Investment Engineers, LTD., Robert S. McGlamery, A Partner Other than the Tax Matters Partner - Page 9

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            regarding the marketing of any potential product created pursuant                             
            to the Research Agreement.  There was no funding within the                                   
            partnership for the marketing of any computer software product                                
            that might have been produced, and no marketing occurred.                                     
                  Knox never provided the partnership with the completed                                  
            computer software product.  The partnership never maintained any                              
            office.  The partnership never operated a trade or business.  The                             
            partnership received no income from sales of computer software.                               
                  During the years in issue, Knox wrote checks to various                                 
            partners and related persons and entities for “research” or                                   
            “consulting”.  For 1982, the partnership sent a Form 1099-MISC to                             
            Knox, reporting $4,000 paid for research.  Knox sent a                                        
            Form 1099-MISC to Montelius, reporting $500 paid for research.                                
                  For 1983, the partnership sent a Form 1099-MISC to Knox,                                
            reporting $71,136 paid for research, and Knox sent Forms                                      
            1099-MISC to Montelius and to Michael V. Jensen (Jensen),                                     
            reporting $17,804 and $17,691, respectively.  For 1984, the                                   
            partnership sent to Knox a Form 1099-MISC, reporting payment of                               
            $29,450.  Knox issued Forms 1099-MISC to Wayne E. Brickey for                                 
            $5,453, Montelius for $6,000, and Jensen for $7,374.                                          
                  In an undated report to limited partners, the following                                 
            accounting summary was set forth:                                                             

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