SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] Annual report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 (Fee Required)
For the fiscal year ended June 30, 1997 or
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (No Fee Required)
For the transition period from _____ to_____.
Commission File Number 0-1937
OAKRIDGE HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)
MINNESOTA 41-0843268
(State of Incorporation) (I.R.S. Employer Identification No.)
4810 120TH STREET WEST, APPLE VALLEY, MINNESOTA 55124
(Address of Principal Executive Offices)
(612) 686-5495
(Issuer's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.10 PER SHARE
(Title of Class)
Check whether the issuer (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the past 12 months (or for such shorter period
that the registrant was required to file such reports) and (2)
has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B is not contained in this
form, and no disclosure will be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to the Form 10-KSB. [X]
The issuer's revenues for its most recent fiscal year were
$2,585,443.
The aggregate market value of voting stock held by non-affiliates
on September 23, 1997, was approximately $1,043,643 based on the
average of the bid and ask price.
The number of shares outstanding of Registrant's only class of
common equity on June 30, 1997, was 1,309,670.
No documents are incorporated by reference into this form.
Transitional small business disclosure format. Yes [ ] No [X]
PART I
ITEM 1: BUSINESS
Oakridge Holdings, Inc., the registrant (the "Company") is a
Minnesota corporation organized on March 6, 1961. It is
primarily engaged in the operation of two cemeteries in Cook
County, Illinois. The Company is involved in real estate
holdings in Mohave County, Arizona. During fiscal 1995, the
Company did not change its form of organization or mode of
conducting business, except for: (1) acquisition of 10 waterfront
lots on Colorado River in Mohave County, Arizona, with the option
to purchase 31 additional lots, (2) acquisition of an option to
develop a 18 hole championship golf course in Mohave County,
Arizona, which the company did not exercise November, 1995, (3)
retirement of 752,745 shares of common stock, and (4) a
settlement of $250,000 to Aztar Casualty receiver in settlement
of litigation.
CURRENT OPERATIONS
Through two wholly owned subsidiaries, Oakridge Cemetery
(Hillside), Inc. and Glen Oak Cemetery the Company operates two
adjacent cemeteries near Hillside, Illinois, used for the
internment of human remains. The cemetery operations of the
Company are discussed on a consolidated basis. The Company makes
no functional distinction between the two cemeteries, except
where noted.
The combined cemeteries have 176.7 total acres of which 12.8 are
used for interior roads and other improvements leaving 163.9 net
acres with 137,000 burial plots, of which 39,068 remain in
inventory. The cemeteries have two mausoleums with 975 niches
and 3,190 crypts of which 152 niches and 359 crypts remain in
inventory. The Company also holds deeds to 188 unsold crypts
located in Forest Home Cemetery in Forest Park, Illinois. Cook
and DuPage Counties in Illinois serve as the principal market for
the Company's services.
The Company estimates that it has an inventory of cemetery and
mausoleum spaces representing between a 26 to 35 year supply,
based on the maintenance of current sales levels. This inventory
is considered adequate, and the Company is presently developing a
plan for adding more niches and crypts in the future.
SUMMARY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
FISCAL YEARS ENDED JUNE 30
1997 1996 1995
__________ __________ __________
<S> <C> <C> <C>
Revenues:
Cemetery $2,585,443 $2,614,973 $2,584,565
Other 0 0 0
---------- ---------- ----------
Total $2,585,443 $2,614,973 $2,584,565
========== ========== ==========
</TABLE>
Operating Profit (Loss) from Operations Before Other Income
(Expense), Income Taxes and Extraordinary Items:
<TABLE>
<S> <C> <C> <C>
Cemetery $384,014 $446,940 $416,459
Environmental Costs 0 (33,258) (60,009)
Interest (86,338) (119,641) (63,523)
Other Expense (244) (49,546) 2,222
-------- -------- --------
Total $297,432 $244,495 $295,149
======== ======== ========
</TABLE>
GOVERNMENTAL REGULATION
The Company holds all governmental licenses necessary to carry on
its cemetery business and all such licenses are current.
The Company is required to place a portion of all sales proceeds
of cemetery lots, niches, and crypts in a trust fund for the
perpetual care of the cemeteries. The Company is required by
Illinois law to place 15% of the revenues from the sale of grave
spaces and 10% of revenues from the sale of crypt spaces into a
perpetual care fund. Earnings from these funds are recognized in
current cemetery revenues and are intended to defray cemetery
maintenance costs. The Company's perpetual care funds balance as
of June 30, 1997, was approximately $3,850,000.
The Company has a pre-need trust account for the delivery of
vaults and internment services. The market value of the trust as
of June 30, 1997 was approximately $477,000. The trust is
administered by Access Financial Group, Inc., through a master
trust with the Illinois Cemetery Association.
COMPETITION
The Company's cemetery business competes in Cook and DuPage
Counties in Illinois. Competitive factors in the cemetery
business are primarily predicated on location, convenience,
service, and heritage. Decisions made by customers are only
minimally influenced, it at all, by pricing.
OTHER BUSINESS INFLUENCES
The Company's cemetery business does not exercise seasonal
fluctuations, nor is it dependent upon any customer or group of
customers, the loss of which would have a material adverse effect
on its business, and discussion of backlog is not material to any
understanding of Company's business.
MARKETING
Sales are made to customers utilizing the facilities primarily on
an at-need basis, i.e., on the occurrence of a death in the
family when the products and services and interment space are
sold to the relatives of the deceased. Marketing, per se, takes
the form of satisfied customers based on superior location and
services rendered, and resultant word-of-mouth recommendation.
EMPLOYEES
As of June 30, 1997, the Company has 20 full time and 8 part time
or seasonal employees. The Company considers its labor relations
to be good.
ENVIRONMENTAL
Subsequent to fiscal year 1994, the Company commissioned an
engineering study of its property for the purpose of determining
the full extent of possible soil contamination. Five underground
fuel tanks were found to require removal and the adjoining soil
to undergo remediation.
During 1997, the Company expensed $-0- for current or future
expenditures and a total of approximately $292,000 has been spent
in its clean-up efforts. Furthermore, the Company was notified
by the Illinois Environmental Protection Agency that the clean-up
plan may not be in full compliance with EPA guidelines. The
Company has responded to the Illinois Environmental Protection
Agency with a work plan that calls for additional costs of
approximately $28,500 with the possibility of additional costs.
The Company is awaiting a response on the work plan from the
Illinois Environmental Protection Agency. Additional costs
beyond the $28,500 accrued for at June 30, 1997 may be incurred,
however, management cannot reasonably estimate those costs. In
addition, the Company may not file for reimbursement from the
Leaking Underground Storage Tank Fund until the plan has EPA
approval. Accordingly, the Company has made no provision for
reimbursement.
REAL ESTATE DEVELOPMENT
Mohave County, Arizona Golf Course Rights
On December 5, 1994, the registrant acquired from Mohave Shores
Development, Inc., in the land leased from the Fort Mojave Tribal
Corporation, the right to negotiate with the Tribal Corporation
for the development of a golf course, reception of the proceeds
of up to $6,000,000 of bonds when sponsored by the Tribal
Corporation, allocation of 1,500 acre feet of water rights for
use in connection with the golf course, an option to develop
either a 200 unit lodge or 200 dwelling unit lots adjacent to
golf course, and an option to the commercial site proposed under
the master lease. The Company paid Mohave Shores Development,
Inc. $50,000 cash and 425,000 shares of the Company s common
stock for these rights to negotiate. The shares were issued into escrow
pending the execution of the golf course lease by the Tribal
Corporation, the delivery of the bond proceeds and the execution
of the water rights agreement. The rights of Mohave Shares
Development, Inc. to the cash and the Company common stock were
terminated on November 30, 1995, the 425,000 shares of common
stock was returned, and the $50,000 was written off as
uncollectible.
Mohave County, Arizona Water Front Lots
On December 27, 1994, the Company acquired from Mohave Shores
Development, Inc. the right to a 50 year sublease for the land
leased from the Fort Mojave Tribal Corporation for 10 residential
dwelling units adjacent to the Colorado River and an option for
an additional 31 residential dwelling units in that leased land.
The Company paid Mohave Shores Development, Inc. $250,000 for
these rights and options. The Company, at the present time, plans
to hold the property and sell the lots to builders or home
buyers. Additional expenditures will be immaterial.
ITEM 2: PROPERTIES.
The Company's principal executive offices are located at 4810
120th Street West, Apple Valley, Minnesota, and are leased at no
cost. The Company moved its offices to this address on August
30, 1996, from Minneapolis, Minnesota where the offices were
located since January 1993.
As of June 30, 1997, the principal properties of the Company are
the cemeteries in Hillside, Illinois. The cemetery operations
are discussed in Business.
The cemeteries are subject to a mortgage in the principal amount
of $685,190. See Financial Statements, beginning on page F-1 for
payment details.
ITEM 3: LEGAL PROCEEDINGS
None
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5: MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Trading in the Company's common stock is in the over-the-counter
market, primarily through listings in the National Quotation
Bureau "pink sheets", although the market in the stock is still
not well-established. The table below sets forth the range of
bid and ask prices for the two most recent fiscal years. Prices
used in the table were reported to the Company by National
Quotation Bureau, Inc. These quotations represent inter-dealer
prices, without retail mark-up, mark-down or commission, and may
not necessarily represent actual transactions.
<TABLE>
<CAPTION>
FISCAL YEAR
1997 1996
<S> <C> <C>
First Quarter $.63 - 1.19 $.25 - .63
Second Quarter .63 - 1.13 .50 - .94
Third Quarter .63 - .88 .57 - .94
Fourth Quarter .38 - .75 .63 - 1.32
</TABLE>
As of September 18, 1997, the number of holders of record of the
Company's Common Stock was 1,930.
The Company has never paid dividends on its common stock and does
not anticipate a change in this policy in the foreseeable future.
ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL 1997
LIQUIDITY AND CAPITAL RESOURCES
The Company relies on cash flow from continuing cemetery
operations to meet cash needs and funding capital requirements
for operations. Funeral industry businesses have provided
sufficient cash during the past three years to support day-to-day
operations and cover immediate debt service requirements. Since
1995 cash flow from operations has increased, and liquidity has
continued to improve. The registrant has secured a line of
credit for $225,000 to meet any uncertainties that are likely to
materially affect liquidity.
There are no expected changes in the number of full time, part-
time or seasonal employees employed by the Company.
The Company operating subsidiaries have a five year plan for
capital expenditures in the 1997 to 2001 period of approximately
$600,000 for road improvements, fencing of property, increased
inventory of niches and crypts in Mausoleum and outdoors,
equipment and modernization programs for computer software and
hardware.
Net income in fiscal year 1997 resulted in the company's ability
to generate sufficient cash flow from operations to finance its
operations, fund capital expenditures, pay immediate debt and
continue to solve its environmental problems.
RESULTS OF OPERATIONS
In fiscal year 1997, cemetery revenues remained relatively flat
with cemetery lot sales and interment fees remaining stable in
comparison to prior years, but Mausoleum sales and cremations
fees decreased approximately $37,090 (or 15%). The decrease is
primarily attributable to the increased competition, change in
marketing strategies and publicity surrounding the past lawsuit
in regards to idenmifaction of cremation remains. Investment
income from the cemetery care funds increased $3,591 or 2%, which
was due primarily to the increase in trust assets.
Gross profit before expenses decreased $2,877 or 1% over the
prior fiscal year. The decrease in attributable to decreased
costs of Mausoleum sales and related costs.
Operating expenses remained constant with a less than 1% decrease
in comparison to prior fiscal years.
Selling expenses increased $22,858 or 10% over the prior fiscal
year. The increase is attributable to the having a full-time
sales manager for twelve months. When retained by management it
was atticapted that this individual would be able to increase
productivity and enhance customer service. Customer service was
improved but sales continue to remain flat.
General and administrative expenses increased $9,091 or 1% over
the prior fiscal year, primarily due to increased legal expenses
of $41,230 or 44%, which was due to prior lawsuits brought
against the Company, which were either settled for a immaterial
cost or dismissed by the courts. All other costs remained
constant or decreased due to effective cost controls.
Other expenses decreased $115,863 or 43% over the prior fiscal
year, primarily due to the company recording no environmental
expenditures in 1997 and $33,258 in 1996, no loss on investment
in property rights in 1997 and $50,000 in 1996 and because of
decreased interest expense associated with reduced debt.
FISCAL 1996
LIQUIDITY AND CAPITAL RESOURCES
The Company relies on cash flow from continuing cemetery
operations to meet cash needs and funding capital requirements
for operations. Funeral industry businesses have provided
sufficient cash during the past three years to support day-to-day
operations and cover immediate debt service requirements. Ever
since new management was installed in 1993 cash flow from
operations has increased, and liquidity has continued to improve.
The registrant has secured a commitment for a line of credit for
$250,000 to meet any uncertainties that are likely to materially
affect liquidity.
The Company operating subsidiaries have a five year plan for
capital expenditures in the 1996 to 2000 period of approximately
$750,000 for road improvements, increased inventory of niches
and crypts in Mausoleum and outdoors, and modernization programs
for computer software and hardware.
Net income in fiscal year 1996 resulted in the Company's ability
to generate sufficient cash flow from operations to finance its
operations, continue to solve its environmental problems, fund
capital expenditures and pay immediate debt.
RESULTS OF OPERATIONS
In fiscal year 1996, cemetery revenues increased $28,764 or 2%.
This modest increase was achieved despite a decrease in at need
services of 148 services or 9% from the prior fiscal year.
Decrease in services or increase in revenues is primarily
attributable to managements' efforts to maximize the cemetery's
remaining inventory by increasing the ratio of higher end
services in relation to prior years. Memorial sales decreased
$57,470 over fiscal year 1995 (or 17%). This decrease is
primarily attributable to the increase competition by both
funeral homes, and memorial stores and dramatic changes in the
cemetery's marketing staff. Interest earned from the cemetery
care funds increased $12,494 or 6%, which was due primarily to
higher rates of return on the trust assets.
Gross profit from operating subsidiaries before expenses
increased $48,347 or 3% over the prior fiscal year. This
increase is attributable to management's continuing efforts to
secure the most competitive pricing available.
Operating expenses from operating subsidiaries increased $29,273
or 3% over the prior fiscal year, primarily due to the increase
in repair and maintenance expenditures of $10,660, wages paid to
grounds personnel of $6,786, and depreciation expense of $10,207,
caused by the increased level of depreciable assets.
Selling expenses from operating subsidiaries increased $23,496 or
12% over the prior fiscal year. The increase is attributable to
the hiring of a full-time sales manager. It is contemplated by
management that this individual will be able to increase
productivity of the family service counselors and enhance
customer service.
General and Administrative expenses decreased $28,863 or 3% over
the prior fiscal year, primarily due to decreased travel costs,
with other costs remaining constant or decreasing due to
effective cost controls by management.
Other expenses increased $81,135 primarily because of interest
associated with debt and loss on investment in property rights of
$50,000.
FISCAL 1995
LIQUIDITY AND CAPITAL RESOURCES
The Company relies on cash flow from continuing cemetery
operations to meet cash needs and funding capital requirements
for operations. Funeral industry businesses have provided
sufficient cash during the past three years to support day-to-day
operations and cover immediate debt service requirements. But
now, after several years of turmoil and confused strategic
directions from the prior management, new management's changes in
operations and strategic focus have increased cash flow from
operations, increased the Company's liquidity, and secured a line
of credit to enable the Company to invest in raw land, rights to
a golf course, repurchase of common stock, and provide for the
administrative needs of the Company.
The Company's operating subsidiaries have a five year plan for
capital expenditures in the 1995 to 1999 period of approximately
$375,000 for equipment and modernization programs.
Net income in fiscal year 1995 has resulted in the Company's
ability to generate sufficient cash flow from operations to
finance its cash operations, environmental problems, and
immediate debt.
RESULTS OF OPERATIONS
In fiscal year 1995, cemetery revenues increased $253,101 or 12%,
primarily due to increased market share and 5% price increases
and a $9,787 increase in earnings of the cemetery care funds,
which was due primarily to higher rates of return on the trust
assets. At-need services increased 109 services or 7 percent,
marker sales increased 11% and lot sales increased 174 spaces or
7% between fiscal year 1995 and 1994, due to (a)stable population
levels and increased death rates in the market (b)increased
market shares due to difficulty experienced by a close
competitor, and (c) more aggressive marketing efforts by family
service counselors.
Operating expenses increased $62,965 or 6% in fiscal year 1995,
primarily due to increase in wages of $30,389 or 6%, group
insurance benefits for ground employees of $12,683 or 22%, and
depreciation expense of $15,453 or 55%, caused by the increased
level of depreciable assets.
Selling expenses increased $21,251 or 12%, the increase in cost
is reasonable in relation to the increased sales of 12%. The
only increase was an increase in sales commissions of $26,460 or
18%. All other expenses decreased $5,208 or 21%, with the largest
decrease being the cost of fringe benefits.
General and Administrative expenses increased $25,490 or 3%,
primarily because of the increase in bad debt expense of $19,932
or 100%, salaries increased $12,966 or 7% and professional fees
increased $28,369 or 26%. The increase in bad debts was caused
by the write down of uncollectible public aid claims and Forest
Home Cemetery's bankruptcy filing. The increase in salaries was
caused by additional staff and a new contract for the general
manager. The increased costs for professional expenses related
to costs of purchasing the majority shareholder's shares, land
condemnation problem with the state of Illinois, and an
arbitration hearing with the former general manager.
Other expenses increased $29,435 or 32% primarily because of
interest associated with debt and additional environmental costs
of $63,523 associated with on going clean up of the
property.
ITEM 7: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Financial statements of the Company for the fiscal years ending
June 30, 1997 and 1996 are included at Item 13, F-1.
