Ex-2b - Schedules to Agreement and Plan of Reorganization By and Among Investors Real Estate Trust, IRET, Inc. and T.F. James Company

MINNESOTA COUNTY FILINGS T. F. JAMES COMPANY
Filing Number	Date of Filing	Type of UCC	Secured Party	Collateral Code
101752	5/11/95	UCC-3	IDS Life Insurance Company	Continuation to Original Financing Statement #91823 Scott County IDSL Loan #694-1248
110169	5/30/00	UCC-3	IDS Life Insurance Company	Continuation to Original Financing Statement #91823 Scott County IDSL Loan #694-1248
062806	11/7/94	UCC-1	National City Bank of Minneapolis	Blanket Filing described in Exhibit B in or on real estate described in Exhibit A attached to UCC-1 Financing Statement Benton County
072071	10/29/99	UCC-3	National City Bank of Minneapolis	Continuation to Original Financing Statement #062806 Benton County
076049	6/17/96	UCC-1	Norwest Bank Minnesota, National Association	Blanket Filing described in or on real estate described in Exhibit A attached to UCC-1 Financing Statement LeSueur County

MINNESOTA COUNTY FILINGS T. F. JAMES COMPANY
Filing Number	Date of Filing	Type of UCC	Secured Party	Collateral Code
0082296	2/22/01	UCC-3	Norwest Bank Minnesota, National Association	Continuation to Original Financing Statement #076049 LeSueur County Also Attached: Fourth Amendment to Promissory Note and to Combination Mortgage, Security Agreement and Fixture Financing Statement and to Assignment of Rents and Leases
0082659	6/4/01	UCC-3	Norwest Bank Minnesota, National Association	Amendment to Original Financing Statement #076049 – Secured Party Name Change to Wells Fargo Bank Iowa, National Association LeSueur County
1138522	5/6/99	UCC-1	National City Bank of Minneapolis	Blanket Filing described in Exhibit A in or on real estate described in Exhibit B attached to UCC-1 Financing Statement Hennepin County
1140658	9/9/99	UCC-1	National City Bank of Minneapolis	Blanket Filing described in Exhibit A in or on real estate described in Exhibit B attached to UCC-1 Financing Statement Hennepin County
97201	8/1/00	UCC-1	National City Bank of Minneapolis	Blanket Filing described in Exhibit B in or on real estate described in Exhibit A attached to UCC-1 Financing Statement Carver County

MINNESOTA
COUNTY FILINGS
T. F. JAMES COMPANY

Filing Number

Date of Filing

Type of UCC

Secured Party

Collateral Code

185354

5/25/01

UCC-1

Lutheran Brotherhood

Blanket Filing described in Exhibit A in or on real estate described in Exhibit B attached to UCC-1 Financing Statement

Washington County

Copy of exhibits to come

UCC SEARCH SUMMARY

NAME OF DEBTOR:	T. F. James Company
JURISDICTIONS:	Iowa Secretary of State
EFFECTIVE DATE OF SEARCH:	July 30, 2002 – UCC/Tax Lien – Federal March 30, 2002 – Tax Lien – County

2 UCC filings were found at the Iowa Secretary of State's office. See chart for details.

No Federal or State Tax Liens were found.

IOWA SECRETARY OF STATE T. F. JAMES COMPANY
Filing Number	Date of Filing	Type of UCC	Secured Party	Collateral Code
P307891	8/7/01	UCC-1	The County Bank	Blanket Filing described in Exhibit A in or on real estate described in Exhibit B attached to UCC-1 Financing Statement
P328026	10/15/01	UCC-1	Central Bank	Initial Financing Statement In Lieu of Continuation Statement to Original Financing Statement #2243669, filed in the State of Minnesota on 7/14/00

UCC SEARCH SUMMARY

NAME OF DEBTOR:	Westlake Liquors, Inc.
JURISDICTIONS:	Minnesota Secretary of State Hennepin County
EFFECTIVE DATE OF SEARCH:	July 29, 2002 – UCC/Federal/State Tax Lien – MN Central Index July 5, 2002 – State/Federal Tax Lien – MN Hennepin County July 18, 2002 – Bankruptcy July 5, 2002 – Judgment

No UCC filings were found at the Minnesota Secretary of State's office.

No Federal or State Tax Liens, Bankruptcy's or Judgment's were found.

T. F. JAMES COMPANY

SCHEDULE 3.6

Condition of Assets

None 22

T. F. JAMES COMPANY

SCHEDULE 3.7

Litigation

1.

Janet Gale and Alan Gale, wife and husband v. Hollywood Entertainment Corporation, d/b/a Hollywood Video and T.F. James Company; Hennepin County District Court File No. PI 02006330. This action involves a claim filed on March 6, 2002, by Janet Gale and Alan Gale, wife and husband, against the Company for a "slip and fall" injury sustained by Mrs. Gale at the Company's retail center in Chanhassen, Minnesota. Both Plaintiffs are individually seeking to recover damages in an amount greater than Fifty Thousand ($50,000) Dollars. On January 20, 2002, the Company settled this claim in the amount of $25,000 to be paid by the Company's insurance company, Cincinnati Insurance Company. This claim is currently being handled by Cincinnati Insurance Company and is represented by Terhaar, Archibald, Pfefferle & Griebel, LLP, 300 First Avenue North, Suite 220, Minneapolis, MN 55401, (612) 573-3000; see also Schedule 3.13(5).

2.

Good Fortune Properties, LLC v. The Order of St. Benedict, First American Title Insurance Company and T.F. James Company, Dakota County District Court File No. 19-C7-02-10591. This action involves a claim filed on October 22, 2002, by the Plaintiff, a prospective purchaser of the land adjacent to the Company's Burnsville, Minnesota retail center. The Plaintiff wants to ensure that the Company's easement will give it access to the property it wants to buy. The easement is in place and there should be no monetary damages in this regard. This claim against the Company is currently being handled by Thorfinnson & Thorfinnson, P.A., P.O. Box 44326, Eden Prairie, MN 55344, (952) 974-0454; see also Schedule 3.13(5).

T. F. JAMES COMPANY

SCHEDULE 3.8

Labor Matters None 24

T. F. JAMES COMPANY

SCHEDULE 3.9(a)

Tax Returns

Tax returns filed by the Company:

1. Tax year ended April 30, 1999:

(a)               Federal
(b)                Minnesota
(c)                Arizona
(d)                Iowa
(e)                Kansas
(f)                 Montana
(g)                North Dakota
(h)                Tennessee
(i)                  Wisconsin

2. Tax year ended April 30, 2000:

(a)               Federal
(b)                Minnesota
(c)                Arizona
(d)                Iowa
(e)                Kansas
(f)                 Montana
(g)                North Dakota
(h)                Tennessee
(i)                  Wisconsin

3. Tax year ended April 30, 2001:

(a)               Federal
(b)                Minnesota
(c)                Arizona
(d)                Iowa
(e)                Kansas
(f)                 Montana
(g)                North Dakota
(h)                Tennessee
(i)                  Wisconsin

3. Tax year ended September 30, 2001 :

(a)               Federal
(b)                Minnesota
(c)                North Dakota
(d)                Wisconsin
(e)                Montana
(f)                 Tennessee

S Election:

The Company made the S election with the IRS on June 26, 2001, effective as of May 1, 2001.

Built-In-Gains Tax:

In connection with the May 1, 2001 Company's Subchapter S election under the Code, the Company became subject to the so-call "Built-In-Gains Tax" under Section 1374 of the Code. Under Code Section 1374, the Company became subject to a potential corporate level tax that is imposed on any appreciation that existed in the Company's assets held by the Company on May 1, 2001, the date of the Company's S election, as those assets are disposed of during the next ten (10) year period. The Build-in-Gain affects each parcel of the Owned Real Property of the Company. This Built-in-Gain Tax will be unaffected by the Merger, except that the Shareholders will not be liable for any Built-in-Gain Tax after the Closing. The amount of the Built-in-Gain subject the Built-in-Gain Tax is approximately $34.845 million.

In addition, the "Northfield" property was subject to a condemnation proceeding (a §1033 exchange) during the calendar year 2002. The tax on this condemnation is deferred under section 1033 of the Code. The Northfield property must be replaced within three (3) years after the year (2002) of the condemnation (estimated as September 30, 2005) or the gain and the Built-in-Gain will become payable. The Built-in-Gain subject to the Built-in-Gains Tax on the Northfield property is $215,648. see also Schedule 3.17(h)(2).

See attached Built-in-Gain Calculation's as of April 30, 2002.

Built-in-Gain Calculation - April 30, 2002
Updated for Disposals Through 1/31/03

Tax Basis

Property	FMV	Land	Bldgs & Other	Accum Depr	Total Tax Basis	Built In Gain
Andover - Tom Thumb	150,000	30,000	77,951	(60,978)	46,973	103,027
Anoka	700,000	75,000	301,583	(157,491)	219,092	480,908
Bethel	310,000	32,552	235,819	(219,688)	48,683	261,317
Blaine	490,000	30,349	250,774	(192,264)	88,859	401,141
Buffalo	460,000	31,000	193,050	(149,743)	74,307	385,693
Burnsville	1,100,000	81,561	615,036	(496,610)	199,987	900,013
Burnsville II	700,000	81,560	503,241	(378,190)	206,611	493,389
Centerville	300,000	15,213	173,449	(173,449)	15,213	284,787
Chanhassen	18,500,000	1,796,596	12,720,509	(1,495,937)	13,021,168	5,478,832
Eagan	500,000	16,542	332,866	(269,894)	79,514	420,486
Eagan - Phase II	1,100,000	34,196	562,497	(559,872)	36,821	1,063,179
Eagan - PDQ	675,000	15,000	290,512	(96,320)	209,192	465,808
Eden Prairie	5,000,000	84,781	3,983,676	(3,302,857)	765,600	4,234,400
Excelsior	740,000	50,000	220,171	(215,844)	54,327	685,673
Faribault	380,000	35,000	84,887	(58,776)	61,111	318,889
Forest Lake - Crown Auto	500,000	107,294	280,503	(258,891)	128,906	371,094
Forest Lake - Retail	6,500,000	138,583	4,310,986	(1,199,223)	3,250,346	3,249,654
Glencoe	300,000	55,697	210,739	(194,369)	72,067	227,933
Greenwood	1,000,000	232,107	1,184,227	(145,934)	1,270,400	(270,400)
Ham Lake	275,000	43,000	166,807	(147,691)	62,116	212,884
Howard Lake	265,000	20,879	158,810	(158,810)	20,879	244,121
Inver Grove Center	850,000	87,061	454,359	(449,477)	91,943	758,057
Inver Grove - Undeveloped	600,000	231,541			231,541	368,459
Lakeland	280,000	11,402	217,378	(217,378)	11,402	268,598
Lakeville	530,000	29,798	274,014	(195,977)	107,835	422,165
Lindstrom	130,000	18,500	94,445	(70,102)	42,843	87,157
Lino Lakes	400,000	22,000	276,194	(197,118)	101,076	298,924
Monticello	228,000	58,685	107,024	(77,206)	88,503	139,497
Mora	158,000	32,000	101,184	(78,458)	54,726	103,274
Mound	250,000	47,788	150,234	(116,475)	81,547	168,453
Mounds View	310,000	22,424	123,567	(75,596)	70,395	239,605
Northfield (Condemnation Sec. 1033 Exchange)	290,000	30,000	161,303	(116,951)	74,352	215,648
Oakdale	480,000	34,325	449,248	(156,122)	327,451	152,549
Paynesville	280,000	27,375	213,172	(198,538)	42,009	237,991
Pine City - Tom Thumb	330,000	50,000	282,029	(259,833)	72,196	257,804
Pine City - Pamida Center	3,150,000	132,099	2,460,892	(902,172)	1,690,819	1,459,181
Prior Lake - PDQ	700,000	39,218	393,833	(393,833)	39,218	660,782
Prior Lake - Undeveloped	150,000	30,235			30,235	119,765
Rochester	350,000	44,000	148,653	(94,123)	98,530	251,470
St. Louis Park	300,000	35,000	73,825	(63,986)	44,839	255,161
Sauk Rapids	148,000	13,500	115,354	(83,383)	45,471	102,529
Shoreview	159,000	24,000	132,049	(96,452)	59,597	99,403
St. Paul - West 7th Street	375,000	55,000	96,373	(77,761)	73,612	301,388

Willmar	450,000	36,610	250,803	(121,689)	165,724	284,276
Winsted	278,000	34,152	180,713	(180,713)	34,152	243,848
Libby - Undeveloped	98,000	97,677			97,677	323
Kalispell - Pamida Center	2,800,000	389,000	1,483,220	(515,313)	1,356,907	1,443,093
Kalispell - Undeveloped	770,000	610,217			610,217	159,783
Livingston	1,961,000	195,693	1,378,792	(480,598)	1,093,887	867,113

