John Sann and Marianne Sann, et al. - Page 16

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          profits, as a promoter, would be the operation of the                       
          Partnerships.  Maxfield satisfied himself that "the general                 
          partner had a real economic incentive to make these things work             
          if he was going to ever sell anymore of--of these things."                  
               Maxfield visited PI in 1982 to see what it was like and "to            
          hear from some of the technical people there."  Although                    
          Maxfield's perspective was that of "a tax lawyer" and "not a                
          scientist", he thought that he "could at least listen, and if * *           
          * [he] had questions on their discussion, * * *[he] could ask               
          them."  As Maxfield explained his understanding, the Sentinel EPE           
          recyclers would serve the following function:                               
                    The function served by these recycling machines                   
               [was to grind and chemically condense the plastic                      
               waste,] which would then be reformatted into plastic                   
               pellets and sold * * *                                                 
                    They would simply tell the factory we have a way--                
               we will dispose of--of your waste products without                     
               charging you anything.  We will provide a machine that                 
               you can use without any cost.                                          
          In fact, end-users were not provided Sentinel EPE recyclers                 
          without cost; they bore the service and installation costs.                 
          According to Maxfield, among the criteria required of potential             
          end-users was "the physical space in their factory to have * * *            
          [the] machine installed" and the willingness to "spend something-           
          -roughly $5,000 or $6,000, if necessary, for the wiring of the              
          machine."  Maxfield testified that he thought that there were               
          "thousands and thousands and thousands" of potential end-users              
          for the recycler.                                                           

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