-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LfTrRD6a17P9q3pE8v+43UHfVy9gss0zcj8PX71aQDRAcp7JN/nQuJsr907E4DmL AAtD4nwNgXjKWhDIax5IiQ== 0000950114-98-000427.txt : 19981113 0000950114-98-000427.hdr.sgml : 19981113 ACCESSION NUMBER: 0000950114-98-000427 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEWOOD CARE CENTERS CAPITAL FUNDING CORP CENTRAL INDEX KEY: 0000909110 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431623171 STATE OF INCORPORATION: MO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948 FILM NUMBER: 98744624 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE, SUITE 315 STREET 2: STE 113 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3145760050 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEWOOD CARE CENTER INC OF SWANSEA CENTRAL INDEX KEY: 0000909113 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431375489 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-01 FILM NUMBER: 98744625 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEWOOD CARE CENTER INC OF GALESBURG CENTRAL INDEX KEY: 0000909114 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431375391 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-02 FILM NUMBER: 98744626 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEWOOD CARE CENTER INC OF EAST PEORIA CENTRAL INDEX KEY: 0000909115 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431446788 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-03 FILM NUMBER: 98744627 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DR STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEWOOD CARE CENTER INC OF PEORIA CENTRAL INDEX KEY: 0000909116 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431446786 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-04 FILM NUMBER: 98744628 BUSINESS ADDRESS: STREET 1: 11701 BOWMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BOWMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEWOOD CARE CENTER INC OF ALTON CENTRAL INDEX KEY: 0000909117 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431446787 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-05 FILM NUMBER: 98744629 BUSINESS ADDRESS: STREET 1: 11701 BOWMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DR CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEWOOD CARE CENTER INC OF MOLINE CENTRAL INDEX KEY: 0000909118 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431453169 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-06 FILM NUMBER: 98744630 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SWANSEA REAL ESTATE INC CENTRAL INDEX KEY: 0000909120 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431446792 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-07 FILM NUMBER: 98744631 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GALESBURG REAL ESTATE INC CENTRAL INDEX KEY: 0000909121 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431453172 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-08 FILM NUMBER: 98744632 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAST PEORIA REAL ESTATE INC CENTRAL INDEX KEY: 0000909122 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431453171 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-09 FILM NUMBER: 98744633 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEORIA REAL ESTATE INC CENTRAL INDEX KEY: 0000909123 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431446790 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-10 FILM NUMBER: 98744634 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALTON REAL ESTATE INC CENTRAL INDEX KEY: 0000909124 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431476931 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-11 FILM NUMBER: 98744635 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUITE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOLINE REAL ESTATE INC CENTRAL INDEX KEY: 0000909125 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 431453170 STATE OF INCORPORATION: IL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-65948-12 FILM NUMBER: 98744636 BUSINESS ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: STE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3149949070 MAIL ADDRESS: STREET 1: 11701 BORMAN DRIVE STREET 2: SUTIE 315 CITY: ST LOUIS STATE: MO ZIP: 63146 10-Q 1 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORP. FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 33-65948 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION (Exact name of Registrant as specified in its charter) (See table of Co-Registrants) MISSOURI 43-1623171 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 11701 BORMAN DRIVE, SUITE 315 ST. LOUIS, MISSOURI 63146 (Address of principal executive offices) (Zip Code) Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that Registrant was required to file such reports), (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- APPLICABLE ONLY TO CORPORATE ISSUERS: INDICATE THE NUMBER OF SHARES OF STOCK OF EACH OF THE ISSUER'S CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE: