-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NaMOufEdydHP+Wh1FTXGCz9dPVu8QTKRmujfsGYTYI5CeL76Seigm8D8elPxRieI sABwHYkwE8cGSYzzTIAqWg== 0001171520-02-000147.txt : 20021119 0001171520-02-000147.hdr.sgml : 20021119 20021119165837 ACCESSION NUMBER: 0001171520-02-000147 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021118 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20021119 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEVADA HOLDING GROUP INC /NV/ CENTRAL INDEX KEY: 0001134011 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-32321 FILM NUMBER: 02833520 BUSINESS ADDRESS: STREET 1: 4729 LOMAS SANTE FE STREET CITY: LAS VEGAS STATE: NV ZIP: 89147-6028 BUSINESS PHONE: 702-220-3120 MAIL ADDRESS: STREET 1: 4729 LOMAS SANTE FE STREET CITY: LAS VEGAS STATE: NV ZIP: 89147-6028 FORMER COMPANY: FORMER CONFORMED NAME: NEVADA HOLDINGS GROUP INC DATE OF NAME CHANGE: 20010207 8-K/A 1 d1069.txt NEVADA HOLDING GROUP, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 8-K/A3 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): November 18, 2002 COMMISSION FILE NUMBER: 0-32321 NEVADA HOLDING GROUP, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) NEVADA 88-0440989 - ---------------------------------------- ------------------------------------ (State of jurisdiction of Incorporation) (I.R.S. Employer Identification No.) 4729 Lomas Sante Fe Street, Las Vegas, Nevada 89147-6028 - ---------------------------------------------- --------------- (Address of principal executive offices) (Zip Code) Registrants telephone number, including area code (702) 220-3120 -------------- N/A - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Total Number of Pages: 31 ITEM 1 CHANGES IN CONTROL OF REGISTRANT: Not Applicable. ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS: On April 3, 2002, the Company completed the acquisition of 100% of the issued and outstanding shares of Providence Cabinet Shoppe, Inc. The agreements provide for the Company to acquire 100% of the issued and outstanding shares for a total of $85,000 payable with a down payment of $15,000. $28,000 to be paid 30 days from closing and $40,000 to be paid at $10,000 per month, payable on the 1st and 15th for 4 months. In addition, $2,000 for insurance benefits package for 3 months and $10 for a wraparound warranty deed, to be paid as due. The down payment was made on April 3, 2002. In addition, the Company assumed the liabilities of Providence Cabinet Shoppe, Inc. On November 15, 2002 the Company accepted an Agreement to sell the Company's 100% interest in the Providence Cabinet Shoppe, Inc. located in Clarksville, Tennessee that was acquired on April 3, 2002. The Company sold their interest for a total cash consideration of $25,010 and the assumption of all the assets and liabilities of Providence Cabinet Shoppe, Inc. The breakdown of the assets and liabilities is as follows: (Unaudited) (Unaudited) June 30, 2002 September 30, 2002 ------------- ------------------ Current Assets $ 85,630 $ 372,236 Fixed Assets 1,063,124 1,044,076 Other Assets 875,584 869,750 ---------- ---------- Total Assets $2,024,338 $2,286,062 Current Liabilities $ 840,283 $ 766,636 Long-Term Liabilities 1,140,608 1,444,595 Equity 87,010 87,010 Operating Loss (43,563) (12,179) ---------- ---------- Total Liabilities & Equity $2,024,338 $2,286,062 The sale of the assets and liabilities of Providence Cabinet Shoppe, Inc. was necessary due to the inability of the Company to get accurate audited financial statements for the years ended September 30, 2000 and September 30, 2001 to allow the Company to comply with Securities and Exchange Commission reporting requirements. The Company has restated the information in the June 30, 2002 financial statements to reflect the discontinued operations of Providence Cabinet Shoppe, Inc. by the Company. ITEM 3 BANKRUPTCY OR RECEIVERSHIP: Not Applicable. ITEM 4 CHANGE OF CERTIFIED PUBLIC ACCOUNTANTS: Not Applicable. ITEM 5 OTHER MATERIALLY IMPORTANT EVENTS: Not Applicable. 2 ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS EXHIBIT A -- Agreement for Purchase and Sale of Provident Cabinet Shoppe, Inc., incorporated herein by reference. EXHIBIT B -- Wraparound Warranty Deed, incorporated herein by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NEVADA HOLDING GROUP, INC. Registrant November 18, 2002 /s/ Melanie S. Meinders ----------------------------------- Melanie S. Meinders Chairman of the Board and Chief Executive Officer 3 EXHIBIT "A" AGREEMENT FOR PURCHASE AND SALE OF PROVIDENCE CABINET SHOPPE, INC. STATE OF NEVADA COUNTY OF CLARK This agreement is made on October 1, 2002 by Nevada Holding, Group, Inc., a Nevada Corporation, with its principal office located at 4729 Lomas Santa Fe Street, Las Vegas, Nevada 89147-6028, Clark County, Nevada ("Seller") and Barth E. Barnhart, individually whose address is 1013 Virginia Hill Drive, Mt. Juliet, Tennessee 37122 and Dipak (Danny) Lachmandas, individually whose address is 2003 Woodwind Drive, Greenbriar, Tennessee 37073 ("Buyers"). ARTICLE I PURCHASE AND SALE 1.01 In consideration of the mutual promises and conditions contained in this agreement, Seller agrees to sell to Buyers and Buyers agree to purchase from Seller, on the terms, conditions, warranties and representations set forth in this Agreement: (a) the business owned by Seller, being conducted under Providence Cabinet Shoppe, Inc. and Providence Cabinet, Inc., located at 2084 New Ashland City Road, Clarksville, Tennessee 37043 ("the Business"); (b) all of the stock in trade, inventory and merchandise of the Business as described in the September 30, 2002 financial statements (Exhibit "A") to be attached to this agreement at closing; (c) all of the fixtures, equipment and other tangible assets of the Business, that are provided in the financial statements (Exhibit "B") dated September 30, 2002 at closing; (d) any real estate owned by Seller under the lease for the premises where the Business is located; and (e) all the trade, business name, goodwill and other tangible or intangible assets of the Business. ARTICLE II AMOUNT OF PURCHASE PRICE 2.01 The total purchase price to be paid by the Buyers to Seller for all the properties, assets and rights of the Business described in this Agreement ("Purchase Price") shall be $25,000.00 in cash and the assumption of all debts owed by Providence Cabinet Shoppe, Inc. and Providence Cabinet, Inc. The attached financial statement dated September 30, 2002 discloses all assets and liabilities known to exist at the time of closing. 