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ValleyCrest Holding Co. and Subsidiaries Notes to Consolidated Financial Statements April 30, 2008 1. Description of Business ValleyCrest Holding Co. and Subsidiaries (the Company) is a Delaware corporation and was incorporated on August 16, 2006, pursuant to an Agreement and Plan of Merger between the Company and E.I.I. Holding Co. The Company, comprised of former shareholders of E.I.I. Holding Co. and a private equity investment firm, was formed to acquire the stock of E.I.I. Holding Co., which it did through a merger on October 4, 2006 (effective October 1, 2006, inception). The Company is an independently owned landscape horticultural services company located in the United States and operates under five main business divisions. The Landscape Division builds landscape projects and operates its business under the name of ValleyCrest Landscape Development, Inc. The Maintenance Division performs complete landscape maintenance services and operates its business under the name of ValleyCrest Landscape Maintenance, Inc. U.S. Lawns, Inc. sells landscape maintenance franchises. The Nursery Division grows, preserves, and sells trees under its nursery business and operates its business under the name of Valley Crest Tree Co. The Golf Division, which maintains golf courses, operates its business under the name of ValleyCrest Golf Course Maintenance, Inc. 2. Business Combinations In October 2006, ValleyCrest Holding Co. acquired 100% of the outstanding stock of E.I.I. Holding Co. The acquisition cost was $545 million in cash plus a working capital adjustment of $31.7 million, as defined in the Agreement and Plan of Merger. A portion of the acquisition was funded through a $285 million secured seven -year term loan which carries an interest rate of LIBOR plus 200 basis points. The total cost of the transaction has been allocated to the tangible assets acquired and the liabilities assumed based upon their respective fair values in accordance with Financial Accounting Standards Board (FASB) Statement No. 141, Business Combinations, none of which is deductible for tax purposes. Goodwill and other intangibles recorded in connection with the acquisition totaled $320.2 million and $161.9 million, respectively. Of the $161.9 million of acquired intangible assets, $87.7 million was assigned to registered trademarks, which were determined to have indefinite useful lives and therefore are not amortized. Aggregate depreciation and amortization expense associated with the above purchase price allocation recorded in fiscal 2008 was $19.5 million. The expected amortization expense for the next succeeding five fiscal years is as follows: 2009 — $6.4 million; 2010 — $6.4 million; 2011 — $6.4 million; 2012 — $6.4 million; and 2013 — $6.4 million. -�((J ValleyCrest Landscap; Maint. 16400 NW 127th Ave. Miami, FL 33018 -1051