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                            TAX ALLOCATION AGREEMENT



                    TAX ALLOCATION AGREEMENT, dated as of November 1, 1995,
               among ITT Corporation, a Delaware corporation (which will be
               reincorporated in Indiana and renamed ITT Industries, Inc.; "ITT
               INDUSTRIES"), ITT Destinations, Inc., a Nevada corporation (which
               will be renamed ITT Corporation; "ITT DESTINATIONS"), and ITT
               Hartford Group, Inc., a Delaware corporation ("ITT HARTFORD").
               ITT Industries, ITT Destinations and ITT Hartford are hereinafter
               jointly referred to as the "COMPANIES".

         WHEREAS, as of the date hereof, ITT Industries is the common parent of
an affiliated group of domestic corporations, including ITT Destinations and ITT
Hartford, which has elected to file consolidated Federal income tax returns;

         WHEREAS, ITT Industries proposes to distribute all of the stock it owns
in ITT Destinations and ITT Hartford to its shareholders (the "DISTRIBUTION")
and, as a result of the Distribution, ITT Destinations and ITT Hartford will not
be included in the consolidated Federal income tax return of ITT Industries for
the portion of the year following the Distribution or in future years;

         WHEREAS, the Companies have entered into an agreement (the
"DISTRIBUTION AGREEMENT") to, among other things, allocate and assign
responsibility for certain liabilities of the present ITT Corporation and its
former subsidiaries; and

         WHEREAS, the Companies desire to allocate the tax burdens and benefits
of transactions which occurred on or prior to the Distribution Date and to
provide for certain other tax matters, including the assignment of
responsibility for the preparation and filing of tax returns and the prosecution
and defense of any tax controversies;

         NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the Companies (each on its own behalf and on behalf of each of its
subsidiaries as of the Distribution Date) hereby agree as follows:

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         1. Definitions. As used in this Agreement, the following terms shall
have the following meaning:

               "ADJUSTED ALLOCABLE FEDERAL INCOME TAX LIABILITY" shall mean the
         Allocable Federal Income Tax Liability, adjusted as provided in
         paragraphs 8(c), 8(d), 16 and 20 hereof.

               "AGREEMENT" shall mean this Tax Allocation Agreement.

               "ALLOCABLE FEDERAL INCOME TAX LIABILITY" shall mean the Separate
         Consolidated Federal Income Tax Liability, but including the AMT and
         adjusted as provided in paragraphs 8(a), 8(e) and 15(b) hereof.

               "AMT" shall mean the alternative minimum tax imposed by Section
         55 of the Code.

               "CONSOLIDATED RETURN" shall mean the consolidated federal income
         tax return of ITT Industries for the period commencing on January 1,
         1995; or, if the Distribution occurs after December 31, 1995, the
         consolidated federal income tax return of ITT Industries for the period
         commencing on January 1, 1996; and including the ITT Destinations Group
         and the ITT Hartford Group through the Distribution Date.

               "CODE" shall mean the Internal Revenue Code of 1986, as amended,
         or any successor statute.

               "DISTRIBUTION" shall have the meaning assigned to such term in
         the recitals to this Agreement.

               "DISTRIBUTION AGREEMENT" shall have the meaning assigned to such
         term in the recitals to this Agreement.

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               "DISTRIBUTION DATE" shall mean the date on which ITT Industries
         distributes to its shareholders all of the stock it owns in ITT
         Destinations and ITT Hartford.

               "FEDERAL TAX ADMINISTRATOR" shall mean James P. Whitson, the
         Director of Taxes of ITT Destinations, or such other person as ITT
         Destinations shall appoint with the consent of each of ITT Industries
         and ITT Hartford, which consent shall not be unreasonably withheld or
         delayed.

               "FINAL DETERMINATION" shall mean the final resolution of
         liability for any tax for any taxable period, including any related
         interest or penalties, by or as a result of: (i) a final and
         unappealable decision, judgment, decree or other order of a court of
         competent jurisdiction; (ii) a closing agreement or accepted offer in
         compromise under Section 7121 or 7122 of the Code, or comparable
         agreement under the laws of other jurisdictions, which resolves the
         entire tax liability for any tax period; (iii) any allowance of a
         refund or credit in respect of an overpayment of tax, but only after
         the expiration of all periods during which such refund may be recovered
         (including by way of offset) by the tax imposing jurisdiction; or (iv)
         any other final disposition, including by reason of the expiration of
         the applicable statute of limitations.

               "FTC" shall mean the foreign tax credit pursuant to Section 27 of
         the Code.

               "GROUP" shall mean the ITT Industries Group, the ITT Destinations
         Group and/or the ITT Hartford Group, as the context may require.

               "IRS" shall mean the United States Internal Revenue Service.