4 ARTICLE III PAYMENT OF PURCHASE PRICE 3.01 The total Purchase Price shall be paid as follows: (a) the sum of $25,000 in cash, cashier's check or equivalent, shall be paid at closing; (b) The assumption and promise to pay as due all current liabilities of Providence Cabinet Shoppe, Inc. and Providence Cabinet, Inc. as disclosed in the company's financial statements dated September 30, 2002; and (c) The assumption and promise to pay as due amounts owed to Farmers & Merchants Bank that is agreed upon in the settlement with the bank. ARTICLE IV CLOSING 4.01 The closing of the sale and purchase of the Business ("the Closing") shall take place on or before November 22, 2002, or at such other place and date as the parties may agree to in writing. 4.02 At the closing the Seller shall: (a) deliver clear and marketable title and ownership to Buyers of all assets subject to this Agreement; (b) execute the Assignment of Assumed Name Certificate; (c) relinquish all management control to buyers; and (d) execute any other documents necessary to finalize this Agreement. 4.03 At the Closing the Buyers shall: (a) pay all remaining moneys owed to Seller; (b) assume all liabilities as set forth in this agreement, unless undisclosed, and (c) execute any other documents necessary to finalize this Agreement. 5 ARTICLE V REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS BY SELLER 5.01 Seller agrees and warrants and represents to Buyers that: (a) The financial records for the Business, previously inspected by Buyers, contain a full and complete record and account of the financial affairs of this Business and truthfully set forth all liabilities, assets and other matters pertaining to the fiscal or financial condition of this Business through the date of inspection and furthermore, that there have been no material changes in the financial condition of this Business since that time except for transactions normal to this Business; (b) Seller is the lawful owner of this Business and has good right and due authorization to sell it. At the time of signing this Agreement, Seller neither knows nor has reason to know of the existence of any outstanding claim or title, or interest, or lien in, to, or on this Business except as shown on the financial records of this Business inspected by Buyers; (c) Seller owes no obligations and has contracted no liabilities affecting this Business or which might affect the consummation of the purchase and sale described in this Agreement that are not shown on the financial records inspected by the Buyers and that have not been expressly disclosed to Buyers; (d) that all taxes due and owing on account of Seller's operation of the Business for unemployment compensation, withholding tax, social security tax, sales tax, personal property tax, franchise tax, income tax, and other taxes of any nature are the responsibility of the Buyers; (e) any undisclosed accounts payable due and owing as of the Closing shall remain the responsibility of Seller and shall be paid promptly as they become due and payable; (f) no litigation, actions or proceedings, legal, equitable, administrative, through arbitration or otherwise, including but not limited to; lawsuits, claims or disputes with employees, customers and vendors, etc., are pending or threatened that might affect this Business, the assets being purchased, or the consummation of the purchase and sale described in this Agreement; (g) Seller agrees to indemnify and hold the Buyers harmless from any and all claims, causes of actions, damages, or debts, including legal fees, resulting from any actions, occurrences or events occurring prior to the Closing; and 6 (h) all mechanical equipment sold pursuant to this Agreement is sold as is to the Buyers. ARTICLE VI REPRESENTATIONS, WARRANTIES AND AGREEMENTS BY BUYER 6.01 The Buyers agree and warrant and represent to the Seller that Buyers will duly notify all authorities, suppliers, creditors and/or other entities that Buyers are to be responsible for all liabilities associated with the operation of the Business, including without limitation withholding taxes, social security taxes, unemployment contributions, salaries, and purchases incurred after the Closing, and Buyers specifically agree to assume such liabilities as of the Closing. Additionally, Buyers acknowledges disclosure by seller of situations regarding the individuals Ron Thomas and Robert E. Miller. ARTICLE VII TRADENAME, TELEPHONE NUMBER AND POST OFFICE BOX 7.01 Seller assigns to Buyers the exclusive right to use the trade or business name and Seller agrees not to use, or authorize others to use, this name or a similar name in the State of Tennessee. 7.02 Seller agrees to allow Buyers to assume the Business telephone number, current advertising arrangements, including "Yellow Pages Advertising," and the Post Office Box, if any, currently used by the Business for a mailing address. ARTICLE VIII DELIVERY OF BOOKS AND RECORDS 8.01 All books, records, files, documents and papers, including customer lists and all records of the accounts of customers used in the operation of or relating to the Business shall be transferred and delivered to Buyers at the Closing. 8.02 All of these books, records, files, documents and papers shall be available to the Buyers at any reasonable time for any proper purpose, and Buyers has the right to freely examine and to copy all such materials prior to closing. 7 ARTICLE IX NONASSUMPTION OF LIABILITIES 9.01 Unless otherwise expressly provided for in this agreement, any undisclosed liabilities and obligations incurred by Seller prior to the Closing are not assumed by the Buyers but continue as liabilities and obligations of Seller and shall be solely paid by Seller. 9.02 In the event the Buyers are required to pay after the Closing any undisclosed valid lien, debt, or expense incurred by Seller prior to the Closing Date, Buyers shall have the right to offset any such lien, debt, or expense actually paid by Buyers, which is the valid and legal obligation of the Seller, against any payment owed to Seller by Buyers. ARTICLE X INDEMNIFICATION OF SELLER 10.01 The Buyers will indemnify and hold Seller and the property of Seller free and harmless from any and all claims, losses, damages, injuries and liabilities arising from or in connection with the operation of the Business after the Closing. ARTICLE XI DEFAULT 11.01 After execution of this Agreement by the parties, default shall consist in the failure of either party to perform its respective obligations and duties and/or a breach of a warranty or covenant in this agreement. 