N/A Certain information called for on Item 6 of Part II of this Form 10-Q is incorporated by reference to Registrants' Registration Statement (No. 33-65948) dated July 13, 1993 which was declared effective October 14, 1993, Registrants' Form 10-Q filed November 29, 1993, Registrants' Form 10-Q filed February 11, 1994, Registrants' Form 10-K filed September 28, 1994, Registrants' Form 10-Q filed February 14, 1995, Registrants' Form 10-Q filed May 15, 1995, Registrants' Form 10-Q filed February 13, 1996, Registrants' Form 10-Q filed May 14, 1996, Registrants' Form 10-K filed September 26, 1996, Registrants' Form 10-Q filed November 13, 1996, Registrants' Form 10-Q filed November 12, 1997, and Registrants' Form 10-Q filed February 11, 1998. Index to Exhibits is on Page 37. 1 2 CO-REGISTRANTS Rosewood Care Center, Inc. of Swansea Rosewood Care Center, Inc. of Galesburg Rosewood Care Center, Inc. of East Peoria Rosewood Care Center, Inc. of Peoria Rosewood Care Center, Inc. of Alton Rosewood Care Center, Inc. of Moline Swansea Real Estate, Inc. Galesburg Real Estate, Inc. East Peoria Real Estate, Inc. Peoria Real Estate, Inc. Alton Real Estate, Inc. Moline Real Estate, Inc. (Exact names of Co-Registrants as specified in their charters) No separate periodic or annual reports are filed for each of the co- registrants and no separate financial statements are included for each of the co-registrants because the co-registrants are effectively jointly and severally liable with respect to the Notes and because such separate periodic or annual reports and such separate financial statements are not deemed material to investors. 2 3 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION INDEX
PART I FINANCIAL INFORMATION Page - ----------------------------- ---- Item 1. Financial Statements 4 Rosewood Care Centers Capital Funding Corporation: Balance Sheet 5 Statement of Operations 6 Statement of Cash Flows 7 Notes to Financial Statement 8 Rosewood Care Center Obligated Companies: Rosewood Care Center, Inc. of Swansea Rosewood Care Center, Inc. of Galesburg Rosewood Care Center, Inc. of East Peoria Rosewood Care Center, Inc. of Peoria Rosewood Care Center, Inc. of Alton Rosewood Care Center, Inc. of Moline Swansea Real Estate, Inc. Galesburg Real Estate, Inc. East Peoria Real Estate, Inc. Peoria Real Estate, Inc. Alton Real Estate, Inc. Moline Real Estate, Inc. Combined Balance Sheet 9 Combined Statement of Operations 11 Combined Statement of Cash Flows 12 Notes to Combined Financial Statements 13 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 15 PART II OTHER INFORMATION - -------------------------- Item 1. Legal Proceedings 22 Item 2. Changes in Securities 22 Item 3. Defaults Upon Senior Securities 22 Item 4. Submission of Matters to a Vote of Security Holders 22 Item 5. Other Information 22 Item 6. Exhibits and Reports on Form 8-K 22 SIGNATURES 23 - ---------- INDEX TO EXHIBITS 37 - -----------------
3 4 PART I FINANCIAL INFORMATION - ----------------------------- ITEM 1. FINANCIAL STATEMENTS 4 5 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION BALANCE SHEET (DOLLARS IN THOUSANDS) (UNAUDITED)
June 30, Sept. 30, ASSETS 1998 1998 ------ -------- --------- Cash $ 262 $ 262 Mortgage notes receivable, Rosewood Companies 25,561 25,240 Accrued interest receivable - - ------- ------- $25,823 $25,502 ------- ------- LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ First mortgage redeemable bonds $25,666 $25,347 Accrued interest 156 154 Stockholders' equity: Common stock, $1 par value Authorized - 30,000 shares Issued and outstanding - 500 shares, at issue price 1 1 Retained earnings - - ------- ------- $25,823 $25,502 ------- ------- The accompanying notes are an integral part of this financial statement.
5 6 ROSEWOOD CARE CENTER CAPITAL FUNDING CORPORATION STATEMENT OF OPERATIONS (DOLLARS IN THOUSANDS) (UNAUDITED)
Three Months Ended September 30, ----------------------- 1997 1998 ---- ---- Interest income $496 $461 Interest expense $496 $461 ---- ---- Net Income $ 0 $ 0 ---- ---- The accompanying notes are an integral part of this financial statement.
6 7 ROSEWOOD CARE CENTER CAPITAL FUNDING CORPORATION STATEMENT OF CASH FLOWS (DOLLARS IN THOUSANDS) (UNAUDITED)
Three Months Ended September 30, -------------------- 1997 1998 ----- ----- Cash flow from operating activities: Net income $ 0 $ 0 Decrease in accrued interest receivable 167 - Increase (decrease) in accrued interest payable (2) (2) ----- ----- Net cash provided by operating activities 165 (2) ----- ----- Cash flow from investing activities: Collections on notes receivable 380 321 ----- ----- Net cash used by investing activities 380 321 ----- ----- Cash flow from financing operations: Reduction of redeemable bonds (284) (319) ----- ----- Net cash provided by financing (284) (319) ----- ----- Net increase (decrease) in cash 261 -0- Cash, beginning 1 262 ----- ----- Cash, ending 262 262 ----- ----- Cash paid for interest $ 496 $ 461 ----- ----- The accompanying notes are an integral part of this financial statement.