               "ITT DESTINATIONS" shall have the meaning assigned to such term
         in the preamble to this Agreement.

               "ITT DESTINATIONS GROUP" shall mean ITT Destinations and each ITT
         Destinations Subsidiary.

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               "ITT DESTINATIONS SUBSIDIARY" shall mean all of the direct or
         indirect subsidiaries of ITT Destinations as of the Distribution Date
         which have joined or are eligible to join the Consolidated Return or
         any Prior Period Consolidated Return.

               "ITT FINANCIAL OPERATIONS" shall have the meaning assigned to
         such term in paragraph 8(e).

               "ITT HARTFORD" shall have the meaning assigned to such term in
         the preamble to this Agreement.

               "ITT HARTFORD GROUP" shall mean ITT Hartford and each ITT
         Hartford Subsidiary.

               "ITT HARTFORD SUBSIDIARY" shall mean all of the direct or
         indirect subsidiaries of ITT Hartford as of the Distribution Date which
         have joined or are eligible to join the Consolidated Return or any
         Prior Period Consolidated Return.

               "ITT INDUSTRIES" shall have the meaning assigned to such term in
         the preamble to this Agreement.

               "ITT INDUSTRIES GROUP" shall mean ITT Industries and each ITT
         Industries Subsidiary.

               "ITT INDUSTRIES SUBSIDIARY" shall mean all of the direct or
         indirect subsidiaries of ITT Industries as of the Distribution Date
         which have joined or are eligible to join the Consolidated Return or
         any Prior Period Consolidated Return, other than subsidiaries which are
         members of the ITT Destinations Group or the ITT Hartford Group.

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               "NET REVERSAL BENEFIT" shall have the meaning assigned to such
         term in paragraph 8(a).

               "PRIME RATE" shall mean the "prime rate" charged by Citibank,
         N.A., New York, New York, as such rate shall be changed from time to
         time, compounded daily on the basis of a year of 365/366 days and
         actual days elapsed.

               "PRIOR PERIOD CONSOLIDATED RETURN" shall mean any consolidated
         tax return of the present ITT Corporation filed, or to be filed, for
         years prior to the Consolidated Return year.

               "SEPARATE CONSOLIDATED FEDERAL INCOME TAX LIABILITY" shall mean,
         with respect to any year or portion thereof, the tax liability which a
         Group would have incurred if such Group, on a stand alone basis, had
         been an affiliated group eligible to file a consolidated return for any
         portion of such taxable year during which it is included in the
         Consolidated Return or any Prior Period Consolidated Return and had
         filed a return for such period, computed without regard to AMT.

               "STATE TAX ADMINISTRATOR" shall mean Richard W. Powers, the
         Director of Taxes of ITT Industries, or such other person as ITT
         Industries shall appoint with the consent of each of ITT Destinations
         and ITT Hartford, which consent shall not be unreasonably withheld or
         delayed.

               "TAX CREDITS" shall include all credits against tax pursuant to
         Subtitle A, Chapter 1, Part IV of the Code..

               "TAX ITEM" shall have the meaning specified in paragraph 8(a).

         2. Consolidated Return to be Filed. Each of the Companies will join,
and will cause each of their subsidiaries to join, in the Consolidated Return to
the extent each is eligible to join in such return under the provisions of the
Code and the regulations thereunder.

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         3. Documentation. The Companies hereby agree to execute and deliver all
documentation reasonably required (including powers of attorney, if requested)
to enable the Federal Tax Administrator to file, and to take all actions
necessary or incidental to the filing of, the Consolidated Return (including,
without limitation, the execution of Treasury Form 1122), or, with the consent
of each of the Companies, which consent shall not be unreasonably withheld or
delayed, any amendment of the Consolidated Return or any Prior Period
Consolidated Return. No consent of any Company shall be required for the filing
of an amended return pursuant to Section 905(c) of the Code.

         4. Tax Return Preparation and Audits. (a) The Federal Tax Administrator
will cause the Consolidated Return to be timely prepared and filed. The Federal
Tax Administrator shall be responsible for the preparation and filing of any
consents and requests for extension of time within which to file the
Consolidated Return or any related information or similar returns. The Federal
Tax Administrator shall make the Consolidated Return available to the Directors
of Taxes of ITT Industries and ITT Hartford for their review prior to filing and
shall furnish them a copy of the return promptly after it is filed.

         (b) ITT Industries and ITT Hartford agree that each will cause their
respective Director of Taxes to furnish to the Federal Tax Administrator on a
timely basis such information, schedules, analyses and any other items as may be
necessary to prepare the Consolidated Return. Such information, schedules,
analyses and other items will be prepared in a manner consistent with existing
practice and in accordance with a work plan and schedule to be agreed upon among
the Directors of Taxes of each of the Companies, acting reasonably, no later
than the Distribution Date.

