Estate of Robert G. Kluener, Deceased, Donald E. Hathaway, Co-executor and Charlotte J. Kluener - Page 8

            nominally an employee of APECO both before and after the                                      
            transfer, Mr. Kluener personally had reimbursed APECO for the                                 
            cost of her compensation and continued to do so after the                                     
                  Horses of the quality of those transferred by Mr. Kluener                               
            are generally sold at open auction, at which the animals offered                              
            for sale are displayed and bid upon.  It is very unusual for                                  
            sales to be effected privately.  Auctions occur at certain times                              
            of the year, including the fall; to be sold at auction, a horse                               
            must be registered by a cutoff date so that it may be placed on                               
            the auction list.  Between August and December 1989, 37 of the                                
            horses transferred were sold at auction, realizing net proceeds                               
            after deduction of expenses in the amount of $2,177,685,                                      
            resulting in gain realized in the amount of $1,235,595.  Of the                               
            remaining horses, two were sold for nominal amounts during early                              
            1990, one died, and one was given away because it was infertile.                              
                  The sales proceeds were paid to APECO Equine beginning in                               
            October 1989.  The bulk of the proceeds was paid in two checks,                               
            each in the amount of $949,400, that were received on December                                
            21, 1989, and January 11, 1990, respectively, with the remainder                              
            being paid over several following months.  The proceeds initially                             
            were deposited in a checking account in the name of APECO Equine                              
            that was maintained at Fifth Third.  Only Mr. Kluener and his                                 
            assistant had signature authority with respect to that account.                               
            The sales proceeds were thereafter deposited in a brokerage                                   

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