John Sann and Marianne Sann, et al. - Page 12

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          (IRS) and the purchase price paid by F & G Corp. to ECI Corp.               
          probably will be challenged as being in excess of fair market               
          value;6 (2) the Partnerships have no prior operating history; (3)           
          the general partner has no prior experience in marketing                    
          recycling equipment and is required to devote only such time to             
          the Partnerships as he deems necessary; (4) the limited partners            
          have no control over the conduct of the Partnerships' business;             
          (5) there is no established market for the Sentinel EPE                     
          recyclers; (6) there are no assurances that market prices for               
          virgin resin will remain at their current costs per pound or that           
          the recycled pellets will be as marketable as virgin pellets; and           
          (7) certain potential conflicts of interest exist.  The Foam                
          offering memorandum also notes that "since August 1981, PI has              
          become a sublicensee of 104 other Sentinel Recyclers" and that it           
          has "encountered longer start-up periods than anticipated".                 
          C.  Richard Roberts                                                         
               Roberts is a businessman and the general partner in a number           
          of limited partnerships that leased and licensed Sentinel EPE               
          recyclers, including Empire, Plymouth, and Foam.  He also is a 9-           
          percent shareholder in F & G Corp., the corporation that leased             
          the recyclers to the Partnerships.  From 1982 through 1985,                 

          6    The offering memoranda note that "Such purchase price is the           
          basis for computing the regular investment and energy tax credits           
          to be claimed by the Partnership."                                          

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