         (c) In preparing the Consolidated Return, the Federal Tax Administrator
shall retain Arthur Andersen LLP to review the Consolidated Return (with a scope
to be agreed upon among the Directors of Taxes of each of the Companies and the
cost of such review to be shared equally among the Companies) and may retain
other advisors and charge the cost of their services to the appropriate Group or
Groups; provided that, without the consent of the affected Group, the cost to
any Group of such services in any calendar year shall not exceed $25,000.

         (d) The Federal Tax Administrator shall have overall responsibility for
obtaining and coordinating all responses in connection with any audit of the
Consolidated Return and all Prior Period Consolidated Returns. Such responses
shall be prepared by the affected Group in a manner consistent with prior
practice. IRS adjustments affecting the taxable income, loss or deductions of,
or tax credits generated by, any Group may be agreed upon or settled only upon
approval of that Group, which approval shall not be unreasonably withheld or
delayed. In connection with the defense of any audit of the Consolidated Return
or any Prior Period Consolidated Return, the 

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Federal Tax Administrator may retain advisors and charge the cost of their
services to the appropriate Group or Groups; provided that, without the consent
of the affected Group, the cost to any Group of such services in any calendar
year shall not exceed $50,000.

         5. Consolidated Return Computations of Tax and Payments. (a) On or
before December 14, 1995, the ITT Destinations Group and the ITT Hartford Group
each agree to make payments to ITT Industries equal to the excess of their
estimated Consolidated Return year Separate Consolidated Federal Income Tax
Liability over their prior payments with respect to estimated taxes for the
Consolidated Return year, and ITT Industries agrees to make payments to the ITT
Destinations Group and the ITT Hartford Group equal to the excess of their prior
payments with respect to estimated taxes for the Consolidated Return year over
their Consolidated Return year Separate Consolidated Federal Income Tax
Liability. For purposes of this paragraph 5(a), the computation of Separate
Consolidated Federal Income Tax Liability shall take into account the benefit of
any net capital loss, net operating loss, credit or deduction of the ITT
Destinations Group or the ITT Hartford Group if the Federal Tax Administrator
reasonably determines that such item will produce a benefit in the Consolidated
Return.

         (b) On or before March 14, 1996, an interim tax settlement payment
shall be made to or by ITT Industries by or to the ITT Destinations Group and
the ITT Hartford Group, as the case may be, equal to the difference between the
Separate Consolidated Federal Income Tax Liability, modified as described in
paragraph 5(a), and the net amounts previously paid with respect to estimated
taxes for the Consolidated Return year.

         (c) Based on computations to be prepared by the affected Group and
approved by the Federal Tax Administrator, an adjusting payment equal to the
difference between the Allocable Federal Income Tax Liability and the net
amounts previously paid with respect to estimated taxes for the Consolidated
Return year shall be made to or by ITT Industries by or to the ITT Destinations
Group and the ITT Hartford Group, as the case may be, on or before October 15,
1996 based on the Consolidated Return as filed, together with interest thereon
at the Prime Rate from December 14, 1995 or March 14, 1996, as the case may be.
Each of the ITT Destinations Group and the ITT Hartford Group shall increase
their liability for such adjusting payment by the amount of any AMT credit
carryforward allocated to them under the consolidated return regulations which
exceeds the AMT calculated on a separate consolidated basis.

         6. Recomputations of Tax and Payments. (a) The Adjusted Allocable
Federal Income Tax Liability of the ITT Destinations Group and the ITT Hartford
Group for the Consolidated Return or any Prior Period Consolidated Return shall
be adjusted in computations to be prepared by the affected Group and approved by
the Federal Tax Administrator with respect to changes in the 

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taxable income, loss, deduction or tax credits of the ITT Destinations Group or
the ITT Hartford Group:

               (i) in each instance when payments are to be made to, or refunds
         are received from, the IRS;

               (ii) when no payment is to be made or refund is to be received
         due to offsetting adjustments, upon filing of an amended return,
         completion of an IRS audit and completion of an IRS appellate review;
         and

               (iii) to reflect the results of any Final Determination.


