D. Sam Scheele - Page 5

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          general release of all claims and counterclaims relating to the             
          construction contract.  Petitioner signed the settlement                    
          agreement, as did the other current and former managing general             
          partners in Biomass.                                                        
               A trust account (the trust account) was established by the             
          law firm of Irell and Manella, attorneys for Biomass, to hold and           
          disburse the funds received pursuant to the settlement agreement            
          (the settlement proceeds).                                                  
          Option Agreement                                                            
               Previously, on December 31, 1987, petitioner, Weisel, and              
          certain limited partners of Biomass, including Laurence A.,                 
          Preston R., Daniel R. and Thomas J. Tisch, and Project Capital              
          1985, a New York general partnership (collectively, the Tisch               
          group), had entered into an option agreement (the option                    
               At the time the option agreement was executed, petitioner              
          and Weisel had equal interests in Biomass (a 3.3-percent interest           
          that would become a 14.561-percent interest after the 60th month            
          of commercial operation of the cogeneration facility).  Under the           
          option agreement, the Tisch group had the option to purchase part           
          of Weisel’s and petitioner’s interests in Biomass.  The amount to           

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Last modified: May 25, 2011