7 8 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION NOTES TO FINANCIAL STATEMENTS 1. Interim Financial Statements ---------------------------- In the opinion of the Company, these unaudited financial statements include all adjustments necessary for a fair presentation of its financial position as of June 30, 1998, and September 30, 1998, and the results of its operations and its cash flows for the three month period ended September 30, 1997 and 1998. Such adjustments were of a normal recurring nature. The results of operations for the three months ended September 30, 1997 and 1998 are not necessarily indicative of the results for the full year. It is suggested that these financial statements be read in conjunction with the financial statements, accounting policies and financial notes thereto included in the Form 10K Annual Report (No. 33-65948), which has previously been filed with the Commission. 2. Issuance of Bonds ----------------- On October 21, 1993, the Company issued $33,000,000 of its 7-1/4% First Mortgage Redeemable Bonds due November 1, 2013. Of the ending cash balance, $ 261,000 represents the note receivable payment on the 25th of the month which is held in the Bond Payment Fund - Principal and Interest accounts until it is disbursed to the Bond Holders on the 1st of the following month. 8 9 ROSEWOOD CARE CENTER FACILITY COMPANIES AND REAL ESTATE COMPANIES COMBINED BALANCE SHEETS (DOLLARS IN THOUSANDS) (UNAUDITED)
June 30, Sept 30, ASSETS 1998 1998 ------ -------- -------- Current assets: Cash $ 2,866 $ 751 Accounts receivable - residents, net of allowance for doubtful accounts of $168 and $168 respectively 1,352 1,426 Accounts receivable - third party payor 2,766 3,505 Interest receivable 282 128 Due from affiliates 327 239 Prepaid insurance and other prepaids 44 184 Deferred income tax benefits 52 52 ------- ------- Total current assets 7,689 6,285 ------- ------- Property, plant and equipment: Land 943 943 Site improvements 2,140 2,140 Building 17,830 17,830 Equipment 3,962 4,024 Leasehold improvements 389 427 ------- ------- 25,264 25,364 Less accumulated depreciation 8,282 8,506 ------- ------- 16,982 16,858 ------- ------- Other assets: Notes receivable from Rosewood Care Center Holding Company 6,910 7,740 Amortizable Costs, Net 840 809 ------- ------- 7,750 8,549 ------- ------- $32,421 $31,692 ------- ------- The accompanying notes are an integral part of these financial statements.
9 10 ROSEWOOD CARE CENTER FACILITY COMPANIES AND REAL ESTATE COMPANIES COMBINED BALANCE SHEETS (DOLLARS IN THOUSANDS) (UNAUDITED)
June 30, Sept 30, LIABILITIES AND STOCKHOLDERS' EQUITY 1998 1998 ------------------------------------ -------- -------- Current liabilities: Current portion of long-term debt $ 2,071 $ 2,109 Accounts payable - trade 2,144 2,176 Accrued expenses: Salaries and payroll taxes 576 367 Vacation and employee fringes 257 239 Accrued Rent 43 25 Real estate taxes 471 342 Management fees - affiliate 599 364 Income taxes 4 92 Dividends payable 801 1,008 ------- ------- Total current liabilities 6,966 6,722 ------- ------- Long-term debt: Notes payable - Rosewood Care Center Capital Funding Corporation 25,561 25,240 ------- ------- 25,561 25,240 Less current maturities 2,071 2,109 ------- ------- 23,490 23,131 ------- ------- Stockholders' equity: Common stock 65 65 Paid-in capital 481 481 Retained earnings 1,419 1,293 ------- ------- 1,965 1,839 ------- ------- $32,421 $31,692 ------- ------- The accompanying notes are in integral part of these financial statements.