ITEM 8: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
During fiscal year 1996 the board of directors approved the
change of accounting firms to Stirtz Bernards Boyden Surdel &
Larter P. A. The Company believes there were no disagreements
with the prior accounting firm of Blackman Kallick Bartelstein
who audited the registrant during the fiscal year 1995. The
financial report for 1995 did not contain an adverse opinon or a
disclaimer of opinion, nor was the report modified as to
uncertainty, audit scope or accounting principles.
PART III
ITEM 9: DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
ACT.
Directors hold office for a one-year term or until their
successors are duly elected and qualify. Each director has
served continuously since the year indicated. The age and
principal occupation or employment of all directors as set forth
below. All occupations or directors are the Company, unless
otherwise indicated.
Robert C. Harvey, (46), Director, Chairman of the Board, and
Chief Executive Officer since 1992. Mr. Harvey is also a partner
in the accounting firm of Harvey & Co. from 1992 to the present.
Robert B. Gregor, (46), Secretary and Director since 1993. Mr.
Gregor has been the Senior Account Executive of E.F. Johnson Co.
since 1993. From 1977 to 1993, Mr. Gregor was a Sales Team
Manager at Motorola Communications.
Hugh H. McDaniel, (57), Director since 1992. Mr. McDaniel has
been a residential real estate broker since 1973.
ITEM 10: EXECUTIVE COMPENSATION
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Long Term
Compensation Compensation
_________________________________________________ ____________
Name and Other Annual Awards
Principal Position Year Salary(1) Bonus Compensation(3) Options
<S> <C> <C> <C> <C>
Robert C. Harvey(2)
Chairman of the Board
and Chief Executive
Officer 1997 $90,000
1996 $90,000 $1,750 $15,200
1995 $78,750 $3,000
<FN>
(1) Includes amounts accrued by the Company to Mr. Harvey of
$15,000 in 1997, $45,000 in 1996, and $37,500 in 1995.
(2) Mr. Harvey was employed by the Company as Chairman of the
Board and Chief Executive Officer in November 1992.
(3) Medical insurance
</FN>
</TABLE>
OPTION GRANTS AND EXERCISES
The following table summarizes options granted to named executive
officer during 1997, 1996, and 1995.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
Number of
Securities % of Total Exercise
Underlying Options Granted or Base
Options to Employees Price Expiration
Name (1)Granted in Fiscal Year ($/SH) Date
_________________________________________________________________
Robert C. Harvey
<C> <C> <C> <C> <C>
1997
1996 40,000(2) 100% $0.25 06/30/99
1995 70,000(3) 100% $0.25 06/30/97
_________________________________________________________________
<FN>
(1) All the options granted to Mr. Harvey were granted pursuant
to his employment contract. See "Executive Compensation and
Other Benefits -- Employment Agreement". Options are exercisable
so long as Mr. Harvey remains in the employ of the Company.
(3) These options were granted on September 30, 1994 and are
fully vested.
(2) These options were granted on June 30, 1996 and are fully
vested.
</FN>
</TABLE>
EMPLOYMENT AGREEMENT
The Company has an employment contract with Mr. Harvey, the
Chairman of the Board and Chief Executive Officer of the Company.
Under the agreement, Mr. Harvey is to receive annual compensation
of $90,000 and a bonus equal to 10% of the company's net income
over $300,000 and 15% of the company's net income over $500,000.
Under this agreement, in addition to his salary and bonus, Mr.
Harvey will receive options to purchase an additional 10,000
shares at $0.25 per share for each $100,000 of net income the
Company achieves over $300,000 and options to purchase 40,000
shares based on the performance of the Company's stock in the
public market. Mr. Harvey was granted options to purchase 70,000
shares in September, 1994 and 40,000 shares in June, 1996, under
the terms of his employment agreement with the Company.
COMPENSATION OF DIRECTORS
Directors who are not salaried employees of the Company are
paid $500 as an annual director's fee plus a fee of $200 per
meeting attended. Directors are also reimbursed for travel and
lodging expenses as appropriate. There was one board of
directors meeting and two meetings by telephone and directors
received $1,000 for these meetings.
On May 18, 1990, the Board of Directors approved a nonqualified
stock option plan for outside directors. Under the plan, each
outside director received options to purchase 3,500 shares of the
Company s common stock at an excercise price per share equal to
the market price at the grant date. These stock options are
exercisable for a period of ten years from the grant date for
active board members or for a period of twelve months from the
date of termination for former board members. The Company
reserved 21,000 shares of common stock for issuance under the
plan, of which 3,500 shares have been issued, an option for 3,500
shares is outstanding and 14,000 shares are available for
issuance.
ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table contains information as of June 30, 1997,
concerning the beneficial ownership of the Company's common
shares by Mr. Robert C. Harvey, each director, by all directors
and officers as a group, and by each person known to the Company
to "beneficially own" more than 5% of its common shares.
<TABLE>
<CAPTION>
Name of Individual
or Persons in Group Number of Shares(a) % of Class
_________________________________________________________________
<S> <C> <C> <C>
Robert C. Harvey 249,594(b) 19.1%
4810 120th Street West
Apple Valley, MN 55124
Robert B. Gregor 118,264(c) 9.0%
844 Oriole Lane
Chaska, MN 55337
Hugh McDaniel 5,100(d) *
4090 Mission Blvd.
San Diego, CA 92109
All Officers and Directors 372,958 28.5%
as a Group (3 persons)
*Less than 1.0%
<FN>
(a) Unless otherwise noted, all shares shown are held by persons
possessing sole voting and investment power with respect to such
shares.
(b) Includes 40,572 held by Mr. Harvey's wife and children to
which Mr. Harvey may be deemed to share voting and investment
power, but as to which he disclaims beneficial ownership. In
addition, 40,000 of the 249,594 share total listed in the table
are shares that could be acquired upon exercise of an option. In
addition 10,000 are held jointly by Mr. Harvey and his wife.
(c) Includes 5,450 held by Mr. Gregor's wife and children to
which Mr. Gregor may be deemed to share voting and investment
power, but as to which he disclaims beneficial ownership. In
addition 77,100 are held jointly by Mr. Gregor and his wife.
(d) Includes 3,500 of the 5,100 share total listed in the table
are shares that could be acquired upon exercise of options as a
board member.
</FN>
ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During the years ended June 30, 1997, 1996, and 1995, amounts
paid for compliance services to entities related to the chief
executive officer were $12,192, $10,908, and $6,014,
respectively. The Company leases office space from the chief
executive officer at no cost.
ITEM 13: EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K.
(a) The following documents are filed or incorporated by
reference as part of this Form 10-KSB.
(1) The following consolidated financial statements of
Oakridge Holdings, Inc. and Subsidiaries, together with the
Independent Auditors Report are filed in this report at
Item 13, F-1:
Independent Auditor's Report
Consolidated Balance Sheets as of June 30, 1997, 1996 and
1995
Consolidated Statements of Operations for Years Ended
June 30, 1997, 1996 and 1995
Consolidated Statements of Stockholders' Equity for Years
Ended June 30, 1997,1996 and 1995
Consolidated Statements of Cash Flows for Years Ended
June 30, 1997, 1996 and 1995
Notes to Consolidated Financial Statements
(2) The schedule of exhibits required to be furnished by Item 601
of Regulations S-B is as follows:
3(i)Amended and Restated Articles of Incorporation as
amended. (1)
3(ii)Amended and Superseding By-Laws as amended. (1)
10(a)Outside Directors Non-qualified Stock Option Plan. (1)
10(b)Robert C. Harvey Employment Agreement. (1)
10(c)Stock purchase agreement. (1)
10(d) Loan documents for Line of Credit.
10(e) Subordinated Debenture Agreement. (1)
10(f) Loan documents for Mortgage Note Payable.
21 Subsidiaries of Registrant.
(1) Filed as exhibit to Form 10-KSB for fiscal year
ended June 30, 1996
(b) No reports on Form 8-K were filed during the last quarter of
the period covered by this report.
F-1
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1997, 1996 AND 1995
TABLE OF CONTENTS
PAGE
Independent Auditors' Report 1
Consolidated Financial Statements:
Consolidated Balance Sheets 2
Consolidated Statements of Operations 3
Consolidated Statements of Stockholders' Equity 4
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 8
<PAGE 1>
{Letterhead of Independent Auditors}
To The Board of Directors and Stockholders
Oakridge Holdings, Inc. and Subsidiaries
Apple Valley, Minnesota
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying consolidated balance sheets of
Oakridge Holdings, Inc. and Subsidiaries as of June 30, 1997 and
1996, and the related consolidated statements of operations,
stockholders' equity and cash flows for the years then ended.
These consolidated financial statements are the responsibility of
the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits. The consolidated financial statements of Oakridge
Holdings, Inc. and Subsidiaries as of June 30, 1995, were audited
by other auditors whose report dated September 1, 1996, expressed
an unqualified opinion on those financial statements.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
consolidated 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 Oakridge Holdings, Inc. and Subsidiaries as of June
30, 1997 and 1996, and the results of their operations and their
cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Stirtz Bernards Boyden Surdel & Larter, P.A.
Edina, Minnesota
September 5, 1997
<PAGE 2>
</TABLE>
<TABLE>
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
June 30,
__________________________________
1997 1996 1995
__________ __________ __________
ASSETS
<S> <C> <C> <C>
Cash and cash equivalents $ 382,287 $ 264,691 $ 192,691
---------- ---------- ----------
Receivables:
Trade, less allowance for
doubtful accounts of $15,000
in 1997, $33,800 in 1996,
and $25,500 in 1995 476,443 446,891 397,386
Trust income (Note 12) 106,855 66,750 62,900
---------- ---------- ----------
Total receivables 583,298 513,641 460,286
---------- ---------- ----------
Inventories:
Cemetery and mausoleum space
available for sale 682,108 701,490 724,030
Markers, urns and flowers 15,924 15,675 14,156
---------- ---------- ----------
Total inventories 698,032 717,165 738,186
---------- ---------- ----------
Property and equipment:
Property and equipment 1,760,528 1,701,490 1,569,774
Less accumulated depreciation(1,286,611) (1,217,310) (1,153,419)
---------- ---------- ----------
Total property and
equipment, net 473,917 484,180 416,355
---------- ---------- ----------
Prepaid expenses and
other assets 39,384 46,331 79,578
---------- ---------- ----------
Deferred income taxes 256,000 337,429 407,249
---------- ---------- ----------
Investment in property rights-
Mohave Shores Development Inc. 250,000 250,000 831,250
---------- ---------- ----------
$2,682,918 $2,613,437 $3,125,595
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
June 30,
__________________________________
1997 1996 1995
__________ __________ __________
LIABILITIES AND STOCKHOLDERS'
EQUITY
<S> <C> <C> <C>
Note payable bank $ 75,000 $ - $ -
---------- ---------- ----------
Accounts payable - trade 42,418 70,199 95,484
---------- ---------- ----------
Accrued liabilities:
Accrued salaries and
payroll taxes 124,971 151,182 125,724
Perpetual care trust funds 227,087 190,135 177,044
Deferred revenue 389,609 314,483 234,586
Accrued marker and
inscription costs 77,976 76,026 100,826
Accrued environmental costs 28,500 28,500 -
Other 7,167 4,692 23,736
---------- ---------- ----------
Total accrued liabilities 855,310 765,018 661,916
---------- ---------- ----------
Mortgage, debentures and
other notes payable 706,603 989,065 1,315,485
---------- ---------- ----------
Commitments and contingencies
(Note 7) - - -
Stockholders' equity:
Preferred stock - $.10 par
value; authorized - 1,000,000
shares; issued - none - - -
Common stock - $.10 par value;
authorized - 5,000,000 shares;
issued and outstanding -
1,309,670 shares in 1997
and 1996, and 1,623,242
shares in 1995 130,968 130,968 162,325
Additional paid-in capital 1,875,500 1,875,500 2,282,193
Accumulated deficit (1,002,881) (1,217,313) (1,391,808)
---------- ---------- ----------
Total stockholders' equity 1,003,587 789,155 1,052,710
---------- ---------- ----------
$2,682,918 $2,613,437 $3,125,595
========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE 3>
<TABLE>
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
June 30,
__________________________________
1997 1996 1995
__________ __________ __________
<S> <C> <C> <C>
Revenue:
Cemetery $2,344,988 $2,378,109 $2,349,345
Trust and interest income 240,455 236,864 235,220
---------- ---------- ----------
Total revenue 2,585,443 2,614,973 2,584,565
---------- ---------- ----------
Operating expenses:
Cemetery 1,210,979 1,209,532 1,204,238
Selling 247,800 224,942 201,446
General and administrative 742,650 733,559 762,422
---------- ---------- ----------
Total operating expenses 2,201,429 2,168,033 2,168,106
---------- ---------- ----------
Income from operations 384,014 446,940 416,459
---------- ---------- ----------
Other income (expense):
Environmental costs - (33,258) (63,523)
Interest expense (86,338) (119,641) (60,009)
Loss on investment in
property rights - (50,000) -
Other (244) 454 2,222
---------- ---------- ----------
Total other income
(expense) (86,582) (202,445) (121,310)
---------- ---------- ----------
Income before income taxes 297,432 244,495 295,149
Income taxes 83,000 70,000 104,637
---------- ---------- ----------
Net income $ 214,432 $ 174,495 $ 190,512
========== ========== ==========
Primary earnings and fully
diluted earnings per common
share $.16 $.12 $.09
========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE 4>
<TABLE>
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED JUNE 30, 1997, 1996 AND 1995
<CAPTION>
Additional
Common Stock Paid-In Accumulated
Shares Amount Capital Deficit Total
___________________ __________ ___________ __________
<S> <C> <C> <C> <C> <C>
Balance, June 30, 1994 1,835,965 $183,597 $2,459,774 $(1,582,320) $1,061,051
Issuance of stock at $.25 per
share on August 22, 1994 as
part of director stock options 3,500 350 525 - 875
Issuance of stock at $.25 per
share on August 22, 1994 as
part of employee stock options 60,000 6,000 9,000 - 15,000
Issuance of stock at $.25 per
share on December 5, 1994 as
part of employee stock options 30,000 3,000 4,500 - 7,500
Issuance of stock at $1.00 per
share on December 5, 1994 as
part of employee stock options 21,522 2,152 19,370 - 21,522
Issuance of escrow stock at $1.25
per share on December 5, 1994
as part of property rights
purchase price 425,000 42,500 488,750 - 531,250
Redemption of common stock
on April 29, 1995 (752,745) (75,274) (699,726) - (775,000)
Net income - - - 190,512 190,512
--------- -------- ---------- ---------- ----------
Balance, June 30, 1995 1,623,242 162,325 2,282,193 (1,391,808) 1,052,710
Return of escrow stock in
December, 1995 (425,000) (42,500) (488,750) - (531,250)
Conversion of subordinated
debentures into common
stock on June 25, 1996 111,428 11,143 66,857 - 78,000
Paid-in capital - stock
options, June 30, 1996 - - 15,200 - 15,200
Net income - - - 174,495 174,495
--------- -------- ---------- ----------- ----------
Balance, June 30, 1996 1,309,670 130,968 1,875,500 (1,217,313) 789,155
Net income - - - 214,432 214,432
--------- -------- ---------- ----------- ----------
Balance, June 30, 1997 1,309,670 $130,968 $1,875,500 $(1,002,881) $1,003,587
========= ======== ========== =========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE 6>
<TABLE>
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
<CAPTION>
June 30,
__________________________________
1997 1996 1995
__________ __________ __________
<S> <C> <C> <C>
Cash flows from operating
activities:
Net income $ 214,432 $ 174,495 $ 190,512
Adjustments to reconcile net
income to net cash flows
from operating activities:
Depreciation 69,301 66,321 61,383
Deferred income taxes 81,429 69,820 104,637
Loss on investment in
property rights - 50,000 -
Compensation expense -
stock options - 15,200 -
Receivables (69,657) (53,355) (90,754)
Inventories 19,133 21,021 (14,555)
Prepaid expenses and
other assets 6,947 33,247 (59,891)
Accounts payable - trade (27,781) (25,285) (43,242)
Accrued liabilities 90,292 103,102 (187,336)
---------- ---------- ----------
Net cash flows from
operating activities 384,096 454,566 (39,246)
---------- ---------- ----------
Cash flows from investing
activities:
Purchase of property
and equipment (59,038) (134,146) (143,715)
Investment in property rights - - (300,000)
---------- ---------- ----------
Net cash flows from
investing activities (59,038) (134,146) (443,715)
---------- ---------- ----------
Cash flows from financing
activities:
Principal payments on
long-term debt (282,462) (254,890) (285,618)
Increase in note payable bank 75,000 - -
Issuance of long-term debt - 28,470 1,200,000
Principle payments on debentures - (22,000) -
Proceeds from issuance of
debentures - - 100,000
Proceeds from issuance of
common stock - - 44,897
Retirement of common stock - - (775,000)
---------- ---------- ----------
Net cash flows from
financing activities (207,462) (248,420) 284,279
---------- ---------- ----------
Net change in cash and
cash equivalents 117,596 72,000 (198,682)
Cash and cash equivalents,
beginning of year 264,691 192,691 391,373
---------- ---------- ----------
Cash and cash equivalents,
end of year $ 382,287 $ 264,691 $ 192,691
========== ========== ==========
</TABLE>
<TABLE>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
<CAPTION>
June 30,
__________________________________
1997 1996 1995
__________ __________ __________
Cash paid during the years for:
<S> <C> <C> <C>
Interest $ 86,338 $ 133,932 $ 45,715
========== ========== ==========
Income taxes $ 560 $ - $ -
========== ========== ==========
</TABLE>
OTHER NONCASH INVESTING AND FINANCING ACTIVITIES
In January 1997, $750,000 of long-term debt was refinanced with the
issuance of long-term debt.
