with the XYZ Consolidated Return. The provisions of the Code that
require consolidated computations, such as Sections 861, 1201-1212, and 1231,
shall be applied separately to the YYY Consolidated Group. Section
1.1502-13 of the Income Tax Regulations shall be applied as if the YYY
Consolidated Group and the XYZ Consolidated Group (excluding the members of
the YYY Group) were separate affiliated groups, except that the Pro
Forma YYY Return shall also include any gains or losses of the members
of the YYY Consolidated Group on transactions within the YYY
Consolidated Group (including in years prior to the first Agreement Year) which
must be taken into account pursuant to Section 1.1502-13 of the Income Tax
Regulations and reflected on the XYZ Consolidated Return if the YYY
Consolidated Group ceases to be included in the XYZ Consolidated Group. For
purposes of the Agreement, all determinations made as if the YYY
Consolidated Group had never been included in the XYZ Consolidated Group and
as if all Pro Forma YYY Returns were actual returns shall reflect any
actual short taxable years resulting from the YYY Consolidated Group
joining or leaving the XYZ Consolidated Group.
 
 4
<PAGE>
 
 3. Pro Forma YYY Return Payments.
 -------------------------------------
 
 For each Agreement Year, YYY shall make periodic payments
("Periodic Payments") to XYZ in such amounts as determined by XYZ based
upon the estimated tax payments that would be due from the YYY
Consolidated Group if it were not included in the XYZ Consolidated Group no
later than the dates on which payments of estimated tax would be due from the
YYY Consolidated Group if it were not included in the XYZ
Consolidated Group. The balance of the tax due for an Agreement Year shall be
paid to XYZ no later than March 15 of the following year (the "Balance
Payment"). YYY shall pay to XYZ no later than the date on which a
XYZ Consolidated Return for any Agreement Year is filed an amount equal to
the sum of (i) the federal income tax liability shown on the corresponding Pro
Forma YYY Return prepared for the Agreement Year and (ii) the additions
to tax, if any, under Section 6655 of the Code that would have been imposed on
YYY (treating the amount due to XYZ under (i) above as its federal
income tax liability and treating any periodic payments to XYZ pursuant to
the first sentence of this Section 3 as estimated payments under Section 6655 of
the Code) and which result from the inaccuracy of any information provided by
YYY to XYZ pursuant to Section 5 hereof or from the failure of
YYY to provide any requested information, reduced by (iii) the sum of
the amount of the Periodic Payments and the Balance Payment (collectively, the
"Total Periodic Payments"), plus (iv) any interest and additions to tax (other
than under Section 6655 of the Code) that would be due under the Code if the
Total Periodic Payments were actual payments of tax. If YYY's Total
Periodic Payments to XYZ for any Agreement Year exceed the
 
 5
<PAGE>
 
amount of its liability under the preceding sentence, XYZ shall refund such
excess to YYY within 30 days after filing the XYZ Consolidated
Return. For purposes of the Agreement, the term "federal income tax liability"
includes the tax imposed by Sections 11, 55 and 59A of the Code, or any
successor provisions to such Sections. XYZ shall notify YYY of any
amounts due from YYY to XYZ pursuant to this Section 3 no later than
5 business days prior to the date such payments are due and such payments shall
not be considered due until the later of the due date described above or the
fifth day from the notice from XYZ.
 
 4. Payments for Taxable Years in the Event of Deconsolidation.
 ----------------------------------------------------------
 (a) Payments by YYY to XYZ. If for any taxable year after
 ---------------------------------
the YYY Consolidated Group ceases to be included in the XYZ
Consolidated Group (a "Post-Consolidation Year"), (i) the federal income tax
liability of the YYY Consolidated Group is less than (ii) the federal
income tax liability that would have been imposed with respect to the same
period if the YYY Consolidated Group had not been included in the XYZ
Consolidated Group for any Agreement Year, all Pro Forma YYY Returns had
been actual returns for such years, and no carryovers of YYY attributes
from pre-Agreement years were permitted, then YYY shall pay to XYZ
the excess of (ii) over (i) within 10 days of the filing of the YYY
Post-Consolidation Year return.
 (b) Payments by XYZ to YYY. If for any Post-Consolidation
 ---------------------------------
Year (i) the federal income tax liability of the YYY Consolidated Group
is greater than (ii) the federal income tax liability that would have been
imposed with respect to the same period if the YYY Consolidated Group
had not been included in the
 
 6
<PAGE>
 
XYZ Consolidated Group for any Agreement Year, all Pro Forma YYY
Returns had been actual returns for such years, and no carryovers of YYY
attributes from pre-Agreement Years were permitted, then XYZ shall pay to
YYY the excess of (i) over (ii) within 10 days of notification by
YYY to XYZ of the filing of the YYY Post-Consolidation Year
return.
 
