AMW Investments, Inc. - Page 5

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          included theaters, bookstores, peep machines, wholesale novelty             
          stores, film distributorships, and "showgirl" clubs. As                     
          Mr. Mohney's business dealings evolved over time and he began to            
          gain greater notoriety, his reputation as a proprietor of adult             
          entertainment establishments preceded him and affected the future           
          expansion of his business operations into new communities.                  
          Mr. Mohney decided to purchase property through nominees due to             
          his concerns that he would encounter legal problems if he                   
          purchased property in his own name.  For example, his mother was            
          the nominee when he purchased a movie theater in Mishawaka,                 
          Indiana (Mishawaka property), on December 1, 1969, for $45,000.             
          Mr. Mohney paid for the Mishawaka property by giving the seller             
          $13,500 in cash and agreeing to pay the balance (with interest              
          at 7 percent) through monthly payments of at least $500.                    
               On October 31, 1970, Mr. Mohney purchased a drive-in theater           
          located in Clarksville, Indiana (Clarksville property), for                 
          $120,000, signing a $114,500 promissory note (Clarksville note).            
          From 1970 to the time that he transferred the Clarksville                   
          property to petitioner, Mr. Mohney made payments on the                     
          Clarksville note.                                                           
               In the early 1970's, Mr. Mohney organized each aspect of his           
          business as a separate corporation.  Mr. Mohney also established            
          five domestic trusts, of which he and his four children were                
          beneficiaries.  Each of these trusts owned an interest in another           

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