In June 1996, $78,000 of subordinated debentures were converted into
111,428 shares of common stock.
In December 1995, common stock valued at $531,250 was returned to the
Company from escrow and retired, and the investment in property rights -
Mohave Shores Development, Inc. was reduced by $531,250.
See Notes to Consolidated Financial Statements
<PAGE 8>
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIRES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1997, 1996, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
The Company is a Minnesota corporation organized on March 6, 1961. It
is engaged in the operation of two cemeteries in Illinois. The cemetery
operations routinely grant credit to pre-need customers, substantially
all of whom are in the Chicago area.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the
Company and its subsidiaries, each of which is wholly owned. All
material intercompany balances and transactions have been eliminated in
consolidation.
UNCLASSIFIED BALANCE SHEETS
The Company presents unclassified balance sheets. The
current/noncurrent presentation is deemed to have little or no relevance
due to the nature of the Company's operations.
ESTIMATES AND ASSUMPTIONS
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles 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 consolidated financial statements and the reported amounts
of revenue and expenses during the reporting period. Actual results
could differ from those estimates.
CASH AND CASH EQUIVALENTS
For purposes of the consolidated statements of cash flows, the Company
considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents.
INVENTORIES
The cemetery and mausoleum space available for sale is stated at the
lower of cost (determined by an allocation of the total purchase and
development costs of each of the properties to the number of spaces
available) or market. Included in cemetery space available for sale is
land held in a land trust in which a wholly owned subsidiary of the
Company is the sole beneficiary.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of the
related assets. When assets are retired or otherwise disposed of, the
cost and related accumulated depreciation are removed from the accounts
and any resulting gain or loss is recognized in income for the period.
The cost of maintenance and repairs is charged to operations as incurred
and significant renewals and betterments are capitalized.
INVESTMENT IN PROPERTY RIGHTS - MOHAVE SHORES DEVELOPMENT INC.
The Company considers the costs of these intangibles to be part of the
developmental cost and will be matched against any revenue from the
development.
CEMETERY AND MAUSOLEUM SPACE REVENUE
Under the Cemetery Care Act of the State of Illinois, the Company is
required to transfer a portion of the proceeds of each sale of cemetery
and mausoleum space to perpetual care trust funds. The reported net
revenue has been reduced by the portion of the sales price that is
required to be remitted to the perpetual care trusts.
Income on the perpetual care trust funds is recorded as cemetery revenue
in the accompanying consolidated financial statements as earned.
Distributions from the perpetual care trusts are used for care and
maintenance of the cemetery. Expenses are recognized as incurred.
DEFERRED REVENUE
Pre-need contracts include charges for services to be performed at a
later date. Revenue on these services is deferred to the period in
which the services are performed.
INCOME TAXES
Income taxes are provided for the tax effects of transactions reported
in the consolidated financial statements and consist of taxes currently
due plus deferred income taxes. Deferred income taxes relate to
differences between the financial and tax bases of certain assets and
liabilities. The significant temporary differences relate to fixed
assets, valuation allowances, certain accruals and operating loss
carryforwards that are available to offset future taxable income.
Deferred income tax assets and liabilities represent the future tax
return consequences of those differences, which will either be taxable
or deductible when the assets and liabilities are recovered or settled.
STOCK OPTIONS
In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 123, Accounting
for Stock-Based Compensation. This new standard defines a fair value
based method of accounting for an employee stock option or similar
equity instrument. This statement gives entities a choice of
recognizing related compensation expense by adopting the new fair value
method or to continue to measure compensation using the intrinsic value
approach under Accounting Principles Board (APB) Option No. 25, the
former standard. If the former standard for measurement is elected,
SFAS No. 123 requires supplemental disclosure to show the pro forma net
income and earnings per share as if SFAS No. 123 had been adopted. This
statement is effective for the Company s 1997 fiscal year. However,
there were no stock options issued in fiscal year 1997, and the effect
of the stock options issued in 1996 under SFAS No. 123 is immaterial to
the 1996 net income and earnings per share. The Company intends to
continue using the measurement prescribed by APB Opinion No. 25, and
accordingly, this pronouncement will not affect the Company s financial
position or results of operations.
ENVIRONMENTAL COSTS
Environmental expenditures that pertain to current operations or relate
to future revenue are expensed or capitalized consistent with the
Company's capitalization policy. Expenditures that result from the
remediation of an existing condition caused by past operations that do
not contribute to current or future revenue are expensed. Liabilities
are recognized for remedial activities when the clean-up is probable and
the cost can be reasonably estimated.
CONCENTRATIONS OF CREDIT RISK
The Company's cash deposits from time to time exceed federally insured
limits. The Company has not experienced any losses on its cash deposits
in the past.
Financial instruments which potentially subject the Company to a
concentration of credit risk consist principally of accounts receivable.
The credit risk is limited due to the large number of entities
comprising the Company's customer base. At June 30, 1997, the Company
had no significant concentrations of credit risk.
2. INVENTORIES
Inventories of cemetery and mausoleum space available for sale consist
of the following:
<TABLE>
<CAPTION>
1997 1996 1995
__________ __________ __________
<S> <C> <C> <C>
Cemetery space $ 556,265 $ 572,523 $ 588,877
Mausoleum space 125,843 128,967 135,153
---------- ---------- ----------
$ 682,108 $ 701,490 $ 724,030
========== ========== ==========
</TABLE>
3. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
1997 1996 1995
__________ __________ __________
<S> <C> <C> <C>
Land $ 50,000 $ 50,000 $ 50,000
Land improvements 252,373 213,773 155,622
Building and improvements 522,881 522,881 510,531
Vehicles 198,617 198,617 165,918
Equipment 736,657 716,219 687,703
---------- ---------- ----------
$1,760,528 $1,701,490 $1,569,774
========== ========== ==========
</TABLE>
Depreciation charged to operations was $69,301 in 1997, $66,321 in 1996,
and $61,383 in 1995.
4. INVESTMENT IN PROPERTY RIGHTS
Mohave Shores Development Inc. (MSD), a Nevada corporation, has a master
lease agreement with the Fort Mohave Tribal Corporation (Tribal
Corporation) located in Arizona. In December 1994, the Company
purchased from MSD a development ground sublease and an option to
develop and operate a golf course. The option to develop and operate a
golf course expired November 30, 1995. The property under rights is
located in the County of Mohave, Arizona.
Development Ground Sublease
The Company purchased the right to develop 10 dwelling units for
$250,000. The right has a term of 50 years. In addition, the Company
has the right to purchase 31 additional development units in increments.
Each increment would require additional fees to a total aggregate of
$1,300,000.
Development of a Golf Course
The Company acquired from Mohave Shores Development, Inc. the right to
negotiate with the Tribal Corporation for the development of a golf
course, reception of the proceeds of up to $6,000,000 of bonds when
sponsored by the Tribal Corporation, allocation of 1,500 acre feet of
water rights for use in connection with the golf course, an option to
develop either a 200-unit lodge or 200 dwelling unit lots adjacent to
the golf course, and an option to the commercial site proposed under the
master lease. The Company paid Mohave Shores Development, Inc. $50,000
cash and 425,000 shares of the Company's common stock for these rights
to negotiate. The shares were issued into escrow pending the execution
of the golf course lease by the Tribal Corporation, the delivery of the
bond proceeds and the execution of the water rights agreement. The
rights of Mohave Shares Development, Inc. to the cash and the Company
common stock were terminated November 30, 1995 and the 425,000 shares of
common stock was returned, and the $50,000 was written off as
uncollectible.
5. NOTE PAYABLE - BANK
The Company has a $225,000 line-of-credit of which $150,000 was unused
and available at June 30, 1997. Interest is payable monthly at the
prime rate (8.25% at June 30, 1997). The note is secured by the assets
of a wholly owned subsidiary and matures November 1, 1997.
6. MORTGAGE, DEBENTURES AND OTHER NOTES PAYABLE
Mortgage, debentures and other notes payable consisted of the following:
<TABLE>
<CAPTION>
1997 1996 1995
__________ __________ __________
<S> <C> <C> <C>
Mortgage note payable bank,
payable in monthly installments
of $9,350 including interest at
8.625%, maturing January 2001,
secured by real estate and the
assets of the Company. $ 685,190 $ - $ -
Mortgage note payable - bank,
payable in monthly installments
of $10,000 plus interest at
.75% over prime, maturing in
March 1998, secured by real
estate, assignment of interest
in a land trust, accounts
receivable and inventories. - 950,000 1,190,000
Note payable, payable in
monthly installments of $365
including interest at 8.75%,
maturing in April 1998,
secured by equipment. 3,120 6,577 9,746
Note payable, payable in
monthly installments of $765
including interest at 8.75%,
maturing in November 1999,
secured by equipment. 18,293 25,413 -
Note payable, payable in
monthly installments of $819
including interest at 9.79%,
secured by equipment. - 7,075 15,739
---------- ---------- ----------
Mortgages and other notes
payable before debentures 706,603 989,065 1,215,485
Convertible subordinated
debentures - 9.25%, convertible
into one common share at par
value of $.01 per share for
each $.70 of the principal
amount, issued primarily to
its officers, matured in July,
1996 and callable after July,
1995. $78,000 of the
subordinated debentures were
converted to common stock and
the remaining $22,000 was
repaid in June 1996. $ - $ - $ 100,000
---------- ---------- ----------
Mortgages, debentures and
other notes payable $ 706,603 $ 989,065 $1,315,485
========== ========== ==========
</TABLE>
Subsequent maturities as of June 30, 1997 are as follows:
Years Ending June 30:
1998 $ 17,075
1999 64,164
2000 63,371
2001 561,993
----------
$ 706,603
==========
7. ENVIRONMENTAL COSTS
Subsequent to June 30, 1994, the Company commissioned an engineering
study of its property for the purpose of determining the full extent of
possible soil contamination. Five underground fuel tanks were found to
require removal and the adjoining soil to undergo remediation.
Environmental costs expensed to operations were $-0- in 1997, $33,258 in
1996, $63,523 in 1995 and approximately $195,000 in years prior to those
presented.
Furthermore, the Company was notified by the Illinois Environmental
Protection Agency (IEPA) that the clean-up plan may not be in full
compliance with IEPA guidelines. The Company has responded to the IEPA
with a work plan that calls for additional costs of approximately
$28,500 with the possibility of additional costs. The Company is
awaiting a response on the work plan from the IEPA. Additional costs
beyond the $28,500 accrued for at June 30, 1997 may be incurred,
however, management cannot reasonably estimate those costs. In addition,
the Company may not file for reimbursement from the Leaking Underground
Storage Tank Fund until the work plan has IEPA approval. Accordingly,
the Company has made no provision for reimbursements.
8. INCOME TAXES
The provision for income taxes consisted on the following:
<TABLE>
<CAPTION>
1997 1996 1995
__________ __________ __________
<S> <C> <C> <C>
Current:
Federal $ - $ - $ -
State 1,571 180 -
---------- ---------- ----------
1,571 180 -
---------- ---------- ----------
Deferred:
Federal 70,000 59,320 88,937
State 11,429 10,500 15,700
---------- ---------- ----------
81,429 69,820 104,637
---------- ---------- ----------
$ 83,000 $ 70,000 $ 104,637
========== ========== ==========
</TABLE>
Principal reasons for variations between the statutory federal tax rate
and the effective tax rate were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
__________ __________ __________
<S> <C> <C> <C>
Federal tax rate 34% 34% 34%
State taxes, net of
federal benefit 3 6 6
Utilization of deferred
income tax assets at
rates different than
originally capitalized (9) (11) (4)
---------- ---------- ----------
28% 29% 36%
========== ========== ==========
The net deferred income tax assets in the accompanying consolidated
balance sheets included the following components as of June 30, 1997,
1996 and 1995:
</TABLE>
<TABLE>
<CAPTION>
1997 1996 1995
__________ __________ __________
<S> <C> <C> <C>
Deferred income tax
liabilities $ (6,000) $ (7,000) $ (13,108)
Deferred income tax assets:
Net operating loss
carryforwards 218,600 298,000 367,358
Environmental liability 8,000 8,000 -
Other 54,300 58,329 75,906
Deferred income tax asset
valuation allowances (18,900) (19,900) (22,907)
---------- ---------- ----------
Net deferred income
tax assets $ 256,000 $ 337,429 $ 407,249
========== ========== ==========
</TABLE>
The Company has operating loss carryforwards of approximately $780,000,
which expire in 2007 and 2008, that may be offset against future taxable
income and investment tax credits totaling approximately $18,900 that
may be offset against future federal income taxes. If not used, the
investment tax credits will expire as follows:
<TABLE>
<C> <C>
1998 $ 2,000
1999 3,100
2000 3,200
2001 10,600
----------
$ 18,900
==========
</TABLE>
The operating loss carryforwards expire as follows:
<TABLE>
<C> <C>
2007 $ 187,000
2008 593,000
----------
$ 780,000
==========
9. RELATED PARTY TRANSACTIONS
During the years ended June 30, 1997, 1996 and 1995, amounts paid for
compliance services to entities related to the chief executive officer
were $12,192, $10,908 and $6,014, respectively. The Company leases
office space from the chief executive officer at no cost.
10. PENSION PLAN
Certain subsidiaries of the Company participate in a multi-employer
union administer defined benefit pension plan that covers the cemetery
employees. Pension expense under this plan was $15,113 in 1997, $14,856
in 1996 and $15,600 in 1995.
11. EMPLOYMENT CONTRACTS AND STOCK OPTIONS
The Company is committed under an employment contract with its chief
executive officer (CEO) to pay annual compensation and bonus payments
for three years ending December 31, 1998. Under this agreement, the
Company is committed to pay a bonus of 10% of the Company net income
over $300,000 and 15% of the Company net income over $500,000. The
Company accrued $-0- under these terms of the agreement for the years
ended June 30, 1997, 1996 and 1995. The annual compensation expense
under the employment contract is $90,000.
In addition, the contract provides for stock options subject to certain
performance levels:
a) 10,000 shares at fair market value for each $100,000 of net income
over a base income amount of $300,000.
b)40,000 shares at fair market value based on the performance of the
Company's stock in the public market.
The employment agreement expires December 31, 1998, and the exercise
date of the stock options must be between three years of their grant or
90 days after the termination of the CEO's employment, whichever is
first.
Under the agreement, stock options for 40,000 shares of common stock at
$.25 per share were earned in 1996. $15,200 of compensation expense was
recognized with these stock options. No other stock options were issued
in 1997, 1996 or 1995, subject to the above performance criteria.
On May 18, 1990, the Board of Directors approved a nonqualified stock
option plan for outside directors. Under the plan, each outside
director received options to purchase 3,500 shares of the Company's
common stock at an exercise price per share equal to the market price at
the grant date. These stock options are exercisable for a period of ten
years from the grant date for active board members or for a period of
twelve months from the date of termination for former board members. The
Company reserved 21,000 shares of common stock for issuance under the
plan, of which 3,500 shares have been issued, an option for 3,500 shares
is outstanding and 14,000 shares are available for issuance.
12. CEMETERY AND MAUSOLEUM TRUST FUNDS
Two of the Company's wholly-owned subsidiaries are beneficiaries of
perpetual care trust funds established under the Cemetery Care Act of
the State of Illinois. Earnings on these perpetual care trust funds are
to be used for the care, preservation and ornamentation of the Company's
cemetery and mausoleum properties.
Earnings on these perpetual care trust funds totaled $226,973 in 1997,
$225,223 in 1996 and $213,978 in 1995. These earnings are included in
cemetery revenue in the accompanying consolidated financial statements.
Perpetual care trust fund assets totaled approximately $3,850,000,
$3,670,000 and $3,500,000 at June 30, 1997, 1996 and 1995, respectively.
13. WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING
The following table reconciles the weighted average number of shares of
common stock outstanding.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1997 1996 1995
__________ __________ __________
Common stock shares
outstanding at June 30 1,309,670 1,309,670 1,623,242
Effect of weighted average
common stock shares - 68,158 408,803
Effect of treasury stock
method for stock options 30,240 27,965 12,217
---------- ---------- ----------
Weighted average common stock
shares for primary earnings
per share at June 30 1,339,910 1,405,793 2,044,262
If converted, effect of
convertible subordinated
debentures - - 142,857
---------- ---------- ----------
Weighted average common
stock shares for fully
diluted earnings per
share at June 30 1,339,910 1,405,793 2,187,119
========== ========== ==========
</TABLE>
14. REDEMPTION OF COMMON STOCK
A former officer of the Company filed Chapter 7 bankruptcy in the United
States Bankruptcy Court for the District of Colorado. The trustee of
the Chapter 7 estate negotiated with the Company for the sale of the
Company's common stock. A court order dated March 21, 1995 was entered
which approved the sale of the common stock. The Company paid $775,000
for 752,745 shares. The transaction was recorded on April 29, 1995.
15. FAIR VALUES OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company's financial instruments at June
30, 1997, and the methods and assumptions used to estimate such fair
values, were as follows:
Cash and cash equivalents - the fair value approximates the carrying
amount because of the short maturity of those financial instruments.
Mortgages, debentures and other notes payable - the fair value
approximates the carrying amount, as the interest rates on the debt
approximate current interest rates.
16. RECLASSIFICATIONS
Certain reclassifications were made to the 1996 and 1995 consolidated
financial statements to conform to the 1997 presentation which had no
effect on net income.
SIGNATURES
In accordance with Section 13 or 15 (d) of the Exchange Act, the
Company has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
OAKRIDGE HOLDINGS, INC.
Dated: September 25, 1997 By /s/ Robert C. Harvey
Robert C. Harvey
Chairman of the Board of Directors
In accordance with the Exchange Act, this report has also been signed
below by the following persons on behalf of the Company and in the
capacities and on the dates indicated.