         ITT Destinations and ITT Hartford each agree to pay to ITT Industries
additional amounts (plus penalties and additions to tax, if any) equal to any
increases in the Adjusted Allocable Federal Income Tax Liability of the ITT
Destinations Group or the ITT Hartford Group resulting from any such changes,
and ITT Industries agrees to pay ITT Destinations and ITT Hartford amounts equal
to any decreases in the Adjusted Allocable Federal Income Tax Liability of the
ITT Destinations Group or the ITT Hartford Group resulting from any such
changes, in each case together with any interest relating thereto. For purposes
of this agreement, unless specifically provided otherwise, interest shall be
computed at the Federal statutory rate used, pursuant to Section 6621(a) of the
Code, by the IRS in computing the interest payable to or by it on the net
balance due to or from the IRS. Any interest under Section 6621(c) of the Code
shall be charged to the Group whose separate deficiencies gave rise to such
interest. If the separate deficiencies of more than one Group gave rise to such
interest, then such interest shall be allocated between or among such Groups.
Penalties levied in respect of the Consolidated Return or any Prior Period
Consolidated Return shall be charged to the Group whose separate computations
gave rise to the penalty. If the separate computations of more than one Group
gave rise to the penalty, then such penalty shall be allocated between or among
such Groups. If a penalty does not arise from the separate computations of the
Groups, it shall be allocated in proportion to the tax in the separate tax
computations of the Groups.

         (b) Amounts payable to or by ITT Industries by or to ITT Destinations
or ITT Hartford under paragraph 6(a) shall be paid upon written request therefor
approved by the Federal Tax Administrator, together with interest thereon from
the original due date or such other date as may be appropriate under the
circumstances. Any amounts due to or from ITT Industries from or to ITT
Destinations or ITT Hartford as a result of a payment to the IRS or the receipt
of a refund shall be paid within five working days after such payment or
receipt, together with appropriate interest 

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thereon. If no payment is to be made or refund is to be received due to
offsetting items among the various Groups, then tax and interest (computed at
the IRS overpayment rates) shall be paid within 30 calendar days after the
completion of each of the IRS audit and appellate review of the tax period in
question and a Final Determination. After expiration of the five day period (or,
if applicable, 30 day period) any amounts unpaid shall bear interest computed
from the date of payment or receipt (or, if applicable, completion or Final
Determination) at the Prime Rate.

         (c) No payment relating to a change in Adjusted Allocable Federal
Income Tax Liability shall be made by or to any Group with respect to the IRS
audit of the Consolidated Return or a Prior Period Consolidated Return until the
audit has been completed with respect to all Groups, unless such advance payment
has been approved by ITT Industries and such Group.

         7. Special Rules. (a) If the Consolidated Return or any Prior Period
Consolidated Return tax liability (including any interest relating thereto)
exceeds or is less than the total of the three Groups' Allocable Federal Income
Tax Liability or Adjusted Allocable Federal Income Tax Liability, as appropriate
(including any interest relating thereto), the cost or benefit of any net
difference shall be allocated equally to ITT Industries and ITT Destinations,
provided, that AMT in an amount equal to any AMT credit carryforward from the
Consolidated Return allocated to a Group shall be borne by such Group.

         (b) The liability for any environmental tax shall be apportioned among
the ITT Industries Group, the ITT Destinations Group and the ITT Hartford Group
in proportion to their separate Group liability therefor, computed without the
benefit of the amount referred to in Section 59A(a)(2) of the Code.

         (c) Each of the Companies agrees that, unless it obtains consent of
each of the other Companies, all members of its Group will waive the carryback
of any net operating loss from a tax period beginning on or after January 1,
1996 to the Consolidated Return or Prior Period Consolidated Return.

         8. Treatment of Various Items. (a) In computing Allocable Federal
Income Tax Liability for the purposes of this Agreement, each Group shall take
into account an amount equal to any benefit resulting from any net operating
loss, net capital loss, deduction or credit or any adjustment arising from an
IRS audit, amended return or otherwise (each, a "TAX ITEM") attributable to it,
or any carryback of a Tax Item attributable to it, which produces a benefit in
the Consolidated Return or any Prior Period Consolidated Return. In determining
whether a Tax Item or carryback of a Tax 

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Item produces such a benefit, no Group shall take into account any Tax Item
which is a carryforward into a taxable year which begins after the Distribution
Date. If the Tax Item or carryback of a Tax Item results in a carryforward into
a taxable year of another Group which begins after the Distribution Date and
such carryforward produces a realized benefit (including a realized benefit as
the result of a tax basis increase), or other use, in such year or any
subsequent year after considering all other items of taxable income or credits
otherwise available to such other Group (a "NET REVERSAL BENEFIT"), then an
amount equal to such Net Reversal Benefit, when realized, shall be paid by such
other Group directly to the Group generating, or otherwise bearing the cost of,
such Tax Item or carryback of a Tax Item. For purposes of this Agreement, a Net
Reversal Benefit shall be deemed to be realized when included in a filed tax
return or otherwise allowed and shall be recomputed if adjusted upon audit by
the IRS, by amended return or otherwise. Payments with respect to the
realization or adjustment of a Net Reversal Benefit, together with interest
thereon (computed at the IRS overpayment rate) from the original due date of the
return in which the Tax Item arose or such other date as may be appropriate in
the case of an adjustment, shall be made within 30 days. The benefit of any
carryback of a Tax Item to the Consolidated Return or any Prior Period
Consolidated Return shall be taken into account only as and to the extent that
such carryback reduces the Consolidated Return or Prior Period Consolidated
Return tax or produces a Net Reversal Benefit. If no AMT is payable in the
Consolidated Return or any Prior Period Consolidated Return, no Group shall
include AMT in its Allocable Federal Income Tax Liability for such year. To the
extent that AMT results from a carryback from a year beginning after the end of
the Consolidated Return year, then such AMT shall be allocated to the Group
giving rise to the carryback and such Group shall be entitled to recover any Net
Reversal Benefit resulting from any AMT credit carryforwards associated with
such AMT.

