Investment Research Associates - Page 589




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               Ballard introduced Schnitzer to Kanter sometime between the            
          early and mid-1970's.  At some time prior to September 1976,                
          Schnitzer and Kanter began discussing the sale of a stock                   
          interest in Schnitzer-PMS to Kanter.  Kanter indicated that,                
          through his business contacts, including the Pritzker family, he            
          could obtain additional property management business for                    
          Schnitzer-PMS.  Before Schnitzer made the offer to Kanter,                  
          Schnitzer had a conversation with Ballard to confirm that Kanter            
          could bring in business for Schnitzer-PMS.                                  
               The initial proposal contemplated that Schnitzer-PMS would             
          be recapitalized in order to provide for the issuance of two                
          classes of stock, common and preferred.  The preferred stock                
          would be $1,000 par value per share, one vote per share, priority           
          as to dividends, when, if, and as declared out of available                 
          earnings and profits up to a maximum of 8 percent of the par                
          value in the year of declaration, and priority on liquidation.              
          The common stock would be no par common stock carrying one vote             
          per share.  Kanter's client (IRA) would purchase 50 percent of              
          the common stock for $50,000 and closing would be set for October           
          1, 1976.                                                                    
               Because of difficulties in finalizing the agreement,                   
          however, closing did not take place in 1976.  In a letter dated             
          April 12, 1977, to Melvin Dow, Kanter stated:                               
               As you know, the president of The Cedilla Company is                   
               Mildred D. Schott and The Cedilla Company is actively                  





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