 (c) Documentation. Prior to the payment of any amounts due pursuant
 -------------
to this Section 4, the parties shall exchange such information and documentation
as is reasonably satisfactory to each of them in order to substantiate the
amounts due pursuant to this Section 4. Any disputes as to such amounts and
documentation which cannot be resolved prior to the date a payment is due shall
be referred to an independent accounting firm whose fees shall paid one half by
YYY and one half by XYZ.
 
 (d) No Post-Consolidation Year Carrybacks. If a YYY federal
 -------------------------------------
income tax return with respect to a Post-Consolidation Year reflects a net
operating loss, net capital loss, excess tax credits, or any other tax
attribute, such attribute may not be carried back to a XYZ tax return.
 
 5. Carrybacks.
 ----------
 
 If a Pro Forma YYY Return reflects a net operating loss, net
capital loss, excess tax credit or other tax attribute (a "Pro Forma YYY
Attribute"), which is actually utilized in a XYZ Consolidated Return
(including any amendments thereto), then, within 30 days after the later of (i)
the due date for the XYZ Consolidated Return (taking into account any
extensions thereof) or (ii) the date such Pro Forma YYY Attribute is
actually realized in cash (whether directly or by
 
 7
<PAGE>
 
offset), XYZ shall pay to YYY an amount equal to the lesser of (x)
the refund which the YYY Consolidated Group would have received as a
result of the carryback of such Pro Forma YYY Attribute to a Pro Forma
YYY Return for any prior Agreement Year or Years (determined as if the
first Agreement Year were the earliest taxable year to which such attributes
could be carried back) or (y) the tax savings or tax benefit realized by XYZ
with respect to the use of such Pro Forma YYY Attribute in a XYZ
Consolidated Return. All calculations of deemed refunds pursuant to this Section
5 shall include interest computed as if YYY had filed a claim for refund
or an application for a tentative carryback adjustment pursuant to Section
6411(a) of the Code on the date on which the XYZ Consolidated Return is
filed.
 
 6. Preparation of Tax Package and Other Financial Reporting
 --------------------------------------------------------
Information.
-----------
 
 YYY shall provide to XYZ in a format determined by XYZ
all information requested by XYZ as necessary to prepare the XYZ
Consolidated Return and the Pro Forma YYY Return (the "XYZ Tax
Package"). The XYZ Tax Package with respect to any taxable year shall be
provided to XYZ on a basis consistent with current practices of the XYZ
Consolidated Group no later than April 1 of the following year. YYY
shall also provide to XYZ information required to determine the Total
Periodic Payments, current federal taxable income, current and deferred tax
liabilities, tax reserve items, and any additional current or prior information
required by XYZ on a timely basis consistent with current practices of the
XYZ Consolidated Group.
 
 8
<PAGE>
 
 7. Returns, Audits, Refunds, Amended Returns, Litigation, Adjustments
 ------------------------------------------------------------------
and Rulings.
-----------
 
 (a) Returns. XYZ shall have exclusive and sole responsibility for
  -------
the preparation and filing of the XYZ Consolidated Returns (including
requests for extensions thereof) and any other returns, amended returns and
other documents or statements required to be filed with the Internal Revenue
Service (the "IRS") in connection with the determination of the federal income
tax liability of the XYZ Consolidated Group.
 
 (b) Audits; Refund Claims. XYZ will have exclusive and sole
 ---------------------
responsibility and control with respect to the conduct of IRS examinations of
the returns filed by the XYZ Consolidated Group and any refund claims with
respect thereto. YYY shall assist and cooperate with XYZ during the
course of any such proceeding. XYZ shall give YYY notice of and
consult with YYY with respect to any issues relating to items of income,
gain, loss, deduction or credit of any member of the YYY Consolidated
Group (any such items, "YYY Consolidated Return Items"). XYZ shall
not settle or otherwise compromise any YYY Consolidated Return Item that
would result in additional liability for YYY under this Agreement
without the written consent of YYY, which consent shall not be
unreasonably withheld. If YYY does not respond to XYZ's request for
consent within 30 days, YYY shall be deemed to have consented.
Notwithstanding the foregoing, XYZ shall have the right in its sole
discretion to pay any disputed taxes and sue for a refund in the forum of its
choice. In the case of any audit or litigation with respect to a YYY
return for a Post-
 
 9
<PAGE>
 
Consolidation Year, YYY shall not settle or otherwise compromise any
matter relating to the treatment of any item arising in an Agreement Year or a
pre-Agreement Year in a manner which would affect the liability of XYZ to
YYY or YYY to XYZ pursuant to Section 4 without the consent
of XYZ, which consent shall not be unreasonably withheld.
 