         (b) In the event that two or more carrybacks of Tax Items are available
for use in the Consolidated Return or in any Prior Period Consolidated Return,
their order of use will be determined by the Code and the regulations
thereunder. Where two or more carrybacks of Tax Items have equal priority and
can not be used in full, each such carryback shall be used by the affected
Groups in proportion to the total of such carrybacks.

         (c) Amounts equal to research credits allowed upon any audit of the
Consolidated Return or any Prior Period Consolidated Return which are
attributable to the activities of the ITT Destinations Group or the ITT Hartford
Group prior to the Distribution Date shall be allocated to such Group. However,
if no credit is allowed, no allocation will be made. If a portion of the total
credit claimed on the Consolidated Return or any Prior Period Consolidated
Return is not allowed, only a portion of the credit as finally allowed (computed
in proportion to qualified expenditures as finally allowed) will be allocated to
the ITT Destinations Group or the ITT Hartford Group.

         (d) Adjustments to the Federal tax liability (including interest and
penalties) of or with respect to any business listed on Schedule 1.01(d) of the
Distribution Agreement for any taxable 

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year before or including the Distribution Date, shall be apportioned among the
Groups in the same manner as the other liabilities with respect to such business
are apportioned in the Distribution Agreement; provided, that any adjustment
with respect to any issue in the Consolidated Return which has not been cleared
with the Federal Tax Administrator, or for which a "more likely than not"
opinion from tax advisors reasonably acceptable to the Federal Tax Administrator
has not been received by him prior to the filing of the Consolidated Return,
shall be charged to the Group in whose separate tax computations the adjustment
arose, with the balance being apportioned. Any benefit (including any Net
Reversal Benefit) arising as a result of an adjustment pursuant to this
paragraph 8(d) or paragraph 8(e) below shall be similarly allocated and
apportioned. In computing the effect of adjustments with respect to companies
listed on Schedule 1.01(d) of the Distribution Agreement, all such adjustments
shall be combined and treated as if they were deemed to be a separate fourth
Group. Notwithstanding the foregoing, changes in direct FTC's generated by a
company listed on Schedule 1.01(d) of the Distribution Agreement and changes in
indirect FTC's generated by any foreign company together with any related
gross-up pursuant to Section 78 of the Code shall be allocated to the Group
owning such company on the Distribution Date (or, if such company has been
disposed of prior to the Distribution Date, the Group owning such company prior
to its disposition) and no FTC benefits or FTC carryforwards shall be computed
for such deemed fourth Group.

         (e) If United States Federal income taxes with respect to the
operations or sale of the businesses of or assets of ITT Financial Corporation,
and the legal entities which were direct or indirect subsidiaries of ITT
Financial Corporation prior to its liquidation (such operations or sale,
collectively "ITT FINANCIAL Operations"), differ from the amounts reflected in
any Prior Period Consolidated Return or in the Consolidated Return, when filed,
then such difference in tax liability shall be apportioned equally among the
three Groups. To the extent that the statutory tax rate on capital gains with
respect to ITT Financial Operations is less than 35%, the difference, when
realized, shall be apportioned equally among the three Groups. In addition,
state, local and foreign taxes with respect to ITT Financial Operations which
differ from the amounts in the returns as originally filed (including the
returns to be filed with respect to 1995), shall be similarly apportioned.
Treatment of items in the Consolidated Return and in state, local and foreign
tax returns for the 1995 year are subject to the proviso in paragraph 8(d)
above.

         (f) If actions taken on or before the Distribution Date cause any of
the Companies to be liable under the tax indemnities contained in the covenants,
loan agreements or offering memoranda of any debt instruments of a company
included in the Consolidated Return and listed on Schedule 1.01(d) of the
Distribution Agreement, with respect to obligations which remain outstanding at
the Distribution Date, then the cost of such tax indemnity shall be shared
equally among the Groups.

