Daniel C. Greer and Winnie L. Greer - Page 13

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              (6) Madison simultaneously entered into a joint venture                 
         agreement with PI and Resin Recyclers, Inc. (RRI), to “exploit”              
         the recyclers and place them with end-users.                                 
              (7) Under the joint venture agreement, Madison received a               
         fixed monthly “joint venture fee” of $80,000, which is equal to              
         the monthly lease payment made to F&G.  The joint venture fee was            
         to commence 9 months after the joint venture agreement closed.               
              (8) After the transactions were completed, the four                     
         recyclers were owned by F&G.                                                 
         C.   Madison Subscription Agreement                                          
              Mr. Greer signed a completed, notarized Madison Subscription            
         Agreement and Purchaser Suitability Representations (Madison                 
         subscription agreement), required for purchasing a limited                   
         partnership interest in Madison during 1982.  At the time Mr.                
         Greer executed the Madison subscription agreement, he did not meet           
         the net worth suitability (net worth exceeds $1 million) for                 
         purchasing an interest in Madison.  Mr. Greer submitted his                  
         subscription agreement to purchase an interest in Madison using              
         another option, in which he acknowledged that he did not meet                
         either the net worth or annual net income suitability test to                
         purchase an interest in Madison but represented and warranted that           
         he had sufficient business knowledge and financial knowledge, and            

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Last modified: November 10, 2007