 (c) Litigation. If the federal income tax liability of the XYZ
  ----------
Consolidated Group becomes the subject of litigation in any court, the conduct
of the litigation shall be controlled exclusively by XYZ. YYY shall
assist and cooperate with XYZ during the course of litigation, and XYZ
shall consult with YYY regarding any issues relating to YYY
Consolidated Return Items.
 
 (d) Expenses. YYY shall reimburse XYZ for all reasonable
 --------
out-of-pocket expenses (including, without limitation, legal, consulting and
accounting fees) in the course of proceedings (i) described in paragraphs (b)
and (c) of this Section to the extent such expenses are reasonably attributable
to YYY Consolidated Return Items for any Agreement Year or (ii) relating
to any assertion of liability attributable in whole or in part to actions or
events covered by Section 11.
 
 (e) Recalculation of Payments to Reflect Adjustments. To the extent
 ------------------------------------------------
that any audit, litigation or claim for refund with respect to a XYZ
Consolidated Return or a YYY return for a Post-Consolidation Year
results in an additional payment of tax (including a payment of tax made
preliminary to commencing a refund claim or litigation) or a refund of tax (any
such additional payment or refund, an "Adjustment") relating to the treatment of
a YYY Consolidated Return Item for an
 
 10
<PAGE>
 
Agreement Year, a corresponding adjustment shall be made to the corresponding
Pro Forma YYY Return.
 
 All calculations of payments made pursuant to Sections 3, 4, and 5 of
the Agreement shall be recomputed to reflect the effect of any Adjustments on
the relevant Pro Forma YYY Return or on the liability of the YYY
Consolidated Group for a Post-Consolidation Year. Within 5 days after any such
Adjustment, YYY or XYZ, as appropriate, shall make additional
payments or refund payments to the other party reflecting such Adjustment, plus
interest pursuant to Section 8 of the Agreement calculated as if payments by and
to YYY pursuant to Sections 3, 4, and 5 of the Agreement and this
Section 7 were payments and refunds of federal income taxes. YYY shall
further pay to XYZ the amount of any penalties or additions to tax incurred
by the XYZ Consolidated Group as a result of an adjustment to any YYY
Consolidated Return Item for an Agreement Year.
 
 (f) Rulings. YYY shall assist and cooperate with XYZ and
 -------
take all actions requested by XYZ in connection with any ruling requests
submitted by XYZ to the IRS, including rulings unrelated to the Distributions
(defined in Section 11(a) below).
 
 (g) Applicability with Respect to All Consolidated Returns. The
  ------------------------------------------------------
provisions of Section 7(a), (b) and (c) above shall apply to XYZ Consolidated
Returns and YYY Consolidated Return Items for all taxable years in which
the YYY Consolidated Group (or any member thereof) is includable in the
XYZ Consolidated Group.
 
 11
<PAGE>
 
 (h) Document Retention, Access to Records & Use of Personnel. Until
 --------------------------------------------------------
the expiration of the relevant statute of limitations (including extensions),
YYY shall (i) retain records, documents, accounting data, computer data
and other information (collectively, the "Records") necessary for the
preparation, filing, review, audit or defense of all tax returns relevant to an
obligation, right or liability of either party under the Agreement; and (ii)
give XYZ reasonable access to such Records and to its personnel (insuring
their cooperation) and premises to the extent relevant to an obligation, right
or liability of either party under the Agreement. Prior to disposing of any
such Records, YYY shall notify XYZ in writing of such intention and
afford XYZ the opportunity to take possession or make copies of such Records
at its discretion.
 
 8. Interest.
 --------
 
 Interest required to be paid by or to YYY pursuant to the
Agreement shall, unless otherwise specified, be computed at the rate and in the
manner provided in the Code for interest on underpayments and overpayments,
respectively, of federal income tax for the relevant period. Any payments
required pursuant to the Agreement which are not made within the time period
specified in the Agreement shall bear interest at a rate equal to two hundred
basis points above the average interest rate on the senior bank debt of
YYY.
 