Fargo	2,100,000	369,889	1,245,454	(626,826)	988,517	1,111,483
Jamestown	2,280,000	325,224	3,406,390	(1,887,373)	1,844,241	435,759

Ripley	600,000	193,996	902,974	(815,176)	281,794	318,206
Ripley - Bank of Ripley	200,000		123,520	(95,786)	27,734	172,266
Ripley - Pizza Hut	200,000		68,082	(68,082)	0	200,000

Berlin	145,000	32,000	76,888	(76,888)	32,000	113,000
Ladysmith	1,790,000	95,046	1,453,672	(523,486)	1,025,232	764,768
Schofield	1,900,000	149,000	1,138,820	(814,243)	473,577	1,426,423

TOTALS	65,965,000	6,611,365	44,892,551	(20,059,945)	31,443,971	34,521,029

Inventory	139,706				139,706	0
Investment in Liquor Store	300,000				(24,131)	324,131
Subtotal						34,845,160

Cash Surrender Value of Life Insurance	493,962				395,868	98,094
TOTAL BUILT IN GAIN						34,943,254

T. F. JAMES COMPANY

SCHEDULE 3.9(c)

Other Tax Matters

None. 30

T. F. JAMES COMPANY

SCHEDULE 3.9(c)(i)

Audits or Other Examinations None 31

T. F. JAMES COMPANY

SCHEDULE 3.10

Employee Benefits

Life Insurance Policies:

1.                  Policy on Thomas F. James
                New York Life Insurance Company
                Policy #25 448 610
                Policy Amount: $50,000
                Net Cash Value: Approximately $21,963.03
                Sold to James Family Properties in January 2003; see also Schedule 3.13(9)

2.                  Policy on Thomas F. James
                CUNA Mutual Life Insurance Company
                Policy #00758065
                Policy Amount: $200,000
                Net Cash Value: Approximately $65,632.9
                Sold to James Family Properties in January 2003; see also Schedule 3.13(9)

Term Life Policies on Present Shareholders:

The following Term Life Policies were transferred by the company to each shareholder individually in January, 2003; see also Schedule 3.13(10):

1.                  Douglas M. James
                Northwestern Mutual
                Policy #14404613
                $1,000,000

2.                 Charles Wm. James
                Northwestern Mutual
                Policy #12524265
                $1,000,000

3.                 Thomas J. Legierski
                Northwestern Mutual
                Policy #8132207
                $1,000,000

4.                Judith J. Scherer
               First Colony Life Insurance
                Policy #0205384
                $1,000,000

5.                 Robert R. James
                First Colony Life Insurance
                Policy #0205384
                $1,000,000

6.                Thomas M. James
                National Life Insurance
                Policy #1702123
                $1,000,000

Annuities/Pensions to Former Employees:

1.                 Elaine Engels
                10 year annuity paying $9,796.32 per year, beginning on October 1996
                The Company paid-in-full the balance of $31,964.26, on January 27, 2003; see also Schedule 3.13(11)

2.                James B. O'Rourke
                Lifetime annuity paying $10,400 per year, beginning in 1985
                The Company paid-in-full the balance of $58,977, on January 27, 2003; see also Schedule 3.13(11)

3.                Thomas F. James, Sr.
                Lifetime annuity paying $141,432 per year, beginning in 1984
                Balance of Company pay off by January 31, 2003, is approximately $575,115; see also Schedule 3.26(1).

Employee Group Insurance:

1. Life/AD&D Insurance, Health Insurance and Dental Insurance, is provided by the Company to
all employees by the Principal Life Insurance Company, Account #P53572-1.

2. The Company carries disability insurance for all employees from Unum Insurance Co.,
Policy #0332403.

T. F. JAMES COMPANY

SCHEDULE 3.11

Guaranties

Guarantees by Shareholders on Debts of the Company

Each of the Company Shareholders have personally guaranteed the following Indebtedness of the Company; see also Schedules 3.26(3) and 5.14:

Lender Purpose/Security Original
Amount

Central Bank

Line of Credit

$750,000.00

Marshall & Ilsley Bank

Unsecured Note

300,000.00

Marshall & Ilsley Bank

Schofield, WI

271,153.90

Marshall & Ilsley Bank

Kalispell, MT

2,200,000.00

Twin City Federal

Excelsior, MN

205,239.68

Premier Bank

St. Paul, MN

100,000.00

Oakley National Bank

Buffalo, MN

140,701.00

Marshall & Ilsley Bank

Chanhassen #2, MN

3,100,000.00

Wells Fargo Bank

Inver Grove, MN (Land)

250,000.00

Marshall & Ilsley Bank

Lakeville, MN

225,000.00

Lake Country Bank

Long Prairie, MN

470,692.73

Marshall & Ilsley Bank

Jamestown, ND

1,206,000.00

Marshall & Ilsley Bank

Livingston, MT

900,000.00

Lutheran Brotherhood

Forest Lake, MN

3,400,000.00

Lutheran Brotherhood

Forest Lake, MN

760,000.00

Marshall & Ilsley Bank

Greenwood, MN

750,000.00

Marshall & Ilsley Bank

Greenwood, MN

250,000.00

American Express Financial

Pine City, MN

2,300,000.00

Valley Bank

Kalispell, MT (Land)

190,000.00

County Bank

Oakdale, MN

200,000.00

American Express Financial

Ladysmith, WI

1,200,000.00

U.S. Bank

Eden Prairie, MN

3,600,000.00

American Express Financial

Eagan, MN; Prior Lake, MN; Ripley, TN

3,350,000.00

Guarantees by the Company on behalf of the Shareholders

The Company has guaranteed a loan with First Interstate Bank dated February 1985, for property purchased by Peak Properties Development, a partnership owned by the Shareholders of the Company, in Helena, Montana. The original loan was in the amount of $1,335,000. As of January 1, 2003, the amount owed on the loan was $494,993.74; see also Schedule 3.26(3).

T. F. JAMES COMPANY

SCHEDULE 3.12

Financial Statements

1.	The undeveloped property, located at Highway 35 & 93, in Polson, Montana, was deeded to the James Family Properties and is mistakenly listed on the Company's Schedule of Real Estate as of September 30, 2002; see also "Built-In-Gains" disclosures set forth on Schedule 3.9(a) and disclosures set forth on Schedule 3.13(12).
2.	See T.F. James Company and Subsidiaries Consolidated Financial Statement as of September 30, 2002 which follow.

T. F. JAMES COMPANY AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS
TOGETHER WITH
INDEPENDENT AUDITORS’ REPORT SEPTEMBER 30, 2002

OLSEN THIELEN & CO., LTD.
Certified Public Accountants & Consultants

T. F. JAMES COMPANY AND SUBSIDIARIES CONTENTS

INDEPENDENT AUDITORS' REPORT

CONSOLIDATED FINANCIAL STATEMENTS:

Balance Sheet

Statement of Operations and Retained Earnings

Statement of Cash Flows

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INDEPENDENT AUDITORS’ REPORT ON SUPPLEMENTARY INFORMATION

SUPPLEMENTARY FINANCIAL INFORMATION:

Consolidating Schedules—

Balance Sheet Information

Statement of Operations and Retained Earnings (Deficit) Information

Statement of Cash Flows Information

Schedule of General and Administrative Expenses Information

Schedule of Rental Income

Schedule of Real Estate

INDEPENDENT AUDITORS' REPORT

Board of Directors
T. F. James Company and Subsidiaries
Minneapolis, Minnesota

We have audited the accompanying consolidated balance sheet of T. F. James Company (an Iowa corporation) and subsidiaries as of September 30, 2002 and 2001, and the related consolidated statements of operations and retained earnings and cash flows for the year and five months ended September 30, 2002 and 2001 and the year ended April 30, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of T. F. James Company and subsidiaries as of September 30, 2002 and 2001, and the results of their operations and their cash flows for the year and five months ended September 30, 2002 and 2001 and the year ended April 30, 2001, in conformity with accounting principles generally accepted in the United States of America.

/S/ Olsen Thielen & Co., LTD
St. Paul, Minnesota
November 14, 2002

T. F. JAMES COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2002 AND 2001
ASSETS

		2002			2001

Cash	$	484,702		$	361,869
Cash in Escrow		237,378			306,675
Accounts Receivable, Less Allowance for
Doubtful Accounts of $52,124		1,089,735			1,167,828
Rents Receivable		83,190			49,707
Income Taxes Receivable		116,337			57,702
Other Receivables		113,366			100,000
Inventory		124,878			140,608
Prepaid Expenses		13,974			13,974
Cash Value of Life Insurance		92,327			87,005
Mortgage Commitment Fees, Net		43,448			43,448
		2,399,335			2,328,816

Rental Real Estate		53,663,172			52,514,303
Real Estate Development in Progress		372,213			205,091
Less Accumulated Depreciation		(19,329,329	)		(18,349,392	)
Net Rental Real Estate		34,706,056			34,370,002

Other Property and Equipment		601,708			707,056
Less Accumulated Depreciation		(452,446	)		(509,500	)
Net Other Property and Equipment		149,262			197,556


TOTAL ASSETS	$	37,254,653		$	36,896,374

The accompanying notes are an integral part of the consolidated financial statements. 39

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:		2002			2001

Notes Payable	$	1,017,833		$	665,779
Accounts Payable		1,871,081			1,928,297
Accrued Real Property Taxes		221,065			235,359
Accrued Interest Payable		256,138			256,138
Payable to Related Party		100,000			–
Rents Received in Advance		156,574			53,125
Retirement Contract Payable		93,249			41,468
Annuity Payable		605,997			655,942
Long-Term Debt		31,895,034			32,846,989
Total Liabilities		36,216,971			36,683,097


STOCKHOLDERS' EQUITY:
Common Stock, $100 Par Value, 1,250
Shares Authorized, 650 Shares
Issued, 165.5 Shares Outstanding		65,000			65,000
Retained Earnings		4,090,562			3,232,358
Cost of 484.5 Shares of Common Stock
Owned by Company		(3,117,880	)		(3,084,081	)
Total Stockholders' Equity		1,037,682			213,277


TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY	$	37,254,653		$	36,896,374

T. F. JAMES COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
YEAR AND FIVE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 AND
YEAR ENDED APRIL 30, 2001

					2001
		2002			September 30			April 30
REVENUES:
Sales and Rental Income	$	7,359,251		$	3,300,873		$	7,293,650
Less Cost of Sales and Operating Expenses		5,353,734			2,488,319			5,350,389
Gross Profit and Net Rental Income		2,005,517			812,554			1,943,261

Gain on Sale of Real Estate		898,275			15,614			1,095,615
Interest Income		16,572			4,985			32,862
Miscellaneous Income, Net		96,530			32,517			478,587
Net Revenues		3,016,894			865,670			3,550,325

GENERAL AND ADMINISTRATIVE EXPENSES		1,726,503			741,240			1,996,924

INCOME BEFORE INCOME TAXES		1,290,391			124,430			1,553,401

INCOME TAXES (BENEFIT)		45,624			(384,711	)		707,309

NET INCOME		1,244,767			509,141			846,092

RETAINED EARNINGS at Beginning of Year		3,232,358			2,768,627			1,922,535

DIVIDENDS		(386,563	)		(45,410	)		–

RETAINED EARNINGS at End of Year	$	4,090,562		$	3,232,358		$	2,768,627

The accompanying notes are an integral part of the consolidated financial statements. 41

T. F. JAMES COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR AND FIVE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 AND
YEAR ENDED APRIL 30, 2001

	2001
2002	September 30	April 30

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	1,244,767		$	509,141		$	846,092
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
Depreciation		1,355,866			559,348			1,276,831
Gain on Sale of Property		(898,275	)		(15,614	)		(1,095,615	)
Changes in Assets and Liabilities:
Cash in Escrow		69,297			(68,383	)		34,555
Accounts Receivable		78,093			(393,944	)		(78,440	)
Rents Receivable		(33,483	)		(29,289	)		2,503
Other Receivable		(13,366	)		–			–
Inventory		15,730			(902	)		74,135
Prepaid Expenses		–			–			2,329
Accounts Payable		(57,216	)		451,300			139,994
Accrued Real Property Taxes		(14,294	)		72,389			(33,658	)
Accrued Interest Payable		–			12,825			25,458
Rents Received in Advance		103,449			(135,930	)		86,217
Retirement Contract Payable		51,781			(2,846	)		(6,502	)
Accrued Income Taxes		(58,635	)		(437,631	)		303,966
Deferred Income Taxes		–			(347,330	)		199,839
Net Cash Provided By Operating Activities		1,843,714			173,134			1,777,704

CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in Other Receivables		–			–			(100,000	)
Purchase of Property and Equipment		(1,820,795	)		(603,047	)		(5,060,320	)
Proceeds from Sale of Property and Equipment		1,075,444			24,300			2,651,092
Increase in Cash Value of Life Insurance, Net		(5,322	)		2,515			(11,426	)
Payments Received on Contract for Deed		–			9,896			31,526
Net Cash Used In Investing Activities		(750,673	)		(566,336	)		(2,489,128	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowing (Repayment) Under Line-of-Credit Agreements		352,054			479,033			(619,420	)
Principal Payments of Long-Term Debt		(1,739,397	)		(601,076	)		(2,386,334	)
Proceeds from Issuance of Long-Term Debt		787,442			294,851			4,114,262
Change in Treasury Stock		(33,799	)		–			–
Related Party Loans, Net		100,000			–			(13,460	)
Decrease in Annuity Payable		(49,945	)		–			(33,837	)
Payment of Dividends		(386,563	)		(45,410	)		–
Net Cash Provided By (Used In) Financing Activities		(970,208	)		127,398			1,061,211

NET INCREASE (DECREASE) IN CASH		122,833			(265,804	)		349,787

CASH at Beginning of Year		361,869			627,673			277,886

CASH at End of Year	$	484,702		$	361,869		$	627,673

Net Cash Provided By (Used In) Financing Activities		(970,208	)		127,398			1,061,211

NET INCREASE (DECREASE) IN CASH		122,833			(265,804	)		349,787

CASH at Beginning of Year		361,869			627,673			277,886

CASH at End of Year	$	484,702		$	361,869		$	627,673

The accompanying notes are an integral part of the consolidated financial statements. 43

T. F. JAMES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

The Company's principal line of business is the purchase, sale and operation of rental property. The Company holds real estate in five states concentrated mostly in the midwest.

