H Enterprises International, Inc., and Subsidiaries - Page 8

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          Disbursement                                                                
               The cash distribution was disbursed by HEI into accounts               
          maintained by Investment Divisions I and II and the Trident                 
          Service Division as follows:  $9,803,000 to the Trident Service             
          Division and $32 million into each of Investment Division I and             
          II (together, the Investment Divisions).                                    
          Investments                                                                 
               Other than investment returns, the cash distribution was the           
          only significant source of funds for the Investment Divisions.              
          In January and February 1988, the Investment Divisions entered              
          into investment management agreements with certain investment               
          advisers and, by February 1988, began acquiring investments,                
          including tax-exempt obligations and shares of stock in domestic            
          corporations (domestic shares).  Within approximately 3 months of           
          receipt of their respective portions of the cash distribution,              
          the Investment Divisions had 22.7 percent of their funds invested           
          in tax-exempt obligations and 10.8 percent of their funds                   
          invested in domestic shares.  For the years in issue, the                   
          Investment Divisions held an average of 35.3 percent of their               
          funds in tax-exempt obligations and 23.2 percent of their funds             
          in domestic shares.  From December 1987 through the years in                
          issue, the value of assets in Investment Divisions I and II was             
          not less than $32 million and $31 million, respectively.                    







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