Albert R. and Phyllis F. Dworkin - Page 16

                                                 - 16 -                                                    
                  Petitioner also claims that he reasonably relied upon the                                
            conclusions of the draft opinion letter.  Petitioner contends                                  
            that the nonrecourse nature of F & G's note was not readily                                    
            apparent in the draft opinion letter and that he would not have                                
            made the investment had he been aware that the note was                                        
            nonrecourse.  However, the nonrecourse nature of the note was                                  
            clearly stated in two different sections of the main body of the                               
            offering memorandum.3  One section was headlined "Price of the                                 
            Sentinel Recyclers To F & G and Payment Terms" and the other was                               
            headlined "F & G's Purchase of the Sentinel Recyclers".                                        
                  Petitioner's reliance on Grant and Roberts, two promoters of                             
            Northeast, was not reasonable, in good faith, nor based upon full                              
            disclosure.  The record does not show that either Grant or                                     
            Roberts possessed any special qualifications or professional                                   
            skills in the recycling or plastics industries.  Petitioner's                                  
            stated reliance on Grant in making a substantial investment in a                               
            complex transaction stemmed from nothing more than a 2-year                                    
            shared work environment in the late 1940's and membership in the                               
            same country club and social group for a few years during the                                  
            late 1970's.  Petitioner's reliance on Roberts derived almost                                  

                  According to the purchase agreement as described in the                                  
            Northeast offering memorandum, of the $8,138,667 purchase price,                               
            F & G would pay $615,000 in cash at closing, with the balance to                               
            be paid with a "partial recourse note."  Ten percent of the note                               
            would be full recourse, but such recourse portion would only be                                
            due and payable after the nonrecourse portion of the note had                                  
            been satisfied.                                                                                

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