- 26 -                                        
               When a Laidlaw entity asked for an advance, LIIBV asked LIL            
          to provide funds for the transaction.  When LIL advanced those              
          funds to LIIBV, LIL told LIIBV to record the advance as an                  
          interest-free loan and as a capital contribution, in proportions            
          designated by LIIBV and Coopers & Lybrand.  This was done in part           
          to comply with Dutch tax rulings.                                           
               Written agreements between LIL and LIIBV generally required            
          LIL to provide funds requested by LIIBV, as long as those amounts           
          were no more than amounts that LIIBV agreed to advance to                   
          petitioners or their subsidiaries.  LIIBV agreed to repay                   
          advances from LIL on demand.  LIIBV's managing directors issued             
          more stock to LIL as needed to make LIIBV's debt to equity ratio            
          comply with Dutch tax rulings.                                              
               2.   Advances at Issue                                                 
               LIIBV transferred the following amounts of money to Transit,           
          LWSI, and Tree during the years in issue:                                   
                     LIIBV Advances To --                           CUMULATIVE        
            DATE     TRANSIT         LWSI        TREE     TOTAL      BALANCE          
          12/18/85   $5,000,000     -0-         -0-    $5,000,000  $5,000,000         
          02/18/86   18,000,000     -0-         -0-    18,000,000  23,000,000         
          04/29/86   30,100,000 $29,000,000     -0-    59,100,000  82,100,000         
          05/29/86   9,588,797      -0-         -0-    9,588,797  91,688,797          
          08/06/86   54,000,000     -0-         -0-    54,000,000 145,688,797         
          08/28/86   2,204,674      -0-         -0-    2,204,674 147,893,471          
         Total FY1986  118,893,471  29,000,000  -0-    147,893,471                    
          10/20/86      -0-      124,812,613    -0-    124,812,613 272,706,084        
          11/10/86   43,800,000 125,000,000     -0-    168,800,000 441,506,084        
          11/25/86   5,870,270      -0-         -0-    5,870,270 447,376,354          
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