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          the Davids' claimed operating loss and credits related to SAB               
          Recycling.                                                                  
               David learned of the Plastics Recycling transactions and SAB           
          Recycling from Becker in late 1981 or 1982.  He first met Becker            
          sometime in 1963 when David was general counsel for Perfect Photo           
          Co. (PPC) and Becker did tax work for PPC on behalf of Touche,              
          Ross & Co.  From 1968 until 1984, Becker provided David with                
          personal tax advice and performed tax accounting work for                   
          companies that David controlled.  David spent 4 to 6 hours                  
          reviewing the offering memorandum for SAB Recycling and                     
          thereafter he discussed the investment with Becker.  Becker                 
          described his investigation of the Plastics Recycling transaction           
          to David in detail.                                                         
               David has no education or experience in plastics materials             
          or plastics recycling, and he knew that Becker was not an expert            
          in the plastics industry.  He did not discuss the investment with           
          anyone who was knowledgeable or expert in the plastics industry.            
          He never viewed a recycler or independently investigated PI.                
          David did not investigate whether there was a market for recycled           
          pellets or independently verify any of the representations in the           
          offering memorandum.  He simply reviewed the SAB Recycling                  
          offering memorandum and discussed the proposed investment with              
          Becker.                                                                     
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