11.02 In the event of default of either party, Seller and Buyers shall have the right to sue for specific performance and/or sue for damages in addition to any other relief provided in this Agreement or attached Exhibits. In a suit for default, reasonable attorney fees shall be recoverable by the prevailing party. ARTICLE XII COSTS AND EXPENSES 12.01 All costs and expenses incurred in finalizing the purchase and sale described in this Agreement in the manner prescribed by this Agreement shall be paid by Buyers and Seller in the following manner. (a) Buyers agree to prepare the Closing documents and be responsible for any fees and expenses incurred in preparation of these documents. Should either party retain an additional attorney to review the documents necessary for the transfer of the Business, the attorney fees so incurred shall be the responsibility of the party retaining the attorney. (b) Any other Closing costs and expenses shall be paid at the Closing by the Buyers. 8 ARTICLE XIII RESTRICTIVE COVENANTS 14.01 The Seller shall not for a period of 2 years immediately following the execution of this Agreement, regardless of any reasons or cause, either directly or indirectly: (a) make known to any person, firm or corporation the names and addresses of any of the customers of the Seller or Buyers or any other information pertaining to them; or (b) call on, solicit, or take away, or attempt to call on, solicit, or take away any of the customers of the Seller on whom the Seller called or with whom he became acquainted during ownership of this Business either for Seller or for any other person, firm or corporation. 14.02 Should Seller violate any paragraph of this Article, any remaining amounts now due, or which shall become due, from Buyers to Seller shall be considered paid in full. ARTICLE XIV GENERAL AND ADMINISTRATIVE PROVISIONS 15.01 Parties Bound. This Agreement shall be binding upon and inure to the benefit of the Parties to this agreement and their respective heirs, executors, administrators, legal representatives, successors and assigns. 15.02 Assignment. The Seller shall have no right to transfer or assign his interest in this Agreement without the prior written consent of the Buyers. 15.03 Corporate Authority. If any party to this agreement is a legal entity (partnership, corporation and/or trust), such party represents to the other that this Agreement, the transaction contemplated in this agreement, and the execution and delivery hereof, have been duly authorized by all necessary partnership, corporate or trust proceedings and actions, including without limitation the action on the part of the directors, if the party is a corporation. Certified copies of such corporate or other resolutions authorizing this transaction shall upon request be delivered at the Closing. 15.04 Use of Pronouns. The use of the neuter singular pronoun to refer to the Parties described in this agreement shall be deemed a proper reference even though the Parties may be an individual, a partnership, a corporation, or group of two or more individuals, partnerships or corporations. The necessary grammatical changes required to make the provisions of this Agreement apply in the plural sense where there is more than one party to this Agreement, and to either corporations, partnerships or individuals, males or females, shall in all instances be assumed as though in each case fully expressed. 9 15.05 Nevada Law. This Agreement shall be subject to and governed by the laws of the State of Nevada. Any and all obligations or payments are due and payable in Las Vegas, Clack County, Nevada. 15.06 Severability. If any provision of this Agreement should, for any reason, be held in violation of any applicable law, and so much of this Agreement be held unenforceable, then the invalidity of such a specific provision in this agreement shall not be held to invalidate any other provisions in this agreement, which other provisions shall remain in full force and effect unless removal of this invalid provision destroys the legitimate purposes of this Agreement, in which event this Agreement shall be canceled. 15.07 Entire Agreement. This Agreement represents the entire understanding of the Parties hereto. There are no oral agreements, understandings, or representations made by any party to this agreement that are outside of this agreement and are not expressly stated in it. 15.08 Notices. All notices or other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be considered as properly given if mailed from within the United States by first class mail, postage prepaid, and addressed as follows: to Seller: Nevada Holding Group, Inc., 4729 Lomas Santa Fe Street, Las Vegas, Nevada 89147-6028 to Buyers: Barth E. Barnhart, 1013 Virginia Hill Drive, Mt. Juliet, Tennessee 37122 and Dipak (Danny) Lachmandas, 2003 Woodwind Drive, Greenbriar, Tennessee 37073 A party may change the address for notice by giving notice of such change to the other party in writing. 15.09 Facsimile Signatures. This Agreement shall be deemed properly executed when bearing facsimile signatures, regardless of how or by whom the signatures were affixed. 10 SIGNED, ACCEPTED, AND AGREED TO on November 18th, 2002 by the undersigned parties, who acknowledge that they have read and understand this Agreement and the Attachments and Schedules to it and that they execute this legal document voluntarily and of their own free will. Respectfully submitted, /s/ Thomas R. Meinders - ---------------------------- By: Thomas R. Meinders President Nevada Holding Group, Inc. a Nevada Corporation /s/ Barth E. Barnhart - ---------------------------- Accepted By: Barth E. Barnhart an individual /s/ Dipak Lachmandas - ---------------------------- Accepted By: Dipak (Danny) Lachmandas an individual STATE OF TENNESSEE COUNTY OF MONTGOMERY This instrument was acknowledged before me on November 15th, 2002 by Barth E. Barnhart, individually and as President of Providence Cabinet Shoppe, Inc., a Tennessee Corporation. /s/ Sonya Y. Edwards ------------------------ Sonya Y. Edwards Notary Public's Signature STATE OF TENNESSEE COUNTY OF MONTGOMERY This instrument was acknowledged before me on November 15th, 2002 by Dipak (Danny) Lachmandas, individually. /s/ Sonya Y. Edwards ------------------------ Sonya Y. Edwards Notary Public's Signature STATE OF NEVADA COUNTY OF CLARK This instrument was acknowledged before me on November 18th, 2002 by Thomas R. Meinders, President of Nevada Holding Group, Inc., a Nevada Corporation. /s/ Zola T. Abadie -------------------------- Notary Public's Signature 11 EXHIBIT "A" FINANCIAL STATEMENTS OF PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 SEPTEMBER 30, 2002 (UNAUDITED) - -------------------------------------------------------------------------------- 12 PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 INDEX TO FINANCIAL STATEMENTS Opinion Letter of Management 11 Balance Sheet 12 Income Statement 14 Statement of Shareholders' Equity 16 Notes to Financial Statements 17 13 NEVADA BOOKKEEPING CORP. 