10 11 ROSEWOOD CARE CENTER FACILITY COMPANIES AND REAL ESTATE COMPANIES COMBINED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DOLLARS IN THOUSANDS) (UNAUDITED)
Three Months Ended Sept. 30, --------------------- 1997 1998 ------ ------ Patient service revenue: Private $4,830 $4,914 Medicare 2,251 2,528 Medicaid 374 424 Other patient revenues, net of expenses 66 45 ------ ------ 7,521 7,911 ------ ------ Operating expenses: Facility expenses: Administrative expense 253 276 Employee fringe benefits 473 552 Dietary 473 527 Nursing 1,822 2,219 Ancillary services 1,411 1,041 Plant utilities and maintenance 313 354 Housekeeping and laundry 237 302 Social services and activities 170 187 ------ ------ 5,152 5,458 ------ ------ Income after facility expenses 2,369 2,453 ------ ------ Nonfacility expenses: Rent -0- 111 Real estate taxes and insurance 139 140 Base management fees 198 214 Illinois Medicaid assessments 99 107 Depreciation and amortization 266 255 ------ ------ 702 827 ------ ------ Income before incentives 1,667 1,626 Incentive management fees (426) (359) Officers' bonuses - - ------ ------ Income from operations 1,241 1,267 ------ ------ Other income (expense): Interest income 169 147 Interest expense (496) (461) ------ ------ (327) (314) ------ ------ Income before income taxes 914 953 Income tax expense (83) (71) ------ ------ Net income 831 882 Retained earnings, beginning 1,388 1,419 Dividends declared (789) (1,008) ------ ------ Retained earnings, ending $1,430 $1,293 ------ ------ The accompanying notes are an integral part of these financial statements.
11 12 ROSEWOOD CARE CENTER FACILITY COMPANIES AND REAL ESTATE COMPANIES COMBINED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS) (UNAUDITED)
Three Months Ended September 30, --------------------- 1997 1998 ------ ------- Cash flow from operating activities: Net income $ 831 $ 882 Adjustments: Depreciation 234 224 Amortization 32 31 Decrease (increase) in: Accounts receivable - residents (262) (74) Accounts receivable - third party payors 970 (739) Other receivables and prepaids (140) 102 Increase (decrease) in: Accounts payable - trade 69 32 Accrued salaries, taxes and fringes (118) (227) Accrued real estate taxes (149) (129) Accrued management fees 161 (235) Other payables and accruals (37) 70 ------ ------- Net cash provided by operating activities 1,591 (63) ------ ------- Cash flow from investing activities: Purchase of property and equipment (26) (100) Loans and deposits with affiliate 342 (830) ------ ------- Net cash (used) by investing activities 316 (930) ------ ------- Cash flow from financing activities: Reduction of long-term debt (380) (321) Dividends paid (543) (801) ------ ------- Net cash (used) by financing activities (923) (1,122) ------ ------- Net increase (decrease) in cash 984 (2,115) Cash, beginning 2,320 2,866 ------ ------- Cash, ending $3,304 $ 751 ------ ------- Cash paid for: Interest $ 586 $ 461 ------ ------- Income taxes paid (refunded) $ 50 $ (20) ------ ------- The accompanying notes are an integral part of these financial statements.
12 13 ROSEWOOD CARE CENTER FACILITY COMPANIES AND REAL ESTATE COMPANIES NOTES TO COMBINED FINANCIAL STATEMENTS 1. Interim Financial Statements ---------------------------- In the opinion of the Companies, these unaudited combined financial statements include all adjustments necessary for a fair presentation of their financial position as of June 30, 1998 and September 30, 1998 and the results of their operations and their cash flows for the three month periods ended September 30, 1997 and 1998. Such adjustments were of a normal recurring nature. The results of operations for the three month period ended September 30, 1997 and 1998, are not necessarily indicative of the results for the full years. It is suggested that these financial statements be read in conjunction with the financial statements, accounting policies and financial notes thereto included in the Form 10K Annual Report (No. 33-65948), which has previously been filed with the Commission. 2. Litigation ---------- The Companies, from time to time, are involved in litigation in the ordinary course of business including disputes involving management contracts, patient services, employment services, employment claims and construction matters. The Companies are also involved in routine administrative and judicial proceedings regarding permits and expenses. The Companies are not a party to any lawsuit or proceeding which, in the opinion of management, is individually or in the aggregate, likely to have a material adverse effect on the combined financial position or results of operations of the Companies. 3. Refinancing of Long-Term Debt ----------------------------- On October 21, 1993, the Companies refinanced their long-term debt with Rosewood Care Centers Capital Funding Corporation, which issued $33,000,000 of its 7-1/4% First Mortgage Redeemable Bonds due November 1, 2013. Remaining loan proceeds were loaned to Rosewood Care Center Holding Company under unsecured promissory notes bearing interest at 7-1/4% per annum and having maturities of December 1999. 13 14 ROSEWOOD CARE CENTER FACILITY COMPANIES AND REAL ESTATE COMPANIES NOTES TO COMBINED FINANCIAL STATEMENTS 3. Refinancing of Long-Term Debt (Continued) ----------------------------------------- Loan costs of $609,000 and underwriter's discount of $841,500 are being amortized over the term of the long-term debt, on the interest method. 4. Dividends --------- Dividends in the amount of $1,008,000 were declared during the three months ended September 30, 1998. 