James H. Upchurch - Page 5

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          promoted by Professional and Mr. Chalich.  Petitioner, to some                
          extent, relied on Mr. Pecha's background in chemistry in                      
          considering whether to become involved in Saxon.                              
               Petitioner attended about six meetings or discussions                    
          conducted by Professional prior to investing in Saxon.                        
          Professional advised petitioner that he could be at risk without              
          signing a note and that his investment in the energy device held              
          through the Evergreen partnership, would be funded by the refund              
          of prior years' income taxes generated by the carryback of                    
          investment tax credits.  Petitioner was also advised that his                 
          involvement in Evergreen would result in reductions of his                    
          current (1983) and future years' tax liabilities.  Petitioner                 
          also understood that he could retain any tax savings generated                
          through his investment.  Petitioner stated that he was interested             
          in the investment for retirement purposes and that his primary                
          motivation was not the tax benefits, but his actions belie that               
          statement.                                                                    
               Petitioner was aware that Evergreen was to lease the energy              
          device, but after investing and claiming the tax benefits, he                 
          made no effort to inquire whether the energy device had been                  
          leased.  Petitioner was aware that, in addition to the initial                
          lease payment of about $12,700, the partnership and/or partners               
          were not obligated to make any payments unless the device was                 
          leased to a user.  Petitioner believed that his 16.667-percent                
          interest in Evergreen (which held an interest in the energy                   




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