Accounting Estimates

The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany transactions and accounts have been eliminated in consolidation.

Inventory

Inventories of finished goods are valued at the lower of first-in, first-out cost or market.

Property and Depreciation

Property and equipment are recorded at original cost. Additions, improvements or major renewals are capitalized. Any gains or losses on property and equipment retirements are reflected in the current year operations.

Depreciation is computed using the straight-line and declining balance methods at rates based on the asset's useful life as follows:

Buildings

5-40 years

Rental Equipment

7-8 years

Furniture and Fixtures

2-7 years

Transportation Equipment

3-5 years

Interest

The Company capitalizes interest related to assets during their construction. For the year and five months ended September 30, 2002 and 2001 and the year ended and April 30, 2001, $0 and $0 and $156,948 was capitalized, $2,689,060 and $1,148,412 and $2,619,896 was expensed as rental

operating expense, and $30,113 and $54,046 and $82,220 was expensed as general and administrative expense.

T. F. JAMES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of trade receivables. Concentrations of credit risk with respect to trade receivables are limited due to the Company’s large number of customers and their dispersion across many different industries. The Company requires no collateral from its customers. Historically, the Company has not incurred significant credit related losses and believes no significant credit risk exists at September 30, 2002.

Income Taxes

Prior to May 1, 2001 the provision for income taxes consisted of an amount for taxes that were currently payable and a provision for tax consequences deferred to future periods. Deferred income taxes were recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities were measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences were expected to be recovered or settled. The major temporary difference that gave rise to the net deferred tax liability was alternative minimum tax credit carryforwards and depreciation, which for tax purposes is determined based on accelerated methods and shorter lives.

As of May 1, 2001 the Company elected to have its income taxed to the shareholders under Subchapter S of the Internal Revenue Code. Therefore, for the years subsequent to April 30, 2001 the statements will not include a provision for income taxes, except for the benefit due to the reversal of previously recorded deferred income taxes.

Reclassification

Certain reclassifications have been made to the 2001 financial statements to conform to the 2002 presentations. These reclassifications had no effect on net income or total stockholders’ equity.

NOTE 2 - CASH VALUE OF LIFE INSURANCE

The Company has $207,000 of life insurance on a former shareholder. The cash value of life insurance is presented net of life insurance loans:

2002

2001

                                  Cash Surrender Value

$

527,057

$

498,531

                                  Policy Loans

434,730

411,526

                                      Net Cash Value

$

  92,327

$

  87,005

NOTE 3 - NOTES PAYABLE

Notes payable consists of two lines of credit agreements totaling $1,310,000. Interest is paid monthly at 1% above the prime rate. The notes are secured by real estate.

T. F. JAMES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - LONG-TERM DEBT

Long-term debt and related pledged assets are as follows:

2002

2001

         Real Estate Mortgages payable in monthly installments with
             6.5% to 10.5% interest. Mortgages are secured by real estate.

$

31,846,317

$

32,783,621



        Notes payable in monthly installments with 1.9% to 10%
            interest. The notes are secured by transportation equipment.

        48,717

        63,368

                                  Total

$

31,895,034

$

32,846,989

The principal payments required during the next five years are: 2003 $1,749,000; 2004 $2,263,000; 2005 $1,815,000; 2006 $1,837,000; and 2007 $1,916,000.

NOTE 5 - INCOME TAXES

The Company elected to be a Subchapter S corporation beginning May 1, 2001. Therefore, deferred income tax liabilities were eliminated resulting in a recognition of income tax benefits in 2001.

The provisions for income tax expense includes the following components:

2001

2002

September 30

April 30

                                  Current Payable:

                                      Federal

$

(1,044

)

$

(41,880

)

$

381,099

                                      State

       46,668

         4,499

       126,371

                                                Total

       45,624

      (37,381

)

       507,470

                                  Deferred:

                                      Federal

–

(169,742

)

167,075

                                      State

                 –

      (177,588

)

        32,764

                 –

      (347,330

)

       199,839

                              Total Income Tax Expense
                                     (Benefit)

$

       45,624

$

     (384,711

)

$

       707,309

The Company is subject to a built-in gains tax on asset appreciation. The appreciation is calculated as of the Subchapter S election date and is the excess of the fair market value of all corporate assets over their tax bases. The tax is imposed at the maximum federal rate of 35% and is based on the

Company’s asset appreciation that is realized within ten years after the Subchapter S election. Asset appreciation as of May 1, 2001 is approximately $34,800,000.

T. F. JAMES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - INCOME TAXES AND INVESTMENT TAX CREDITS (Continued)

When a company changes from a C corporation to an S corporation it would continue to recognize a deferred tax liability to the extent it would be subject to the builtin gains tax. Deferred tax liabilities were eliminated May 1, 2001 since the realized asset appreciation for the ten year period cannot be reasonably estimated.

Built in gains of approximately $580,000 were recognized in the year ended September 30, 2002. Alternative minimum tax credit carryforwards of approximately $310,000 were used to offset the built in gains income tax liability.

NOTE 6 - RENTAL INCOME UNDER OPERATING LEASES

The Company rents various real estate under noncancelable leases. Real estate consists primarily of retail store buildings and related land. Most leases include provisions for additional rent based on excess sales. All of these leases, with terms of from one to twenty years, have been accounted for as operating leases.

The following is a schedule of future minimum rental revenue due under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of September 30, 2002:

                                  2003

$

5,932,000

                                  2004

5,555,000

                                  2005

5,069,000

                                  2006

4,750,000

                                  2007

4,354,000

                                  Later Years

13,964,000

                                      Total Minimum Rental Revenue

$

39,624,000

NOTE 7 - ANNUITY PAYABLE

On July 15, 1979, the Company purchased 475 shares of its common stock in exchange for a lifetime annuity payable to the former shareholder. The annuity contract provides for monthly payments of $11,786. The stock purchased and the liability for the annuity were recorded at the present value of the expected future payments discounted using a 6% rate and IRS mortality tables. The liability and treasury stock is adjusted annually based on the life expectancy of the former shareholder. Treasury stock increased $33,799 and $0 during the years ended September 30, 2002 and 2001 as a result of this adjustment.

T. F. JAMES COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - STOCK REDEMPTION AGREEMENT

The Company has a stock redemption agreement with all stockholders requiring the corporation to purchase the outstanding shares of any stockholder upon death. The agreement requires an unspecified payment at time of death and the remainder to be paid in installments over five years with 8% interest. The Company has sufficient life insurance on all stockholders to meet current redemption agreement requirements. The agreement allows transfer by gift or sale to members of a stockholder's family, other stockholders or children of any other stockholder. This agreement also restricts the sale of corporation stock to outsiders by giving the corporation and other stockholders first option to purchase at a predetermined price.

NOTE 9 - SUPPLEMENTAL CASH FLOW INFORMATION

2001

2002

September 30

April 30

Cash Payments For:

Interest

$

2,719,173

$

1,189,134

$

2,665,447

Income Taxes

104,259

400,250

203,504

NOTE 10 - RETIREMENT CONTRACT

The Company is making monthly payments of $816, including 7% interest, to a retired employee which will continue to September 1, 2006.

The Company has a lifetime annuity payable to a former employee. The annuity contract provides for monthly payments of $867. The liability for the annuity was recorded at the present value of expected future payments discounted using a 6% late and IRS mortality tables. The liability is adjusted annually based on the life expectancy of the former employee.

INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION

Board of Directors
T. F. James Company and Subsidiaries
Minneapolis, Minnesota

Our report on the audits of the basic financial statements of T. F. James Company and subsidiaries as of September 30, 2002 and 2001 appears on page 1. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information on pages 12-26 is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/S/ Olsen Thielen & Co., LTD
St. Paul, Minnesota
November 14, 2002

T. F. JAMES COMPANY AND SUBSIDIARIES

CONSOLIDATING BALANCE SHEET INFORMATION
SEPTEMBER 30, 2002

ASSETS

Consolidated

Eliminations

T. F. James
Company

Jamestown
Variety, Inc.

Westlake
Liquors, Inc.

Cash

$ 484,702

$ 407,162

$ 77,540

Cash in Escrow

237,378

237,378

Accounts Receivable Less Allowance

for Doubtful Accounts of $52,124

1,089,735

1,089,735

Rents Receivable

83,190

83,190

Income Taxes Receivable

116,337

116,337

Other Receivables

113,366

113,366

Inventory

124,878

124,878

Prepaid Expenses

13,974

13,974

Cash Value of Life Insurance

92,327

92,327

Mortgage Commitment Fees, Net

43,448

43,448

Rental Real Estate

53,663,172

53,663,172

Real Estate Development in Progress

372,213

372,213

Other Property and Equipment

601,708

483,406

118,302

Accumulated Depreciation

(19,781,775)

(19,680,661)

(101,114)

Investment and Advances to Subsidiaries

–

(884,148)

884,148

TOTAL ASSETS

$ 37,254,653

$(884,148)

$37,919,195

$ –

$219,606

T. F. JAMES COMPANY AND SUBSIDIARIES

CONSOLIDATING BALANCE SHEET INFORMATION (Continued)
SEPTEMBER 30, 2002

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

			Consolidated	Eliminations	T. F. James Company	Jamestown Variety, Inc.	Westlake iquors, Inc.
LIABILITIES:
Notes Payable			$ 1,017,833	$	$ 1,017,833	$	$
Accounts Payable			1,871,081		1,848,060		23,021
Accrued Property Taxes			221,065		221,065
Accrued Interest Payable			256,138		256,138
Notes Payable to Related Parties			100,000	(220,046)	100,000		220,046
Rents Received in Advance			156,574		156,574
Retirement Contract Payable			93,249		93,249
Annuity Payable			605,997		605,997
Long-Term Debt			31,895,034		31,895,034
	Total Liabilities		36,216,971	(220,046)	36,193,950	–	243,067

STOCKHOLDERS' EQUITY (DEFICIT): Common Stock $100 Par Value, 1,250
	Shares Authorized, 650 Shares Issued,
	165.5 Shares Outstanding		65,000	(100,100)	65,000	100,000	100
Paid in Capital			–	(564,002)		394,694	169,308
Retained Earnings (Deficit)			4,090,562		4,778,125	(494,694)	(192,869)
Cost of 484.5 Shares of Common
		Stock Owed by Company	(3,117,880)		(3,117,880)
		Total Stockholders' Equity (Deficit)	1,037,682	(664,102)	1,725,245	–	(23,461)


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)			$ 37,254,653	$(884,148)	$37,919,195	$ –	$219,606

T. F. JAMES COMPANY AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF OPERATIONS AND
RETAINED EARNINGS (DEFICIT) INFORMATION
YEAR ENDED SEPTEMBER 30, 2002

Consolidated

Eliminations

T. F. James
Company

Jamestown
Variety, Inc.

Westlake
Liquors, Inc.

REVENUES:

Sales and Rental Income

$ 7,359,251

$(42,000)

$6,356,493

$1,044,758

Less Cost of Sales and Operating Expenses

5,353,734

4,518,447

835,287

Gross Profit and Net Rental Income

2,005,517

(42,000)

1,838,046

–

209,471

Gain on Sale of Property

898,275

898,275

Interest Income

16,572

16,572

Miscellaneous Income, Net

96,530

96,530

Net Revenues

3,016,894

(42,000)

2,849,423

–

209,471

GENERAL AND ADMINISTRATIVE EXPENSES

1,726,503

(42,000)

1,540,880

–

227,623

INCOME (LOSS) BEFORE INCOME TAXES

1,290,391

–

1,308,543

–

(18,152)

INCOME TAXES

45,624

–

45,624

–

NET INCOME (LOSS)

1,244,767

–

1,262,919

–

(18,152)

RETAINED EARNINGS (DEFICIT) at Beginning of Year

3,232,358

–

3,901,769

(494,694)

(174,717)

DIVIDENDS

(386,563)

–

(386,563)

–

RETAINED EARNINGS (DEFICIT) at End of Year

$ 4,090,562

$ –

$4,778,125

$(494,694)

$ (192,869)

T. F. JAMES COMPANY AND SUBSIDIARIES CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
YEAR ENDED SEPTEMBER 30, 2002

Consolidated

Eliminations

T. F. James
Company

Jamestown
Variety, Inc.

