Estate of Robert G. Kluener, Deceased, Donald E. Hathaway, Co-executor and Charlotte J. Kluener - Page 10

                  Mr. Kluener made loans to APECO instead of using the funds                              
            held in the name of APECO Equine in order to, inter alia, keep                                
            the existence of those funds a secret from APECO personnel.  Mr.                              
            Kluener made loans to APECO during the time the sales proceeds                                
            were held in the name of APECO Equine as follows:                                             
                        Approximate Date                      Amount                                      
                               Nov. 3, 1989             $700,000                                          
                               Jan. 29, 1990            300,000                                           
                  The foregoing loans were funded in whole or part by                                     
            distributions from Mr. Kluener's agency account.  During December                             
            1989, APECO collected approximately $1,600,000 with respect to a                              
            disputed account receivable.  On or about December 29, 1989,                                  
            APECO made a distribution to Mr. Kluener in the amount of                                     
            $1,437,488.90 that (1) repaid the $1,400,000 in loans that he had                             
            made on or about June 12, and November 3, 1989, and (2) paid                                  
            interest to him in the amount of $37,488.90.  The payment was                                 
            deposited in Mr. Kluener's agency account.                                                    
                  On or about June 4, 1990, Mr. Kluener's personal debts to                               
            Fifth Third became due.  Fifth Third refused to renew its loans                               
            to Mr. Kluener that totaled $12,200,000 and its loans to APECO                                
            that totaled $4,785,0003 because Mr. Kluener had submitted to it                              
            a financial statement showing that his liabilities exceeded his                               
            assets by $3,856,608 as of September 30, 1989.  The loans were                                
            renegotiated shortly thereafter.  As part of the renegotiation,                               

            3     APECO reduced its debt to Fifth Third from $5,385,000 to                                
            $4,785,000 by making principal payments of $400,000 and $200,000                              
            on or about Apr. 10 and July 9, 1990, respectively.                                           

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