4729 LOMAS SANTA FE STEEET LAS VEGAS, NEVADA 89147 OPINION LETTER To the Board of Directors Providence Cabinet Shoppe, Inc. Clarksville, Tennessee 37043 The accompanying balance sheet of Providence Cabinet Shoppe, Inc., a Tennessee corporation, the wholly owned subsidiary of Nevada Holding Group, Inc., as of September 30, 2002 and the related statement of income and expenses, statement of shareholders' equity and the related notes to the financial statements have been prepared from information provided by management. The Company has utilized Generally Accepted Account Principles in the preparation of these financial statements. The Company performed a physical inventory on September 30, 2002. In addition, the Company has verified the balance of every note, loan and mortgage payable as of September 30, 2002. The Company has completed a complete review of all accounts receivable and accounts payable as of September 30, 2002. The contracts in progress have been reviewed and the costs associated with the contracts have been reviewed. The asset evaluation of the purchase price has been completed utilizing the appraisal of the building and real estate, fair market value of all machinery and equipment, actual accounts receivables, actual accounts payable, mortgage information and loan information on all vehicles with the remaining portion of the purchase price established as goodwill. Although these financial statements are unaudited it is managements belief that there will not be any substantial changes when the financial statements are audited for the year ending December 31, 2002. It is the recommendation of the Company's management that the fiscal year of the Company be changed to a calendar year to coincide with that of Nevada Holding Group, Inc. Any adjustments that may result from our negotiations with creditors and lending institutions will be made in the October financial statements. Respectfully submitted, /s/ Thomas R. Meinders - ------------------------- Thomas R. Meinders President October 14, 2002 14 PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 BALANCE SHEET SEPTEMBER 30, 2002 ASSETS Current Assets: Cash and Cash Equivalents $ 10,032.65 Accounts Receivable - Operating 270,008.30 Accounts Receivable - Retainage 55,372.43 Inventory 36,822.40 ---------------------------- Total Current Assets $ 372,235.78 Fixed Assets: Land $ 99,000.00 Building 720,000.00 Furniture & Fixtures 19,425.00 Machinery & Equipment 161,340.00 Delivery Equipment 34,758.69 Automobiles 47,648.27 ------------- Total $1,082,171.96 Less: Depreciation Reserve 38,095.56 ---------------------------- Total Fixed Assets $1,044,076.40 Other Assets: Goodwill $ 881,417.09 Total 881,417.09 Less: Amortization Reserve 11,666.70 ---------------------------- Total Other Assets $ 869,750.39 ------------- Total Assets $2,286,062.57 The accompanying notes are an integral part of this financial statement 15 PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 BALANCE SHEET SEPTEMBER 30, 2002 LIABILITIES Current Liabilities: Accounts Payable - Current $ 152,103.65 Accrued Credit Cards Payable 15,244.98 Accrued Federal Payroll Taxes 52,374.33 Accrued Kentucky Withholding Taxes 60.55 Accrued Voluntary Withholding Items Payable 1,145.70 Note Payable - Nevada Holding Group, Inc. (Note 4) 8,000.00 Business Management Account - F & M Bank (Net) 468,246.00 Loan Payable - Barth E. Barnhart 3,700.00 Current Portion of Long Term Liabilities 65,760.96 ---------------------------- Total Current Liabilities $ 766,636.17 Long Term Liabilities: Mortgage Payable - First Federal Savings & Loan 1,127,347.08 Loan Payable - Farmers & Merchants Bank 297,871.59 Loan Payable - Ford Motor Credit Corp. 25,159.50 Loan Payable - Textron Financial 15,021.13 Loan Payable - Bank of America 23,309.24 Loan Payable - Legend's Bank 10,218.93 Loan Payable - First Virginia Credit 11,428.92 ------------- Total Long Term Liabilities 1,510,356.39 Less: Current Portion 65,760.96 ---------------------------- Net Long Term Liabilities 1,444,595.43 ------------- Total Liabilities 2,211,231.60 SHAREHOLDERS' EQUITY Capital Stock: Common Shares; No Par Value 1,000 Authorized; 51 Issued And Outstanding $ 87,010.00 Net Income (Loss) Current Year (12,179.03) ---------------------------- Total Shareholders' Equity $ 74,830.97 ------------- Total Liabilities & Shareholders' Equity $2,286,062.57 -------------
The accompanying notes are an integral part of this financial statement 16 PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 STATEMENT OF INCOME AND EXPENSES FOR THE PERIODS ENDED SEPTEMBER 30, 2002 April 3, 2002 Through September 2002 September 30, 2002 -------------- ------------------ Revenues: Sales - Tennessee $155,024.82 $917,601.86 Sales - Kentucky 13,127.97 13,127.97 ----------- ----------- Total Revenue $168,152.79 $930,729.83 Cost of Revenues: Materials 42,834.94 262,609.61 Direct Labor 47,488.96 276,488.94 Freight 32.00 32.00 ----------- ----------- Total Cost of Revenue 90,355.90 539,130.55 ----------- ----------- Gross Profit 77,796.89 391,599.28 Operating Expenses: See Schedule 46,677.43 296,568.48 ----------- ----------- Net Income (Loss) 31,119.46 95,030.80 Amortization, Depreciation & Interest: Amortization 1,944.45 11,666.70 Depreciation 6,349.26 38,095.56 Interest 10,050.93 57,447.57 ----------- ----------- Total Other Expenses 18,344.64 107,209.83 ----------- ----------- Net Income (Loss) 12,774.82 (12,179.03) The accompanying notes are an integral part of this financial statement 17 PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 STATEMENT OF INCOME AND EXPENSES FOR THE PERIODS ENDED SEPTEMBER 30, 2002 April 3, 2002 Through September 2002 September 30, 2002 -------------- ------------------ Operating Expenses: Accounting $ 500.00 $ 5,950.00 Advertising 555.11 1,115.81 Automobiles 368.82 7,577.68 Bank Charges 485.23 19,748.44 Contract Labor 150.00 150.00 Equipment Lease 310.36 2,936.31 Insurance 6,860.48 40,708.02 Legal & Professional 0 0 Postage & Mailing 17.85 530.08 Repairs 381.81 4.293.21 Salaries - Administrative 18,278.54 95,399.24 Salaries - Officers 9,230.75 47,307.60 Supplies - Office 95.92 2,601.48 Supplies - Shop 68.44 2,026.79 Taxes - Payroll 5,441.52 31,010.20 Taxes - Sales 0 3,736.57 Taxes - Property 0 5,229.52 Taxes - Unemployment 0 1,372.09 Telephone 860.68 4,295.94 Trash Removal 546.40 4,679.20 Travel 356.98 4,101.41 Utilities 1,264.17 6,480.72 Warehouse Lease 500.00 3,000.00 Water & Gas 404.37 2,318.17 ----------- ----------- Total Expenses 46,677.43 296,568.48 The accompanying notes are an integral part of this financial statement 18 PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 STATEMENT OF SHAREHOLDERS' EQUITY FOR THE PERIOD ENDED SEPTEMBER 30, 