Westlake
Liquors, Inc.

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income Loss)

$ 1,244,767

$1,262,919

$ (18,152)

Adjustments to Reconcile Net Income (Loss) to Net

Cash Provided By (Used In) Operating Activities:

Depreciation

1,355,866

1,353,639

2,227

Gain on Sale of Property

(898,275)

(898,275)

Changes in Assets and Liabilities::

Cash in Escrow

69,297

69,297

Accounts Receivable

78,093

78,093

Rents Receivable

(33,483)

(33,483)

Other Receivable

(13,366)

(13,366)

Inventory

15,730

15,730

Accounts Payable

(57,216)

(36,505)

(20,711)

Accrued Real Property Taxes

(14,294)

(14,294)

Rents Received in Advance

103,449

103,449

Retirement Contract

51,781

51,781

Accrued Income Taxes

(58,635)

(58,635)

Net Cash Provided By (Used In) Operating Activities

1,843,714

–

1,864,620

–

(20,906)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of Property and Equipment

(1,820,795)

(1,809,926)

(10,869)

Proceeds from Sale of Property and Equipment

1,075,444

1,075,444

Increase in Cash Value of Life Insurance

(5,322)

(5,322)

Net Cash Used In Investing Activities

(750,673)

–

(739,804)

–

(10,869)

CASH FLOWS FROM FINANCING ACTIVITIES:

Net Receipts Under Line-of-Credit Agreements

352,054

352,054

Principal Payments of Long-Term Debt

(1,739,397)

(1,739,397)

Proceeds from Issuance of Long-Term Debt

787,442

787,442

Change in Treasury Stock

(33,799)

(33,799)

Related Party Loans

100,000

100,000

Decrease in Annuity Payable

(49,945)

(49,945)

Payment of Dividends

(386,563)

(386,563)

Net Cash Used in Financing Activities

(970,208)

–

(970,208)

–

NET INCREASE (DECREASE) IN CASH

122,833

–

154,608

–

(31,775)

CASH at Beginning of Year

361,869

–

252,554

–

109,315

CASH at End of Year

$ 484,702

$ –

$ 407,162

$ –

$ 77,540

T. F. JAMES COMPANY AND SUBSIDIARIES

CONSOLIDATING SCHEDULE OF GENERAL AND
ADMINISTRATIVE EXPENSES INFORMATION
YEAR ENDED SEPTEMBER 30, 2002

		Consolidated	Eliminations	T. F. James Company	Westlake Liquors, Inc.
Annuity Expense		$ 57,688	$	$ 57,688	$
Auto		7,129		7,129
Advertising		4,317		2,090	2,227
Board Fees		72,000		72,000
Computer Services		2,573		2,573

Depreciation		49,079		45,212	3,867
Donations		2,070		1,795	275
Group Insurance		101,369		97,812	3,557
General Insurance		63,255		63,255
Interest		30,113		30,113

Legal, Accounting and Architectural		136,606		136,606
Mortgage Fees		5,500		5,500
Officers' Life Insurance		86,296		86,296
Operating		76,393		53,936	22,457
Payroll Taxes		51,484		42,989	8,495

Real Estate Taxes		45,065		30,431	14,634
Rents		–	(42,000)		42,000
Repairs and Maintenance		11,836		7,971	3,865
Supplies		108			108

Telephone		23,094		20,816	2,278
Travel and Entertainment		15,003		15,003
Utilities		8,530			8,530
Wages and Benefits		876,995		761,665	115,330

	TOTAL	$ 1,726,503	$(42,000)	$1,540,880	$227,623

T. F. JAMES COMPANY AND SUBSIDIARIES

SCHEDULE OF RENTAL INCOME
YEAR ENDED SEPTEMBER 30, 2002

		Gross Rental Income	Interest	Taxes	Other Operating Expense	Building Depreciation	Total Expenses	Net Rental Income (Loss)
MINNESOTA:
	Andover - Tom Thumb	$ 10,625	$	$	$	$ 2,612	$ 2,612	$ 8,013
	Anoka	77,410	16,894		11,328	7,651	35,873	41,537
	Bethel	31,710	14,601			7,861	22,462	9,248
	Blaine	48,037			4,703	8,359	13,062	34,975
	Bloomington	1,815			2,157	748	2,905	(1,090)
	Brooklyn Park-63rd Ave(retail)	12,860			419		419	12,441
	Buffalo	46,858	15,054		198	6,440	21,692	25,166
	Burnsville - Phase I	129,853	27,014		(3,438)	19,498	43,074	86,779
	Burnsville - Phase II	79,055	34,244	672	2,045	16,775	53,736	25,319
	Centerville	30,055	5,707			5,782	11,489	18,566
	Chanhassen	1,765,680	984,702	9,424	52,060	323,606	1,369,792	395,888
	Eagan - Phase I	115,818	29,248		1,478	25,379	56,105	59,713
	Eagan - Phase II	101,748	50,140		19,533		69,673	32,075
	Eagan - PDQ	–	25,070		(765)	9,642	33,947	(33,947)
	Eden Prairie	546,626	206,737	4,296	2,456	132,590	346,079	200,547
	Excelsior	85,063	6,819	6,727	11,537	653	25,736	59,327
	Faribault	40,781	6,050			980	7,030	33,751
	Forest Lake - Crown Auto	42,000	7,902				7,902	34,098
	Forest Lake - Retail	687,392	244,037		(15,719)	160,412	388,730	298,662
	Glencoe	31,641	15,433		152	7,024	22,609	9,032
	Greenwood	32,000	93,724	28,755	19,009	43,045	184,533	(152,533)
	Ham Lake	27,552	7,160			5,576	12,736	14,816
	Howard Lake	40,836	5,707			5,294	11,001	29,835
	Inver Grove Heights	92,874	92,384		(1,641)	15,145	105,888	(13,014)
	Lakeland	53,442	8,104			7,246	15,350	38,092
	Lakeville	4,400	8,716	26,515	4,489	4,649	44,369	(39,969)
	Lindstrom	13,451				2,864	2,864	10,587
	Lino Lakes	40,784	7,175		(3,228)	9,206	13,153	27,631
	Monticello	22,778			6,856	3,567	10,423	12,355
	Mora	15,827				3,374	3,374	12,453
	Mound	23,621				5,012	5,012	18,609
	Mounds View	29,011	3,941			3,398	7,339	21,672
	Northfield	–		10,317	2,206	2,688	15,211	(15,211)
	Oakdale	86,461	18,312		14,749	13,115	46,176	40,285
	Paynesville	28,879	14,459			7,106	21,565	7,314
	Pine City	343,745	157,073	202	14,571	91,431	263,277	80,468
	Prior Lake	64,940	57,876	2,970	4,868	13,843	79,557	(14,617)
	Rochester	34,236	12,328			3,462	15,790	18,446
	St. Louis Park	24,081	6,734		39	377	7,150	16,931
	Sauk Rapids	–		5,642	3,752	3,845	13,239	(13,239)
	Shoreview	15,900			120	4,402	4,522	11,378
	St. Paul - West 7th Street	36,000	5,314			1,863	7,177	28,823

			Gross Rental Income	Interest	Taxes	Other Operating Expense	Building Depreciation	Total Expenses	Net Rental Income (Loss)
	Willmar		43,262				5,366	5,366	37,896
	Winsted		45,519	8,104			6,024	14,128	31,391
		Total Minnesota	5,004,626	2,196,763	95,520	153,934	997,910	3,444,127	1,560,499

MONTANA:
	Kalispell		$ 256,890	$ 86,612	$ 26,118	$ 600	$ 49,434	$ 162,764	$ 94,126
	Livingston		196,114	50,745			45,960	96,705	99,409
		Total Montana	453,004	137,357	26,118	600	95,394	259,469	193,535

NORTH DAKOTA:
	Fargo		145,379	87,978	14,087	6,213	34,843	143,121	2,258
	Jamestown		332,115	76,428	36,838	125,104	79,441	317,811	14,304
		Total North Dakota	477,494	164,406	50,925	131,317	114,284	460,932	16,562

TENNESSEE:
	Ripley		40,808	119,986	21,027	28,879	21,863	191,755	(150,947)
		Total Tennessee	40,808	119,986	21,027	28,879	21,863	191,755	(150,947)

WISCONSIN:
	Berlin		14,400		3,338	3,208		6,546	7,854
	Ladysmith		165,410	65,761			48,297	114,058	51,352
	Schofield		200,751	4,787	2,470	3,624	30,679	41,560	159,191
		Total Wisconsin	380,561	70,548	5,808	6,832	78,976	162,164	218,397

TOTAL			$6,356,493	$2,689,060	$199,398	$321,562	$1,308,427	$4,518,447	$1,838,046

T. F. JAMES COMPANY AND SUBSIDIARIES

SCHEDULE OF REAL ESTATE
SEPTEMBER 30, 2002

		Date Acquired	Land	Buildings and Improvements	Total	Accumulated Depreciation	Net Book Value	Mortgage Or Note Payable
MINNESOTA:
	Andover - Tom Thumb	1976-1978	$ 30,000	$ 77,951	$ 107,951	$ 64,677	$ 43,274	$
	Anoka	1971	75,000	329,756	404,756	168,122	236,634	181,892
	Bethel	1984	32,551	235,819	268,370	142,803	125,567	140,906
	Blaine	1978-1979	30,349	250,774	281,123	199,567	81,556
	Buffalo	1976-1979	31,000	193,050	224,050	154,066	69,984	140,269
	Burnsville - Phase I	1985	81,561	584,949	666,510	324,972	341,538	391,309
	Burnsville - Phase II	1986-1987	81,560	503,241	584,801	265,378	319,423	368,700
	Centerville	1979-1982	15,214	173,449	188,663	124,407	64,256	61,450
	Chanhassen	1986-1994, 2001-2002	1,796,596	13,055,779	14,852,375	1,928,749	12,923,626	11,112,725
	Eagan - Phase I	1978-1981	16,542	332,866	349,408	214,906	134,502	322,789
	Eagan - Phase II	1979-1984	34,196	562,497	596,693	418,144	178,549	553,352
	Eagan - PDQ	1990-1991	15,000	290,512	305,512	114,774	190,738	276,676
	Eden Prairie	1979-1990	84,781	3,983,677	4,068,458	2,218,371	1,850,087	2,566,871
	Excelsior	1976	50,000	220,171	270,171	220,171	50,000	55,721
	Faribault	1971	35,000	84,887	119,887	61,168	58,719	65,137
	Forest Lake - Champion Auto	1978-1985	107,294	270,140	377,434	162,835	214,599	76,290
	Forest Lake - Retail	1989, 2001	138,583	4,669,396	4,807,979	1,505,668	3,302,311	3,307,207
	Glencoe	1984	55,697	210,739	266,436	127,029	139,407	140,617
	Greenwood	1971-2000	225,300	1,181,399	1,406,699	237,870	1,168,829	1,028,159
	Ham Lake	1976-1985	43,000	166,807	209,807	119,938	89,869	550,476
	Howard Lake	1978-1982	20,879	158,810	179,689	114,076	65,613	61,450
	Inver Grove Center	1984	87,061	454,359	541,420	284,819	256,601	226,027
	Inver Grove - Undeveloped	1984	231,541		231,541		231,541	68,861
	Lakeland	1977-1982	11,402	217,378	228,780	155,876	72,904	87,259
	Lakeville	1971-1987	29,798	274,014	303,812	203,892	99,920	117,475
	Lindstrom	1976	18,500	94,445	112,945	74,159	38,786
	Lino Lakes	1978-1979	22,000	276,193	298,193	171,180	127,013	81,007
	Long Prairie	2002	100,000	583,247	683,247	1,620	681,627	470,693
	Monticello	1978-1979	58,685	107,024	165,709	82,260	83,449
	Mora	1978-1979	32,000	101,184	133,184	80,659	52,525
	Mound	1977-1979	47,788	150,234	198,022	119,745	78,277
	Mounds View	1973	22,424	123,567	145,991	86,331	59,660	52,070
	Oakdale	1977-1979	34,325	449,248	483,573	174,892	308,681	235,434
	Paynesville	1984	27,375	213,172	240,547	129,089	111,458	139,532
	Pine City - Tom Thumb	1978-1985	50,000	282,029	332,029	169,217	162,812	139,983

