<PAGE>
 
                               ZAPATA CORPORATION
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
NOTE 7. DEBT--(CONTINUED)
Norex, along with accrued interest, and to pay a $3.5 million prepayment
premium. Also, Zapata wrote off $3.3 million of previously deferred expenses
related to the origination of such indebtedness. In September 1994, Zapata
repaid the remaining balance of its 13% senior convertible indebtedness to
Norex and a required prepayment penalty of $655,000 with proceeds from the
initial drawdown of $15 million from a $30 million bank credit facility
provided by Texas Commerce Bank National Association (the "TCB Loan
Agreement").
 
  In April 1995, Zapata used proceeds of $12.7 million from the sale of its
remaining 673,077 shares of Tidewater common stock to reduce the Company's
$17.5 million in notes due to Norex in May 1996.
 
  In 1995, two of the Company's subsidiaries, Zapata Protein, Inc. and Zapata
Protein (USA), Inc. (collectively "Zapata Protein") entered into a loan
agreement with Internationale Nederlanden (U.S.) Capital Corporation ("ING Loan
Agreement"). The ING Loan Agreement provides Zapata Protein with a $15 million
revolving credit facility that is due June 30, 1997. The ING Loan Agreement
bears interest at a variable interest rate that is adjusted periodically based
on prime interest rate plus 1%. Pursuant to the ING Loan Agreement, Zapata
Protein agreed to maintain certain financial covenants and to limit additional
indebtedness, dividends, dispositions and acquisitions. Zapata Corporation has
guaranteed up to $10.0 million of the outstanding balance of debt related to
the ING Loan Agreement. The amount of restricted net assets for Zapata Protein
at September 30, 1995 was approximately $47.7 million. Pursuant to the ING Loan
Agreement, Zapata Protein's ability to transfer funds to Zapata Corporation is
limited to $10.0 million. As of September 30, 1995, Zapata Protein had already
transferred the maximum amount of $10.0 million to Zapata Corporation. The
Company remains subject to a covenant in the Norex debt agreement that requires
Zapata to maintain a consolidated tangible net worth as defined in such
agreement of at least $100 million. Effective September 30, 1995, the Company
was in compliance with all provisions governing its outstanding indebtedness.
 
  In August 1995, Zapata acquired 31% of the outstanding common stock of
Envirodyne for $18.8 million from a trust controlled by Malcolm Glazer,
Chairman of the Board of Zapata and a director of Envirodyne. Zapata paid the
purchase price by issuing to the seller a subordinated promissory note bearing
interest at prime and maturing in August 1997, subject to prepayment at the
Company's option. The Company has since prepaid approximately $15.6 million on
the promissory note.
 
  During 1993, the Company refinanced its U.S. government-guaranteed debt in
order to achieve lower interest rates; other significant terms were unchanged.
The U.S. government-guaranteed debt is collateralized by a first lien on all of
the vessels refurbished by the refinancing proceeds and certain plant assets.
 
 Annual maturities
 
  The annual maturities of long-term debt for the five years ending September
30, 2000 are as follows (in thousands):
 

<TABLE>
<CAPTION>
       1996               1997                       1998                     1999                     2000
       ----              -------                     ----                     ----                     ----
      <S>                <C>                         <C>                      <C>                      <C>
      $16,148            $19,288                     $514                     $537                     $555
</TABLE>

 
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