Jerome J. and Ann T. Klawitter - Page 7

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          the Hemex Liquidation Trust.5  Mr. Hunter did not make a capital            
          contribution to the partnership and was not entitled to a                   
          distribution upon its liquidation.  Pursuant to the amended                 
          agreement Tellurogenic was no longer designated the partnership’s           
          managing partner, and unanimous consent of the general partners             
          was required for partnership decisions.                                     
               In May 1992, petitioner formed Ascension Biomedical, a                 
          company through which he intended to develop finger joints made             
          from carbon.  Nothing in the record suggests that Dr. Chambers              
          was involved in this company.  A short time later, the Archimedes           
          partners decided to terminate Archimedes, effective December 30,            
          1992.  The partners agreed that petitioner would serve as the               
          liquidating partner.  Petitioner and Dr. Chambers disagreed over            
          petitioner’s proposal to distribute Archimedes’s 40-percent                 
          interest in Onex Farms to himself.  Apparently Dr. Chambers                 
          believed that he and petitioner (directly or through various                
          entities that each owned or controlled) were equal partners in              
          Onex Farms, and if petitioner received Archimedes’s entire                  
          40-percent interest, then petitioner would own 60 percent                   
          (directly and through Lever) of that partnership.  Dr. Chambers             
          apparently threatened petitioner with a lawsuit if petitioner               
          distributed the assets of Archimedes as proposed.  Nevertheless,            


               5 Little is known about this entity other than that it was             
          apparently created in connection with Baxter’s acquisition of               
          Hemex’s assets.                                                             




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