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for the above amounts under the structure of simultaneous
transactions, the fair market value of a Sentinel EPE recycler in
1981 and up to the end of 1982 was not in excess of $50,000.
PI allegedly sublicensed the recyclers to entities that
would use them to recycle plastic scrap. The sublicense
agreements provided that the end-users would transfer to PI 100
percent of the recycled scrap in exchange for a payment from FMEC
Corp. based on the quality and amount of recycled scrap.
Like Clearwater, Empire and Plymouth leased Sentinel EPE
recyclers from F & G Corp. and licensed those recyclers to FMEC
Corp. The Empire and Plymouth transactions differ from the
underlying transactions in the Provizer case in two respects:
(1) The entity that leased the machines from F & G Corp. and
licensed them to FMEC Corp.; and (2) the circumstance that seven
machines were sold, leased, licensed, and sublicensed by Empire
and Plymouth. Foam leased four Sentinel EPE recyclers from F & G
Corp., but it did not license them to FMEC. Instead, in its
fourth transaction, Foam entered into (1) a 1-year consulting
agreement with the president of PI, John D. Bambara (Bambara),
who was to assist in the placement of the machines with end-
users, and (2) a joint venture agreement with PI for the further
processing and sale of the output of the Sentinel EPE recyclers.
For convenience, we refer to the series of transactions
among PI, ECI Corp., F & G Corp., each of the Partnerships, FMEC
Corp. or Bambara, and PI as the Partnership transactions. In
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