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         (g) The intention of paragraphs 8(d), 8(e) and 8(f) above and of
paragraphs 9(b) and 15 below is that the items which are to be shared equally
pursuant to the Distribution Agreement or this Agreement shall be shared equally
on an after-tax basis.

         9. Taxes Other Than Federal Taxes. (a) The Companies and their
subsidiaries shall file income and franchise tax returns in those jurisdictions
in which they are required to do so. Consistent with prior practice, the
Companies and their subsidiaries shall file combined tax returns in certain
jurisdictions. If any state or local income or franchise tax audit adjustment
attributable to any of the Companies, or any subsidiary of any of the Companies,
increases or decreases such combined tax liability for a taxable period
beginning before the Distribution Date, then an amount in respect of that
adjustment shall be paid as provided in paragraph 9(c) hereof. The State Tax
Administrator shall have the power and responsibility to act in a manner
substantially identical to the Federal Tax Administrator in connection with all
combined state and local tax returns and settlements with respect thereto;
provided that, without the consent of any affected Group, the cost to any Group
of outside services in any calendar year shall not exceed $5,000. In connection
with any Connecticut Combined Group Return, the Director of Taxes of ITT
Hartford shall act for the State Tax Administrator with respect to the ITT
Hartford Group.

         (b) Tax liabilities incurred and refunds received by any of the
Companies or by a subsidiary of any of the Companies (other than those relating
to Federal, state and local income or franchise taxes computed on a combined or
consolidated basis) and all taxes not measured by income, including, but not
limited to, premium, ad valorem, capital stock, sales, use, real and personal
property, special assessment, franchise, automobile registration, employment,
earnings, duty and import taxes (plus interest) shall be for the account of ITT
Industries, ITT Destinations or ITT Hartford, as the case may be. All foreign
taxes shall be allocated to the Group which has legal ownership of the taxpayer
as of the Distribution Date, except that foreign taxes incurred with respect to
transactions undertaken in order to arrange the ownership of foreign companies
or assets to conform with management responsibility for such companies or assets
shall be apportioned equally among the Groups and that foreign taxes with
respect to operations of divisions of or subsidiaries of a foreign company which
are managed by a Group other than the Group having legal ownership shall be
allocated to such other Group. If, as a result of changes in foreign taxes which
are allocated or apportioned to one or more Groups under this paragraph 9(b) or
under paragraph 8(e) or of adjustments to FTC's under paragraph 8(d), another
Group realizes a benefit in its separate tax computations relating to the
Consolidated Return or any Prior Period Consolidated Return, after considering
all other credits otherwise available to such other Group except credit
carrybacks from a taxable year beginning after the Distribution, or a Net
Reversal Benefit, then such other Group shall pay the amount of such benefit or
Net Reversal Benefit to the Group or Groups to which the foreign taxes were
allocated or apportioned.

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         (c) Consistent with prior practice, the Companies will reimburse each
other for any payment by one of them to a state or local tax authority which is
determined to be for the account of another Company, provided however that such
matter is timely referred to the State Tax Administrator. The rules contained in
paragraph 6(b) will apply to amounts any party must pay.

         10. Tax Deficiencies and Claims. (a) The Federal Tax Administrator
shall defend or prosecute proposed or actual income tax deficiencies or refund
claims with respect to the Consolidated Return or any Prior Period Consolidated
Return where that deficiency or claim relates to the businesses of all of the
Groups or with respect to any businesses listed on Schedule 1.01(d) of the
Distribution Agreement. In connection with such defense or prosecution, the
Federal Tax Administrator may retain such accountants and counsel as required
and charge their costs ratably to each Group with the prior approval of each
Group, which approval shall not be unreasonably withheld or delayed. Similarly,
any compromise or settlement of such a claim or deficiency may be made by the
Federal Tax Administrator only after receipt of the approval of each Group,
which shall not be unreasonably withheld or delayed. The Federal Tax
Administrator will keep all Groups timely advised of all matters relating to
such defense or prosecution.

         (b) Any proposed or actual income tax deficiencies or refund claims
with respect to the Consolidated Return or any Prior Period Consolidated Return
which arise from the business activities of only one Group may be defended or
prosecuted by that interested Group at its own cost and expense and with counsel
and accountants of its own selection. Either of the remaining Groups may
participate in any such prosecution or defense at its own cost and expense (in
either event such cost or expense is not to include the amount of any payment of
any tax claim, interest or penalties, or of any compromise settlement or other
disposition thereof). The interested Group may control the proceedings, but it
may not compromise or settle any deficiency of tax or refund claim for the
Consolidated Return year or any Prior Period Consolidated Return year without
the prior written consent of the other Groups, which shall not be unreasonably
withheld. Notwithstanding the foregoing, no Group shall have a right to an
extension of the statute of limitations beyond the time reasonably necessary to
complete review at the Appeals Division of the IRS or to any waiver of any other
procedural safeguard without the prior written consent of the other Groups. The
limitation expressed in the preceding sentence applies, but is not limited to,
the filing of a petition with the United States Tax Court. If any Group defends
or prosecutes an action, it shall keep each other Group informed of matters
relating to such defense or prosecution.

