TAX SHARING AGREEMENT



          AGREEMENT, dated as of December 20, 1996, by and between
Orion Capital Corporation, a Delaware corporation ("Orion"), and
Guaranty National Corporation, a Colorado corporation ("GNC").

                         W I T N E S S E T H :



          WHEREAS, Orion is the common parent corporation of an
"affiliated group" of corporations (the "Orion Group"), as that term
is defined in Section 1504(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), which group now includes GNC and any corporation
that is or subsequently becomes a member of an "affiliated group" of
which GNC would be the "common parent," as such terms are defined in
Section 1504(a) of the Code, if GNC were owned by individuals (GNC and
any present or future member of its affiliated group being referred to
herein as the "GNC Group"); and

          WHEREAS, Orion and GNC desire to agree on an equitable basis
for determining the amount to be paid by GNC to Orion on account of
the GNC Group's inclusion in the Orion Group's consolidated federal
income tax returns.

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          NOW, THEREFORE, in consideration of the premises and of the
mutual covenants contained herein, the parties hereto agree as
follows:



               1.  Inclusion in Orion Return.  GNC agrees to join, and
shall cause each other member of the GNC Group to join, in the filing
of the Orion Group's consolidated federal income tax return for any
taxable year for which GNC is eligible to join in such filing.  GNC
agrees to, and agrees to cause each member of the GNC Group to, file
such consents, elections, and other documents and to take such other
action as may be necessary or appropriate to carry out the purposes of
this Agreement.  Orion agrees that Orion shall timely file the Orion
Group's consolidated federal income tax return for the taxable year
and shall pay the amount of tax reflected thereon.

          In all matters relating to the Orion Group's consolidated
tax liability, Orion is the agent for each member of the Orion Group,
including GNC.  As said agent, Orion has the sole authority and
discretion to make any election for each member, including any
election that must be made to determine a member's separate taxable
income for purposes of computing the consolidated taxable income of
the Orion Group.

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               2.  The GNC Group's Hypothetical Tax.  For purposes of
this Agreement, the "GNC Group's hypothetical tax" for any taxable
year covered by this Agreement shall be the federal income tax
liability that the GNC Group would have had for such taxable year if
the GNC Group had filed its own consolidated federal income tax return
for such taxable year, taking into account any carryovers to, or
carrybacks from, other taxable years of the GNC Group (or any member
thereof) that are available in such taxable year of the GNC Group, or
would have been so available if the GNC Group had filed its own
consolidated (or where applicable, separate) federal income tax
returns for such other taxable years, and the GNC Group was subject to
tax on all of its taxable income at the applicable maximum rate
specified in the Code but without the benefit of any surtax exemption;
provided, however, that in computing such hypothetical tax: (i) there
will be eliminated from taxable income any intercompany dividends that
would be eliminated under Treasury Regulation Section 1.1502-14(a);
(ii) intercompany transactions between members of the Orion Group that
would be deferred under Treasury Regulation Section 1.1502-13 shall be
deferred; (iii) the allowable credits against tax shall be limited to
those credits attributable to the GNC Group that are actually allowed
as credit against tax on the Orion Group consolidated

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federal income tax return for the taxable year of reference (allocated
pursuant to the Treasury Regulations under Section 1552 of the Code);
and (iv) in computing the deduction under Section 167 of the Code,
property shall not lose its character as a result of a transfer from
one member of the Orion Group to another.  All intercompany
transactions (as defined in Treasury Regulation Section 1.1502-13(a))
between members of the Orion Group will be taken into account in
computing the GNC Group hypothetical tax at the time provided under
Treasury Regulation Section 1.1502-13.

               3.  Payment.  With respect to each taxable year for
which GNC is part of the Orion Group:

               (a) On each due date for payment of estimated federal
     income tax and on the due date for filing the Orion Group
     consolidated return (determined without regard to any
     extensions), GNC shall pay to Orion the federal income tax that
     would have been payable by the GNC Group on such date if the GNC
     Group were filing its own consolidated federal income tax return
     for such taxable year based upon the GNC Group's hypothetical
     tax.  In computing GNC's estimated federal income tax payments,
     each payment shall be sufficient to avoid incurring any addition
     to tax under Section 6655 of the Code by reason of an
     underpayment by a "large corporation" within the

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     meaning of Section 6655(g)(2) of the Code and shall be consistent
     with the
     elections permitted to be made under Section 6655(d) and (e) of
     the Code to be made by Orion, in its sole discretion, for such
     taxable year and communicated to GNC.