Dated: September 25, 1997 By /s/ Robert C. Harvey
Robert C. Harvey
Chief Executive Officer
Chief Financial Officer
Dated: September 25, 1997 By /s/ Robert B. Gregor
Robert B. Gregor
Secretary
Director
REVOLVING CREDIT NOTE
$ 225,000.00 October 22, 1996
FOR VALUE RECEIVED, the undersigned borrower (the
Borrower ), promises to pay to the order of FIRSTAR BANK
ILLINOIS (the Bank ), at its main office in CHICAGO, ILLINOIS,
the principal sum of TWO HUNDRED TWENTY- FIVE THOUSAND AND NO/100
Dollars ($225,000.00), payable NOVEMBER 1, 1997.
Interest.
The unpaid principal balance will bear interest at any annual
rate equal to 0.000% in excess of the prime rate announced by the
Bank.
Interest Payment Schedule.
Interest is payable beginning December 1, 1966, and on the same
date of each Consecutive month thereafter (except that if a given
month does not have such a date, the last day of such month),
plus a final interest payment with the final payment of
principal.
Interest will be computed for the actual number of days
principal is unpaid, using a daily factor obtained by dividing
the stated interest rate by 360.
Principal amounts remaining unpaid after the maturity
thereof, whether t fixed maturity or by reason of acceleration of
maturity, shall bear interest from and after maturity until paid
at a rate of 2% per annum plus the rate otherwise payable
hereunder.
In no event will the interest rate hereunder exceed that
permitted by applicable law. If any interest or other charge is
finally determined by a court of competent jurisdiction to exceed
the maximum amount permitted by law, the interest or charge shall
be reduced to the maximum permitted by law, and the Bank may
credit any excess amount previously collected against the balance
due or refund the amount to the Borrower.
If any payment is not made on or before its due date, the
Bank may collect a delinquency charge of 5.00% of the unpaid
amount. Collection of the late payment fee shall not be deemed
to be a waiver of the Bank s right to declare a default
hereunder.
Without affecting the liability of any Borrower, endorser,
surety or guarantor, the Bank may, without notice, renew or
extend the time for payment, accept partial payments, release or
impair any collateral security for the payment of this Note, or
agree not to sue any party liable on it.
This Revolving Credit Note constitutes the Note issued under
a Revolving Credit Agreement dated as of the date hereof between
the Borrower and Bank, to which Agreement reference is hereby
made for a statement of the terms and conditions under which
loans evidenced hereby were or may be made and a description of
the terms and conditions upon which the maturity of this Note may
be accelerated, and for a description of the collateral securing
this Note.
The Borrower hereby acknowledges the receipt of a copy of the
Note.
(Individual Borrower) LASALLE NATIONAL TRUST, as trustee
under trust
Borrower Name (Organization)
(SEAL) Agreement No. 38160, dated 02/01/69
and not personally
Borrower Name N/A By /s/ Corinne Bak,
Name and Title Corinne Bak,
Vice President
By
Borrower Name N/A Name and Title
This NOTE is executed by LASALLE NATIONAL TRUST, N.A., not
personally but as Trustee under Trust No. 38160 in the exercise
of the power and authority conferred upon and vested in it as
such Trustee, and is payable only out of the property described
in the Trust Deed or Mortgage given to secure payment hereof. It
is expressly understood and agreed by each original and
successive holder of this note, that no personal liability shall
be asserted or be enforceable against the promisor or any person
interested beneficially or otherwise in said property,
specifically described in said Trust Deed or Mortgage given to
secure the payment hereof, or in the property or funds at any
time subject to said trust agreement, because or in respect of
this note or the making, issue or transfer thereof, all such
liability, if any, being expressly waived by each taker and
holder hereof, but nothing herein contained shall modify or
discharge the personal liability expressed assumed by the
guarantor hereof, if any, and each original and successive holder
of this note accepts the same upon the express condition that no
duty shall rest upon said LASALLE NATIONAL TRUST, N.A., either
personally or as said Trustee, to sequester the rents, issues and
profits arising from the property described in said Trust Deed or
Mortgage, or the proceeds arising from the sale or other
disposition thereof, but that in case of default in the payment
of this note or of any installment hereof, the sole remedy of the
holder hereof shall be by foreclosure of the said Trust Deed or
Mortgage given to secure the indebtedness evidenced by this note,
in accordance with the terms and provisions in said Trust Deed or
Mortgage set forth or by action to enforce the personal liability
of the guarantor, if any, of the payment hereof, or both.
REVOLVING CREDIT AGREEMENT
This Revolving Credit Agreement (the Agreement ) is made and
entered into by and between the undersigned borrower (the
Borrower ) and the undersigned bank (the Bank ) as of the date
set forth on the last page of this Agreement.
ARTICLE I. LOANS
1.1 Revolving Credit Loans. From time to time prior to NOVEMBER
1, 1997 (the Maturity Date ) or the earlier termination hereof,
the Borrower may borrow from the Bank for working capital
purposes up to the aggregate principal amount outstanding at any
one time of the lesser of (i) $ 225,000.00 (the Loan Amount ),
or (ii) if applicable, the Borrowing Base (defined below). All
Revolving loans hereunder will be evidenced by a single
promissory note of the borrower payable to the order of the Bank
in the principal amount of the Loan Amount (the Note ).
Although the Note will be expressed to be payable in the full
Loan Amount, the Borrower will be obligated to pay only the
amounts actually disbursed hereunder, together with accrued
interest on the outstanding balance at the rates and on the dates
specified therein and such other charges provided for herein. In
the event that the principal amount outstanding under the Note
exceeds the Borrowing Base at any time, the Borrower will
immediately, without request, prepay an amount sufficient to
eliminate such excess.
1.2 Borrowing Base. The Borrowing Base will be an amount equal
to the sum of (i) N/A % of the face amount of Eligible Accounts,
and (ii) the lesser of $ N/A or N/A % of the Borrower s cost of
Eligible Inventory, as such cost may be diminished as a result of
any event causing loss or depreciation in value of Eligible
Inventory. The Borrower will provide the Bank with information
regarding the Borrowing Base in such form and at such times as
the Bank may request. The terms used in this Section 1.2 will
have the meanings set forth in a supplement entitled Financial
Definitions, a copy of which the Borrower acknowledges having
received with this Agreement and which is incorporated herein by
reference.
1.3 Advances and Paying Procedure. The Bank is authorized and
directed to credit any of the Borrower s accounts with the Bank
(or to the account the Borrower designates in writing) for all
loans made hereunder, and the Bank is authorized to debit such
account or any other account of the Borrower with the Bank for
the amount of any principal or interest due under the Note or
other amount due hereunder on the due date with respect thereto.
1.4 Closing Fee. The Borrower will pay the Bank a one-time
closing fee of $ N/A contemporaneously with execution of this
Agreement. This fee is in addition to all other fees, expenses
and other amounts due hereunder.
1.5 Loan Facility Fee. The Borrower will pay a loan facility fee
equal to:
( ) $ N/A per annum, payable annual in advance; (or)
( ( ) $ N/A % per annum of the Loan Amount, payable
annually in advance; (or)
( ) $ N/A % per annum of the difference between the Loan
Amount and the unpaid principal amount of the Note
outstanding from time to time, payable quarterly, in
arrears, on the last business day of each third
calendar month, and at maturity; (or)
( ) $ N/A % per annum of the unpaid principal amount of the
Note outstanding from time to time, payable quarterly,
in arrears, on the last business day of each third
calendar month, and at maturity.
The loan facility fee is payable for the entire period that this
Agreement is in effect, regardless of whether any amounts are
outstanding hereunder at any given time.
1.6 Expenses and Attorneys Fees. The Borrower will reimburse
the Bank and any Participant (defined below) for all attorneys
fees and all other costs, fees and out-of-pocket disbursements
(including fees and disbursements of both inside counsel and
outside counsel) occurred by the Bank or any Participant in
connection with the preparation, execution, delivery,
administration, defense and enforcement of this Agreement or any
of the other Loan Documents (defined below), including fees and
costs related to any waivers or amendments with respect thereto
(examples of costs and fees include but are not limited to fees
and costs for: filling, perfecting or confirming the priority of
the Bank s lien, title searches or insurance, appraisals,
environmental audits and other reviews related to the Borrower,
any collateral or the loans, if requested by the Bank). The
Borrower will also reimburse the Bank and any Participant for all
costs of collection before and after judgment, and the costs of
preservation and/or liquidation of any collateral (including fees
and disbursements of both inside and outside counsel).
1.7 Compensating Balances. The Borrower will maintain on deposit
with the Bank in non-interest bearing accounts average daily
collected balances, in excess of that required to support account
activity and other credit facilities extended to the Borrower by
the Bank, on amount at least equal to the sum of (i) $ N/A and
(II) N/A % of the Loan Amount as computed on a monthly basis. If
the Borrower fails to keep and maintain such balances, it will
pay a deficiency fee, payable within five days after receipt of a
statement therefor calculated on the amount by which the
Borrower s average daily balances are less than the requirements
set forth above, computed at a rate equal to the rate set forth
in the Note.
1.8 Conditions to Borrowing. The Bank will not be obligated to
make (or continue to make) advances hereunder unless (i) the Bank
has received executed originals of the Note and all other
documents or agreements applicable to the loans described herein,
including but not limited to the documents specified in Article
III (collectively with this Agreement the Loan Documents ), in
form and content Satisfactory to the Bank; (ii) if the loan is
secured, the Bank has received confirmation satisfactory to it
that the Bank has a properly perfected security interest,
mortgage or lien, with the proper priority; (iii) the Bank has
received certified copies of the Borrower s Articles as
Incorporation and By-Laws, or it Partnership Agreement (as
appropriate), certification of corporate or partnership status
satisfactory to the Bank and all other relevant documents; (iv)
the Bank has received a certified copy of a resolution or
authorization in form and content satisfactory to the Bank
authorizing the loan and all acts contemplated by this Agreement
and all related documents and confirmation of proper
authorization of all guaranties and other acts of third parties
contemplated hereunder (v) the Bank has been provided with an
Opinion of the Borrower s counsel in form and content
satisfactory to the Bank confirming the matters outlined in
Section 2.2 and such other matters as the Bank requests; (vi) no
default exists under this Agreement or under any other Loan
Documents, or under any other agreements by and between the
Borrower and the Bank; and (vii) all proceedings taken in
connection with the transactions contemplated by this Agreement
(including any required environmental assessments), and all
instruments, authorizations and other documents applicable
thereto, are satisfactory to the Bank and its counsel.
ARTICLE II. WARRANTIES AND COVENANTS
While any part of the credit granted to the Borrower under this
Agreement or the other Loan Documents is available or any
obligations under any of the Loan Documents are unpaid or
outstanding, the Borrower continuously warrants and agrees as
follows:
2.1 Accuracy of Information. All information, certificates or
statements given to the Bank pursuant to this Agreement and the
other Loan Documents will be true and complete when given.
2.2 Organization and Authority; Litigation. If the Borrower is a
corporation or partnership, the Borrower is a validly existing
corporation or partnership (as applicable) in good standing under
the laws of its state of organization, and has all requisite
power and authority, corporate or otherwise, and possesses all
licenses necessary, to conduct its business and own its
properties. The execution, delivery and performance of this
Agreement and the other Loan Documents (i) are within the
Borrower s power; (ii) have been duly authorized by proper
corporate or partnership action (as applicable); (iii) do not
require the approval of any governmental agency, other entity or
person; and (iv) will not violate any law, agreement or
restriction by which the Borrower is bound. This Agreement and
the other Loan Documents are the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in
accordance with their terms. There is no litigation or
administrative proceeding threatened or pending against the
Borrower which would, if adversely determined, have a material
adverse effect on the Borrower s financial condition or its
property.
2.3 Existence; Business Activities; Assets. The Borrower will
(i) preserve its corporate or partnership (as applicable)
existence, rights and franchises; (ii) not make any material
change in the nature or manner of its business activities; (iii)
not liquidate, dissolve, merge or consolidate with or into
another entity; and (iv) not sell, lease, transfer or otherwise
dispose of all or substantially all of its assets.
2.4 Use of Proceeds; Margin Stock; Speculation. Advances by the
Bank hereunder will be used exclusively by the Borrower for
working capital and other regular and valid purposes. The
Borrower will not use any of the loan proceeds to purchase or
carry margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System). No part of any of the
proceeds will be used for speculative investment purposes,
including, without limitation, speculating or hedging in the
commodities and/or futures market.
2.5 Environmental Matters. Except as disclosed in a written
schedule attached to this Agreement (if no schedule is attached,
there are no exceptions), there exists no uncorrected violation
by the Borrower of any federal, state or local laws (including
statutes, regulations, ordinances or other governmental
restrictions and requirements) relating to the discharge of air
pollutants, water pollutants or process waste water or otherwise
relating to the environment of Hazardous Substances as
hereinafter defined, whether such laws currently exist or are
enacted in the future (collectively Environmental Laws ). The
term Hazardous Substances will mean any hazardous or toxic
wastes, chemicals or other substances, the generation, possession
or existence of which is prohibited or governed by any
Environmental Laws. The Borrower is not subject to any judgment,
decree, order or citation, or a party to (or threatened with) any
litigation or administrative proceedings, which asserts that the
Borrower (i) has violated any Environmental Laws; (ii) is
required to clean up, remove or take remedial or other action
with respect to any Hazardous Substances (collectively Remedial
Action ); or (iii) is required to pay all or a portion of the
cost of any Remedial Action, as a potentially responsible party.
Except as disclosed on the Borrower s environmental questionnaire
provided to the Bank, there are not now, nor to the Borrower s
knowledge after reasonable investigation have there ever been,
any Hazardous Substances (or tanks or other facilities for the
storage of Hazardous Substances) stored, deposited, recycled or
disposed of on, under or at any real estate owned or occupied by
the Borrower during the periods that the Borrower owned or
occupied such real estate, which if present on the real estate or
in soils or ground water, could require Remedial Action. To the
Borrower s knowledge, there are no proposed or pending changes in
Environmental laws which would adversely affect the Borrower or
its business, and there are no conditions existing currently or
likely to exist while the Loan Documents are in effect which
would subject the Borrower to Remedial Action or other liability.
The Borrower currently complies with and will continue to timely
comply with all applicable Environmental Laws; and will provide
the Bank, immediately upon receipt, copies of any correspondence,
notice, complaint, order or other document from any source
asserting or alleging any circumstance or condition which
requires or may require a financial contribution by the Borrower
or Remedial Action or other response by or on the part of the
Borrower under Environmental Laws, or which seeks damages or
civil, criminal or punitive penalties from the Borrower for an
alleged violation of Environmental Laws.
2.6 Compliance with Laws. The Borrower has complied with all
laws applicable to its business and its properties, and has all
permits, licenses and approvals required by such laws, copies of
which have been provided to the Bank.
2.7 Restriction on Indebtedness. The Borrower will not create,
incur, assume or have outstanding any indebtedness for borrowed
money (including capitalized leases) except (i) any indebtedness
owing to the Bank, and (ii) any other indebtedness outstanding on
the date hereof, and shown on the Borrower s financial statements
delivered to the Bank prior to the date hereof, provided that
such other indebtedness will not be increased.
2.8 Restriction on Liens. The Borrower will not create, incur,
assume or permit to exist any mortgage, pledge, encumbrance or
other lien or levy upon or security interest in any of the
Borrower s property now owned or hereafter acquired, except (i)
taxes and assessments which are either not delinquent or which
are being contested in good faith with adequate reserves
provided; (ii) easements, restrictions and minor title
irregularities which do not, as a practical matter, have an
adverse effect upon the ownership and use of the affected
property; (iii) liens in favor of the Bank; and (iv) other liens
disclosed in writing to the Bank prior to the date hereof.
2.9 Restriction on Contingent Liabilities. The Borrower will not
guarantee or become a surety or otherwise contingently liable for
any obligations of others, except pursuant to the deposit and
collection of checks and similar matters in the ordinary course
of business.
2.10 Insurance. The Borrower will maintain insurance to such
extent, covering such risks and with such insurers as is usual
and customary for businesses operating similar properties and as
is satisfactory to the Bank including insurance for fire and
other risks insured against by extended coverage, public
liability insurance and workers compensation insurance; and will
designate the Bank as loss payee with a Lender s Loss Payable
endorsement on any casualty policies and take such other action
as the Bank may reasonably request to ensure that the Bank will
receive (subject to no other interests) the insurance proceeds on
the Bank s collateral.
2.11 Taxes and Other Liabilities. The Borrower will pay and
discharge, when due, all of its taxes, assessments and other
liabilities, except when the payment thereof is being contested
in good faith by appropriate procedures which will avoid
foreclosure of liens securing such items and with adequate
reserves provided therefor.
2.12 Financial Statements and Reporting. The financial
statements and other information previously provided to the Bank
or provided to the Bank in the future are or will be complete and
accurate and prepared in accordance with generally accepted
accounting principles. There has been no material adverse change
in the Borrower s financial condition since such information was
provided to the Bank. The Borrower will (i) maintain accounting
records in accordance with generally recognized and accepted
principles of accounting consistently applied throughout the
accounting periods involved; (ii) provided the Bank with such
information concerning its business affairs and financial
condition (including insurance coverage) as the Bank may request;
and (iii) without request, provide the Bank with management-
prepared financial statements:
(X) quarterly within 60 days of the end of each quarter;
( ) monthly within N/A days of the end of each month;
and annual audited financial statements prepared by an accounting
firm acceptable to the Bank within 120 days of the end of each
fiscal year.
2.13 Inspection of Properties and Records; Fiscal Year. The
Borrower will permit representatives of the Bank to visit and
inspect any of the properties and examine any of the books and
records of the Borrower at any reasonable time and as often as
the Bank may reasonably desire. The Borrower will not change its
fiscal year.