         (c) Where proposed or actual income tax deficiencies or refund claims
of the type described in paragraph 10(b) above arise from the business
activities of two Groups, those Groups may jointly participate in the
prosecution or defense of such claims or deficiencies on the basis of and
subject to the limitations of paragraph 10(b) above.

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         11. Dispute Resolution. In the event of a disagreement between the
Federal Tax Administrator (or, if with respect to state or local taxes, the
State Tax Administrator) and another party hereto, all computations or
recomputations of Federal or state and local income and franchise tax liability,
and all computations or recomputations of any amount or any payment (including,
but not limited to, computations of the amount of the tax liability, any loss or
credit or deduction, Federal statutory tax rate change for a year, utilization
of carryback items, interest, penalties, and adjustments) and all determinations
of the amount of payments or repayments, or determinations of any other nature
necessary to carry out the terms of this Agreement will be reviewed by Arthur
Andersen LLP or another mutually satisfactory third party, with the costs of
such review to be shared equally by the disputing parties. If any disagreement
remains after any such review, including any disagreement as to the
construction, applicability or binding nature of this Agreement, that
disagreement will be resolved as provided by Article VI of the Distribution
Agreement. In such case, the arbitrator shall be a retired or former judge of
the United States Tax Court or such other qualified person as the relevant
parties may agree to designate, provided that such individual has had
substantial experience with regard to settling complex tax disputes.

         12. Tax Benefit Transfer Leases. (a) In computing any ITT Destinations
and ITT Hartford payment to ITT Industries under this Agreement, ITT
Destinations and ITT Hartford, and their respective subsidiaries and Groups,
will determine their tax liability as if their tax benefit transfer leases were
not in effect.

         (b) ITT Destinations and ITT Hartford will indemnify ITT Industries if
ITT Industries is required to make any termination payments or other payments,
including interest and penalties, resulting from their failure to perform under
a tax benefit transfer lease.

         (c) ITT Industries agrees to continue to provide assistance to ITT
Destinations and ITT Hartford in connection with their tax benefit transfer
leases.

         13. Survival of Terms. The provisions of this Agreement shall survive
the Distribution and remain in full force until all periods of limitations,
including any extensions or waiver periods, as well as the ten-year statute of
limitations with respect to foreign tax credit redeterminations, for the
Consolidated Return period and Prior Period Consolidated Return periods have
expired and no further carrybacks to such periods are possible. At that time all
remaining payments required under this Agreement shall become immediately due
and payable.

                                       14
<PAGE>   15
         14. Parties to Cooperate. Each of the Companies and their subsidiaries
shall cooperate fully and to the extent reasonably requested by the other party
in connection with the preparation and filing of any return or the conduct of
any audit, dispute, proceeding, suit or action concerning any issues or any
other matter contemplated hereunder. Such cooperation shall include, without
limitation, (i) the retention and provision on demand of books, records,
documentation or other information relating to any tax matter until the later of
(x) the expiration of the applicable statute of limitation (giving effect to any
extension, waiver, or mitigation thereof) and (y) in the event any claim has
been made under this Agreement for which such information is relevant, until a
Final Determination with respect to such claim; (ii) the provision of additional
information with respect to and explanation of tax practices (elections,
accounting methods, conventions and principles of taxation) and material
provided under clause (i) of this paragraph 14; (iii) the execution of any
document that may be necessary or reasonably helpful in connection with the
filing of any tax return by any member of one of the Groups, or in connection
with any audit, proceeding, suit or action addressed in the preceding sentence;
and (iv) the use by each of the Companies of its reasonable efforts to obtain
any documentation from a governmental authority or a third party that may be
necessary or helpful in connection with the foregoing. Each of the companies
shall make its employees and facilities available on a mutually convenient basis
to facilitate such cooperation and shall retain as permanent records all
documentation necessary to enable it to determine any obligation under this
Agreement. The records described above will be made available to representatives
of any of the Companies within a reasonable time upon request and may be
photocopied on an as needed basis.

