Joe E. Henry and Carolyn J.Henry - Page 7

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          as 100-percent owner of its stock.  Giovannone is executive vice            
          president of PI and a member of its board of directors.                     
          Giovannone and Bambara advised Storey that the recycler was                 
          unique because no other machine on the market could recycle                 
          plastic.  To support their statements, they referred Storey to              
          the marketing report of Stanley Ulanoff, a marketing consultant             
          with an interest in two recycling partnerships.  The marketing              
          report was appended to the offering memorandum.                             
               When Storey questioned Bambara about the price of the                  
          recycler, Bambara stated that the recycler was unique and that,             
          if he were to sell the recycler, he would not sell it for less              
          than the price in the offering memorandum.  However, Storey was             
          still skeptical about its cost because in his words:                        
               I am not an engineer and it is hard for me to say what                 
               it cost to produce something like that and I couldn't                  
               see the inside of the machine.  But I -- it just didn't                
               look like the cost to produce one would be anything                    
               like the price that was put on them but the value of it                
               is not the cost to produce it.                                         
                    I was somewhat at a loss regarding this. * * *                    
               In December 1981, Storey went to Clearwater, Florida, to               
          meet Winer.  Storey and Winer discussed Sunbelt; however, the               
          substance of any conversation between them is unknown.  In                  
          October 1982, Storey traveled to Hyannis with Bill Stewart                  
          (Stewart) to observe a demonstration of another recycler.  During           
          this trip, Storey and Stewart agreed to split the commissions               







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