Jeffrey I. and Roberta H. Stone - Page 8

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          and Sentinel expanded polystyrene recyclers.  We refer to these             
          collectively as the Plastics Recycling transactions.                        
               With respect to each of the Partnerships, a private                    
          placement memorandum was distributed to potential limited                   
          partners.  Appended to the offering memoranda were reports by F &           
          G's evaluators, Dr. Stanley M. Ulanoff (Ulanoff), a marketing               
          consultant, and Dr. Samuel Z. Burstein (Burstein), a mathematics            
          professor.  The offering memoranda list significant business and            
          tax risk factors associated with investments in the Partnerships.           
          Specifically, the offering memoranda state:  (1) That there is a            
          substantial likelihood of audit by the Internal Revenue Service             
          (IRS) and that the purchase price paid to ECI Corp. probably                
          would be challenged as being in excess of fair market value; (2)            
          that the Partnerships have no prior operating history; (3) that             
          the general partners have no prior experience in marketing                  
          recycling or similar equipment; (4) that the limited partners               
          have no control over the conduct of the Partnerships' business;             
          (5) that there is no established market for the Sentinel EPE                
          recyclers; (6) that there are no assurances that market prices              
          for virgin resin will remain at their current costs per pound or            
          that the recycled pellets will be as marketable as virgin                   
          pellets; and (7) that certain potential conflicts of interest               
               During 1981, Stone acquired a 2.60525-percent interest in              
          Northeast for his investment of $25,000.  As a result of the                

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