R. Paul Kropp - Page 4

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          Despite her intensifying illness, in 1984, Doris Kropp organized              
          a corporation to hold certain tracts of the undeveloped land and              
          gave stock in that corporation (corporate stock) equally to Paul              
          and Mrs. Harte and their immediate families.                                  
               In 1985 and 1986, Paul rendered some services to Doris Kropp             
          with regard to her financial affairs.  In 1986, Paul arranged the             
          sale of one of the tracts of undeveloped land, but the buyer                  
          decided not to purchase the property.  In 1991, Doris Kropp sold              
          that remaining tract of undeveloped land.  Paul was not involved              
          in the sale of that property.  Instead, Mrs. Harte’s husband met              
          with a real estate agent and the buyer for Doris Kropp.  Around               
          this time, Doris Kropp also sold one of the health/sports                     
          facilities to Paul and the other to Mrs. Harte.  In 1994, Paul                
          worked extensively, on a volunteer basis, with children.  He                  
          managed two soccer teams and chaired the Spokane Junior Soccer                
               From 1985 to 1994, Paul continued to withdraw funds from the             
          joint account, including $81,000 in 1994.  Paul and Lorna                     
          continued to use the withdrawn funds for their household’s living             
          and medical expenses and in addition used the withdrawn funds for             
          the education of their children at a private school.  It is                   
          unclear from the record how Paul treated the withdrawn funds on               
          his 1985 through 1993 tax returns or whether he filed tax returns             
          at all for those years.  Paul did not file a tax return for                   

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