         15. Distribution Taxes. (a) If the Distribution is ultimately held to
be a taxable transaction and there has been no material breach of the covenants
contained in Section 2.10 of the Distribution Agreement, then any tax liability
incurred by ITT Industries (as well as any payments which ITT Industries makes
with respect to the cost of additional taxes paid by its shareholders receiving
ITT Destinations and ITT Hartford stock in the Distribution, whether or not ITT
Industries is legally obligated to make such payments) shall be divided equally
among the Companies. If any of the Companies (or any subsidiary thereof) takes
or omits any action after the Distribution which materially contributes to a
Final Determination that the Distribution is a taxable event, then such Company
will indemnify ITT Industries for the resulting tax liability which would not
otherwise have been incurred (including interest and penalties) and any
resulting payments (computed after any available tax benefit) which ITT
Industries makes to its shareholders with respect to the cost of additional
taxes, whether or not ITT Industries is legally obligated to make such payments.
No settlement with respect to the matters referred to in this paragraph 15(a)
shall be entered into without the agreement of each Group having liability with
respect thereto under the terms of this Agreement.

         (b) Taxes which are triggered in the Consolidated Return and which
relate to the intercompany sale or distribution of stock of a subsidiary or of
other property by one Group to

                                       15
<PAGE>   16
another Group (but not those which relate to the intercompany sale or
distribution of assets within a Group) shall be shared equally by the three
Groups.

         16. Gain Recognition Agreements. Adjustments to the tax liability
(including interest and penalties) of ITT Industries which result because of
actions taken by either ITT Destinations or ITT Hartford after the Distribution
Date which trigger any gain recognition agreements entered into in a Prior
Period Consolidated Return year by ITT Industries pursuant to Section 367 of the
Code shall be charged to the ITT Destinations Group or to the ITT Hartford
Group, as the case may be. ITT Industries shall make available to ITT
Destinations and ITT Hartford copies of such gain recognition agreements
immediately after the Distribution.

         17. No Self-Approval. Any computation or issue of the ITT Destinations
Group which is to be approved by or cleared with the Federal Tax Administrator
shall also be approved by or cleared with the Director of Taxes of ITT
Industries and any computation or issue of the ITT Industries Group which is to
be approved by or cleared with the State Tax Administrator shall also be
approved by or cleared with the Director of Taxes of ITT Destinations.

         18. Notices. Any notices, payments or other communications required by
this Agreement shall be made as provided in the Distribution Agreement with a
copy to the attention of the Director of Taxes of the appropriate Company.

         19. Indemnification. ITT Industries shall indemnify ITT Destinations
and ITT Hartford for any Federal or state income or franchise taxes for any
taxable period (or portion of a taxable period) ending before or including the
Distribution Date for which the ITT Destinations Group or the ITT Hartford Group
or any ITT Destinations Subsidiary or ITT Hartford Subsidiary may be liable
solely as a result of the operation of Treasury Regulation Sections 1.1502-6 and
1.1502-77 or any state counterpart statute or regulation.

         20. Certain Pending Claims. The tax and after-tax interest effects of
the tax refund litigation covering the period 1970 through 1980 (with possible
rollover effects on subsequent years) shall be allocated 50% to the ITT
Industries Group and 50% to the ITT Destinations Group. The tax and after-tax
interest effects of the tax refund claim with respect to the 1987 reserve
strengthening issue shall be allocated solely to the ITT Hartford Group.

                                       16
<PAGE>   17
         21. Choice of Law; Successors and Assigns. This Agreement shall be
governed and construed in accordance with the laws of the State of New York
applicable to contracts executed in and to be performed in that state. This
Agreement shall be binding on the successors and assignees of the Companies.

         22. Entire Agreement. This Agreement contains the entire agreement
among the Companies with respect to the subject matter hereof and supersedes all
prior written tax sharing or tax allocation agreements, memoranda, negotiations
and oral understandings, if any, and may not be amended, supplemented or
discharged except by performance or by an instrument in writing signed by all of
the Companies. However, this Agreement does not supersede the certain Agreement
and Plan of Merger identified in the first footnote on page 3 of Schedule
1.01(c) of the Distribution Agreement, provided, however, that the liabilities
of ITT Corporation with respect to tax matters under such Agreement and Plan of
Merger shall be apportioned as provided in the Distribution Agreement for
liabilities of ITT Financial Corporation and its subsidiaries.

         23. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but which
together shall constitute one and the same instrument.

         IN WITNESS WHEREOF, the Companies have duly executed this Agreement as
of the date first above written.

                                   ITT CORPORATION



                                   By: /s/ Richard W. Powers
                                       -----------------------------------------
                                       Name:   Richard W. Powers
                                       Title:  Vice President


                                   ITT DESTINATIONS, INC.



                                   By: /s/ Richard S. Ward
                                       -----------------------------------------
                                       Name:   Richard S. Ward
                                       Title:  Executive Vice President

                                       17
<PAGE>   18
                                   ITT HARTFORD GROUP, INC.



                                   By: /s/ Michael S. Wilder
                                       -----------------------------------------
                                       Name:   Michael S. Wilder
                                       Title:  Senior Vice President

                                       18