Estate of Robert G. Kluener, Deceased, Donald E. Hathaway, Co-executor and Charlotte J. Kluener - Page 5

            conducted at a site in Harrison, Ohio, that had been acquired                                 
            from Campbell Hausfeld.                                                                       
                  APECO had a history of losses.  On its Federal income tax                               
            return for its fiscal year ending June 30, 1989, it reported that                             
            a net operating loss (NOL) of $4,472,915 was available for                                    
            carryover to its fiscal year ending June 30, 1990, and that NOL                               
            was carried over.  During relevant times, APECO received loans                                
            from Mr. Kluener and Fifth Third to finance its operations.  As                               
            of January 1, 1989, APECO owed Mr. Kluener $800,000.  On or about                             
            April 19 and June 12, 1989, he made loans of $700,000 apiece to                               
            APECO using funds from his agency account to fund all or a                                    
            portion of each loan.  As of June 30, 1989, APECO owed Fifth                                  
            Third $3,885,000, and, on or about July 31, 1989, APECO obtained                              
            a final loan of $1,500,000 from the bank, bringing its                                        
            indebtedness to Fifth Third to $5,385,000.  Mr. Kluener                                       
            guaranteed Fifth Third's loans to APECO.                                                      
                  During 1989, APECO's personnel were developing a variety of                             
            new or improved products, including more durable sprayer parts, a                             
            high-volume, low-pressure spray gun, and a Do-It-Yourself paint                               
            sprayer.  Mr. Kluener dictated the products that APECO's                                      
            personnel were to develop.  During mid-1989, a project to develop                             
            a new type of paint sprayer was just beginning and did not yet                                
            have a name.  The concept on which the sprayer was based called                               
            for a new method of powering the sprayer mechanism and involved a                             
            different design than had been used previously.  At a June 8,                                 

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