14 15 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED WITH THREE MONTHS ENDED SEPTEMBER 30, 1997 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION The Corporation is a pass through entity. Interest income and expenses offset, resulting in no income or loss. THE COMBINED FACILITY COMPANIES AND REAL ESTATE COMPANIES Overview -------- The Companies' operating strategy focuses on the average daily rate as well as on occupancy levels in order to maximize revenues from the facilities. The Companies principally market their services to private paying patients. Revenues from this market continued to grow in 1998. However, the underperformance of the facility in East Peoria, where occupancy has decreased appreciably due to administrative turnover and operational difficulties, will continue into the next fiscal year. Marketing --------- The Companies' attempt to increase admissions through marketing programs. The Companies' marketing programs are executed under the direction of a full time marketing staff member employed by HSM Management. Marketing is done through direct mail, community programs and television. Although the Companies provide long-term nursing home care, their marketing strategy emphasizes short-term nursing home care for rehabilitative purposes. The Companies believe this emphasis has an appeal to a much larger private payor market than exists for strictly long-term care oriented nursing homes. Governmental Regulation and Reimbursement ----------------------------------------- The Companies' nursing facilities are required to comply with various federal and state health care regulations and statutes. Compliance with the state licensing regulations is a prerequisite for the operation of the facilities and for participation in government sponsored health care programs such as Medicaid and Medicare. All six facilities participate in the federally administered Medicare and Medicaid programs. Medicare is a health insurance program for the aged and certain other disabled individuals, operated by the federal government and administered by an insurance intermediary. As a result of the Companies' emphasis on short-term rehabilitative nursing care, which is covered by Medicare, the percentage of patient service revenue attributable to Medicare continues to be a significant sector of the Companies' total revenue. Health care reform continues to be a high priority concern at both the Federal and State government levels. In August 1997, the Balanced Budget Act of 1997 was signed into law. Included in the law are program changes directed at balancing the federal budget. The legislation changes Medicare and Medicaid policy in a number of ways as follows: a) Development of new Medicare and Medicaid health plan options; b) Creation of additional safeguards designed to prevent fraud and abuse; 15 16 c) A 10% reduction in Part B therapy costs for the period January 1, 1998 through July 1, 1998. As of July 1, 1998, reimbursement for services is based on fee schedules established by the United States Department of Health and Human Services Health Care Financing Administration ("HCFA"); d) Phase-in of a Medicare Prospective Payment System ("PPS") for skilled nursing facilities effective July 1, 1998; and e) Limitations in Part B therapy charges per beneficiary per year. The new legislation will force skilled nursing facilities to contain costs as well as place further focus on patient outcomes. At this time, the Companies have not been able to assess the full impact of the changes due to the uncertainty of the interpretation of the legislation by HCFA and, therefore, no assurances can be made as to the impact of this legislation or any future health care legislation on the Companies' financial position, results of operations or cash flows. However, future and current federal legislative changes may have a negative impact on the operations of the Companies. PPS was effective for all of the Companies on July 1, 1998. This has changed the manner in which the facilities are paid for inpatient services provided to Medicare beneficiaries. PPS will have a three year phase-in period. For the fiscal year ending June 30, 1999, the Medicare reimbursement rate will be based 75% on the June 30, 1995 facility-specific Medicare costs, as adjusted for inflation, and 25% will be federally determined based on the acuity level of the Medicare esetents. For the fiscal year ending June 30, 2000, the rate will be based 50% on the 1995 facility-specific costs and 50% on the federally determined acuity rate. For the fiscal year ending June 30, 2001, the Medicare reimbursement will be based 25% on the 1995 facility-specific costs and 75% on the federally determined acuity rate. For the fiscal year ending June 30, 2002, the Medicare reimbursement rate will be based entirely on the federally determined rate based on the acuity level of the patients. The Companies are analyzing their 1995 facility rates and the acuity level of the Medicare patients in the facilities. Based on this analysis, the Companies hope to implement changes to lower the cost of providing services to their Medicare residents. Should the Companies be unable to execute the changes to reduce costs, PPS could have a material negative effect on the Companies' financial position and results of operations. Under reimbursement regulations effective through June 30, 1998, funds received under Medicare programs are subject to audit by the third party payor responsible for administering the facility account. This results either in amounts due to or from the facilities based on the actual costs of participating in the Medicare program during the year. Past audits of the Companies' reimbursements through the fiscal year ending June 30, 1996, have not resulted in any material adjustments for any of the Companies that were not otherwise indemnified for by private vendors to the Companies. 