               (b) On or prior to the date the Orion Group
     consolidated return is actually filed for a taxable year, GNC
     shall pay to Orion, or Orion shall pay to GNC, as the case may
     be, the difference between the GNC Group's hypothetical tax for
     such taxable year and the amount paid by GNC to Orion pursuant to
     paragraph 3(a) hereof.  If the GNC Group for any taxable year has
     a loss or credit which could be carried back to and which would
     reduce the GNC Group's hypothetical tax (as adjusted) for any
     earlier taxable year for which the GNC Group was included in the
     Orion Group, then (x) if and to the extent such loss or credit is
     utilized to actually reduce the Orion Group's tax liability for
     such taxable year, Orion shall pay to GNC on the date the Orion
     Group consolidated return is actually filed for such taxable year
     the amount by which the GNC Group's hypothetical tax in such
     earlier taxable year is reduced by reason of such carryback or
     (y) if and to the extent such loss or credit is actually carried
     back to an

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     earlier taxable year, Orion shall pay to GNC on the date any
     refund of tax is actually received the amount by which the GNC
     Group's hypothetical tax in such earlier year is reduced by
     reason of such carryback together with any applicable interest.
               4.  Adjustments.  GNC agrees that Orion shall be
responsible for, and shall have sole and absolute discretion with
respect to, claiming any deductions or credits not claimed on the
Orion Group consolidated return as filed, agreeing to, contesting, or
settling any adjustments to the Orion Group's federal income tax li
ability for any taxable year covered by this Agreement, and Orion
shall pay any deficiencies in, or receive any refunds of, the Orion
Group's federal income tax liability for any such taxable year
resulting from a final determination by the Internal Revenue Service
or the courts, or from carrybacks or carryovers of the Orion Group
from or to other taxable years.  On or prior to the date of payment or
receipt or, if there is to be no payment or receipt, then on or prior
to the date on which there is an adjustment in the GNC Group's
hypothetical tax resulting from a final determination by the Internal
Revenue Service or the courts, or from carrybacks or carryovers of the
Orion Group from other taxable years, GNC shall pay to Orion or Orion
shall pay to GNC, as the case may be, the

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amount necessary to reflect the adjustment in the GNC Group's
hypothetical tax liability, together with any applicable interest and
penalties.

               5.  Resolution of Disputes as to the GNC Group's
Hypothetical Tax.  In the event of a disagreement between the parties
hereto as to the amount of the GNC Group's hypothetical tax for any
taxable year covered by this Agreement, such amount shall be
determined by the independent certified public accountants who audit
Orion's certified financial statements for such taxable year, and the
determination of such accountants shall be final and binding on the
parties hereto.

            6.  Earnings and Profits and Characterization of Payments.
Earnings and profits of each member of the Orion Group shall be
calculated by allocating the federal income tax liability of the Orion
Group to each member in accordance with the method described in
Section 1552(a)(2) of the Code and the applicable Treasury Regulations
thereunder.

            7.  Miscellaneous Provisions.

            (a) Entire Understanding.  This Agreement contains the
entire understanding of the parties hereto with respect to the subject
matter hereof.  No alteration, amendment or modification of any of the
terms of this Agreement shall be

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valid unless made by an instrument signed in writing by an authorized
officer of each of the parties hereto.

            (b) Further Assurances.  The parties hereto shall execute
and deliver such further instruments and do such further acts and
things (including, without limitation, by causing their subsidiaries
to execute and deliver such instruments and to do such acts and
things) as may be required to carry out the intent and purpose of this
Agreement.  The parties each shall cooperate with the other with
respect to the preparation and filing of any tax return or the conduct
of any tax audit or other tax proceeding.  If any party has possession
of documents or records which relate to, or could affect, any item of
income, loss, deduction, credit, tax basis or other tax attributes of
any other party hereto, such party shall take reasonable steps to
preserve such documents or records for the same period and to the same
extent as such party preserves and protects its own similar tax
documents, and prior to destroying or discarding any such records
shall notify the party to whom the records relate and offer such party
the opportunity, at such parties' expense, to take possession or
control of such documents.

          IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the
date first above written.


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                              ORION CAPITAL CORPORATION

                              By:  s/Daniel L. Barry
                           Title:  Chief Financial Officer


Attest:___________________


                              GUARANTY NATIONAL CORPORATION

                              By:  s/Shelly J. Hengsteler
                           Title:  Assistant Treasurer


Attest:  s/Michael L. Pautler