John Sann and Marianne Sann, et al. - Page 11

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          Recycling Associates are partnerships that leased Sentinel                  
          recyclers.  Burstein also was a client and business associate of            
          Elliot I. Miller (Miller), the corporate counsel to PI.                     
               The offering memoranda for Empire, Plymouth, and Foam state            
          that the general partner will receive fees from those                       
          partnerships in the respective amounts of $35,000, $37,500, and             
          $25,000.5  In addition, each of the offering memoranda provide              
          that the general partner may retain as additional compensation              
          all amounts not paid as sales commissions or offeree/purchaser              
          representative fees.  According to the offering memoranda, 10               
          percent of the proceeds from each offering ($95,000 in the case             
          of Empire, $97,500 in the case of Plymouth, and $60,000 in the              
          case of Foam) was allocated to the payment of sales commissions             
          and offeree/purchaser representative fees.  Consequently, Roberts           
          was scheduled to receive a minimum of $97,500 and up to a maximum           
          of $350,000 from the Partnerships.                                          
               The offering memoranda list significant business and tax               
          risk factors associated with investments in the Partnerships.               
          Specifically, the offering memoranda state:  (1) There is a                 
          substantial likelihood of audit by the Internal Revenue Service             

          5    The Foam limited partnership agreement provided that the               
          $37,500 fee was "payable ten (10) days after the Closing."  The             
          limited partnership agreements for Empire and Plymouth provided             
          that the fees of $35,000 and $37,500, respectively, were payable            
          "ten (10) days after the Sentinel Recyclers are delivered to a              
          licensee thereof."  Such amounts were essentially guaranteed                
          because FMEC and PI were committed to be licensees of the                   

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