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least 1989. By its terms, HCT was governed by the laws of the
State of Illinois.
Neither Kanter nor members of his family were beneficiaries
of HCT. Kanter is not related to Federman but is a friend of
Federman and the trustee of HCT.
At the inception of HCT, Federman and the beneficiaries of
HCT orally agreed with Kanter that Kanter (or his designee) would
at all times during the continuance of HCT be entitled to
participate in the investments of HCT by way of a so-called
carried interest to the extent of 10 percent of any and all
profits realized from time to time by HCT on its individual
investments. Such profits were to be payable upon disposition of
any specific investment, whether an investment was in the form of
a note, stock, securities, partnership interest, or other forms
of property but excluding any interest income realized on
deposits, such as savings accounts, certificates of deposit, time
deposits or debt instruments. Kanter had the option to exercise
his right to the carried interest by electing a distribution in
kind of any investment held by the trust to which the carried
interest applied. If Kanter elected a distribution in kind, HCT
made a distribution to Kanter or his designee of a 10-percent
interest in the investment in consideration for a payment by
Kanter or his designee to HCT of 10 percent of HCT's cost of the
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