Don Ballantyne and Susanne C. Ballantyne - Page 9

          Hong Kong corporation, and the Marwick Trust, a purported offshore          
          trust formed in Guernsey, the Channel Islands.                              
               Petitioner was a client of Schiavenza.  Upon the advice of             
          Schiavenza, in October 1985, petitioner entered into a management           
          contract with AMCOR with respect to BTG.3  In connection with that          
          arrangement, petitioner agreed to acquire all the stock of BTG in           
          exchange for a portion of the Escondido property.  Corporate                
          minutes authorizing petitioner's acquisition of the BTG stock were          
          backdated to July 30, 1985.                                                 
          Capitalization Agreement                                                    
               Petitioner's acquisition of BTG stock for property was                 
          memorialized in a Capitalization Agreement that was backdated to            

               3    During the years 1984 to 1988, AMCOR provided                     
          management services to numerous corporations, including BTG and             
          EPIC.  For an annual fee, AMCOR provided the purchaser with a               
          domestic corporation and services related to the management of              
          that corporation, including but not limited to the following:               
          (1) Supplying individuals to serve as directors, officers, and              
          bank signatories; (2) supplying a registered agent for the                  
          purpose of accepting service of process on the corporation; (3)             
          filing annual information reports and payment of any annual fees            
          to the secretary of state and other authorities of the State of             
          the corporation's formation; (4) holding annual shareholders'               
          meetings or preparing consents of shareholders in lieu thereof;             
          (5) holding directors' meetings; (6) preparing corporate minutes            
          of stockholders' meetings and meetings of directors; (7)                    
          maintaining corporate bank accounts as required; and (8)                    
          executing documentation prepared by counsel on behalf of the                
          corporation and administering transactions established by said              
                    AMCOR's normal practice was to have its employees serve           
          as officers and directors for its client corporations.                      
          Occasionally, AMCOR used the employees of the offices of those              
          attorneys utilizing AMCOR's services to serve as officers and/or            
          directors of AMCOR's client corporations.                                   

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