Malcolm I. Lewin and Trina Lewin - Page 5

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               Simultaneously, ECI resold the recyclers to F&G Equipment              
          Corp. (F&G) for $7 million.  F&G agreed to pay ECI $513,000 at              
          the closing, with the balance of $6,487,000 financed through a              
          purportedly partial recourse promissory note (F&G note).  The F&G           
          note was recourse against F&G to the extent of 20 percent of its            
          face value.  However, the recourse portion was payable only after           
          F&G satisfied the nonrecourse portion of the note.  Each monthly            
          installment on the F&G note was $81,250.  In turn, F&G leased the           
          recyclers to SAB Foam for a monthly base rent of $81,250.                   
          Pursuant to the lease and in accordance with applicable                     
          provisions of the Internal Revenue Code and the Treasury                    
          regulations, F&G elected to treat SAB Foam as having purchased              
          the recyclers for purposes of the investment and business energy            
          tax credits.                                                                
               Simultaneously, SAB Foam entered into a joint venture with             
          PI and Resin Recyclers, Inc. (RRI).  The joint venture agreement            
          provided that RRI was to assist SAB Foam with the placement of              
          recyclers with end-users and that PI was to pay a monthly joint             
          venture fee to SAB Foam of $81,250.                                         
               In connection with the SAB Foam transactions, therefore, the           
          arrangement was that PI would pay a monthly joint venture fee to            
          SAB Foam, in the same amount that SAB Foam would pay monthly to             
          F&G as rent, in the same amount that F&G would pay monthly to ECI           
          on the F&G note, in the same amount that ECI would pay monthly to           

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