 9. Foreign, State and Local Income Taxes.
 -------------------------------------
 
 In the case of foreign, state or local taxes based on or measured by
the net income of the XYZ Consolidated Group, or any combination of members
thereof (other than solely with respect to members which are members of the
YYY
 
 12
<PAGE>
 
Consolidated Group or which are members of the XYZ Consolidated Group but not
the YYY Consolidated Group) on a combined, consolidated or unitary
basis, the provisions of the Agreement shall apply with equal force to such
foreign, state or local tax for each Agreement Year whether or not the
YYY Consolidated Group is included in the XYZ Consolidated Group for
federal income tax purposes; provided however, that interest pursuant to the
 -------- -------
first sentence of Section 8 of the Agreement shall be computed at the rate and
in the manner provided under such foreign, state or local law for interest on
underpayments and overpayments of such tax for the relevant period and
references to provisions of the Code throughout the Agreement shall be deemed to
be references to analogous provisions of state, local, and foreign law.
 
 For any Agreement Year or pre-Agreement Year, XYZ shall have the
sole and exclusive control of (a) the determination of whether a combined,
consolidated or unitary tax return should be filed for any foreign, state or
local tax purpose and (b) all foreign, state or local income tax audits and
litigation with respect to any member of the YYY Consolidated Group.
YYY shall reimburse XYZ for all reasonable out-of-pocket expenses
(including, without limitation, legal, consulting and accounting fees) in the
course of proceedings described in the preceding sentence to the extent such
expenses are reasonably attributable to YYY or any member of the
YYY Consolidated Group.
 
 13
<PAGE>
 
 YYY shall provide to XYZ separate legal entity reporting
information with respect to any member of the YYY Consolidated Group as
requested by XYZ on a timely basis.
 
 XYZ will provide notice of and consult with YYY with
respect to any issue relating to such audits and litigation and YYY will
provide to XYZ any information necessary to conduct such audits and
litigation. XYZ shall not settle or otherwise compromise any audits or
litigation that would result in additional liability for YYY under this
Section 9 without the written consent of YYY, which consent shall not be
unreasonably withheld. If YYY does not respond to XYZ's request for
consent within 30 days, YYY shall be deemed to have consented.
Notwithstanding the foregoing, XYZ shall have the right in its sole
discretion to have YYY pay any disputed taxes and sue for a refund in
the forum of XYZ's choice.
 
 YYY shall be responsible for filing tax returns relating to
payroll, sales and use, property, withholding and similar taxes and shall be
responsible for the payment of such taxes.
 
 For all taxable years prior to and including the taxable years that
YYY is a member of the XYZ Consolidated Group, YYY shall have
the sole and exclusive responsibility for all taxes based on or measured by the
net income which are determined solely by the income of the YYY
Consolidated Group (or any combination of the members thereof including the
predecessors of such members) on a combined, consolidated, unitary or separate
company basis. XYZ, in consultation with the Chief Financial Officer of
YYY, shall have sole and
 
 14
<PAGE>
 
exclusive responsibility for the preparation of returns relating to such taxes
and the control of audits, controversies and proceedings with respect thereto.
 
 Notwithstanding the immediately preceding paragraph, in the case of
New York State and New York City taxes based on or measured by the net income
which are determined solely by the income of the YYY Consolidated Group
(or any combination of the members thereof including the predecessors of such
members) on a combined, consolidated, unitary or separate company basis, XYZ
shall have the sole and exclusive responsibility for such taxes and for the
return preparation and the control of audits, controversies and proceedings with
respect thereto.
 
 10. UK Tax Surrenders.
 -----------------
 
 If requested to do so by XYZ UK Limited ("VUKL"), YYY
agrees that it will cause any of its direct or indirect subsidiaries which,
under the tax laws of the United Kingdom, are or have been regarded as resident
in the United Kingdom to consent under provisions of Chapter IV of Part X of TA
1988 to the surrender of all or any part of their available tax losses to VUKL
or to any member of the United Kingdom tax group of which VUKL is the principal
member. This agreement is made in respect of all accounting periods ended on or
before December 31, 1998, and YYY agrees to take or cause to be taken
all actions necessary to effect the loss surrender.
 