			Date Acquired	Land	Buildings and Improvements	Total	Accumulated Depreciation	Net Book Value	Mortgage Or Note Payable
	Pine City - Pamida Center		1978-1989	132,099	2,460,892	2,592,991	1,053,497	1,539,494	1,700,114
	Prior Lake - PDQ		1977-1984	39,218	393,833	433,051	248,334	184,717	638,723
	Prior Lake - Undeveloped		1977-1984	30,235		30,235		30,235
	Prior Lake 2		2002	165,000	257,521	422,521	715	421,806
	Rochester		1972	44,000	148,653	192,653	110,483	82,170	132,732
	St. Louis Park		1970	$ 35,000	$ 73,825	$ 108,825	$ 65,130	$ 43,695	$ 72,511
	Sauk Rapids		1978-1981	13,500	115,354	128,854	88,830	40,024
	Shoreview		1978-1979	24,000	132,049	156,049	102,687	53,362
	St. Paul - West 7th Street		1972	55,000	96,373	151,373	89,291	62,082	56,929
	Willmar		1973	36,610	250,803	287,413	131,253	156,160
	Winsted		1978-1982	34,152	180,713	214,865	129,790	85,075	87,259
		Total Minnesota		4,381,816	34,972,779	39,354,595	12,641,440	26,713,155	25,708,605

MONTANA:
	Polson		1988	51,246		51,246		51,246
	Libby		1989	97,676		97,676		97,676
	Kalispell - Pamida Center		1989-1990	389,000	1,483,221	1,872,221	609,706	1,262,515	1,146,324
	Kalispell - Undeveloped		1989	610,217		610,217		610,217	157,566
	Livingston		1989-1990	195,693	1,378,792	1,574,485	548,520	1,025,965	640,401
		Total Montana		1,343,832	2,862,013	4,205,845	1,158,226	3,047,619	1,944,291

NORTH DAKOTA:
	Fargo		1962-1989	369,889	1,245,455	1,615,344	684,400	930,944	1,142,011
	Jamestown		1974-1979	325,224	3,592,369	3,917,593	2,314,858	1,602,735	847,770
		Total North Dakota		695,113	4,837,824	5,532,937	2,999,258	2,533,679	1,989,781

TENNESSEE:
	Ripley		1974-1975	193,996	914,296	1,108,292	767,379	340,913	1,191,764
	Ripley - Bank of Ripley		1978		123,520	123,520	98,472	25,048	132,418
	Ripley - Pizza Hut		1975		68,082	68,082	68,082	–
		Total Tennessee		193,996	1,105,898	1,299,894	933,933	365,961	1,324,182

WISCONSIN:
	Berlin		1960	32,000	76,888	108,888	76,888	32,000
	Ladysmith		1990	95,046	1,453,671	1,548,717	622,425	926,292	709,195
	River Falls		2002	165,870		165,870		165,870	150,000
	Schofield		1967-1987	149,000	1,297,426	1,446,426	897,159	549,267	20,263
		Total Wisconsin		441,916	2,827,985	3,269,901	1,596,472	1,673,429	879,458

TOTAL REAL ESTATE				$7,056,673	$46,606,499	$53,663,172	$19,329,329	$34,333,843	$31,846,317

T. F. JAMES COMPANY

SCHEDULE 3.13

Absence of Certain Developments

1.

Since June 30, 2002, the Company has expended sums for architectural and other services to undertake the remodeling of the Company's Lakeville, Minnesota Strip Center. When completed, this project is estimated to require in excess of $750,000. This remodeling project is anticipated to begin in the winter of 2002-2003.

2.

Any mortgages on properties that were due for renewal after June 30, 2002 have been renewed. This is in the normal course of business.

3.

The Company may apply for and complete a loan transaction in the approximate amount of $3,200,000.00 with the Bremer Bank (or a similar lending institution) prior to or upon the Closing.

4.

The Company made Shareholder distributions in 2002 and 2003 in the approximate aggregate amount of $621,301.00. An additional $3.2 million will be paid in January, 2003; see attached 2002 and 2003 Payment to Stockholders.

5.

See Litigation disclosures set forth on Schedule 3.7.

6.

See also Schedule 3.17(h)(1 and 2)

7. See disclosures under "Built-In-Gains Tax" set forth in Schedule 3.9(a)

8. Bonus Accruals for payment to the employees of the Company as of the closing date will approximate $450,000. Payment on this Accrual must be made within 2½ months after the Closing Date.

9. The Company sold the New York Life Insurance Company Policy #25 448 610 and the CUNA Mutual Life Insurance Company Policy #00758065, both in the name of Thomas F. James, to the James Family Properties in January 2003; see also disclosures set forth in Schedule 3.10(1 and 2) at "Life Insurance Policies".

10. In January 2003, the Company transferred the Term Life Policies on the Company shareholders to each of the shareholders individually; see also Schedule 3.10 at "Term Life Policies on Present Shareholders".

11. On January 27, 2003, the Company paid-in-full the individual annuities owed to each of Elaine Engels and James B. O'Rourke; see also Schedule 3.10 at "Annuities/Pensions to Former Employees".

12.	See disclosures regarding property located in Polson, Montana set forth on Schedule 3.12(1).
13.	On January 28, 2003, Douglas M. James, a Shareholder and an employee of the Company, purchased a _____ Volvo from the Company.
14.	In January of 2003 the Company paid to Charles Wm. James, a Shareholder and an employee of the Company $100,000 for the purchase of land in Kalispell, Montana; see also Schedules 3.31(1) and 3.26(2)

2002 AND 2003 PAYMENTS TO SHAREHOLDERS

	Douglas M. James	Judith Scherer	Thomas M. James	Charles Wm. James	Robert R. James	Thomas J. Legierski	TOTAL

3/29/2002	$5,000.00	$5,000.00	$5,000.00	$5,000.00	$5,000.00	$5,000.00	$30,000.00
4/15/2002	4,217.00	4,217.00	4,217.00	4,217.00	4,217.00	3,752.00	24,837.00
4/15/2002	19,109.00	19,109.00	19,109.00	19,109.00	19,109.00	17,002.00	112,547.00
6/14/2002	3,526.00	3,526.00	3,526.00	3,526.00	3,526.00	3,137.00	20,767.00
6/14/2002	15,977.00	15,977.00	15,977.00	15,977.00	15,977.00	14,214.00	94,099.00
9/16/2002	14,504.00	14,504.00	14,504.00	14,504.00	14,504.00	12,904.00	85,424.00
9/16/2002	3,201.00	3,201.00	3,201.00	3,201.00	3,201.00	2,848.00	18,853.00
12/13/2002	1,430.00	1,430.00	1,430.00	1,430.00	1,430.00	1,272.00	8,422.00
1/10/2003	6,479.00	5,479.00	6,479.00	6,479.00	6,479.00	5,765.00	37,160.00
1/21/2003	1,031.00	1,031.00	1,031.00	1,031.00	1,031.00	917.00	6,072.00
1/21/2003	26,534.00	26,534.00	26,534.00	26,534.00	26,534.00	23,605.00	156,275.00
1/21/2003	3,389.00	3,353.00	3,389.00	3,389.00	3,389.00	3,015.00	19,924.00
1/21/2003	550.00	550.00	550.00	550.00	550.00	490.00	3,240.00
1/21/2003	625.00	625.00	625.00	625.00	625.00	556.00	3,681.00

TOTAL	$105,572.00	$104,536.00	$ 105,572.00	$ 105,572.00	$ 105,572.00	$94,477.00	$ 621,301.00

T. F. JAMES COMPANY

SCHEDULE 3.14

Intellectual Property

7.

Service Mark Reg. No. 1,699,398; Ser. No. 74-135,952, Filed by the Company on February 4, 1991 The mark consists of the letter "J" in a design which forms the stylized letters "TFJ". See Service Mark below:

   [ TFJ LOGO]

8.

TFJamesco.com – domain name

9.

Various software such as real estate management software and GL software are owned by the Company and are under no restrictions or claims.

10.

The Company uses various "off-the-shelf" software in the conduct of its business for which no separate list has been prepared.

T. F. JAMES COMPANY

SCHEDULE 3.15

Compliance with Laws

None 66

T. F. JAMES COMPANY

SCHEDULE 3.16

Operating Contracts

Location	Contractor	Service	Contract Date	Contract Terms
Anoka, MN	Alley Brothers Lawn & Landscape 9804 – 302nd Avenue NW Princeton, MN 55371 Phone: (612) 282-4009	Snowplow	10/7/02	11/1/02 – 4/1/02 $65 per hour
Blaine, MN	Alley Brothers Lawn & Landscape 9804 – 302nd Avenue NW Princeton, MN 55371 Phone: (612) 282-4009	Snowplow	10/7/02	11/1/02 – 4/1/03 $65 per hour
Buffalo, MN	Tri-Co Tree Movers 5412 County Road 12N Buffalo, MN 55313 Phone: (763) 682-1050	Snowplow	10/10/02	11/1/02 – 4/1/03 $45 per hour
Burnsville, MN	Dennis Jenkins 14078 Natalie Road NE Prior Lake, MN 55372 Phone: (952) 440-2135	Snowplow	10/7/02	11/1/02 – 4/1/03 $236 per plow
Chanhassen, MN	Kahnke Bros., Inc. 1400 Arboretum Boulevard Victoria, MN 55386 Phone: (952) 443-3800	Snowplow	10/2/02	11/1/02 – 4/1/03 $40-$80 per hour based on equipment
Chanhassen, MN	Waste Management 124 Union Street, PO Box 119 Norwood Young America, MN 55368	Trash Service	8/30/95	$291 per month
Chanhassen, MN	Waste Management 124 Union Street, PO Box 119 Norwood Young America, MN 55368	Trash Service	3/14/02	$260 per month
Chanhassen, MN	Thyssen Lagerquist 1801 West River Road North Minneapolis, MN 55411 Phone: (612) 588-7844	Elevator	6/8/00	$140 per month 5 year term to June 2005 with automatic renewal unless terminated
Chanhassen, MN	ADT 2561 Territorial Road St. Paul, MN 55114 Phone: (888) 238-2666	Fire Sprinkler Monitor	4/11/95 (renewed 7/10/00)	5 Year term $1,488 per year
Chanhassen, MN	ADT 2561 Territorial Road St. Paul, MN 55114 Phone: (888) 238-2666	Fire Sprinkler Monitor	1/15/01	5 Year term $832 per year
Eagan, MN	Heikes Enterprises 19595 Lillehei Avenue Hastings, MN 55033 Phone: (651) 437-3847	Snowplow	10/7/02	11/1/02 – 4/1/03 $400 per plow 4-8" snow

Location	Contractor	Service	Contract Date	Contract Terms
Eden Prairie, MN	Kahnke Bros., Inc. 1400 Arboretum Boulevard Victoria, MN 55386 Phone: (952) 443-3800	Snowplow		11/1/02 – 4/1/03 $40-$80 per hour based on equipment
Eden Prairie, MN	Perfection Plus	Cleaning Service	1/23/97	$2,795 per month
Eden Prairie, MN	Aspen Waste 2951 Weeks Avenue SE Minneapolis, MN 55414	Trash Service		$450 per month
Excelsior, MN	Bernie Whetston 5835 Eureka Road Excelsior, MN 55331 Phone: (952) 474-4908	Snowplow	10/22/02	11/1/02 – 4/1/03 $60 per plow
Forest Lake, MN	Oakley Contracting 19480 Fenway Avenue North Forest Lake, MN 55025 Phone: (651) 464-2750	Snowplow	10/7/02	11/1/02 – 4/1/03 $42-$105 per hour based on equipment
Greenwood, MN	Bernie Whetston 5835 Eureka Road Excelsior, MN 55331 Phone: (952) 474-4908	Snowplow	10/22/02	11/1/02 – 4/1/03 $60 per plow
Inver Grove Heights, MN	Koehnen Landscaping & Trucking 9932 Rich Valley Boulevard Inver Grove Heights, MN 55077 Phone: (651) 450-1025	Snowplow	10/17/02	11/1/02 – 4/1/03 $125 per plow $45 per hour
Jamestown, ND	Brad Thronton	Snowplow	10/1/02	10/02 – 4/03 $1,500 per month
Jamestown, ND	Ella Rettig	Mall Manager		$650 per month
Lakeville, MN	Reisinger Lawn & Snowplowing PO Box 507 Lakeville, MN 55044 Phone: (952) 469-6695	Snowplow	10/14/02	11/1/02 – 4/1/03 $50 per hour
Line Lakes, MN	Breen Enterprises 14001 Julliard Street NE Forest Lake, MN 55025 Phone: (651) 982-6292	Snowplow	10/21/02	11/1/02 – 4/1/03 $95 per plow
Oakdale, MN	D and R & Son, Inc. 1245 Granada Avenue North Oakdale, MN 55128 Phone: (651) 295-0811	Snowplow	10/23/02	11/1/02 – 4/1/02 $95 per plow up to 6" $55 per hour
Oakdale, MN	TruGreen ChemLawn Maplewood, MN	Lawn Fertilizer	10/23/02	$290 per year
Pine City, MN	Stransky Construction 645 NE 2nd Street Pine City, MN 55063 Phone: (320) 629-6589	Snowplow	10/17/02	1/1/02 – 4/1/03 $45 - $85 per hour based on equipment
Prior Lake, MN	Dennis Jenkins 14078 Natalie Road NE Prior Lake, MN 55372 Phone: (952) 440-2135	Snowplow	10/7/02	11/1/02 -4/1/03 $177 per plow

Location

Contractor

Service

Contract Date

Contract Terms

Golden Valley, MN

GMAC Financial Services

2002 Bravada Oldsmobile

09/23/01

$570.50 per month for 60 months

*See also Schedule 3.29

Burnsville, MN

Chrysler Financial Company L.L.C.