2.14 Financial Status. The Borrower will maintain at all times:
(i) Net Working Capital in the amount of at least $ N/A.
(ii) Tangible Net Worth in the Amount of at least $ N/A.
(iii) Debt to Worth Ratio of not more than N/A.
(iv) Current Ratio of at least N/A.
(v) Capital Expenditures not to exceed $ N/A per fiscal year.
(vi) Cash Flow Coverage Ratio of at least N/A.
The terms used in this Section 2.14 will have the meanings set
forth in a supplement entitled Financial Definitions, a copy of
which the Borrower hereby acknowledges having received with this
Agreement and which is incorporated herein by reference.
ARTICLE III. COLLATERAL AND GUARANTIES
3.1 Collateral. This Agreement and the Note are secured by any
and all security interests, pledges, mortgages or liens now or
hereafter in existence granted to the Bank to secure indebtedness
of the Borrower to the Bank, including without limitation as
described in the following documents:
(X) Real Estate Mortgage(s)/Deed(s) of Trust dated OCTOBER 22,
1996
covering real estate located at
(X) Security Agreement(s) dated OCTOBER 22, 1996
( ) Collateral Pledge Agreement(s) dated
( ) Other
3.2 Guaranties. This loan is guaranteed by LAIN & SONS, INC.
3.3 Credit Balances; Setoff. As additional security for the
payment of the obligations described in the Loan Documents and
any other obligations of the Borrower to the Bank of any nature
whatsoever (collectively the Obligations ), the Borrower hereby
grants to the Bank a security interest in, a lien on and an
express contractual right to set off against all depository
account balances, cash and any other property of the Borrower now
or hereafter in the possession of the Bank. The Bank may, at any
time upon the occurrence of a default hereunder (notwithstanding
any notice requirements or grace/cure periods under this or other
agreements between the Borrower and the Bank) set off against the
Obligations whether or not the Obligations (including future
installments) are then due or have been accelerated, all without
any advance or contemporaneous notice or demand of any kind to
the Borrower, such notice and demand being expressly waived.
The information in this Article III is for information only and
the omission of any reference to the agreement will not affect
the validity or enforceability thereof. The rights and remedies
of the Bank outlined in this Agreement and the Documents
identified above are intended to be cumulative.
ARTICLE IV. DEFAULTS
4.1 Defaults. Notwithstanding any cure periods described below,
the Borrower will immediately notify the Bank in writing when the
Borrower obtains knowledge of the occurrence of any default
specified below. Regardless of whether the Borrower has given
the required notice, the occurrence of one or more of the
following will constitute a default:
(a) Nonpayment. The Borrower shall fail to pay (i) any interest
due on the Note or any fees, charges, costs or expenses
under the Loan Documents by 5 days after the same becomes
due; or (ii) any principal amount of the Note when due.
(b) Nonperformance. The Borrower or any guarantor of Borrower s
Obligations to the Bank ( Guarantor ) shall fail to perform
or observe any agreement, term, provision, condition, or
covenant (other than a default occurring under
(a),(c),(d),(e),(f) or (g) of this Section 4.1) required to
be performed or observed by the Borrower or any Guarantor
hereunder or under any other Loan Document or other
agreement with or in favor of the Bank.
(c) Misrepresentation. Any financial information, statement,
certificate, representation or warranty given to the Bank by
the Borrower or any Guarantor (or any of their
representatives) in connection with entering into this
Agreement or the other Loan Documents and/or any borrowing
thereunder, or required to be furnished under the terms
thereof, shall prove untrue or misleading in any material
respect (as determined by the Bank in the exercise of its
judgment) as of the time when given.
(d) Default on Other Obligations. The Borrower or any Guarantor
shall be in default under the terms of any loan agreement,
promissory note, lease, conditional sale contract or other
agreement, document or instrument evidencing, governing or
securing any indebtedness owing by the Borrower or any
Guarantor to the Bank or any indebtedness in excess of
$10,000 owing by the Borrower to any third party, and the
period of grace, if any, to cure said default shall have
passed.
(e) Judgments. Any judgment shall be obtained against the
Borrower or any Guarantor which, together with all other
outstanding unsatisfied judgments against the Borrower (or
such Guarantor), shall exceed the sum of $10,000 and shall
remain unvacated, unbonded or unstayed for a period of 30
days following the date of entry thereof.
(f) Inability to Perform; Bankruptcy/Insolvency. (i) the
Borrower or any Guarantor shall die or cease to exist; or
(ii) any Guarantor shall attempt to revoke any guaranty of
the Obligations described herein, or any guaranty becomes
unenforceable in whole or in part for any reason; or (iii)
any bankruptcy, insolvency or receivership proceedings, or
an assignment for the benefit of creditors, shall be
commenced under any federal or state law by or against the
Borrower or any Guarantor; or (iv) the Borrower or any
Guarantor shall become the subject of any out-of-court
settlement with its creditors; or (v) the Borrower or any
Guarantor is unable or admits in writing its inability to
pay its debts as they mature.
(g) Adverse Change; Insecurity. (i) there is a material
adverse change in the business, properties, financial
condition or affairs of the Borrower or any Guarantor, or in
any collateral securing the Obligations; or (ii) the Bank in
good faith deems itself insecure.
4.2 Termination of Loans; Additional Bank Rights. Upon the
occurrence of any of the events identified in Section 4.1, the
Bank may at any time (notwithstanding any notice requirements or
grace/cure periods under this or other agreements between the
Borrower and the Bank) (i) immediately terminate its obligation,
if any, to make additional loans to the Borrower; (ii) set off,
and/or (iii) take such other steps to protect or preserve the
Bank s interest in any collateral, including without limitation,
notifying account debtors to make payments directly to the Bank,
advancing funds to protect any collateral and insuring collateral
at the Borrower s expense; all without demand or notice of any
kind, all of which are hereby waived.
4.3 Acceleration of Obligations. Upon the occurrence of any of
the events identified in Sections 4.1(a) through 4.1(e) and
4.1(g), and the passage of any applicable cure periods, the Bank
may at any time thereafter, by written notice to the Borrower,
declare the unpaid principal balance of any Obligations, together
with the interest accrued thereon and other amounts accrued
hereunder and under the other Loan Documents, to be immediately
due and payable; and the unpaid balance will thereupon be due and
payable, all without presentation, demand, protest or further
notice of any kind, all of which are hereby waived, and
notwithstanding anything to the contrary contained herein or in
any of the other Loan Documents. Upon the occurrence of any
event under Section 4.1(f), the unpaid principal balance of any
Obligations, together with all interest accrued thereon and other
amounts accrued hereunder and under the other Loan Documents,
will thereupon be immediately due and payable, all without
presentation, demand, protest or notice of any kind, all of which
are hereby waived, and notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents. Nothing
contained in Section 4.1, Section 4.2 or this section will limit
the Bank s right to set off as provided in Section 3.3 or
otherwise in this Agreement.
4.4 Other Remedies. Nothing in this Article IV is intended to
restrict the Bank s rights under any of the Loan Documents or at
law, and the Bank may exercise all such rights and remedies as
and when they are available.
ARTICLE V. OTHER TERMS
5.1 Financial Definitions Supplement. If a Borrowing Base or
covenants regarding financial status apply to this loan, the
Financial Definitions Supplement identified in Sections 1.2 and
2.14 of this Agreement is hereby incorporated into this
Agreement. The Borrower acknowledges receiving a copy of such
Supplement.
5.2 Additional Terms; Addendum/Supplements. The warranties,
covenants, conditions and other terms described in this Section
and/or in the Addendum and/or other attached document(s)
referenced in this Section are incorporated into this Agreement:
ARTICLE VI. MISCELLANEOUS
6.1 Delay; Cumulative Remedies. No delay on the part of the Bank
in exercising any right, power or privilege hereunder or under
any of the other Loan Documents will operate as a waiver thereof,
nor will any single or partial exercise of any right, power or
privilege hereunder preclude other or further exercise thereof or
the exercise of any other right, power or privilege. The rights
and remedies herein specified are cumulative and are not
exclusive of any rights or remedies which the Bank would
otherwise have.
6.2 Relationship to Other Documents. The warranties, covenants
and other obligations of the Borrower (and the rights and
remedies of the Bank) that are outlined in this Agreement and the
other Loan Documents are intended to supplement each other. In
the event of any inconsistencies in any of the terms in the Loan
Documents, all terms will be cumulative so as to give the Bank
the most favorable rights set forth in the conflicting documents,
except that if there is a direct conflict between any preprinted
terms and specifically negotiated terms (whether included in an
addendum or otherwise), the specifically negotiated terms will
control.
6.3 Participations; Guarantors. The Bank may, at its option sell
all or any interests in the Note and other Loan Documents to
other financial institutions (the Participant ), and in
connection with such sales (and thereafter) disclose any
financial information the Bank may have concerning the Borrower
to any such Participant or potential Participant. From time to
time, the Bank may, in its discretion and without obligation to
the Borrower, any guarantor or any other third party, disclose
information about the Borrower and this loan to any guarantor,
surety or other accommodation party. This provision does not
obligate the Bank to supply any information or release the
Borrower from its obligation to provide such information, and the
Borrower agrees to keep all Guarantors advised of its financial
condition and other matters which may be relevant to the
Guarantors obligations to the Bank.
6.4 Successors. The rights, options, powers and remedies granted
in this Agreement and the other Loan Documents will extend to the
Bank and to its successors and assigns, will be binding upon the
Borrower and its successors and assigns and will be applicable
hereto and to all renewals and/or extensions hereof.
6.5 Indemnification. Except for harm arising from the Bank s
willful misconduct, the Borrower hereby indemnifies and agrees to
defend and hold the Bank harmless from any and all losses, costs,
damages, claims and expenses of any kind suffered by or asserted
against the Bank relating to claims by third parties arising out
of the financing provided under the Loan Documents or related to
any collateral (including, without limitation, the Borrower s
failure to perform its obligations relating to Environmental
Matters described in Section 2.5 above). This indemnification
and hold harmless provision will survive the termination of the
Loan Documents and the satisfaction of the Obligations due the
Bank.
6.6 Notice of Claims Against Bank; Limitation of Certain Damages.
In order to allow the Bank to mitigate any damages to the
Borrower from the Bank s alleged breach of its duties under the
Loan Documents or any other duty, if any, to the Borrower, the
Borrower agrees to give the Bank immediate written notice of any
claim or defense it has against the Bank, whether in tort or
contract, relating to any action or inaction by the Bank under
the Loan Documents, or the transactions related thereto, or of
any defense to payment of the Obligations for any reason. The
requirement of providing timely notice to the Bank represents the
parties agreed-to standard of performance regarding claims
against the Bank. Notwithstanding any claim that the Borrower
may have against the Bank, and regardless of any notice the
Borrower may have given the Bank, the Bank will not be liable to
the Borrower for consequential and/or special damages arising
therefrom, except those damages arising from the Bank s willful
misconduct.
6.7 Notices. Although any notice required to be given hereunder
or under any of the other Loan Documents might be accomplished by
other means, notice will always be deemed given when placed in
the United States Mail, with postage prepaid, or sent by
overnight delivery service, or sent by telex or facsimile, in
each case to the address set forth below or as amended.
6.8 Payments. Payments due under the Note and other Loan
Documents will be made in lawful money of the United States, and
the Bank is authorized to charge payments due under the Loan
Documents against any account of the Borrower. All payments may
be applied by the Bank to principal, interest and other amounts
due under the Loan Documents in any order which the Bank elects.
6.9 Applicable Law and Jurisdiction; Interpretation; Joint
Liability. This Agreement and all other Loan Documents will be
governed by and interpreted in accordance with the internal laws
of the state where the Bank s mail office is located, except to
the extent superseded by Federal law. Invalidity of any
provisions of this Agreement will not affect any other provision.
THE BORROWER HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT SITUATED IN THE COUNTY OR FEDERAL
JURISDICTION WHERE THE BANK S OFFICE IS DESIGNATED IN THE NOTE AS
THE PLACE FOR PAYMENT IS LOCATED (OR, IN THE ABSENCE OF SUCH
DESIGNATION, THE BANK S MAIN OFFICE), AND WAIVES ANY OBJECTION
BASED ON FORUM NON CONVENIENS, WITH REGARD TO ANY ACTIONS,
CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE
NOTE, THE COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY
TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT AND/OR
INTERPRETATION OF ANY OF THE FOREGOING. Nothing herein will
affect the Bank s rights to serve process in any manner permitted
by law, or limit the Bank s right to bring proceedings against
the Borrower in the competent courts of any other jurisdiction or
jurisdictions. This Agreement, the other Loan Documents and any
amendments hereto (regardless of when executed) will be deemed
effective and accepted only upon the Bank s receipt of the
executed originals thereof. If there is more than one Borrower,
the liability of the Borrowers will be joint and several, and the
reference to Borrower will be deemed to refer to all Borrowers.
6.10 Copies; Entire Agreement; Modification. The Borrower hereby
acknowledges the receipt of a copy of this Agreement and all
other Loan Documents.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT
SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE
ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN
THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE
THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
THIS NOTICE SHALL ALSO BE EFFECTIVE WITH RESPECT TO ALL OTHER
CREDIT AGREEMENTS NOW IN EFFECT BETWEEN YOU AND THIS LENDER. A
MODIFICATION OF ANY OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN
YOU AND THIS LENDER, WHICH OCCURS AFTER RECEIPT BY YOU OF THIS
NOTICE, MAY BE MADE ONLY BY ANOTHER WRITTEN INSTRUMENT. ORAL OR
IMPLIED MODIFICATIONS TO SUCH CREDIT AGREEMENTS ARE NOT
ENFORCEABLE AND SHOULD NOT BE RELIED UPON.
6.11 Waiver of Jury Trial. THE BORROWER AND THE BANK HEREBY
JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING RELATING TO ANY OF THE LOAN DOCUMENTS,
THE OBLIGATIONS THEREUNDER, ANY COLLATERAL SECURING THE
OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED
THERETO. THE BORROWER AND THE BANK EACH REPRESENTS TO THE OTHER
THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.
IN WITNESS WHEREOF, the undersigned have executed this REVOLVING
CREDIT AGREEMENT AS OF OCTOBER 22, 1996.
(Individual Borrower) OAKRIDGE HOLDINGS, INC.
Borrower Name (Organization)
(SEAL) a MINNESOTA Corporation
Borrower Name N/A By /s/ R. C. Harvey
Name and Title ROBERT HARVEY, PRES.
(SEAL)
By
Borrower Name N/A Name and Title
FIRSTAR BANK ILLINOIS (Bank)
By /s/ Earl Goldman, V.P.
Name and Title Earl Goldman, V.P.
Borrower Address: 4301 W Roosevelt Road, Hillside, IL 60106
Borrower Telephone No.: 708-344-5600
MARITAL PURPOSE STATEMENT
(To be completed by married Wisconsin residents)
Each Borrower who is married represents that this obligation is
incurred in the interest of his or her marriage or family.
Date: n/a
Printed Name:
Date: n/a
Printed Name:
Borrower Name Name and Title
FIRSTAR BANK ILLINOIS (Bank)
By: /s/ Earl Goldman, V.P.
Name and Title Earl Goldman, V.P.
ADDENDUM TO REVOLVING CREDIT AGREEMENT
This Addendum is made part of the Revolving Credit Agreement
(the Agreement ) made and entered into by and between the
undersigned borrower (the Borrower ) and the undersigned bank
(the Bank ) as of the date identified below. The warranties,
covenants and other terms described below are hereby added to the
Agreement.
1) The borrower agrees to maintain a cash flow coverage of not
less than 1.25x, defined as follows:
Earnings before interest, taxes, depreciation/amortization less
nonfinanced capital expenditures divided by current fiscal year
debt maturities and total interest paid during the year.
Covenant will be tested upon receipt of the fiscal year end
financial statements.
2) Borrower/Guarantors agree to maintain all necessary operating
licenses and permits as required by the state and local
regulatory agencies in Illinois.
3) Borrower/Guarantors agree to limit total investment or
acquisition of any additional companies or businesses to $50,000,
without the prior written consent of Firstar Bank.
Dated as of:
(Individual Borrower) OAKRIDGE HOLDINGS, INC. and
Subsidiaries
Borrower Name (Organization)
(Seal)
Borrower Name By: /s/ R. C. Harvey
(Individual Borrower) Name and Title Robert Harvey, Pres.
(Seal) By:
TERM NOTE
(For Term Loan Agreement; No Prepayment Premium)
$ 750,000.00 October 22, 1996
FOR VALUE RECEIVED, the undersigned borrower (the
Borrower ), promises to pay to the order of FIRSTAR BANK
ILLINOIS (the Bank ), at its main office in CHICAGO, ILLINOIS,
the principal sum of TWO HUNDRED TWENTY- FIVE THOUSAND AND NO/100
Dollars ($750,000.00).
Interest.
The unpaid principal balance will bear interest at any annual
rate of 8.625%.
Payment Schedule.
See Attached Payment Schedule Rider
Interest will be computed for the actual number of days
principal is unpaid, using a daily factor obtained by dividing
the stated interest rate by 360.
Principal amounts remaining unpaid after the maturity
thereof, whether t fixed maturity or by reason of acceleration of
maturity, shall bear interest from and after maturity until paid
at a rate of 2% per annum plus the rate otherwise payable
hereunder.
In no event will the interest rate hereunder exceed that
permitted by applicable law. If any interest or other charge is
finally determined by a court of competent jurisdiction to exceed
the maximum amount permitted by law, the interest or charge shall
be reduced to the maximum permitted by law, and the Bank may
credit any excess amount previously collected against the balance
due or refund the amount to the Borrower.