 11. Taxes Attributable to the Distributions.
  ---------------------------------------
 
 (a) Actions Inconsistent with the Rulings. In the event that stock of
 -------------------------------------
YYY (or any successor thereto) is ultimately distributed to any or all
of XYZ's shareholders pursuant to transactions intended to qualify under
Section 355 of the Code, including a distribution of YYY stock from
XYZ International Inc. to
 
 15
<PAGE>
 
XYZ, (any such transaction, a "Distribution" and collectively, the
"Distributions"), YYY shall not take or fail to take, and shall not
permit any other member of the YYY Consolidated Group or any other
corporation or other entity that is directly or indirectly more than 50 percent
(by vote or value) owned by any member of the YYY Consolidated Group
(any such entity, a "YYY Affiliate" and together with the YYY
Consolidated Group, the "YYY Entities") to take or fail to take, any
action if such act or failure to act would be inconsistent with any ruling,
including for all purposes of the Agreement any supplemental rulings,
(collectively, the "Rulings") issued by the IRS in connection with the
Distributions or any representation, covenant or information included in any
submission to the IRS in connection with the Rulings (together with the Rulings,
the "Rulings and Submissions").
 
 (b) Liability. Notwithstanding anything to the contrary in the
 ---------
Agreement, YYY and the YYY Entities shall be jointly and
severally liable for, and shall indemnify and hold harmless XYZ and each
member of the XYZ Consolidated Group (other than members of the YYY
Consolidated Group) from and against, on an after-tax basis, any and all taxes
(including interest, penalties and additions to tax) resulting from the
Distributions to the extent such taxes result from (i) any event or transaction
after the Distributions that involves the stock, assets, or business of the
YYY Entities, whether or not such event or transaction is the result of
direct actions of, or within the control of, the YYY Entities, (ii) any
act or failure to act on the part of any of the YYY Entities after the
Distributions, (iii) the breach of any representation, covenant or information
regarding the YYY Entities included in the Rulings and Submissions, or
(iv) any actions contemplated by
 
 16
<PAGE>
 
Section 11(c) below, regardless of whether such actions are permitted pursuant
to Section 11(d) below.
 
 (c) Covenants. YYY agrees that during the two years following
 ---------
the Distributions, YYY will not, and will not permit any of the
YYY Entities to:
 
 (i) sell, exchange, distribute or otherwise transfer all or a
 substantial portion of its assets or any stock or equity interest in any of
 the YYY Entities,
 
 (ii) enter into any merger or liquidation transaction,
 
 (iii) discontinue or otherwise fail to maintain the active trade or
 business relied upon in connection with the Rulings and Submissions,
 
 (iv) purchase any of its outstanding stock other than through stock
 purchases meeting the requirements of section 4.05(1)(b) of Rev. Proc. 96-
 30,
 
 (v) issue any stock or equity interests (except pursuant to the
 exercise of employee stock options),
 
 (vi) enter into any agreement for the sale or other disposition of
 its stock or equity interests,
 
 (vii) amend its certificate of incorporation (or other organizational
 documents), whether through a stockholder vote or otherwise, in a manner
 that affects the relative voting rights of the separate classes of
 YYY stock (including, without limitation, through the conversion of
 one class of YYY stock into another class of YYY stock), or
 
 17
<PAGE>
 
 (viii) take any action inconsistent with the information,
 representations or covenants included in the Rulings and Submissions or
 that would result in the Distributions being taxable in whole or in part to
 the XYZ Consolidated Group or XYZ's shareholders.
 
 (d) Exceptions to Covenants. Notwithstanding Section 11(c) above, the
 -----------------------
YYY Entities may take actions inconsistent with the covenants contained
in such Section 11(c), if XYZ consents in writing to such actions, such
consent to be determined by XYZ in its sole discretion taking into account
solely the preservation of the tax-free status of the Distributions; provided,
however, that if such consent is not given, YYY may request, which
request may not be unreasonably denied, that XYZ either:
 
 (i) seek to obtain a ruling from the IRS that the actions in question
 (the "Restricted Actions") will not result in the Distributions being
 taxable to the XYZ Consolidated Group or XYZ's shareholders (an
 "Additional Ruling"); provided, however, that XYZ shall not be obligated
 to request such a ruling if it determines in good faith that such request
 might have an adverse effect on the XYZ Consolidated Group or XYZ's
 shareholders; or
 (ii) seek an unqualified opinion of counsel from counsel chosen by
 XYZ that the Restricted Actions will not result in the Distributions
 being taxable to the XYZ Consolidated Group or XYZ's shareholders (an
 "Unqualified Opinion").
 