2002 Transaction Number of Common Accumulated Total And Date Common Shares Stock Deficit Equity - -------------------------------------------------------------------------------- April 3, 2002 Shares for Cash No Par Value 51 $87,010.00 $87,010.00 Net Income (Loss) Current Year - 2002 0 0 $(12,179.03) $74,830.97 -------------------------------------------------------- Balance 9/30/02 51 $87,010.00 $(12,179.03) $74,830.97 == ========== =========== ========== The accompanying notes are an integral part of this financial statement 19 PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 NOTES TO FINANCIAL STATEMENTS September 30, 2002 Note 1 -- Summary of Significant Accounting Policies Nature of Operations Providence Cabinet Shoppe, Inc. (the "Company") is a Tennessee corporation that constructs and installs commercial cabinets primarily in the Middle Tennessee and Southern Kentucky areas. The length of the contracts varies, but is typically less than one year. Use of Estimates The Company's financial statements are presented in accordance with generally accepted accounting principles that require the use of management's estimates and assumptions. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported revenues and expenses. Actual results could vary from the estimates that were used. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of 90 days or less to be cash equivalents. Inventory Inventories consist of completed products that have not been charged to specific contracts, materials and supplies that have not been charged to specific contracts and are stated at the lower of cost (first-in, first-out method) or market. Amortization Determining the fair market value of the assets acquired and deducting the assets from the total cost of the acquisition established the cost of goodwill. Nevada Holding Group, Inc established goodwill of $881,417.09 from the acquisition of Providence Cabinet Shoppe, Inc. on April 3, 2002. Providence Cabinet Shoppe, Inc. is a 100% wholly owned subsidiary of Nevada Holding Group, Inc. Goodwill is amortized over a life of 15 years. Amortization expense for the month of September 2002 totaled $1,944.45. Amortization expense for the period from acquisition (April 3, 2002) through September 30, 2002 totaled $11,666.70 20 PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 NOTES TO FINANCIAL STATEMENTS September 30, 2002 Note 1 -- Summary of Significant Accounting Policies (continued) Depreciation The cost of property and equipment is depreciated over the estimated useful lives of the assets using straight-line and accelerated tax methods that are in accordance with Generally Accepted Accounting Principles. Expenditures for improving or extending the life of property are capitalized. Maintenance and repair expenditures are charged to operations. Furniture and Fixtures are depreciated on a useful life of 7 years. Machinery and equipment is depreciated on a useful life of 5 years. Buildings are depreciated on a useful life of 30 years. Automobiles and delivery equipment are depreciated on a useful life of 5 years. Depreciation expense for the month of September 2002 totaled $6,349.26. Depreciation expense for the period from acquisition (April 3, 2002) through September 30, 2002 totaled $38,095.56 Interest Expense Interest expense is computed on all notes payable and the mortgage payable on a monthly basis. Note 2 -- Accounts Receivable and Note Receivable Accounts Receivable - Retainage Included in August 31, 2002 Accounts Receivable-Retainage is the percentage of the Company's billed contracts that have been retained by the general contractors until the specific jobs are completed. The Company expects to receive the retained amounts within one year. Accounts Receivable - Operating Included in the Accounts Receivable-Operating are all of the Company's accounts receivable that have not been sold to the Farmers and Merchants Bank of Clarksville, Tennessee. 21 PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 NOTES TO FINANCIAL STATEMENTS September 30, 2002 Note 3 -- Loans and Mortgages Payable Farmers and Merchants Bank The Company entered into an installment loan on July 31, 2002. The loan, #21288562 in the amount of $297,871.59 is to be repaid in 60 equal monthly installments of $5,990.66 commencing on September 5, 2002. The interest rate on the loan is 7.50% with a maturity date of August 5, 2007. Ford Motor Credit Corp. The Company entered into an installment loan on July 7, 2001. The loan #CQ A302 Q289 in the amount of $33,423.00 is to be repaid in 60 equal monthly installments of $557.05 commencing on August 21, 2001. The interest rate is 2.90% with a maturity date of July 21, 2006. A 2001 Mercury Villager secures the loan. Bank of America The Company entered into an installment loan on January 29, 2001. The loan #63000000323249 in the amount of $39,759.00 is to be repaid in 60 equal monthly installments of $662.65 commencing on March 15, 2001. The interest rate is 9.99% with a maturity date of February 15, 2006. A 2000 Ford Explorer secures the loan. Textron Financial The Company had a credit line with Textron in the amount of $35,000.00. The Contract Number 011-7033160-000 currently has a balance of $16,220.16 with monthly payments of $519.03. The interest rate is 11.75%. This was an unsecured line of credit that has been discontinued. First Virginia Credit The Company entered into an installment loan on January 29, 2001. The loan #02654198933 in the amount of $19,102.80 is to be repaid in 60 equal monthly installments of $318.38 commencing on March 15, 2001. The interest rate is 8.90% with a maturity date of February 15, 2006. A 2001 Ford Ranger secures the loan. First Federal Savings & Loan The Company entered into a mortgage with on June 18, 2000. The loan #6-03-56168825 in the amount of $1,200,000.00 is to be repaid in monthly installments of $12,897.30. The interest rate on this mortgage is 10%. The Company's real estate and land secures this loan. 22 PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 NOTES TO FINANCIAL STATEMENTS September 30, 2002 Note 3 -- Loans and Mortgages Payable (continued) Legend's Bank The Company entered into three installment loans on June 30, 2000. The loans #21020101, #21020302 and # 21020300 in the amount of $9,670.00, $9,670.00 and $11,219.00 respectively are to be repaid in 36 equal monthly installments of $314.98, $314.98 and $365.40 respectively commencing on July 30, 2000. The interest rate on these loans is 10.50% with a maturity date of June 30, 2003. Two (2) 1998 Ford 150 Pickups and a 1998 Ford E150 Extended Cab secure these loans. Note 4 -- Related Party Transactions The Company had related party transactions with Nevada Holding Group, Inc. during