2001 Jeep Grand Cherokee

05/17/01

$650.38 per month for 60 months

*See also Schedule 3.29

T. F. JAMES COMPANY

SCHEDULE 3.17

Real Estate

Schedule 3.17 (a):

The following properties/locations are owned by the Company:

LOCATION BUILDING DESCRIPTION ADDRESS

Andover Tom Thumb # 255 15825 7th Avenue, Andover, MN 55303

Anoka River Road Shopping Ctr. 504 - 516 East River Road, Anoka, MN 55303

Blaine Tom Thumb #180 601 - 641 Main Street NE, Blaine, MN 55433

Burnsville 1 PDQ #210 Strip 13700 - 13720 County Road 11, Burnsville, MN 55337

Burnsville 2 Phase 2 Strip 13600 - 13614 County Road 11, Burnsville, MN 55337

Buffalo Tom Thumb #218 401 - 409 East Highway 55, Buffalo, MN 55313

Centerville Tom Thumb #295 1801 Main Street, Centerville, MN 55038

Centerville Undeveloped Land Next door to 1801 Main Street, Centerville, MN 55038

Chanhassen 1 Byerlys 800 West 78th Street, Chanhassen, MN 55317

Chanhassen 2 Retail Center 816 - 860 West 78th Street, Chanhassen, MN 55317

Chanhassen 3 Kinko's Copy Center 880 West 78th Street, Chanhassen, MN 55317

Chanhassen 4 TCF Bank 900 West 78th Street, Chanhassen, MN 55317

Chanhassen 5 Office Max 960 West 78th Street, Chanhassen, MN 55317

Chanhassen 6 Retail Center Phase 2 910 - 950 West 78th Street, Chanhassen, MN 55317

East Bethel Tom Thumb #243 4825 East Viking Road, East Bethel, MN 55092

Eagan 1 Hilltop Plaza 4160 - 4166 Pilot Knob Road, Eagan, MN 55123

Eagan 2 Hilltop Plaza 4168 - 4180 Pilot Knob Road, Eagan, MN 55123

Eagan 3 PDQ #213 4198 Pilot Knob Road, Eagan, MN 55123

Eden Prairie Central Bank Building 6640 Shady Oak Road, Eden Prairie, MN 55344

Excelsior Water Street Strip 10 Water Street & 324 - 332 Lake Street, MN 55331

Fargo Express Shopping Center 1431 - 1441 South University Avenue, Fargo, ND 58102

Faribault CSK Auto Store 1233 West Highway 60, Faribault, MN 55021

Forest Lake 1 Champion Auto Store #407 107 SW. 12th Street, Forest Lake, MN 55025

Forest Lake 2 West Lake Shopping Center 119 - 289 SW. 12th Street, Forest Lake, MN 55025

Glencoe Tom Thumb #246 415 Chandler Avenue North, Glencoe, MN 55336

Greenwood 1 T.F. James Company 21500 Highway 7, Excelsior, MN 55331

Greenwood 2 Excelsior Chiropractic Clinic 21450 Highway 7, Excelsior, MN 55331

Ham Lake Tom Thumb #185 16315 Highway 65, Ham Lake, MN 55303

Howard Lake Tom Thumb #222 1025 6th Street, Howard Lake, MN 55343

Inver Grove Hts. PDQ #212 5440 - 5472 Roberts Trail, Inver Grove Heights, MN 55077

Inver Grove Hts. Undeveloped Land Roberts Trail, Inver Grove Heights, MN 55077

Jamestown Jamestown Mall 3rd Street N.E. & 3rd Avenue, Jamestown, ND 58401

Kalispell Ernst Home Center 1441 Montana Highway 35, Kalispell, MT 59901

Kalispell Undeveloped Land Montana Highway 35, Kalispell, MT 59901

Ladysmith Pamida #282 500 West 9th Street, Ladysmith, WI 54848

Lakeland Tom Thumb #546 280 St. Croix Trail, Lakeland, MN 55043

Lakeville Lakeville Strip 17440 - 17450 Kenwood Trail, Lakeville, MN 55044

LOCATION BUILDING DESCRIPTION ADDRESS

Libby Undeveloped Land Highway 2, Libby, MT

Lindstrom Tom Thumb #178 100 West St. Croix Avenue, Lindstrom, MN 55055

Lino Lakes Tom Thumb #197 Strip 797 Lake Drive, Lino Lakes, MN 55014

Livingston Pamida 100 West Washington, Livingston, MT 59047

Long Prairie Tom Thumb # 303 904 1st Avenue NE, Long Prairie, MN 56347

Monticello Tom Thumb #583 110 Oakwood Drive, Monticello, MN 55362

Mora Tom Thumb Highway 23 & 65, Mora, MN 55362

Mound PDQ 292 5550 Three Points Blvd., Mound, MN 55364

Moundsview Interstate Brands 2701 Highway 10, Moundsview, MN 55112

Oakdale Tom Thumb #214 Strip 1025 - 1043 Hadley Drive, Oakdale, MN 55128

Paynesville Tom Thumb #244 28976 Collins Road, Paynesville, MN 55362

Pine City Evergreen Square 100 - 170 Evergreen Square, Pine City, MN 55063

Pine City Tom Thumb #248 1120 Hillside, Pine City, MN 55063

Prior Lake 1 PDQ Shopping Center 14161 - 14173 Commerce Ave., Prior Lake, MN 55372

Prior Lake 2 Undeveloped Land Commerce Ave., Prior Lake, MN 55372

Prior Lake 3 Shopping Center 14123 - 14129 Commerce Ave., Prior Lake, MN 55372

Ripley Shopping Center 309 - 319 South Washington, Ripley, TN 38063

River Falls Undeveloped Land SE Corner of STH 65 & Cemetary Road ( 830th Ave.)

Rochester CSK Auto Store 2001 South Broadway, Rochester, MN 55901

Sauk Rapids Tom Thumb Strip 1313 2nd Street North, Sauk Rapids, MN 55901

Schofield Schofield Plaza 5302 - 5317 Business Highway 51, Schofield, WI 54476

Shoreview Tom Thumb #195 5995 Hodgson Road, Shoreview, MN 55343

Saint Louis Park Dilly Lilly 4611 Excelsior Blvd., St. Louis Park, MN 55411

St. Paul Interstate Brands 1546 West 7th Street, St. Paul, MN 55102

Willmar Sam Goody 701 South First Street, Willmar, MN 56201

Winsted Tom Thumb #223 132 5th Street North, Winsted, MN 55395

Schedule 3.17(b)

Curbing was recently installed at the Company's Winsted, MN location. The formal assessment has not yet been received by the Company; however, it is estimated to approximate $2,000.00.

Schedule 3.17(c)

None

Schedule 3.17(d)

See mortgages against Company's properties set forth in Schedule 3.22.

Schedule 3.17(e)

None

Schedule 3.17(f)

None

Schedule 3.17(g)

Several of the Company's locations are leased to convenience stores that purchase, store and sell gasoline.

Schedule 3.17(h)

1.
The Central Bank Building, located at 6640 Shady Oak Road, Eden Prairie, MN 55344, has a re-occurring problem with leaky window seals. The Company has on several occasions made attempts to repair the leaks, however they appear to be an ongoing problem; see also Schedule 3.13(6)

2. In April of 2002, The Company entered into an Agreement for Purchase and Sale of Commercial Real Estate with the Economic Development Authority of the City of Northfield, for the purchase of its property located at 110 North Water Street, Northfield, MN. The sale was in lieu of condemnation that allows the Company to qualify for an IRS Code Section 1033 exchange; see also disclosures set forth under "Built-In-Gains Tax" at Schedule 3.9(a) and Schedule 3.13(6).

Schedule 3.17(i)

None

Schedule 3.17(j)

None

Schedule 3.17(k)

None

Schedule 3.17(l)

None

T. F. JAMES COMPANY

SCHEDULE 3.19

Books and Records; Bank Accounts

Checking Accounts: Authorized Signers

Central Bank, Eden Prairie, MN                                 Douglas M. James
Account #270082                                                      Thomas J. Legierski
                                                                                 Robert J. Martin

Central Bank, Eden Prairie, MN                                 Douglas M. James
Account #270504                                                      Thomas J. Legierski
                                                                                  Robert J. Martin

Marshall & Ilsley Bank, Minneapolis, MN                   Douglas M. James
Account #110-6414                                                   Thomas J. Legierski
                                                                                   Robert J. Martin

Lake Elmo Bank, Lake Elmo, MN                              Douglas M. James
Account #927623                                                       Thomas J. Legierski
                                                                                   Robert J. Martin

Safe Deposit Box

Central Bank, Eden Prairie, MN Douglas M. James
Thomas J. Legierski

Certificate of Deposit

Central Bank, Eden Prairie, MN Douglas M. James
Account #305471 Thomas J. Legierski

Escrow/Savings Account

Marshall & Ilsley Bank, Minneapolis, MN Heitman Financial*
Account #1915428

* The Company remits an additional monthly payment to Heitman Financial which, in turn, is remitted by Heitman Financial to pay the real estate taxes on the Chanhassen Phase 1 Development.

T. F. JAMES COMPANY

SCHEDULE 3.20

Employees

1. The following employee list does not include the 4 owners/officers/shareholders of the Company.

Employee Job Desc. Vacation* Sick/Leave*

Richard Kvanbeck Prop Mgr/ 4 weeks 6 days
Leasing Agent

Anthony Oxborough Prop Mgr/ 3 weeks 6 days
Leasing Agent

Robert Martin Payable/Rec./ 4 weeks 6 days
Insurance

Brian Rose Gen. Maint. 2 weeks 6 days

Tonia Sikorski Receptionist 2 weeks 6 days
Clerk

* The period of time indicated is a yearly amount. No accumulation of vacation or sick leave is permitted.

2. There are no written employment contracts or benefit plans.

T. F. JAMES COMPANY

SCHEDULE 3.21

Permits

None 75

T. F. JAMES COMPANY

SCHEDULE 3.22

Mortgages and Tenant Leases

Mortgage Location Due Date

Marshall & Ilsley Bank                       Kalispell, MT                                      12/31/02
Lake Elmo Bank                                 Lakeland, Centerville, MN                 10/10/03
The County Bank                                Forest Lake, MN                               10/17/03
Twin City Federal                               Excelsior, MN                                    11/1/03
Premier Bank                                      West St. Paul, MN                             1/14/04
Twin City Federal                               Pine City, MN                                     4/1/04
Twin City Federal                               Paynesville, MN                                  4/1/04
Twin City Federal                               Glencoe, MN                                      4/1/04
Twin City Federal                               East Bethel, MN                                 4/1/04
Prior Lake State Bank                         Ham Lake, Moundsview, MN           8/15/05
Teachers Insurance                            Chanhassen, MN                                8/31/05
Oakley National Bank                          Buffalo, MN                                      9/10/05
Marshall & Ilsley Bank                       Chanhassen #2, MN                           1/27/06
Wells Fargo Bank                               Inver Grove, MN (Land)                     6/1/06
Marshall & Ilsley Bank                       Lakeville, MN                                     11/1/06
Lake Country State Bank                    Long Prairie, MN                                9/1/07
Marshall & Ilsley Bank                       Jamestown, ND                                  4/5/08
First Security State Bank                     Lino Lakes, MN                                 4/16/08
Marshall & Ilsley Bank                       Livingston, MT                                   12/10/08
U.S. Bank                                          Inver Grove, MN                                2/20/09
Lutheran Brotherhood                          Forest Lake, MN                               5/1/09
Lutheran Brotherhood                          Forest Lake, MN                               5/1/09
Marshall & Ilsley Bank                       Greenwood, MN                                 5/22/09
Marshall & Ilsley Bank                       Greenwood #2, MN                            9/2/09
American Express                              Pine City, MN                                     1/1/10
Valley Bank                                       Kalispell, MT                                      8/10/10
US Bank                                            Burnsville, MN                                    1/1/11
The County Bank                                Oakdale, MN                                     8/1/11
American Express                              Ladysmith, WS                                    9/1/11
First Security State Bank                     Anoka, MN                                       3/10/12
                                                          Burnsville #2, MN
                                                          St. Louis Park, MN
                                                          Winsted, MN

Mortgage Location Due Date

                                                          Howard Lake, MN
                                                          Rochester, MN
                                                          Faribault, MN
U.S. Bank                                          Eden Prairie, MN                                5/20/14
Standard Mtge Investors, LLC           Fargo, ND                                          9/1/14
American Express                              Eagan, MN                                         9/1/15
                                                          Prior Lake, MN
                                                          Ripley, TN

See attached tenant summary by location.

