Paul L. and Doris J. Triemstra, et al. - Page 10

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               Kravitz also discussed the Northeast transaction and the               
          Sentinel EPE recycler with Grant.  Grant was the president and              
          100-percent owner of the stock of ECI.  Kravitz knew that Grant             
          was an attorney who had worked in the securities industry, but he           
          had no reason to believe that Grant had any knowledge or                    
          experience with respect to plastics, plastics recycling, or                 
          machinery.  Grant told Kravitz that he had spoken with people at            
          PI and that these people at PI had told him that the Sentinel EPE           
          recyclers were priced as if being sold to an independent third              
          party.  Kravitz did not know how the Sentinel EPE recycler worked           
          or why it was presented as unique.  He did not investigate the              
          Sentinel EPE recycler.  Kravitz understood from the offering                
          memorandum that the Sentinel EPE recycler was not patented, and             
          he did not conduct a patent search.  He never saw a Sentinel EPE            
          recycler or asked if he could see one.  Kravitz never                       
          investigated or visited any end-user company.                               
               Triemstra learned of the Northeast transaction from Kravitz.           
          Triemstra read the Northeast offering memorandum over the course            
          of several evenings.  Triemstra previously had seen other                   
          offering memoranda.  During 1981 Triemstra also invested in a gas           
          exploration venture and directed the investment of $5,000 of his            
          retirement plan into a mobile home park.  Triemstra discussed the           
          Northeast transaction with Kravitz, Cohn, and Hechtman.  Kravitz            
          informed Triemstra of his discussions with Roberts and Grant.               

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