If any payment is not made on or before its due date, the
Bank may collect a delinquency charge of 5.00% of the unpaid
amount. Collection of the late payment fee shall not be deemed
to be a waiver of the Bank s right to declare a default
hereunder.
This Note may be prepaid in full or in part at any time
without premium. Prepayments of less than all the outstanding
principal amount of this Note shall be applied upon principal
payments in the inverse order of their maturities.
Without affecting the liability of any Borrower, endorser,
surety or guarantor, the Bank may, without notice, renew or
extend the time for payment, accept partial payments, release or
impair any collateral security for the payment of this Note, or
agree not to sue any party liable on it.
This Term Note constitutes the Note issued under a Term Loan
Agreement dated as of the date hereof between the Borrower and
Bank, to which Agreement reference is hereby made for a statement
of the terms under which the loan evidenced hereby was made and a
description of the terms and conditions upon which the maturity
of this Note may be accelerated, and for a description of the
collateral securing this Note.
The Borrower hereby acknowledges the receipt of a copy of the
Note.
(Individual Borrower) LASALLE NATIONAL TRUST, as trustee
under trust
Borrower Name (Organization)
(SEAL) Agreement No. 38160, dated 02/01/69
and not personally
Borrower Name N/A By /s/ Corinne Bak,
Name and Title Corinne Bak,
Vice President
By
Borrower Name N/A Name and Title
TERM LOAN AGREEMENT
This Term Loan Agreement (the Agreement ) is made and entered
into by and between the undersigned borrower (the Borrower ) and
the undersigned bank (the Bank ) as of the date set forth on the
last page of this Agreement.
ARTICLE I. LOANS
1.1 Terms for Advance(s). [Choose One:]
(X) Single Advance Term Loan. As of the date hereof, the
Borrower has obtained a term loan from the Bank in the
amount of $750,000.00 (the Loan Amount ). The term
loan is evidenced by a single promissory note of the
Borrower to the order of the Bank in the principal
amount of the Loan Amount and dated as of the date
hereof (the Note ).
( ) Multiple Advance Term Loan. Prior to N/A or the
earlier termination hereof, the Borrower may obtain
advances from the Bank in an aggregate amount not
exceeding $ N/A (the Loan Amount ). The term loans
will be evidenced by a single promissory note of the
Borrower to the Bank in the principal amount of the
Loan Amount and dated as of the date hereof (the
Note ). Although the Note will be expressed as
payable in the full Loan Amount, the Borrower will be
obligated to pay only the amounts actually disbursed
hereunder, together with accrued interest on the
outstanding balance at the rates and on the dates
specified therein and such other charges provided for
herein.
1.2 Advances and Paying Procedure. The Bank is authorized and
directed to credit any of the Borrower s accounts with the Bank
(or to the account the Borrower designates in writing) for all
loans made hereunder, and the Bank is authorized to debit such
account or any other account of the Borrower with the Bank for
the amount of any principal or interest due under the Note or
other amount due hereunder on the due date with respect thereto.
1.3 Closing Fee. The Borrower will pay the Bank a one-time
closing fee of $6000.00 contemporaneously with execution of this
Agreement. This fee is in addition to all other fees, expenses
and other amounts due hereunder.
1.4 Compensating Balances. The Borrower will maintain on deposit
with the Bank in non-interest bearing accounts average daily
collected balances, in excess of that required to support account
activity and other credit facilities extended to the Borrower by
the Bank, an amount at least equal to the sum of (i) $ N/A and
(ii) N/A % of the Loan Amount as computed on a monthly basis. If
the Borrower fails to keep and maintain such balances, it will
pay a deficiency fee, payable within five days after receipt of a
statement therefor calculated on the amount by which the
Borrower s average daily balances are less than the requirements
set forth above, computed at a rate equal to the rate set forth
in the Note.
1.5 Expenses and Attorneys Fees. The Borrower will reimburse
the Bank and any Participant (defined below) for all attorneys
fees and all other costs, fees and out-of-pocket disbursements
(including fees and disbursements of both inside counsel and
outside counsel) incurred by the Bank or any Participant in
connection with the preparation, execution, delivery,
administration, defense and enforcement of this Agreement or any
of the other Loan Documents (defined below), including fees and
costs related to any waivers or amendments with respect thereto
(examples of costs and fees include but are not limited to fees
and costs for: filling, perfecting or confirming the priority of
the Bank s lien, title searches or insurance, appraisals,
environmental audits and other reviews related to the Borrower,
any collateral or the loans, if requested by the Bank). The
Borrower will also reimburse the Bank and any Participant for all
costs of collection before and after judgment, and the costs of
preservation and/or liquidation of any collateral (including fees
and disbursements of both inside and outside counsel).
1.6 Conditions to Borrowing. The Bank will not be obligated to
make (or continue to make) advances hereunder unless (i) the Bank
has received executed originals of the Note and all other
documents or agreements applicable to the loans described herein,
including but not limited to the documents specified in Article
III (collectively with this Agreement the Loan Documents ), in
form and content Satisfactory to the Bank; (ii) if the loan is
secured, the Bank has received confirmation satisfactory to it
that the Bank has a properly perfected security interest,
mortgage or lien, with the proper priority; (iii) the Bank has
received certified copies of the Borrower s Articles as
Incorporation and By-Laws, or it Partnership Agreement (as
appropriate), certification of corporate or partnership status
satisfactory to the Bank and all other relevant documents; (iv)
the Bank has received a certified copy of a resolution or
authorization in form and content satisfactory to the Bank
authorizing the loan and all acts contemplated by this Agreement
and all related documents and confirmation of proper
authorization of all guaranties and other acts of third parties
contemplated hereunder (v) the Bank has been provided with an
Opinion of the Borrower s counsel in form and content
satisfactory to the Bank confirming the matters outlined in
Section 2.2 and such other matters as the Bank requests; (vi) no
default exists under this Agreement or under any other Loan
Documents, or under any other agreements by and between the
Borrower and the Bank; and (vii) all proceedings taken in
connection with the transactions contemplated by this Agreement
(including any required environmental assessments), and all
instruments, authorizations and other documents applicable
thereto, are satisfactory to the Bank and its counsel.
ARTICLE II. WARRANTIES AND COVENANTS
While any part of the credit granted to the Borrower under this
Agreement or the other Loan Documents is available or any
obligations under any of the Loan Documents are unpaid or
outstanding, the Borrower continuously warrants and agrees as
follows:
2.1 Accuracy of Information. All information, certificates or
statements given to the Bank pursuant to this Agreement and the
other Loan Documents will be true and complete when given.
2.2 Organization and Authority; Litigation. If the Borrower is a
corporation or partnership, the Borrower is a validly existing
corporation or partnership (as applicable) in good standing under
the laws of its state of organization, and has all requisite
power and authority, corporate or otherwise, and possesses all
licenses necessary, to conduct its business and own its
properties. The execution, delivery and performance of this
Agreement and the other Loan Documents (i) are within the
Borrower s power; (ii) have been duly authorized by proper
corporate or partnership action (as applicable); (iii) do not
require the approval of any governmental agency, other entity or
person; and (iv) will not violate any law, agreement or
restriction by which the Borrower is bound. This Agreement and
the other Loan Documents are the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in
accordance with their terms. There is no litigation or
administrative proceeding threatened or pending against the
Borrower which would, if adversely determined, have a material
adverse effect on the Borrower s financial condition or its
property.
2.3 Existence; Business Activities; Assets. The Borrower will
(i) preserve its corporate or partnership (as applicable)
existence, rights and franchises; (ii) not make any material
change in the nature or manner of its business activities; (iii)
not liquidate, dissolve, merge or consolidate with or into
another entity; and (iv) not sell, lease, transfer or otherwise
dispose of all or substantially all of its assets.
2.4 Use of Proceeds; Margin Stock; Speculation. Advances by the
Bank hereunder will be used exclusively by the Borrower for
working capital and other regular and valid purposes. The
Borrower will not use any of the loan proceeds to purchase or
carry margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System). No part of any of the
proceeds will be used for speculative investment purposes,
including, without limitation, speculating or hedging in the
commodities and/or futures market.
2.5 Environmental Matters. Except as disclosed in a written
schedule attached to this Agreement (if no schedule is attached,
there are no exceptions), there exists no uncorrected violation
by the Borrower of any federal, state or local laws (including
statutes, regulations, ordinances or other governmental
restrictions and requirements) relating to the discharge of air
pollutants, water pollutants or process waste water or otherwise
relating to the environment of Hazardous Substances as
hereinafter defined, whether such laws currently exist or are
enacted in the future (collectively Environmental Laws ). The
term Hazardous Substances will mean any hazardous or toxic
wastes, chemicals or other substances, the generation, possession
or existence of which is prohibited or governed by any
Environmental Laws. The Borrower is not subject to any judgment,
decree, order or citation, or a party to (or threatened with) any
litigation or administrative proceedings, which asserts that the
Borrower (i) has violated any Environmental Laws; (ii) is
required to clean up, remove or take remedial or other action
with respect to any Hazardous Substances (collectively Remedial
Action ); or (iii) is required to pay all or a portion of the
cost of any Remedial Action, as a potentially responsible party.
Except as disclosed on the Borrower s environmental questionnaire
provided to the Bank, there are not now, nor to the Borrower s
knowledge after reasonable investigation have there ever been,
any Hazardous Substances (or tanks or other facilities for the
storage of Hazardous Substances) stored, deposited, recycled or
disposed of on, under or at any real estate owned or occupied by
the Borrower during the periods that the Borrower owned or
occupied such real estate, which if present on the real estate or
in soils or ground water, could require Remedial Action. To the
Borrower s knowledge, there are no proposed or pending changes in
Environmental laws which would adversely affect the Borrower or
its business, and there are no conditions existing currently or
likely to exist while the Loan Documents are in effect which
would subject the Borrower to Remedial Action or other liability.
The Borrower currently complies with and will continue to timely
comply with all applicable Environmental Laws; and will provide
the Bank, immediately upon receipt, copies of any correspondence,
notice, complaint, order or other document from any source
asserting or alleging any circumstance or condition which
requires or may require a financial contribution by the Borrower
or Remedial Action or other response by or on the part of the
Borrower under Environmental Laws, or which seeks damages or
civil, criminal or punitive penalties from the Borrower for an
alleged violation of Environmental Laws.
2.6 Compliance with Laws. The Borrower has complied with all
laws applicable to its business and its properties, and has all
permits, licenses and approvals required by such laws, copies of
which have been provided to the Bank.
2.7 Restriction on Indebtedness. The Borrower will not create,
incur, assume or have outstanding any indebtedness for borrowed
money (including capitalized leases) except (i) any indebtedness
owing to the Bank, and (ii) any other indebtedness outstanding on
the date hereof, and shown on the Borrower s financial statements
delivered to the Bank prior to the date hereof, provided that
such other indebtedness will not be increased.
2.8 Restriction on Liens. The Borrower will not create, incur,
assume or permit to exist any mortgage, pledge, encumbrance or
other lien or levy upon or security interest in any of the
Borrower s property now owned or hereafter acquired, except (i)
taxes and assessments which are either not delinquent or which
are being contested in good faith with adequate reserves
provided; (ii) easements, restrictions and minor title
irregularities which do not, as a practical matter, have an
adverse effect upon the ownership and use of the affected
property; (iii) liens in favor of the Bank; and (iv) other liens
disclosed in writing to the Bank prior to the date hereof.
2.9 Restriction on Contingent Liabilities. The Borrower will not
guarantee or become a surety or otherwise contingently liable for
any obligations of others, except pursuant to the deposit and
collection of checks and similar matters in the ordinary course
of business.
2.10 Insurance. The Borrower will maintain insurance to such
extent, covering such risks and with such insurers as is usual
and customary for businesses operating similar properties and as
is satisfactory to the Bank including insurance for fire and
other risks insured against by extended coverage, public
liability insurance and workers compensation insurance; and will
designate the Bank as loss payee with a Lender s Loss Payable
endorsement on any casualty policies and take such other action
as the Bank may reasonably request to ensure that the Bank will
receive (subject to no other interests) the insurance proceeds on
the Bank s collateral.
2.11 Taxes and Other Liabilities. The Borrower will pay and
discharge, when due, all of its taxes, assessments and other
liabilities, except when the payment thereof is being contested
in good faith by appropriate procedures which will avoid
foreclosure of liens securing such items and with adequate
reserves provided therefor.
2.12 Financial Statements and Reporting. The financial
statements and other information previously provided to the Bank
or provided to the Bank in the future are or will be complete and
accurate and prepared in accordance with generally accepted
accounting principles. There has been no material adverse change
in the Borrower s financial condition since such information was
provided to the Bank. The Borrower will (i) maintain accounting
records in accordance with generally recognized and accepted
principles of accounting consistently applied throughout the
accounting periods involved; (ii) provided the Bank with such
information concerning its business affairs and financial
condition (including insurance coverage) as the Bank may request;
and (iii) without request, provide the Bank with management-
prepared financial statements:
(X) quarterly within 60 days of the end of each quarter;
( ) monthly within N/A days of the end of each month;
and annual audited financial statements prepared by an accounting
firm acceptable to the Bank within 120 days of the end of each
fiscal year.
2.13 Inspection of Properties and Records; Fiscal Year. The
Borrower will permit representatives of the Bank to visit and
inspect any of the properties and examine any of the books and
records of the Borrower at any reasonable time and as often as
the Bank may reasonably desire. The Borrower will not change its
fiscal year.
2.14 Financial Status. The Borrower will maintain at all times:
(i) Net Working Capital in the amount of at least $ N/A.
(ii) Tangible Net Worth in the Amount of at least $ N/A.
(iii) Debt to Worth Ratio of not more than N/A.
(iv) Current Ratio of at least N/A.
(v) Capital Expenditures not to exceed $ N/A per fiscal year.
(vi) Cash Flow Coverage Ratio of at least N/A.
The terms used in this Section 2.14 will have the meanings set
forth in a supplement entitled Financial Definitions, a copy of
which the Borrower hereby acknowledges having received with this
Agreement and which is incorporated herein by reference.
ARTICLE III. COLLATERAL AND GUARANTIES
3.1 Collateral. This Agreement and the Note are secured by any
and all security interests, pledges, mortgages or liens now or
hereafter in existence granted to the Bank to secure indebtedness
of the Borrower to the Bank, including without limitation as
described in the following documents:
(X) Real Estate Mortgage(s)/Deed(s) of Trust dated OCTOBER 22,
1996
covering real estate located at 4301 W Roosevelt Road,
Hillside, IL 60106
(X) Security Agreement(s) dated OCTOBER 22, 1996
( ) Collateral Pledge Agreement(s) dated
( ) Other
3.2 Guaranties. This loan is guaranteed by LAIN & SONS, INC.
3.3 Credit Balances; Set off. As additional security for the
payment of the obligations described in the Loan Documents and
any other obligations of the Borrower to the Bank of any nature
whatsoever (collectively the Obligations ), the Borrower hereby
grants to the Bank a security interest in, a lien on and an
express contractual right to set off against all depository
account balances, cash and any other property of the Borrower now
or hereafter in the possession of the Bank. The Bank may, at any
time upon the occurrence of a default hereunder (notwithstanding
any notice requirements or grace/cure periods under this or other
agreements between the Borrower and the Bank) set off against the
Obligations whether or not the Obligations (including future
installments) are then due or have been accelerated, all without
any advance or contemporaneous notice or demand of any kind to
the Borrower, such notice and demand being expressly waived.
The information in this Article III is for information only and
the omission of any reference to the agreement will not affect
the validity or enforceability thereof. The rights and remedies
of the Bank outlined in this Agreement and the Documents
identified above are intended to be cumulative.
ARTICLE IV. DEFAULTS
4.1 Defaults. Notwithstanding any cure periods described below,
the Borrower will immediately notify the Bank in writing when the
Borrower obtains knowledge of the occurrence of any default
specified below. Regardless of whether the Borrower has given
the required notice, the occurrence of one or more of the
following will constitute a default:
(a) Nonpayment. The Borrower shall fail to pay (i) any interest
due on the Note or any fees, charges, costs or expenses
under the Loan Documents by 5 days after the same becomes
due; or (ii) any principal amount of the Note when due.
(b) Nonperformance. The Borrower or any guarantor of Borrower s
Obligations to the Bank ( Guarantor ) shall fail to perform
or observe any agreement, term, provision, condition, or
covenant (other than a default occurring under
(a),(c),(d),(e),(f) or (g) of this Section 4.1) required to
be performed or observed by the Borrower or any Guarantor
hereunder or under any other Loan Document or other
agreement with or in favor of the Bank.
(c) Misrepresentation. Any financial information, statement,
certificate, representation or warranty given to the Bank by
the Borrower or any Guarantor (or any of their
representatives) in connection with entering into this
Agreement or the other Loan Documents and/or any borrowing
thereunder, or required to be furnished under the terms
thereof, shall prove untrue or misleading in any material
respect (as determined by the Bank in the exercise of its
judgment) as of the time when given.
(d) Default on Other Obligations. The Borrower or any Guarantor
shall be in default under the terms of any loan agreement,
promissory note, lease, conditional sale contract or other
agreement, document or instrument evidencing, governing or
securing any indebtedness owing by the Borrower or any
Guarantor to the Bank or any indebtedness in excess of
$10,000 owing by the Borrower to any third party, and the
period of grace, if any, to cure said default shall have
passed.
(e) Judgments. Any judgment shall be obtained against the
Borrower or any Guarantor which, together with all other
outstanding unsatisfied judgments against the Borrower (or
such Guarantor), shall exceed the sum of $10,000 and shall
remain unvacated, unbonded or unstayed for a period of 30
days following the date of entry thereof.