T. F. JAMES COMPANY

SCHEDULE 3.23

Subsidiaries

1.

The Company owns 100% of the stock in Westlake Liquors, Inc., a Minnesota corporation. This is a retail off-sale establishment which leases space from the Company in the Forest Lake, Minnesota facility. For Tax purposes, this entity is a "disregarded entity."

2.

Jamestown Variety, Inc., a former wholly-owned subsidiary of the Company, was involuntarily dissolved and ceased to exist with the North Dakota Secretary of State's office on August 6, 2001, for failure to file its 2000 Annual Report.

T. F. JAMES COMPANY

SCHEDULE 3.24

Insurance

1.

Business Property/Casualty Insurance – T. F. James Company and/or Westlake Liquors, Inc. DBA Westlake Warehouse Liquors and/or Peak Properties Development, for the period September 1, 2002 to September 1, 2003. Insurance Carrier: Cincinnati Insurance Company. Policy Coverage: (i) Commercial Main Package, Policy #COP2314667; (ii) Commercial Package – Vacant Buildings, Policy #CPP0734709; (iii) Commercial Umbrella, Policy #CCC4479494; (iv) Commercial Automobile, Policy #CAP5450417; (v) Workers Compensation, Policy #WC1914512-01.

T. F. JAMES COMPANY

SCHEDULE 3.25

Brokers and Finders

1.

The Company is obligated to CB Richard Ellis and its former agent, Joseph Sullivan, for a finder's fee in the approximate amount of $138,000, in connection with the transaction contemplated by the Agreement.

T. F. JAMES COMPANY

SCHEDULE 3.26

Relationship with Related Persons

1.

The Company is indebted to Mr. T. F. James (the father of each of the Shareholders other than Thomas Legierski) for an annuity which has a principal amount of approximately $600,000; see also Schedule 3.10.

2.

The Company was indebted to Charles Wm. James as set forth in Schedules 3.31(14) and 3.31(1).

3.

See Guarantees by Shareholders on Debts of the Company set forth on Schedules 3.11 and 5.14 and Guarantees by the Company on behalf of the Shareholders set forth on Schedule 3.11.

4. Stock Purchase Agreement by and between Phillip M. James, Thomas M. James, Douglas M. James, Judith James Scherer, Robert R. James, Charles W. James and Thomas J. Legierski and James Refrigeration Company, dated effective July 15, 1979; see also Schedule 3.2(1).

T. F. JAMES COMPANY

SCHEDULE 3.27

Hazardous Materials

None 82

T. F. JAMES COMPANY

SCHEDULE 3.28

Other Environmental Matters

Schedule of Underground Storage Tanks Owned by Tenants

LOCATION TENANT

Andover, MN

Tom Thumb

Bethel, MN

Tom Thumb

Buffalo, MN

Tom Thumb

Blaine, MN

Tom Thumb

Burnsville #1, MN
(Recently removed)

PDQ

Centerville, MN

Tom Thumb

Eagan, MN

PDQ

Glencoe, MN

Tom Thumb

Ham Lake, MN

Tom Thumb

Howard Lake, MN

Tom Thumb

Inver Grove, MN

PDQ

Lakeland, MN

Tom Thumb

Lino Lakes, MN

Tom Thumb

Lindstrom, MN

Tom Thumb

Monticello, MN

Tom Thumb

Mora, MN

Tom Thumb

Mound, MN

PDQ

Oakdale, MN

Tom Thumb

Paynesville, MN

Tom Thumb

Pine City, MN

Tom Thumb

Prior Lake, MN

PDQ

Shoreview, MN

Tom Thumb

Winsted, MN

Tom Thumb

Other Matters

The Inver Grove, Minnesota location has a tenant that performs on-site dry cleaning. The Eagan, Minnesota and Burnsville, Minnesota locations have tenants that provide dry cleaning services off-site; however, on-site dry cleaning services were previously performed at these locations.

T. F. JAMES COMPANY

SCHEDULE 3.29

Debt Instruments

Other than the mortgages which are set forth on Schedule 3.22, the Company has outstanding Debt Instruments with and with respect to the following:

Central Bank, Eden Prairie

Line of Credit

Marshall & Ilsley Bank

Line of Credit

*GMAC

Auto Loan - 2002 Bravada

*Chrysler Financial

Auto Loan - 2001 Jeep Grand Cherokee

*see also Schedule 3.16

[**Note to IRET – One or more of the currently owned vehicles may be purchased by one or more of the Shareholders prior to the closing. We may need to add a covenant in the Agreement to reflect this]

T. F. JAMES COMPANY

SCHEDULE 3.31

Shareholder Loans

1.

The Company was indebted to Charles Wm. James, a Shareholder and an employee of the Company, in the amount of $100,000 for land purchased by the Company in Kalispell, Montana. This debt was paid in full in January, 2003; see also Schedules 3.13(14) and 3.26(2).

T. F. JAMES COMPANY

SCHEDULE 3.33

Absence of Certain Business Practices

None 86

T. F. JAMES COMPANY

SCHEDULE 3.34

Trade Regulation

None 87

T. F. JAMES COMPANY

SCHEDULE 3.35

Representations Regarding the Shareholders

Each of the Shareholders' right, title and interest in and to the Company Common Stock, other than Thomas J. Legierski, is Encumbered by a Federal Tax Lien which was issued by the IRS on March 29, 2000, and filed in the office of the Minnesota Secretary of State on April 30, 2001. The amount of the IRS Tax Lien as stated on the April 30, 2001 filing with the Minnesota Secretary of State is $350,660.15. As of January 31, 2003, the Federal Tax Lien is estimated to approximate $459,325, including interest accrued from June 29, 1999 through January 31, 2003 in the amount of 108,657.00; see also Schedule 3.5.

T. F. JAMES COMPANY

SCHEDULE 5.5

Restrictions on New Contracts

None 89

T. F. JAMES COMPANY

SCHEDULE 5.14

Shareholder Guarantees

Each of the Company Shareholders have personally guaranteed the following Indebtedness of the Company; see also Schedules 3.11 and 3.26(3):

Indebtedness Owed To:	Description of Purpose/Location

Central Bank	Line of Credit
Marshall & Ilsley Bank	Line of Credit
Marshall & Ilsley Bank	Mortgage Loan, Schofield, WI
Marshall & Ilsley Bank	Mortgage Loan, Kalispell, MT
Twin City Federal	Mortgage Loan, Excelsior, MN
Premier Bank	Mortgage Loan, St. Paul, MN
Oakley National Bank	Mortgage Loan, Buffalo, MN
Marshall & Ilsley Bank	Mortgage Loan, Chanhassen #2, MN
Wells Fargo Bank	Mortgage Loan, Inver Grove Land, MN
Marshall & Ilsley Bank	Mortgage Loan, Lakeville, MN
Lake Country Bank	Mortgage Loan, Long Prairie, MN
Marshall & Ilsley Bank	Jamestown, ND
Marshall & Ilsley Bank	Livingston, MT
Lutheran Brotherhood	Forest Lake, MN
Lutheran Brotherhood	Forest Lake, MN
Marshall & Ilsley Bank	Greenwood Office, MN
Marshall & Ilsley Bank	Greenwood, MN
American Express Financial	Pine City, MN
Valley Bank	Kalispell, MT
County Bank	Oakdale, MN
American Express Financial	Ladysmith, WI
U.S. Bank	Eden Prairie, MN
American Express Financial	Eagan, MN; Prior Lake, MN; Ripley, TN

IRS LIEN ON COMMON STOCK
SHAREHOLDER	AMOUNT DUE AS OF JANUARY 31, 2003
Douglas M. James	$91,865
Charles Wm. James	$91,865
Judith J. Scherer	$91,865
Robert R. James	$91,865
Thomas M. James	$91,865
TOTAL	$459,325

MINNESOTA SECRETARY OF STATE T. F. JAMES COMPANY
Filing Number	Date of Filing	Type of UCC	Secured Party	Collateral Code
751400	6/5/84	UCC-1	American National Bank and Trust Company	See Exhibit A attached to UCC-1 Financing Statement for property covered
1225418	3/21/89	UCC-3	American National Bank and Trust Company	Continuation to Original Financing Statement #751400
1562959	2/10/93	UCC-3	American National Bank and Trust Company	Amendment to Original Financing Statement #751400 – Debtor Name Change from James Refrigeration Company to T F James Company
1659068	3/18/94	UCC-3	American National Bank and Trust Company	Continuation to Original Financing Statement #751400
2122078	4/13/99	UCC-3	American National Bank and Trust Company	Amendment to Original Financing Statement #751400 – Secured Party Name Change to Firstar Bank Minnesota, N.A.
2122079	4/13/99	UCC-3	Firstar Bank Minnesota, N.A.	Continuation to Original Financing Statement #751400
2002439476	6/17/02	UCC-3	Firstar Bank Minnesota, N.A.	Amendment to Original Financing Statement #751400 – Debtor Address Change
827116	7/12/85	UCC-1	First Bank (National Association) - Lake	All bldg. materials, EQ, FX, FU to property located at Lot 1, Block 1, James Plaza, Dakota County; See Exhibit A attached to UCC-1 Financing Statement for additional property covered

MINNESOTA SECRETARY OF STATE T. F. JAMES COMPANY
Filing Number	Date of Filing	Type of UCC	Secured Party	Collateral Code
1333192	5/29/90	UCC-3	First Bank (National Association) - Lake	Amendment to Original Financing Statement #827116 – Secured Party Name Change to First Bank National Association
1333193	5/29/90	UCC-3	Firstar Bank National Association	Continuation to Original Financing Statement #827116
1743763	3/9/95	UCC-3	Firstar Bank National Association	Continuation to Original Financing Statement #827116
2215865	4/3/00	UCC-3	Firstar Bank National Association	Continuation to Original Financing Statement #827116
2215866	4/3/00	UCC-3	Firstar Bank National Association	Amendment to Original Financing Statement #827116 – Secured Party Name Change to U.S. Bank National Association
971709	6/18/87	UCC-1	First Bank (National Association) - Lake	Lapsed 6/18/02
1487143	3/18/92	UCC-3	First Bank (National Association) - Lake	Continuation to Original Financing Statement #971709Lapsed 6/18/02
1922898	3/10/97	UCC-3	First Bank (National Association) - Lake	Continuation to Original Financing Statement #971709 Lapsed 6/18/02
1234350	4/21/89	UCC-1	Lutheran Brotherhood	Blanket Filing (see Exhibit A) on real property described in Exhibit B attached to UCC-1 Financing Statement

MINNESOTA SECRETARY OF STATE T. F. JAMES COMPANY
Filing Number	Date of Filing	Type of UCC	Secured Party	Collateral Code
1645897	1/24/94	UCC-3	Lutheran Brotherhood	Continuation to Original Financing Statement #1234350
2086333	11/25/98	UCC-3	Lutheran Brotherhood	Continuation to Original Financing Statement #1234350
1293660	12/21/89	UCC-1	IDS Life Insurance Company	Blanket Filing (see Exhibit A) on real property described in Exhibit B attached to UCC-1 Financing Statement
1718462	11/28/94	UCC-3	IDS Life Insurance Company	Continuation to Original Financing Statement #1293660
2173041	10/26/99	UCC-3	IDS Life Insurance Company	Continuation to Original Financing Statement #1293660
1326308	5/3/90	UCC-1	TCF Bank Savings fsb	Blanket Filing; See Exhibit A attached to UCC-1 Financing Statement for property covered
1725859	12/27/94	UCC-3	TCF Bank Savings fsb	Continuation to Original Financing Statement #1326308
2191868	1/7/00	UCC-3	TCF Bank Savings fsb	Continuation to Original Financing Statement #1326308
1354727	8/30/90	UCC-1	IDS Life Insurance Company	Blanket Filing (see Exhibit A) on real property described in Exhibit B attached to UCC-1 Financing Statement
1760697	5/11/95	UCC-3	IDS Life Insurance Company	Continuation to Original Financing Statement #1354727
2232216	5/30/00	UCC-3	IDS Life Insurance Company	Continuation to Original Financing Statement #1354727