If either an Additional Ruling or Unqualified Opinion is obtained in form and
substance acceptable to XYZ, the YYY Entities may engage in such
Restricted Actions.
 
 18
<PAGE>
 
YYY agrees that XYZ is to have no liability for any tax resulting
from any Restricted Actions permitted pursuant to this Section 11(d) and agrees
to indemnify and hold harmless XYZ against any such tax. YYY shall
also bear all costs incurred by XYZ in connection with considering whether to
grant a request pursuant to this Section 11(d) or in requesting and/or obtaining
any Additional Ruling or Unqualified Opinion.
 
 (e) Rulings and Additional Rulings. In its sole discretion and
 ------------------------------
control, XYZ shall have the right to obtain the Rulings and, if any, the
Additional Rulings. YYY shall cooperate with XYZ and take all
actions requested by XYZ in connection with obtaining the Rulings and
Additional Rulings (including, without limitation, by making any representation
or covenant or providing any materials or information requested by XYZ or the
IRS; provided that YYY shall not be required to make any representation
or covenant that is inconsistent with historical facts or as to future matters
or events over which it has no control).
 
 12. Deductions Attributable to Options.
 ----------------------------------
 
 XYZ shall determine whether XYZ or YYY shall file tax
returns claiming the deductions attributable to the exercise of (i) options to
purchase stock of XYZ which are held by employees of YYY (or its
affiliates) after the Distributions or by employees of both XYZ (or its
affiliates) and YYY (or its affiliates) after the Distributions and/or
(ii) options to purchase stock of YYY which were issued as a result of a
conversion of XYZ options and which resulted in a charge to the earnings of
XYZ at the time of such conversion for financial reporting purposes. If it
is determined that XYZ shall claim all such tax deductions, XYZ
 
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shall be entitled to any such tax deductions and the tax returns of XYZ and
YYY shall be prepared accordingly and XYZ shall be responsible for
the remittance of the employer's share of FICA and similar taxes. To the extent
any such deductions are disallowed because a tax authority determines that
YYY should have claimed such deductions, YYY shall take all
actions necessary to claim such deductions and pay to XYZ an amount equal to
the tax benefit of such deductions. If it is determined that YYY shall
claim all such tax deductions, YYY shall be entitled to any such tax
deductions and the tax returns of XYZ and YYY shall be prepared
accordingly. YYY shall notify XYZ of the amount of tax deductions it
intends to claim with respect to the exercise of XYZ options and shall pay
XYZ an amount equal to the actual benefit of the related deductions (less any
FICA or similar taxes paid by YYY) not later than 3 days prior to the
due date of the estimated tax payment immediately following when any member of
the YYY Consolidated Group becomes entitled to any tax savings, refund,
credit or other offset attributable to such deduction. To the extent any such
deductions are disallowed because a tax authority determines that XYZ should
have claimed such deductions, XYZ shall pay to YYY an amount equal to
the actual benefit received by XYZ as a result of the disallowance to the
extent YYY has paid XYZ pursuant to the preceding sentence. For
purposes of the preceding sentence, such benefit shall be considered equal to
the excess of the amount of tax that would have been payable to a tax authority
(or of the refund that would have been receivable) by XYZ.
 
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 13. Confidentiality.
 ---------------
 
 Each of XYZ and YYY agrees that any information furnished
pursuant to the Agreement is confidential and, except as and to the extent
required by law or otherwise during the course of an audit or litigation or
other administrative or legal proceeding, shall not be disclosed to other
persons. In addition, each of XYZ and YYY shall cause its employees,
agents and advisors to comply with the terms of this Section 13.
 
 14. Successors and Access to Information.
 ------------------------------------
 
 The Agreement shall be binding upon and inure to the benefit of any
successor to any of the parties, by merger, acquisition of assets or otherwise,
to the same extent as if the successor had been an original party to the
Agreement. If for any taxable year the YYY Consolidated Group is no
longer included in the XYZ Consolidated Group, XYZ and YYY agree
to provide to the other party any information reasonably required to complete
tax returns for taxable periods beginning after the YYY Consolidated
Group is no longer included in a XYZ Consolidated Return, and each of XYZ
and YYY will cooperate with respect to any audits or litigation relating
to any XYZ Consolidated Return.
 
 15. Governing Law.
 -------------
 
 The Agreement shall be governed by and construed in accordance with
the laws of New York excluding (to the greatest extent permissible by law) any
rule of law that would cause the application of the laws of any jurisdiction
other than the State of New York.
 
 16. Headings.
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