(f) Inability to Perform; Bankruptcy/Insolvency. (i) the
Borrower or any Guarantor shall die or cease to exist; or
(ii) any Guarantor shall attempt to revoke any guaranty of
the Obligations described herein, or any guaranty becomes
unenforceable in whole or in part for any reason; or (iii)
any bankruptcy, insolvency or receivership proceedings, or
an assignment for the benefit of creditors, shall be
commenced under any federal or state law by or against the
Borrower or any Guarantor; or (iv) the Borrower or any
Guarantor shall become the subject of any out-of-court
settlement with its creditors; or (v) the Borrower or any
Guarantor is unable or admits in writing its inability to
pay its debts as they mature.
(g) Adverse Change; Insecurity. (i) there is a material
adverse change in the business, properties, financial
condition or affairs of the Borrower or any Guarantor, or in
any collateral securing the Obligations; or (ii) the Bank in
good faith deems itself insecure.
4.2 Termination of Loans; Additional Bank Rights. Upon the
occurrence of any of the events identified in Section 4.1, the
Bank may at any time (notwithstanding any notice requirements or
grace/cure periods under this or other agreements between the
Borrower and the Bank) (i) immediately terminate its obligation,
if any, to make additional loans to the Borrower; (ii) set off,
and/or (iii) take such other steps to protect or preserve the
Bank s interest in any collateral, including without limitation,
notifying account debtors to make payments directly to the Bank,
advancing funds to protect any collateral and insuring collateral
at the Borrower s expense; all without demand or notice of any
kind, all of which are hereby waived.
4.3 Acceleration of Obligations. Upon the occurrence of any of
the events identified in Sections 4.1(a) through 4.1(e) and
4.1(g), and the passage of any applicable cure periods, the Bank
may at any time thereafter, by written notice to the Borrower,
declare the unpaid principal balance of any Obligations, together
with the interest accrued thereon and other amounts accrued
hereunder and under the other Loan Documents, to be immediately
due and payable; and the unpaid balance will thereupon be due and
payable, all without presentation, demand, protest or further
notice of any kind, all of which are hereby waived, and
notwithstanding anything to the contrary contained herein or in
any of the other Loan Documents. Upon the occurrence of any
event under Section 4.1(f), the unpaid principal balance of any
Obligations, together with all interest accrued thereon and other
amounts accrued hereunder and under the other Loan Documents,
will thereupon be immediately due and payable, all without
presentation, demand, protest or notice of any kind, all of which
are hereby waived, and notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents. Nothing
contained in Section 4.1, Section 4.2 or this section will limit
the Bank s right to set off as provided in Section 3.3 or
otherwise in this Agreement.
4.4 Other Remedies. Nothing in this Article IV is intended to
restrict the Bank s rights under any of the Loan Documents or at
law, and the Bank may exercise all such rights and remedies as
and when they are available.
ARTICLE V. OTHER TERMS
5.1 Financial Definitions Supplement. If a Borrowing Base or
covenants regarding financial status apply to this loan, the
Financial Definitions Supplement identified in Sections 1.2 and
2.14 of this Agreement is hereby incorporated into this
Agreement. The Borrower acknowledges receiving a copy of such
Supplement.
5.2 Additional Terms; Addendum/Supplements. The warranties,
covenants, conditions and other terms described in this Section
and/or in the Addendum and/or other attached document(s)
referenced in this Section are incorporated into this Agreement:
FIXED ASSET EXPENDITURES. THE BORROWER WILL NOT EXPEND SUMS FOR
THE ACQUISITION OF FIXED ASSETS (INCLUDING CAPITALIZED LEASES) IN
ANY ONE FISCAL YEAR EXCEEDING $175,000.00 IN THE AGGREGATE.
ARTICLE VI. MISCELLANEOUS
6.1 Delay; Cumulative Remedies. No delay on the part of the Bank
in exercising any right, power or privilege hereunder or under
any of the other Loan Documents will operate as a waiver thereof,
nor will any single or partial exercise of any right, power or
privilege hereunder preclude other or further exercise thereof or
the exercise of any other right, power or privilege. The rights
and remedies herein specified are cumulative and are not
exclusive of any rights or remedies which the Bank would
otherwise have.
6.2 Relationship to Other Documents. The warranties, covenants
and other obligations of the Borrower (and the rights and
remedies of the Bank) that are outlined in this Agreement and the
other Loan Documents are intended to supplement each other. In
the event of any inconsistencies in any of the terms in the Loan
Documents, all terms will be cumulative so as to give the Bank
the most favorable rights set forth in the conflicting documents,
except that if there is a direct conflict between any preprinted
terms and specifically negotiated terms (whether included in an
addendum or otherwise), the specifically negotiated terms will
control.
6.3 Participations; Guarantors. The Bank may, at its option sell
all or any interests in the Note and other Loan Documents to
other financial institutions (the Participant ), and in
connection with such sales (and thereafter) disclose any
financial information the Bank may have concerning the Borrower
to any such Participant or potential Participant. From time to
time, the Bank may, in its discretion and without obligation to
the Borrower, any guarantor or any other third party, disclose
information about the Borrower and this loan to any guarantor,
surety or other accommodation party. This provision does not
obligate the Bank to supply any information or release the
Borrower from its obligation to provide such information, and the
Borrower agrees to keep all Guarantors advised of its financial
condition and other matters which may be relevant to the
Guarantors obligations to the Bank.
6.4 Successors. The rights, options, powers and remedies granted
in this Agreement and the other Loan Documents will extend to the
Bank and to its successors and assigns, will be binding upon the
Borrower and its successors and assigns and will be applicable
hereto and to all renewals and/or extensions hereof.
6.5 Indemnification. Except for harm arising from the Bank s
willful misconduct, the Borrower hereby indemnifies and agrees to
defend and hold the Bank harmless from any and all losses, costs,
damages, claims and expenses of any kind suffered by or asserted
against the Bank relating to claims by third parties arising out
of the financing provided under the Loan Documents or related to
any collateral (including, without limitation, the Borrower s
failure to perform its obligations relating to Environmental
Matters described in Section 2.5 above). This indemnification
and hold harmless provision will survive the termination of the
Loan Documents and the satisfaction of the Obligations due the
Bank.
6.6 Notice of Claims Against Bank; Limitation of Certain Damages.
In order to allow the Bank to mitigate any damages to the
Borrower from the Bank s alleged breach of its duties under the
Loan Documents or any other duty, if any, to the Borrower, the
Borrower agrees to give the Bank immediate written notice of any
claim or defense it has against the Bank, whether in tort or
contract, relating to any action or inaction by the Bank under
the Loan Documents, or the transactions related thereto, or of
any defense to payment of the Obligations for any reason. The
requirement of providing timely notice to the Bank represents the
parties agreed-to standard of performance regarding claims
against the Bank. Notwithstanding any claim that the Borrower
may have against the Bank, and regardless of any notice the
Borrower may have given the Bank, the Bank will not be liable to
the Borrower for consequential and/or special damages arising
therefrom, except those damages arising from the Bank s willful
misconduct.
6.7 Notices. Although any notice required to be given hereunder
or under any of the other Loan Documents might be accomplished by
other means, notice will always be deemed given when placed in
the United States Mail, with postage prepaid, or sent by
overnight delivery service, or sent by telex or facsimile, in
each case to the address set forth below or as amended.
6.8 Payments. Payments due under the Note and other Loan
Documents will be made in lawful money of the United States, and
the Bank is authorized to charge payments due under the Loan
Documents against any account of the Borrower. All payments may
be applied by the Bank to principal, interest and other amounts
due under the Loan Documents in any order which the Bank elects.
6.9 Applicable Law and Jurisdiction; Interpretation; Joint
Liability. This Agreement and all other Loan Documents will be
governed by and interpreted in accordance with the internal laws
of the state where the Bank s mail office is located, except to
the extent superseded by Federal law. Invalidity of any
provisions of this Agreement will not affect any other provision.
THE BORROWER HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT SITUATED IN THE COUNTY OR FEDERAL
JURISDICTION WHERE THE BANK S OFFICE IS DESIGNATED IN THE NOTE AS
THE PLACE FOR PAYMENT IS LOCATED (OR, IN THE ABSENCE OF SUCH
DESIGNATION, THE BANK S MAIN OFFICE), AND WAIVES ANY OBJECTION
BASED ON FORUM NON CONVENIENS, WITH REGARD TO ANY ACTIONS,
CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE
NOTE, THE COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY
TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT AND/OR
INTERPRETATION OF ANY OF THE FOREGOING. Nothing herein will
affect the Bank s rights to serve process in any manner permitted
by law, or limit the Bank s right to bring proceedings against
the Borrower in the competent courts of any other jurisdiction or
jurisdictions. This Agreement, the other Loan Documents and any
amendments hereto (regardless of when executed) will be deemed
effective and accepted only upon the Bank s receipt of the
executed originals thereof. If there is more than one Borrower,
the liability of the Borrowers will be joint and several, and the
reference to Borrower will be deemed to refer to all Borrowers.
6.10 Copies; Entire Agreement; Modification. The Borrower hereby
acknowledges the receipt of a copy of this Agreement and all
other Loan Documents.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT
SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE
ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN
THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE
THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
THIS NOTICE SHALL ALSO BE EFFECTIVE WITH RESPECT TO ALL OTHER
CREDIT AGREEMENTS NOW IN EFFECT BETWEEN YOU AND THIS LENDER. A
MODIFICATION OF ANY OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN
YOU AND THIS LENDER, WHICH OCCURS AFTER RECEIPT BY YOU OF THIS
NOTICE, MAY BE MADE ONLY BY ANOTHER WRITTEN INSTRUMENT. ORAL OR
IMPLIED MODIFICATIONS TO SUCH CREDIT AGREEMENTS ARE NOT
ENFORCEABLE AND SHOULD NOT BE RELIED UPON.
6.11 Waiver of Jury Trial. THE BORROWER AND THE BANK HEREBY
JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING RELATING TO ANY OF THE LOAN DOCUMENTS,
THE OBLIGATIONS THEREUNDER, ANY COLLATERAL SECURING THE
OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED
THERETO. THE BORROWER AND THE BANK EACH REPRESENTS TO THE OTHER
THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.
IN WITNESS WHEREOF, the undersigned have executed this REVOLVING
CREDIT AGREEMENT AS OF OCTOBER 22, 1996.
(Individual Borrower) OAKRIDGE HOLDINGS, INC.
Borrower Name (Organization)
(SEAL) a MINNESOTA Corporation
Borrower Name N/A By /s/ R. C. Harvey
Name and Title ROBERT HARVEY, PRES.
(SEAL)
By
Borrower Name N/A Name and Title
FIRSTAR BANK ILLINOIS (Bank)
By /s/ Earl Goldman, V.P.
Name and Title Earl Goldman, V.P.
Borrower Address: 135 S LASALLE STREET, CHICAGO, IL 60604
Borrower Telephone No.:
MARITAL PURPOSE STATEMENT
(To be completed by married Wisconsin residents)
Each Borrower who is married represents that this obligation is
incurred in the interest of his or her marriage or family.
Date: n/a
Printed Name:
Date: n/a
Printed Name:
Borrower Name Name and Title
PAYMENT SCHEDULE RIDER
This rider is made part of the Term Note (the Note ) by the
undersigned borrower (the Borrower ) in favor of FIRSTAR BANK
ILLINOIS (the Bank ) as of the date identified below.
The following payment schedule is hereby added to the Note:
Thereafter, principal and interest are payable in 59 installments
of $9,350.00 each, beginning February 1, 1997, and on the same
date of each consecutive month thereafter (except that if a given
month does not have such a date, the last day of such month),
plus a final payment equal to all unpaid principal and accrued
interest on DECEMBER 1, 2001, the maturity date.
Dated as of: OCTOBER 22, 1996
(Individual Borrower) OAKRIDGE HOLDINGS, INC.
Borrower Name (Organization)
a MINNESOTA Corporation
By /s/ Robert C. Harvey
Borrower Name N/A
Name and Title Robert Harvey, Pres.
(Seal)
By
Borrower Name N/A Name and Title
ADDENDUM
(Land Trust)
This Addendum is made part of the Term Loan Agreement, Note
and Mortgage dated on or about 10/22/96 (the Land Trust
Documents ) by the undersigned borrowers (the Borrowers ) in
favor of FIRSTAR BANK ILLINOIS as of the date identified below.
The following provisions are hereby added to the Land Trust
Documents:
The Undersigned Beneficiary Borrower, being the sole
beneficiary of the Trustee Borrower, does hereby join with
the Trustee Borrower in the making of the Land Trust
Documents, including the assignment of rents contained in
the Mortgage, it being intended that the Borrowers are each
jointly, severally and primarily liable as makers of the
Land Trust Documents and are each liable for the payment and
performance of all obligations under the Land Trust
Documents, including, without limitation, the making of all
representations and warranties contained in the Land Trust
Documents, and neither of the Borrowers shall be deemed a
surety, accommodation maker or guarantor.
Notwithstanding the foregoing, this instrument is signed by
the undersigned Trustee Borrower, not individually, but
solely as Trustee under a certain Trust Agreement known as
Trust No. 38160. Said Trust Agreement is hereby made a part
hereof and any claims against Trustee which may result from
the signing of the Land Trust Documents shall be payable
only out of any trust property which may be held thereunder,
and said Trustee shall not be personally liable for the
performance of any of the terms and conditions of the Land
Trust Documents or the validity or condition of title of
said property or for any agreement with respect thereto.
Any and all personal liability of the undersigned Trustee is
hereby expressly waived by the parties hereto and the
respective successors and assignees.
Dated as of 10/22/96
OAKRIDGE CEMETERY (HILLSIDE), INC. LASALLE NATIONAL TRUST
Beneficiary Borrower (Organization) Trustee Borrower
a Illinois Corporation (Organization)
By: /s/ R. C. Harvey By: /s/ Corinne Bak
Name: Robert Harvey Name: Corinne Bak
Title: President Title: Vice President
By:
Name:
Title:
(Individual Beneficiary Borrower)
(Seal)
Beneficiary Borrower Name: N/A
(Seal)
Beneficiary Borrower Name: N/A
BUSINESS SECURITY AGREEMENT
(FOR USE WITH FIRSTAR LOAN DOCUMENTS ONLY)
This Business Security Agreement ( Agreement ) is made and
entered into by the undersigned borrower, guarantor and/or other
obligor (the Debtor ) in favor of FIRSTAR BANK ILLINOIS (the
Bank ) as of the date set forth on the last page of this
Agreement.
ARTICLE 1. SECURITY INTEREST
1.1 Grant of Security Interest. The Debtor hereby grants a
security interest in and collaterally assigns the Collateral
(defined below) to the Bank to secure all of the Debtor s
Obligations (defined below) to the Bank. The intent of the
parties hereto is that the Collateral secures all Obligations of
the Debtor to the Bank, whether or not such Obligations exist
under this Agreement or any other agreements, whether now or
hereafter existing, between the Debtor and the Bank or in favor
of the Bank, including, without limitation, any note, any loan or
security agreement, any lease, any mortgage, deed of trust or
other pledge of an interest in real or personal property, any
guaranty, any letter of credit or banker s acceptance, any
agreement for any other services or credit extended by the Bank
to the Debtor even though not specifically enumerated herein, and
any other agreement with Bank (together and individually, the
Loan Documents ).
1.2 Collateral means all of the following whether now owned or
existing or hereafter acquired by the Debtor (or by the Debtor
with spouse), wherever located (including all documents, general
intangibles, additions and accessions, spare and repair parts,
special tools, replacements, returned or repossessed goods and
books and records relating to the following; and all proceeds and
products of the following) [Check all that apply]:
(X) All accounts, instruments, documents, chattel paper,
general intangibles, contract rights, all investment
property (including any securities entitlements and/or
securities accounts held by Debtor), securities and
certificates of deposit, and all funds on deposit with and
all property in the possession of the Bank or any other
depository institution;
(X) All inventory;
(X) All equipment;
(X) All fixtures; and
( ) Specific Collateral (the following, whether constituting
equipment, inventory or fixtures):
The terms set forth in this Agreement shall have the meanings set
forth in the Uniform Commercial Code as adopted in the state
where the Bank s main office is located, unless otherwise defined
herein.
1.3 Obligations means all the Debtor s debts (except for
consumer credit if the Debtor is a natural person), liabilities,
obligations, convenants, warranties, and duties to the Bank (plus
its affiliates including any Elan entity), whether now or
hereafter existing or incurred, whether liquidated or
unliquidated, whether absolute or contingent, whether arising out
of the Loan Documents or otherwise, and regardless of whether
such Obligations arise out of existing or future credit granted
by the Bank to any Debtor, to any Debtor and others, to others
guaranteed, endorsed or otherwise secured by any Debtor or to any
debtor-in-possession or other successor-in-interest of any
Debtor, and including principal, interest, fees, expenses and
charges relating to any of the foregoing.
ARTICLE II. WARRANTIES AND COVENANTS
In addition to all other warranties and covenants of the Debtor
under the Loan Documents which are expressly incorporated herein
as part of this Agreement and while any part of the credit
granted the Debtor under the Loan Documents is available or any
Obligations of the Debtor to the Bank are unpaid or outstanding,
the Debtor continuously warrants and agrees as follows:
2.1 Debtor s Name, Location; Notice of Location Changes. The
Debtor s name and organizational structure has remained the same
during the past five (5) years. The Debtor will continue to use
only the name set forth with the Debtor s signature unless the
Debtor gives the Bank prior written notice of any change.
Furthermore, the Debtor shall not do business under another name
nor use any trade name without giving ten (10) days prior written
notice to the Bank. The address appearing in Schedule A below is
the Debtor s chief executive office and principal place of
business; and all Collateral shall be located at such address or
the other addresses listed on Schedule A except to the extent the
Debtor has provided prior written notice to the Bank of any
change of address/new location.
