Salina Partnership LP - Page 11




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          interested in pursuing the STAMPS investment strategy and inquired          
          whether ABN would be interested in forming a partnership for use in         
          connection with that strategy.  Mr. Ackert informed Mr. Van Burg            
          that the partnership would be most marketable to his client if the          
          partnership held a $350 million short position in Treasury bills.           
          Mr. Van Burg obtained approval for ABN to participate in the                
          transaction as outlined by Mr. Ackert.                                      
          III.  Salina Partnership                                                    
               On July 16, 1992, and October 22, 1992, ABN formed two limited         
          liability companies, Caraville Corporation, N.V. (Caraville), and           
          Pallico Corporation, N.V. (Pallico).  Caraville and Pallico                 
          initially were each capitalized with $6,001.  ABN controlled                
          Caraville and Pallico through ABN Trust and N.V. Fides, as managing         
          directors, respectively (both of which were in turn owned by ABN).          
          As foreign entities, ABN, Caraville, and Pallico were not subject           
          to U.S. income tax.                                                         
               Caraville owned the stock of Aldershot Corp.  On August 17,            
          1992, Aldershot Corp. paid a dividend of $1,928,669 to Caraville.           
               A.  Formation of the Partnership                                       
               On December 16, 1992, Caraville and Pallico formed Salina as           
          a limited partnership under the laws of the State of Delaware.  The         
          Salina partnership agreement stated in pertinent part that the              
          partnership was organized to invest in “Permitted Investments”, a           
          term defined as obligations of the United States and obligations of         






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