the period from April 3, 2002 (Acquisition) through June 30, 2002 as follows: (i) Providence Cabinet, Inc. transferred a total of $18,107.20 in cash to Nevada Holding Group, Inc., (ii) Providence Cabinet, Inc. made payments for the benefit of Nevada Holding Group, Inc. totaling $31,700.30, (iii) Nevada Holding Group, Inc. made payments for the benefit of Providence Cabinet, Inc. in the amount of $26,582.50, and (iv) Nevada Holding Group, Inc. made cash deposits into the account of Providence Cabinet, Inc. of $31,225.00. These transactions resulted in a Note Payable - Nevada Holding Group, Inc. balance of $8,000.00 on June 30, 2002. During July 2002, Providence Cabinet, Inc. made payments for the benefit of Nevada Holding Group, Inc. in the amount of $5,000.00. Nevada Holding Group, Inc. made cash deposits for the benefit of Providence Cabinet, Inc. in the amount of $14,000.00. This resulted in a Note Payable - Nevada Holding Group, Inc. balance of $17,000.00 on July 31, 2002. During August 2002, Providence made payments for the benefit of Nevada Holding Group, Inc. in the amount of $33,000.00. Nevada Holding Group, Inc. made cash deposits for the benefit of Providence Cabinet, Inc. in the amount of $16,000.00. This resulted in a Note Payable - Nevada Holding Group, Inc. balance of zero on August 31, 2002. During September 2002, Nevada Holding Group, Inc. loaned a total of $8,000.00 to Providence Cabinet Shoppe, Inc. 23 PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 NOTES TO FINANCIAL STATEMENTS September 30, 2002 Note 5 -- Capitalization On April 3, 2002, the Company had 51 common shares, no par value per share, issued and outstanding. The Company has 1,000 shares authorized and was incorporated under the laws of the State of Tennessee on October 15, 1984. The Company does not have any preferred shares outstanding. Nevada Holding Group, Inc. acquired 100% of the issued and outstanding shares of Providence Cabinet Shoppe, Inc. from Ronald and Cheryl Edmundson for a total consideration of $87,010.00 and the assumption of certain liabilities of Providence Cabinet Shoppe, Inc. Note 6 -- Subsequent Events The Company is aware of the obligation to the Farmers and Merchants Bank of Clarksville, Tennessee with regard to a Business Management Account. Due to the fact that the liability for the Business Management Account was not disclosed to Nevada Holding Group, Inc. prior to the closing. It is the position of Nevada Holding Group, Inc. that this liability is the sole responsibility of Ronald and Cheryl Edmundson. Further, the accounts receivable were included in the financial statements and are the assets of Nevada Holding Group, Inc. Providence Cabinet Shoppe, Inc. is a wholly owned subsidiary of Nevada Holding Group, Inc. Nevada Holding Group, Inc. entered into a purchase agreement on March 27, 2002 with Ronald and Cheryl Edmundson for the purchase of Providence Cabinet Shoppe, Inc. Article V, Paragraph 5.01 (a) states as follows: "The financial records for the Business, previously inspected by Buyer, contain a full and complete record and account of the financial affairs of this Business and truthfully set forth all liabilities, assets and other matters pertaining to the fiscal or financial condition of this Business through the date if inspection and furthermore, that there have been no material changes in the financial condition of this Business since that time except for transactions normal to this Business". Article IX, Paragraph 9.01 states as follows: "Unless otherwise expressly provided for in this Agreement, any undisclosed liabilities and obligations incurred by Seller prior to the Closing are not assumed by Buyer but continue as liabilities and obligations of Seller and shall be solely paid by Seller. 24 PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 NOTES TO FINANCIAL STATEMENTS September 30, 2002 Note 6 -- Subsequent Events (continued) Should it ultimately be determined that this is an actual liability of Providence Cabinet Shoppe, Inc. the amount of goodwill that was paid for the acquisition will be increased accordingly. Farmers and Merchants Bank states that the balance of the payable is $542,296.17 and the reserve account balance is $121,708.19 on August 31, 2002. When it is determined what the actual balances are in these accounts and a complete accounting from the Farmers and Merchants Bank is received, the amount of the adjustment to goodwill from the purchase will be determined. 25 EXHIBIT "B" PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 SEPTEMBER 30, 2002 SCHEDULE OF MACHINERY AND EQUIPMENT YEAR, MAKE & MODEL: ACQ. DATE CONTROL #: VALUE: - -------------------------------------------------------------------------------- DEWALT CROSS CUT MITER 4/3/02 340.00 - -------------------------------------------------------------------------------- JET WELD APPLICATOR 4/3/02 400.00 - -------------------------------------------------------------------------------- DELTA CHOP SAW 4/3/02 220.00 - -------------------------------------------------------------------------------- AMERICAN SCISSOR LIFT 4/3/02 2,100.00 - -------------------------------------------------------------------------------- DRYING RACK 4/3/02 200.00 - -------------------------------------------------------------------------------- BINKS SPRAY BOOTH 4/3/02 950.00 - -------------------------------------------------------------------------------- MAKITA COMP MITER SAW 4/3/02 320.00 - -------------------------------------------------------------------------------- NAIL GUN 4/3/02 250.00 - -------------------------------------------------------------------------------- NAIL GUN 4/3/02 195.00 - -------------------------------------------------------------------------------- HP DESIGN JET PLOTTER 4/3/02 1,350.00 - -------------------------------------------------------------------------------- HOMAG ES CH-10 SAW 4/3/02 26,820.00 - -------------------------------------------------------------------------------- 5 GAL SPRAY/AGITATOR 4/3/02 420.00 - -------------------------------------------------------------------------------- 5 GAL SPRAY/AGITATOR 4/3/02 420.00 - -------------------------------------------------------------------------------- POWERMATIC SAW 4/3/02 2,850.00 - -------------------------------------------------------------------------------- UHLING CASE CLAMP HP 4/3/02 1,550.00 - -------------------------------------------------------------------------------- HOLZER VERTICAL SAW 4/3/02 16,160.00 - -------------------------------------------------------------------------------- W & H MULDER PLANER 4/3/02 620.00 - -------------------------------------------------------------------------------- MORBIDELLI ROUTER 4/3/02 39,500.00 - -------------------------------------------------------------------------------- 2 UHLING CASE CLAMPS 4/3/02 4,280.00 - -------------------------------------------------------------------------------- LAMINATED STORAGE 4/3/02 1,800.00 - -------------------------------------------------------------------------------- BRANDT PROFILE TRIMMER 4/3/02 5,360.00 - -------------------------------------------------------------------------------- 2 AIR COMPRESSORS 4/3/02 1,205.00 - -------------------------------------------------------------------------------- 2 RES-AIR C DUSTS 4/3/02 1,500.00 - -------------------------------------------------------------------------------- PACCO T-EDGE APPLICATOR 4/3/02 950.00 - -------------------------------------------------------------------------------- AIR COMPRESSOR 4/3/02 820.00 - -------------------------------------------------------------------------------- HOLZ-H VERTICAL PANEL 4/3/02 16,160.00 - -------------------------------------------------------------------------------- REES-AIR DUST COLLECTOR 4/3/02 820.00 - -------------------------------------------------------------------------------- TIMESAVER SANDER 4/3/02 7,390.00 - -------------------------------------------------------------------------------- REES DUST COLLECTOR 4/3/02 750.00 - -------------------------------------------------------------------------------- 2 DEWALT ARM SAWS 4/3/02 320.00 - -------------------------------------------------------------------------------- CONTRACTORS SAW 4/3/02 165.00 - -------------------------------------------------------------------------------- EZ NAIL FINISHER 4/3/02 185.00 - -------------------------------------------------------------------------------- BORING DOWELING MACH 4/3/02 8,500.00 - -------------------------------------------------------------------------------- MISCELLANEOUS PRINTERS 4/3/02 770.00 - -------------------------------------------------------------------------------- LAMINATE SLITTER 4/3/02 2,200.00 - -------------------------------------------------------------------------------- HAND TOOLS 4/3/02 13,500.00 - -------------------------------------------------------------------------------- TOTAL MACHINERY AND EQUIPMENT $161,340.00 - -------------------------------------------------------------------------------- 26 PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 SEPTEMBER 30, 2002 SCHEDULE OF FURNITURE AND FIXTURES YEAR, MAKE & MODEL: ACQ. DATE CONTROL #: VALUE: - -------------------------------------------------------------------------------- HP DESKJET 540 PRINTER 4/3/02 100.00 - -------------------------------------------------------------------------------- ELECTRONIC TIME CLOCK 4/3/02 150.00 - -------------------------------------------------------------------------------- DRAFTSMAN COMPUTER 4/3/02 500.00 - -------------------------------------------------------------------------------- DRAFTING CHAIR 4/3/02 50.00 - -------------------------------------------------------------------------------- BROTHER TYPEWRITER 4/3/02 50.00 - -------------------------------------------------------------------------------- MUSIC SYSTEM 4/3/02 200.00 - -------------------------------------------------------------------------------- 3 HIGH BACK CHAIRS 4/3/02 180.00 - -------------------------------------------------------------------------------- MICROWAVE/REFRIG 4/3/02 300.00 - -------------------------------------------------------------------------------- BURGLER/FIRE ALARM 4/3/02 700.00 - -------------------------------------------------------------------------------- FS-900 PHONE SYSTEM 4/3/02 120.00 - -------------------------------------------------------------------------------- RECPTION PHONE 4/3/02 100.00 - -------------------------------------------------------------------------------- SAVIN 9022 COPIER 4/3/02 1,600.00 - -------------------------------------------------------------------------------- BUILT IN OFFICE FURNITURE 4/3/02 9,000.00 - -------------------------------------------------------------------------------- TELEPHONE SYSTEM 4/3/02 1,000.00 - -------------------------------------------------------------------------------- IBM TYPEWRITER 4/3/02 400.00 - -------------------------------------------------------------------------------- AWNINGS 4/3/02 2,500.00 - -------------------------------------------------------------------------------- DRAFTSMAN COMPUTER 4/3/02 900.00 - -------------------------------------------------------------------------------- BROTHERS INTELI FAX 4/3/02 385.00 - -------------------------------------------------------------------------------- TECTRON COMPUTER 4/3/02 620.00 - -------------------------------------------------------------------------------- PACKARD BELL COMUTER 4/3/02 50.00 - -------------------------------------------------------------------------------- ZEOS ABC COMPUTER 4/3/02 50.00 - -------------------------------------------------------------------------------- DELL CX100 COMPUTER 4/3/02 290.00 - -------------------------------------------------------------------------------- 6 IONISORS 4/3/02 180.00 - -------------------------------------------------------------------------------- TOTAL FURNITURE AND FIXTURES $19,425.00 - -------------------------------------------------------------------------------- 27 PROVIDENCE CABINET SHOPPE, INC. 2084 NEW ASHLAND CITY ROAD CLARKSVILLE, TENNESSEE 37043 SEPTEMBER 30, 2002 SCHEDULE OF VEHICLES YEAR, MAKE & MODEL: VIN: VALUE: - -------------------------------------------------------------------------------- 2001 MERCURY VILLAGER 4M2ZV14T01DJ14314 $25,383.04 - -------------------------------------------------------------------------------- 2001 FORD RANGER 1FTYR10C51TA45918 10,977.60 - -------------------------------------------------------------------------------- 2000 FORD EXPLORER 1FMZV63E6YZB45701 22,265.23 - -------------------------------------------------------------------------------- 1998 FORD 150 PICK-UP 3,464.78 - -------------------------------------------------------------------------------- 1998 FORD 150 PICK-UP 3,464.78 - -------------------------------------------------------------------------------- 1998 FORD 150 EXTENDED CAB 4,019.73 - -------------------------------------------------------------------------------- 1993 FORD 14 FOOT VAN 6,542.80 - -------------------------------------------------------------------------------- 1993 MITISUBISHI 24 FOOT TRUCK 3,240.00 - -------------------------------------------------------------------------------- 1987 INTERNATIONAL 2,000.00 - -------------------------------------------------------------------------------- CAMPER SHELLS 1,049.00 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DELIVERY EQUIPMENT $34,758.69 - -------------------------------------------------------------------------------- AUTOMOBILES $47,648.27 - -------------------------------------------------------------------------------- TOTAL VALUE OF VEHICLES $82,406.96 - -------------------------------------------------------------------------------- 28 EXHIBIT "B" WRAPAROUND WARRANTY DEED STATE OF NEVADA COUNTY OF CLARK Nevada Holding Group, Inc., a Nevada corporation, whose address is 4729 Lomas Sante Fe Street, Las Vegas, Nevada 89147 ("Grantor") for the consideration paid and to be paid as stipulated below by Barth E. Barnhart, individually, whose address is 1013 Virginia Hill Drive, Mt. Juliet, Tennessee 37122 and Dipak (Danny) Lachmandas, individually, whose address is 2003 Woodwind Drive, Greenbriar, Tennessee 37073. ("Grantees"), grant to Grantees that one particular tract of land described in Exhibit A (Attached). The Consideration is as follows: 1. The sum of Ten Dollars ($10.00) and other good and valuable consideration paid to us by Grantees, the receipt of which is hereby acknowledged; 2. The further consideration that the described tract of land is conveyed subject to, and Grantees expressly does assume liability for payment of, that one certain First Lien promissory note (the "Wrapped" note) described as follows: (a) $1,200,000 note dated May 18, 2000 signed by R & C Properties, payable to First Federal Savings Bank, secured by vendor's lien reserved in deed of even date from R & C Properties, filed for record in the Real Property Records of Montgomery County, Tennessee and additionally secured by (b) Deed of Trust of even date therewith from R & C Properties, filed for record on the Real Property Records in Montgomery County, Tennessee. Subject to the Exceptions specified below, Grantor has granted, sold and conveyed, and by this instrument does grant, sell and convey to the Grantees the property described above and the improvements situated on it in Montgomery County, Tennessee. EXCEPTIONS This Deed is made and expressly accepted by Grantees subject to the following: 1. The above described First Lien Wrapped Note and all liens securing same, if any; 2. Any Restrictions recorded in the Real Property Records of Montgomery County, Tennessee; 29 Subject to the Exceptions stated above, Grantor grants the property to Grantees and to Grantee's heirs and assigns, to have and to hold, together with all and singular the rights and appurtenances the property in any wise belonging, forever. And Grantor does hereby bind itself, its heirs, executors, and administrators, to warrant and forever defend, all and singular, the premises to Grantees and Grantee's heirs and assigns, against every person lawfully claiming or to claim the same, or any part thereof. /s/ Thomas R. Meinders -------------------------- Nevada Holding Group, Inc. a Nevada Corporation By: Thomas R. Meinders President STATE OF NEVADA COUNTY OF CLARK This instrument was acknowledged before me on November 18th, 2002 by Thomas R. Meinders, President of Nevada Holding Group, Inc., a Nevada corporation. /s/ Zola T. Abadie ------------------------------------- Notary Public for the State of Nevada 30 EXHIBIT "A" TRACT ONE: Beginning at a point in the southern right of way margin of State Highway 12, said point of beginning being 700.7 feet, more or less, from the centerline of the abandoned right of way of the I.C. Railroad, said distance from said right of way being measured along a line running generally westerly with said right of way margin of said highway. Said point of beginning is further identified as being at a concrete marker adjacent to a pole. Thence leaving said point of beginning in said margin of said highway on a new line south 4 degrees 30 minutes east 509.57 feet to an iron pin; thence continuing south 4 degrees 30 minutes east 35.03 feet to a point in the center line of a gully; thence with the meanders of the center line of said gully south 53 degrees 45 minutes west 117.56 feet to another point in the centerline of said gully; thence leaving the centerline of said gully on a new line north 4 degrees 30 minutes west 35.0 feet to an iron pin; thence passing over said iron pin and continuing on a line north 4 degrees 30 minutes west 574 feet to an iron pin in the southern right of way of said State Highway 12; thence with said margin of said State Highway 12, 100 feet, more or less, to the point of beginning, according to survey by Erle M. Butts, Licensed Surveyor No. 606-241, King Engineers, Inc., dated March 30, 1985. TRACT TWO: Beginning at a point in the southern right of way margin of State Highway 12 (New Ashland City Highway), said point of beginning being also further identified as being west of the Joe F. Wall property and being 497.5 feet, more or less, from the center line of the right of way of the abandoned I.C. Railroad, along a line running generally westerly from said center line of said railroad right of way, running with said right of way margin of said highway and passing over a concrete marker in said right of way at 52.30 feet; thence from said point of beginning, which is at an iron pin, and leaving said margin of said state highway south 4 degrees 30 minutes 0 seconds east 376.97 feet to an iron pin; thence continuing on the same call 42.63 feet to a point in the center line of a dry branch, being an old property line; thence with said center line of said branch south 86 degrees 33 minutes west 37.5 feet to a point; thence continuing with said center line of said branch south 53 degrees 43 minutes west 104.99 feet to a point; thence continuing south 37 degrees 57 minutes west 75.46 feet to a point; thence continuing south 52 degrees 7 minutes west 26.7 feet to a point in the center line of said branch; thence leaving said center line of said branch on a line north 4 degrees 30 minutes 0 seconds west 35.03 feet to an existing iron pin; thence along the same call 509.57 feet to an existing highway monument in said margin of said state highway; thence with said right of way margin of said state highway north 85 degrees 30 minutes 0 seconds east 200.00 feet to the point of beginning, containing 2.14 acres, more or less, according to survey dated January 16, 1987, per Erle M. Butts, Licensed Land Surveyor #606-241, King Engineers, Inc. Any rights to a roadway contiguous with the Eastern margin of the above property. This being the same realty conveyed to M & J Properties, a Tennessee General Partnership composed of Jerry N. Baldwin and William M. Parchman, by deed from Jerry N. Baldwin and William M. Parchman, of record in Official Record Book Volume 653, Page 1753, in the Register's Office for Montgomery County, Tennessee. 31 -----END PRIVACY-ENHANCED MESSAGE-----