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investment. Kanter did not otherwise pay a fee to HCT for this
carried interest.
During the years in question, Kanter, as trustee, performed
various services for HCT. He determined whether investments by
HCT would be made and whether and when they would be sold. His
decisions on these matters were final. Kanter made the decisions
as to whether or not distributions would be made to the
beneficiaries; he directed people who worked for him at his law
firm and then later at Administration Co. and Principal Services
to perform various administrative services for HCT; he supervised
them in the performance of these services and, as trustee, he was
responsible for the performance or non performance of these
services. Kanter signed the tax returns of HCT; he hired the
accounting firm of Oppenheim, Appel & Dixson to prepare some of
the tax returns of HCT; and he subjected himself to liability
under VIII, paragraph 8.3 of the HCT agreement for any willful
default, wrongdoing, or gross negligence in connection with his
duties as trustee of HCT.
On December 22, 1980, Kanter sent a letter to Federman
enclosing a document entitled “Agreement and Indemnification”.
As stated in the letter, the enclosed Agreement and
Indemnification reflected the agreement concerning the carried
interest. The Agreement and Indemnification document was not
executed at that time.
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