MINNESOTA SECRETARY OF STATE T. F. JAMES COMPANY
Filing Number	Date of Filing	Type of UCC	Secured Party	Collateral Code
1354729	8/30/90	UCC-1	IDS Life Insurance Company	Blanket Filing (see Exhibit A) on real property described in Exhibit B attached to UCC-1 Financing Statement
1760698	5/11/95	UCC-3	IDS Life Insurance Company	Continuation to Original Financing Statement #1354729
2232215	5/30/00	UCC-3	IDS Life Insurance Company	Continuation to Original Financing Statement #1354729
1411061	4/26/91	UCC-1	First Bank National Association	Blanket Filing; See Exhibit A attached to UCC-1 Financing Statement for property covered
1829432	3/4/96	UCC-3	First Bank National Association	Continuation to Original Financing Statement #1411061
2271305	10/31/00	UCC-3	First Bank National Association	Continuation to Original Financing Statement #1411061
1714944	11/7/94	UCC-1	National City Bank of Minneapolis	Blanket Filing described in Exhibit B in or on the real property described in Exhibit A to Original UCC-1 Financing Statement
2172740	10/25/99	UCC-3	National City Bank of Minneapolis	Continuation to Original Financing Statement #1714944
1853666	6/3/96	UCC-1	Norwest Bank Minnesota, National Association	Blanket Filing in or on the real property described in Exhibit A to Original UCC-1 Financing Statement
2301096	2/21/01	UCC-3	Norwest Bank Minnesota, National Association	Continuation to Original Financing Statement #1853666

Name of Debtor:	Jurisdiction
Jamestown Variety, Inc.	North Dakota Secretary of State Stutsman County
T. F. James Company	Minnesota Secretary of State Washington, Pine, Dakota, Scott, Benton, LeSueur and Hennepin Countie s
T. F. James Company	Iowa Secretary of State
Westlake Liquors, Inc.	Minnesota Secretary of State Hennepin County

NAME OF DEBTOR:	Jamestown Variety, Inc.
JURISDICTIONS:	North Dakota Secretary of State Stutsman County
EFFECTIVE DATE OF SEARCH:	August 1, 2002 – UCC/Federal/State Tax Lien July 18, 2002 – Bankruptcy August 5, 2002 – Judgment

Lender	Purpose/Security	Original Amount
Central Bank	Line of Credit	$750,000.00
Marshall & Ilsley Bank	Unsecured Note	300,000.00
Marshall & Ilsley Bank	Schofield, WI	271,153.90
Marshall & Ilsley Bank	Kalispell, MT	2,200,000.00
Twin City Federal	Excelsior, MN	205,239.68
Premier Bank	St. Paul, MN	100,000.00
Oakley National Bank	Buffalo, MN	140,701.00
Marshall & Ilsley Bank	Chanhassen #2, MN	3,100,000.00
Wells Fargo Bank	Inver Grove, MN (Land)	250,000.00
Marshall & Ilsley Bank	Lakeville, MN	225,000.00
Lake Country Bank	Long Prairie, MN	470,692.73
Marshall & Ilsley Bank	Jamestown, ND	1,206,000.00
Marshall & Ilsley Bank	Livingston, MT	900,000.00
Lutheran Brotherhood	Forest Lake, MN	3,400,000.00
Lutheran Brotherhood	Forest Lake, MN	760,000.00
Marshall & Ilsley Bank	Greenwood, MN	750,000.00
Marshall & Ilsley Bank	Greenwood, MN	250,000.00
American Express Financial	Pine City, MN	2,300,000.00
Valley Bank	Kalispell, MT (Land)	190,000.00
County Bank	Oakdale, MN	200,000.00
American Express Financial	Ladysmith, WI	1,200,000.00
U.S. Bank	Eden Prairie, MN	3,600,000.00
American Express Financial	Eagan, MN; Prior Lake, MN; Ripley, TN	3,350,000.00

Buildings	5-40 years
Rental Equipment	7-8 years
Furniture and Fixtures	2-7 years
Transportation Equipment	3-5 years

		2002		2001
Cash Surrender Value	$	527,057	$	498,531
Policy Loans		434,730		411,526

Net Cash Value	$	92,327	$	87,005

		2002		2001
Real Estate Mortgages payable in monthly installments with 6.5% to 10.5% interest. Mortgages are secured by real estate.	$	31,846,317	$	32,783,621

Notes payable in monthly installments with 1.9% to 10% interest. The notes are secured by transportation equipment.		48,717		63,368

Total	$	31,895,034	$	32,846,989

Current Payable:
Federal	$	(1,044	)	$	(41,880	)	$	381,099
State		46,668			4,499			126,371
Total		45,624			(37,381	)		507,470

Deferred:
Federal		–			(169,742	)		167,075
State		–			(177,588	)		32,764
		–			(347,330	)		199,839

Total Income Tax Expense (Benefit)	$	45,624		$	(384,711	)	$	707,309

2003	$	5,932,000
2004		5,555,000
2005		5,069,000
2006		4,750,000
2007		4,354,000
Later Years		13,964,000

Total Minimum Rental Revenue	$	39,624,000

Cash Payments For:
Interest	$	2,719,173	$	1,189,134	$	2,665,447
Income Taxes		104,259		400,250		203,504

1.	Since June 30, 2002, the Company has expended sums for architectural and other services to undertake the remodeling of the Company's Lakeville, Minnesota Strip Center. When completed, this project is estimated to require in excess of $750,000. This remodeling project is anticipated to begin in the winter of 2002-2003.
2.	Any mortgages on properties that were due for renewal after June 30, 2002 have been renewed. This is in the normal course of business.
3.	The Company may apply for and complete a loan transaction in the approximate amount of $3,200,000.00 with the Bremer Bank (or a similar lending institution) prior to or upon the Closing.
4.	The Company made Shareholder distributions in 2002 and 2003 in the approximate aggregate amount of $621,301.00. An additional $3.2 million will be paid in January, 2003; see attached 2002 and 2003 Payment to Stockholders.
5.	See Litigation disclosures set forth on Schedule 3.7.
6.	See also Schedule 3.17(h)(1 and 2)
7.	See disclosures under "Built-In-Gains Tax" set forth in Schedule 3.9(a)
8.	Bonus Accruals for payment to the employees of the Company as of the closing date will approximate $450,000. Payment on this Accrual must be made within 2½ months after the Closing Date.
9.	The Company sold the New York Life Insurance Company Policy #25 448 610 and the CUNA Mutual Life Insurance Company Policy #00758065, both in the name of Thomas F. James, to the James Family Properties in January 2003; see also disclosures set forth in Schedule 3.10(1 and 2) at "Life Insurance Policies".
10.	In January 2003, the Company transferred the Term Life Policies on the Company shareholders to each of the shareholders individually; see also Schedule 3.10 at "Term Life Policies on Present Shareholders".
11.	On January 27, 2003, the Company paid-in-full the individual annuities owed to each of Elaine Engels and James B. O'Rourke; see also Schedule 3.10 at "Annuities/Pensions to Former Employees".

8.	TFJamesco.com – domain name
9.	Various software such as real estate management software and GL software are owned by the Company and are under no restrictions or claims.
10.	The Company uses various "off-the-shelf" software in the conduct of its business for which no separate list has been prepared.

LOCATION	BUILDING DESCRIPTION	ADDRESS
Andover	Tom Thumb # 255	15825 7th Avenue, Andover, MN 55303
Anoka	River Road Shopping Ctr.	504 - 516 East River Road, Anoka, MN 55303
Blaine	Tom Thumb #180	601 - 641 Main Street NE, Blaine, MN 55433
Burnsville 1	PDQ #210 Strip	13700 - 13720 County Road 11, Burnsville, MN 55337
Burnsville 2	Phase 2 Strip	13600 - 13614 County Road 11, Burnsville, MN 55337
Buffalo	Tom Thumb #218	401 - 409 East Highway 55, Buffalo, MN 55313
Centerville	Tom Thumb #295	1801 Main Street, Centerville, MN 55038
Centerville	Undeveloped Land	Next door to 1801 Main Street, Centerville, MN 55038
Chanhassen 1	Byerlys	800 West 78th Street, Chanhassen, MN 55317
Chanhassen 2	Retail Center	816 - 860 West 78th Street, Chanhassen, MN 55317
Chanhassen 3	Kinko's Copy Center	880 West 78th Street, Chanhassen, MN 55317
Chanhassen 4	TCF Bank	900 West 78th Street, Chanhassen, MN 55317
Chanhassen 5	Office Max	960 West 78th Street, Chanhassen, MN 55317
Chanhassen 6	Retail Center Phase 2	910 - 950 West 78th Street, Chanhassen, MN 55317
East Bethel	Tom Thumb #243	4825 East Viking Road, East Bethel, MN 55092
Eagan 1	Hilltop Plaza	4160 - 4166 Pilot Knob Road, Eagan, MN 55123
Eagan 2	Hilltop Plaza	4168 - 4180 Pilot Knob Road, Eagan, MN 55123
Eagan 3	PDQ #213	4198 Pilot Knob Road, Eagan, MN 55123
Eden Prairie	Central Bank Building	6640 Shady Oak Road, Eden Prairie, MN 55344
Excelsior	Water Street Strip	10 Water Street & 324 - 332 Lake Street, MN 55331
Fargo	Express Shopping Center	1431 - 1441 South University Avenue, Fargo, ND 58102
Faribault	CSK Auto Store	1233 West Highway 60, Faribault, MN 55021
Forest Lake 1	Champion Auto Store #407	107 SW. 12th Street, Forest Lake, MN 55025
Forest Lake 2	West Lake Shopping Center	119 - 289 SW. 12th Street, Forest Lake, MN 55025
Glencoe	Tom Thumb #246	415 Chandler Avenue North, Glencoe, MN 55336
Greenwood 1	T.F. James Company	21500 Highway 7, Excelsior, MN 55331
Greenwood 2	Excelsior Chiropractic Clinic	21450 Highway 7, Excelsior, MN 55331
Ham Lake	Tom Thumb #185	16315 Highway 65, Ham Lake, MN 55303
Howard Lake	Tom Thumb #222	1025 6th Street, Howard Lake, MN 55343
Inver Grove Hts.	PDQ #212	5440 - 5472 Roberts Trail, Inver Grove Heights, MN 55077
Inver Grove Hts.	Undeveloped Land	Roberts Trail, Inver Grove Heights, MN 55077
Jamestown	Jamestown Mall	3rd Street N.E. & 3rd Avenue, Jamestown, ND 58401
Kalispell	Ernst Home Center	1441 Montana Highway 35, Kalispell, MT 59901
Kalispell	Undeveloped Land	Montana Highway 35, Kalispell, MT 59901
Ladysmith	Pamida #282	500 West 9th Street, Ladysmith, WI 54848
Lakeland	Tom Thumb #546	280 St. Croix Trail, Lakeland, MN 55043
Lakeville	Lakeville Strip	17440 - 17450 Kenwood Trail, Lakeville, MN 55044

1.	The Company owns 100% of the stock in Westlake Liquors, Inc., a Minnesota corporation. This is a retail off-sale establishment which leases space from the Company in the Forest Lake, Minnesota facility. For Tax purposes, this entity is a "disregarded entity."
2.	Jamestown Variety, Inc., a former wholly-owned subsidiary of the Company, was involuntarily dissolved and ceased to exist with the North Dakota Secretary of State's office on August 6, 2001, for failure to file its 2000 Annual Report.

1.	The Company is indebted to Mr. T. F. James (the father of each of the Shareholders other than Thomas Legierski) for an annuity which has a principal amount of approximately $600,000; see also Schedule 3.10.
2.	The Company was indebted to Charles Wm. James as set forth in Schedules 3.31(14) and 3.31(1).
3.	See Guarantees by Shareholders on Debts of the Company set forth on Schedules 3.11 and 5.14 and Guarantees by the Company on behalf of the Shareholders set forth on Schedule 3.11.
4.	Stock Purchase Agreement by and between Phillip M. James, Thomas M. James, Douglas M. James, Judith James Scherer, Robert R. James, Charles W. James and Thomas J. Legierski and James Refrigeration Company, dated effective July 15, 1979; see also Schedule 3.2(1).

LOCATION	TENANT
Andover, MN	Tom Thumb
Bethel, MN	Tom Thumb
Buffalo, MN	Tom Thumb
Blaine, MN	Tom Thumb
Burnsville #1, MN (Recently removed)	PDQ
Centerville, MN	Tom Thumb
Eagan, MN	PDQ
Glencoe, MN	Tom Thumb
Ham Lake, MN	Tom Thumb
Howard Lake, MN	Tom Thumb
Inver Grove, MN	PDQ
Lakeland, MN	Tom Thumb
Lino Lakes, MN	Tom Thumb
Lindstrom, MN	Tom Thumb
Monticello, MN	Tom Thumb
Mora, MN	Tom Thumb
Mound, MN	PDQ
Oakdale, MN	Tom Thumb
Paynesville, MN	Tom Thumb
Pine City, MN	Tom Thumb
Prior Lake, MN	PDQ
Shoreview, MN	Tom Thumb
Winsted, MN	Tom Thumb

Central Bank, Eden Prairie	Line of Credit
Marshall & Ilsley Bank	Line of Credit
*GMAC	Auto Loan - 2002 Bravada
*Chrysler Financial	Auto Loan - 2001 Jeep Grand Cherokee