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committed to buy all of the issued and outstanding shares of Zapata Protein for
$56 million.  ZP and its guarantors failed to close the transaction and perform
their obligations under the purchase agreement and related guaranty agreement.
The Company has filed a lawsuit in the District Court of Harris County, Texas,
number 95-26579, styled Zapata Corporation v. ZP Acquisition Corp., et al,
seeking to recover all damages arising from the failure to close the Zapata
Protein transaction.

          In August 1995, the Company purchased 4,189,298 shares, or 31%, of the
common stock of Envirodyne for $18.8 million from a trust controlled by Malcolm
I. Glazer.  Mr. M. Glazer is also a director of Envirodyne.  Such shares
represented all of Mr. M. Glazer's ownership interest in Envirodyne.  The
Company paid the purchase price by issuing a subordinated promissory note in a
principal amount of $18.8 million, bearing interest at the prime rate and
maturing in August 1997, subject to prepayment at the Company's option.  This
transaction was approved by a special committee of the Company's Board of
Directors comprised of Messrs. Lassiter, Leffler and Loar. The Company prepaid
the entire principal amount of the promissory note during the first quarter of
fiscal 1996.

          In September 1995, Zapata's Board of Directors established a Special
Committee for the purpose of investigating the legal and financial
considerations of one or more merger or acquisition transactions involving the
Company and Houlihan's Restaurant Group, Inc. ("Houlihan's") and Speciality
Equipment Companies, Inc. ("Specialty"). Mr. M. Glazer and members of his family
beneficially own approximately 73% and 45% of the outstanding common stock of
Houlihan's and Specialty, respectively, and Mr. M. Glazer, Mr. A. Glazer and
other members of their family serve as directors of both of those companies. The
Special Committee, consisting of Messrs. Lassiter, Leffler and Loar, was charged
with determining what further steps, if any, should be taken by the Company to
pursue any such transaction. The Special Committee's investigation is
continuing, but it has made no determination with respect to possible
transactions involving either Houlihan's or Specialty.

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