2.2 Status of Collateral. All collateral is genuine and validly
existing. Except for items of insignificant value or as
otherwise reflected in writing by the Debtor to the Bank under a
borrowing base or otherwise, (i) Collateral constituting
inventory, equipment and fixtures is in good condition, not
obsolete and is either currently saleable or usable; and (ii)
Collateral constituting accounts, contract rights, notes, chattel
paper and other third-party obligations to pay is fully
enforceable in accordance with its terms and not subject to
return, dispute, Set off, credit allowance or adjustment, except
for discounts for prompt payment. Unless the Debtor provides the
Bank with written notice to the contrary, the Debtor has no
notice or knowledge of anything that would impair the ability of
any third-party obligor to pay any debt to the Debtor when due.
2.3 Ownership; Maintenance of Collateral, Restrictions of Liens
and Dispositions. The Debtor is the sole owner of the Collateral
free of all liens, claims, other encumbrances and security
interests except as permitted in writing by the Bank. The Debtor
shall; (i) maintain the Collateral in good condition and repair
(reasonable wear and tear excepted), and not permit its value to
be impaired; (ii) not permit waste, removal or loss of identity
of the Collateral; (iii) keep the Collateral free from all liens,
executions, attachments, claims, encumbrances and security
interests (other than the Bank s paramount security interest and
those permitted in writing by the Bank); (iv) defend the
Collateral against all claims and legal proceedings by persons
other than the Bank; (v) pay and discharge when due all taxes,
levies and other charges or fees upon the Collateral except for
payment of taxes contested by the Debtor in good faith by
appropriate proceedings so long as no levy or lien has been
imposed upon the Collateral; (vi) not lease, sell or transfer the
Collateral to any party nor move it to any new location outside
of the ordinary course of business; (vii) not permit the
Collateral, without the consent of the Bank, to become a fixture
or an accession to other goods; (viii) not permit the Collateral
to be used in violation of any applicable law, regulation or
policy of insurance; and (ix) as to the Collateral consisting of
instruments and chattel paper, preserve the Bank s rights in it
against all other parties. Notwithstanding the above, the Debtor
may sell, lease or transfer inventory in the ordinary course of
its business provided that no sale, lease or transfer shall
include any transfer or sale in satisfaction (partial or
complete) of a debt owed by the Debtor; title will not pass to
buyer until the Debtor physically delivers the goods to buyer or
the Debtor ships the goods F.O.B. to buyer s destination; and
sales and/or leases to the Debtor s affiliates shall be for fair
market value, cash on delivery, with the proceeds remitted to the
Bank.
2.4 Maintenance of Security Interest; Purchase Money Security
Interests. The Debtor shall take any action requested by the
Bank to preserve the Collateral and to establish the value of,
the priority of, to perfect, to continue the perfection of or to
enforce the Bank s interest in the Collateral and the Bank s
rights under this Agreement; and shall pay all costs and expenses
related thereto. The Debtor and the Bank intend to maintain the
full effect of any purchase money security interest granted in
favor of the Bank notwithstanding the fact that the Collateral so
purchased is also pledged as security for other Obligations under
the Loan Documents.
2.5 Collateral Inspections; Modifications and Changes in
Collateral. At reasonable times, the Bank may examine the
Collateral and the Debtor s records pertaining to it, wherever
located, and make copies of such records at the Debtor s expense;
and the Debtor shall assist the Bank in so doing. Without the
Bank s prior written consent, the Debtor shall not alter, modify,
discount, extend, renew or cancel any Collateral, except for
ordinary discounts for prompt payment on accounts, physical
modifications to the inventory occurring in the manufacturing
process or alterations to equipment which do not materially
affect its value. The Debtor shall promptly notify the Bank in
writing of any material change in the condition of the Collateral
and of any change in location of the Collateral.
2.6 Collateral Records, Reports and Statements. The Debtor shall
keep accurate and complete records respecting the Collateral in
such form as the Bank may approve. At such times as the Bank may
require, the Debtor shall furnish to the Bank any
records/information the Bank might require, including, without
limitation, a statement certified by the Debtor and in such form
and containing such information as may be prescribed by the Bank
showing the current status and value of the Collateral.
2.7 Chattel Paper, Instruments, Etc. Chattel Paper, instruments,
drafts, notes, acceptances, and other documents which constitute
Collateral shall be on forms satisfactory to the Bank. The
Debtor shall promptly mark chattel paper to indicate
conspicuously the Bank s security interest therein, shall not
deliver any chattel paper or negotiable instruments to any other
entity and, upon request, shall deliver all original chattel
paper, instruments, drafts, notes, acceptances and other
documents which constitute Collateral to the Bank.
2.8 United States Government Contracts. If any accounts or
contract rights arose out of contracts with the United States or
any of its departments, agencies or instrumentalities, the Debtor
shall promptly notify the Bank and execute any writings required
by the Bank so that all money due or to become due under such
contracts shall be assigned to the Bank under the Federal
Assignment of Claims Act.
2.9 Environmental Matters. Except as disclosed in a written
schedule attached to this Agreement (if no schedule is attached,
there are no exceptions), there exists no uncorrected violation
by the Debtor of any federal, state or local laws (including
statutes, regulations, ordinances or other governmental
restrictions and requirements) relating to the discharge of air
pollutants, water pollutants or process waste water or otherwise
relating to the environment or Hazardous Substances as
hereinafter defined, whether such laws currently exist or are
enacted in the future (collectively Environmental Laws ). The
term Hazardous Substances shall mean any hazardous or toxic
wastes, chemicals or other substances, the generation, possession
or existence of which is prohibited or governed by any
Environmental Laws. The Debtor is not subject to any judgment,
decree, order or citation, or a party to (or threatened with) any
litigation or administrative proceedings, which asserts that the
Debtor (i) has violated any Environmental Laws; (ii) is required
to clean up, remove or take remedial or other action with respect
to any Hazardous Substances (collectively Remedial Action ); or
(iii) is required to pay all or a portion of the cost of any
Remedial Action, as a potentially responsible party. There are
not now, or to the Debtor s knowledge after reasonable
investigation have there ever been, any Hazardous Substances (or
tanks or other facilities for the storage of Hazardous
Substances) stored, deposited, recycled or disposed of on, under
or at any real estate owned or occupied by the Debtor during the
periods that the Debtor owned or occupied such real estate, which
if present on the real estate or in soils or ground water, could
require Remedial Action. To the Debtor s knowledge, there are
no proposed or pending changes in Environmental Laws which would
adversely affect the Debtor or its business, and there are no
conditions existing currently or likely to exist while the Loan
Documents are in effect which would subject the Debtor to
Remedial Action or other liability. The Debtor currently
complies with and will continue to timely comply with all
applicable Environmental Laws; and will provide the Bank,
immediately upon receipt, copies of any correspondence, notice,
complaint, order or other document from any source asserting or
alleging any circumstance or condition which requires or may
require a financial contribution by the Debtor or Remedial Action
or other response by or on the part of the Debtor under
Environmental Laws, or which seeks damages or civil, criminal or
punitive penalties from the Debtor for an alleged violation of
Environmental Laws.
2.10 Insurance. The Debtor will maintain insurance to such
extent, covering such risks and with such insurers as is usual
and customary for businesses operating similar properties, and as
is satisfactory to the Bank, including insurance for fire and
other risks insured against by extended or comprehensive
coverage, public liability insurance and workers compensation
insurance; and will designate the Bank as loss payee with a
Lender s Loss Payable endorsement on any casualty policies and
take such other action as the Bank may reasonably request to
ensure that the Bank will receive (subject to no other interest)
the insurance proceeds of the Collateral. The Debtor hereby
assigns all insurance proceeds to and irrevocably directs, while
any Obligations remain unpaid, any insurer to pay to the Bank the
proceeds of all such insurance and any premium refund; and
authorizes the Bank to endorse the Debtor s name to effect the
same, to make, adjust or settle, in the Debtor s name, any claim
on any insurance policy relating to the Collateral; and, at the
option of the Bank, to apply such proceeds and refunds to the
Obligations or to restoration of the Collateral, returning any
excess to the Debtor.
ARTICLE III. COLLECTIONS
3.1 Deposit with the Bank. At any time the Bank may require that
all proceeds of Collateral received by the Debtor shall be held
by the Debtor upon an express trust for the Bank, shall not be
commingled with any other funds or property of the Debtor and
shall be turned over to the Bank in precisely the form received
(but endorsed by the Debtor, if necessary for collection) not
later than the business day following the day of their receipt.
All proceeds of Collateral received by the Bank directly or from
the Debtor shall be applied against the Obligations in such order
and at such times as the Bank shall determine.
ARTICLE IV. RIGHTS AND DUTIES OF THE BANK
In addition to all other rights (including Set off) and duties of
the Bank under the Loan Documents which as expressly incorporated
herein as a part of this Agreement, the following provisions
shall also apply:
4.1 Authority to Perform for the Debtor. The Debtor presently
appoints any officer of the Bank as the Debtor s attorney-in-fact
(coupled with an interest and irrevocable while any Obligations
remain unpaid) to do any of the following upon the occurrence of
an event of default by the Debtor hereunder: (i) to endorse or
place the name of the Debtor on any invoice or document of title
relating to accounts, drafts against customers, notices to
customers, notes, acceptances, assignments of government
contracts, instruments, financing statements, checks, drafts,
money orders, insurance claims or payments or other documents
evidencing payment or a security interest relating to the
Collateral; (ii) to receive, open and dispose of all mail
addressed to the Debtor and to notify the Post Office authorities
to change the address for delivery of mail addressed to the
Debtor to an address designated by the Bank; (iii) to do all such
other acts and things necessary to carry out the Debtor s duties
under this Agreement and the other Loan Documents; and (iv) to
perfect, protect and/or realize upon the Bank s interest in the
Collateral. If the Collateral includes funds or property in
depository accounts, the Debtor authorizes each of its depository
institutions to remit to the Bank, without liability to the
Debtor, all of the Debtor s funds on deposit with such
institution upon written direction by the Bank after default by
the Debtor hereunder. All acts by the Bank are hereby ratified
and approved, and the Bank shall not be liable for any acts of
commission or omission, nor for any errors of judgment or
mistakes of fact or law.
4.2 Verification and Notification; Bank s Rights. The bank may
verify Collateral in any manner, and the Debtor shall assist the
Bank in so doing. Upon the occurrence of a default hereunder,
the Bank may at any time and the Debtor shall, upon request of
the Bank, notify the account debtors to make payment directly to
the Bank; and the Bank may enforce collection of, sell, settle,
compromise, extend or renew the indebtedness of such account
debtors; all without notice to or the consent of the Debtor.
Until account debtors are so notified, the Debtor, as agent of
the Bank, shall make collections on the Collateral. The Bank may
at any time notify any bailee possessing Collateral of the Bank s
security interest and, upon the occurrence of a default
hereunder, direct such bailee to turn over the Collateral to the
Bank.
4.3 Collateral Preservation. The Bank shall use reasonable care
in the custody and preservation of any Collateral in its physical
possession but in determining such standard of reasonable care,
the Debtor expressly acknowledges that the Bank has no duty to:
(i) insure the Collateral against hazards; (ii) ensure that the
Collateral will not cause damage to property or injury to third
parties; (iii) protect it from seizure, theft or conversion by
third parties, third parties claims or acts of God; (iv) give to
the Debtor any notices received by the Bank regarding the
Collateral; (v) perfect or continue perfection of any security
interest in favor of the Debtor; (vi) perform any services,
complete any work-in-process or take any other action in
connection with the management or maintenance of the Collateral;
or (vii) sue or otherwise effect collection upon any accounts
even if the Bank shall have made a demand for payment upon
individual account debtors. Notwithstanding any failure by the
Bank to use reasonable care in preserving the Collateral, the
Debtor agrees that the Bank shall not be liable for consequential
or special damages arising therefrom.
ARTICLE V. DEFAULTS AND REMEDIES
The Bank may enforce its rights and remedies under this Agreement
upon default. A default (as defined in the Loan Documents) shall
occur if the Debtor fails to comply with the terms of any Loan
Documents, and said default is not cured within 15 days of notice
thereof.
5.1 Cumulative Remedies; Notice; Waiver. In addition to the
remedies for default set forth in the Loan Documents, the Bank
upon default shall have all other rights and remedies for default
provided by the Uniform Commercial Code, as well as any other
applicable law and this Agreement, INCLUDING, WITHOUT LIMITATION,
THE RIGHT TO REPOSSESS, RENDER UNUSABLE AND/OR DISPOSE OF THE
COLLATERAL WITHOUT JUDICIAL PROCESS. The rights and remedies
specified herein are cumulative and are not exclusive of any
rights or remedies which the Bank would otherwise have. With
respect to such rights and remedies:
(a) Assembling Collateral; Storage; Use of the Debtor
Name/Other Property. The Bank may require the Debtor to
assemble the Collateral and to make it available to the Bank
at any convenient place designated by the Bank. The Debtor
recognizes that the Bank will not have an adequate remedy in
Law if this obligation is breached and accordingly, Debtor s
obligation to assemble the Collateral shall be specifically
enforceable. The Bank shall have the right to take
immediate possession of said Collateral and the Debtor
irrevocably authorizes the Bank to enter any of the premises
wherever said Collateral shall be located, and to store,
repair, maintain, assemble, manufacture, advertise and sell,
lease or dispose of (by public sale or otherwise) the same
on said premises until sold, all without charge or rent to
the Bank. The Bank is hereby granted an irrevocable license
to use, without charge, the Debtor s equipment, inventory,
labels, patents, copyrights, franchises, names, trade
secrets, trade names, trademarks and advertising matter and
any property of a similar nature; and the Debtor s rights
under all licenses and franchise agreements shall inure to
the Bank s benefit. Further, the Debtor releases the Bank
from obtaining a bond or surety with respect to any
repossession and/or disposition of the Collateral.
(b) Notice of Disposition. Written notice, when required by
law, sent to any address of the Debtor in this Agreement, at
least ten (10) calendar days (counting the day of sending)
before the date of proposed disposition of the Collateral is
reasonable notice. Notification to account debtors by the
Bank shall not be deemed a disposition of the Collateral.
(c) Possession of Collateral/Commercial Reasonableness. The
Bank shall not, at any time, be obligated to either take or
retain possession or control of the Collateral. With
respect to Collateral in the possession or control of the
Bank, the Debtor and the Bank agree that as a standard for
determining commercial reasonableness, the Bank need not
liquidate, collect, sell or otherwise dispose of any of the
Collateral if the Bank believes, in good faith, that
disposition of the Collateral would not be commercially
reasonable, would subject the Bank to third-party claims or
liability, that other potential purchasers could be
attracted or that a better price could be obtained if the
Bank held the Collateral for up to one year; and the Bank
shall not then be deemed to have retained the Collateral in
satisfaction of the Obligations. Furthermore, the Bank may
sell the Collateral on credit (and reduce the Obligations
only when payment is received from the buyer), at wholesale
and/or with or without an agent or broker; and the Bank need
not complete process or repair the Collateral prior to
disposition.
(d) Waiver by the Bank. The Bank may permit the Debtor to
attempt to remedy any default without waiving its rights and
remedies hereunder, and the Bank may waive any default
without waiving any other subsequent or prior default by the
Debtor. Furthermore, delay on the part of the Bank in
exercising any right, power or privilege hereunder or at law
shall not operate as a waiver thereof, nor shall any single
or partial exercise of such right, power or privilege
preclude other exercise thereof or the exercise of any other
right, power or privilege. No waiver or suspension shall be
deemed to have occurred unless the Bank has expressly agreed
in writing specifying such waiver or suspension.
ARTICLE VI. MISCELLANEOUS
All other provisions in the Loan Documents are expressly
incorporated as a part of this Agreement.
IN WITNESS WHEREOF, the undersigned has/have executed this
BUSINESS SECURITY AGREEMENT as of OCTOBER 22, 1996.
Oakridge Cemetery (Hillside, Inc. Oakridge Holding, Inc.
Debtor name (Organization Debtor Name (Organization)
an Illinois Corporation a Minnesota Corporation
By: /s/ R. C. Harvey By: /s/ R. C. Harvey
Name & Title: Robert Harvey, Name & Title: Robert Harvey,
President President
Lain & Sons, Inc. Glenoak Cemetery Company
Debtor Name (Organization) Debtor Name (Organization)
an Illinois Corporation an Illinois Corporation
By: /s/ R. C. Harvey By: /s/ R. C. Harvey
Name & Title: Robert Harvey, Name & Title: Robert Harvey,
President President
SCHEDULE A
IDENTIFICATION, CHIEF EXECUTIVE OFFICE AND COLLATERAL
LOCATIONS LIST
Taxpayer Identification Number: 41-0843268
(or Social Security Number)
Name of Landlord or Warehouse
(If applicable)
Address of Chief Executive Office: Street:
City State Zip Code
4301 W Roosevelt Rd
Street
Hillside, IL 60106
City State Zip Code Name of Landlord or Warehouse
(If applicable)
Other Collateral Locations List Street
(Include name of third party
[landlord, warehouse, etc.] City State Zip Code
If applicable and collateral
location address)
Name of Landlord or Warehouse Name of Landlord or Warehouse
(If applicable) (If applicable)
4810 120th Street West
Street Street
Apple Valley, MN 55124
City State Zip Code City State Zip
EXHIBIT 21
SUBSIDIARIES OF REGISTRANT
__________________________
SUBSIDIARY STATE IN WHICH ORGANIZED
Lain and Son, Inc. Illinois
Glen Oak Cemetery Company Illinois
(a wholly owned subsidiary
of Lain and Son, Inc.)
Oakridge Cemetery (Hillside), Inc. Illinois
(a wholly owned subsidiary
of Lain and Son, Inc.)
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