16 17 Year 2000 --------- Many computers currently in use in business and government use only two digits, rather than four, to identify the year where information about the date is entered into or automatically added to computer files. These computers automatically add the "19" prefix to the last two digits the computer reads for the year when date information becomes part of a computer file. Thus, when "2000" is entered, the computer will only read the "00" and interpret the date as "1900", rather than "2000". This is becoming known as the Year 2000 ("Y2K") problem. This issue is more of a problem for systems employing large mainframe computers and other similar or older systems. Additional problems come from microprocessors embedded in machinery. The Companies do not utilize mainframes and have updated their computer systems recently, including accounting and clinical software and hardware. The Companies are in the process of upgrading all of the Companies computers to insure microprocessor compatibility. Investigation of readiness of all mechanical systems and other equipment in the Companies' facilities has begun and equipment upgrades and readiness are scheduled to continue over the course of the next year. The Companies believe their internal accounting and patient management systems will not be materially disrupted or adversely affected by the Y2K problem because of software upgrades. Internal software and hardware systems have undergone extensive upgrading in the last two years, in part to address the Y2K issues. The Companies will not be making any significant expenditures for computer equipment or software upgrades, since the cost is being paid for by the affiliated management company. The Companies have had communications with their principal suppliers to determine the extent to which the Companies' systems and operations are vulnerable to third party failure to remedy their own year 2000 issues. There can be no assurance that the systems of other companies or those of the State and Federal governments, on which the Companies' operations rely, will be timely converted and will not have an adverse effect on the Companies' operations. The Companies receive substantial payments from insurance companies and Federal and State agencies. The Y2K readiness of individual insurance companies is not uniform. The Federal government has reported that it is struggling with the Y2K problem. Accordingly, the Companies can not make any assurances that these third party payors will be in compliance by January 1, 2000, and if they are not, there would be a significant impact on the Companies' cash flow. Since under the terms of the bond documents, the Companies are not allowed additional borrowings, they have not established any lines of credit and currently have no other contingency plans in place to normalize cash flow in the event of a significant disruption of payments from third party payors. The Companies will continue to use internal and external sources to insure that the operations of the Companies are not disrupted. However, there can be no assurance that the goals will be achieved and actual results could be materially different from those anticipated. Factors that may cause problems include, but are not limited to, availability and cost of personnel trained in this area, the ability to locate and correct all computer codes, third party readiness and other uncertainties. Operating Results ----------------- NET REVENUES. Net revenues increased to $7,911,000 for the three months ended September 30, 1998, from $7,521,000 for the three months ended September 30, 1997, an increase of $390,000 or 5.2%. Private pay revenue increased $84,000 from $4,830,000 for the three months ended September 30, 1997, to $4,914,000 for the three months ended September 30, 1998. Revenue generated from ancillary services increased $24,000, while 17 18 revenue from room charges increased $60,000 when compared to the same three month period last year. The average private room rate aggregated $116 per patient day compared to $114 per patient day for the same period last year. Private census has decreased from 40,022 patient days for 1997 compared to 39,971 patient days for the current period ended September 30, 1998. Net revenues for Medicare have increased from $2,251,000 for the three months ended September 30, 1997, to $2,528,000 for the three months ended September 30, 1998, an increase of $277,000 or 12.3%. The Medicare census has increased from 8,616 patient days for the same three month period last year to 10,245 patient days for the three months ended September 30, 1998. The average Medicare reimbursement rate has decreased approximately $25 per patient day when compared to the same three month period last year. The decrease in the reimbursement rate is the direct result of the implementation of the new PPS reimbursement program previously discussed. The Companies are closely monitoring the cost associated with providing service to Medicare qualified residents in an effort to offset any decrease in the Medicare reimbursement program. The Companies have reduced the cost of drugs provided to the Medicare residents from an average of $34 per patient day for the three month period ended September 30, 1997 to an average of $14 per patient day for the three month period ended September 30, 1998. In addition to the decrease in drug costs, the Companies were able to decrease the average cost of therapy by $33 per patient day. Medicaid revenue has increased from $374,000 for the same period last year to $424,000 for the three months ended September 30, 1998. The facilities have received an increase in the Medicaid reimbursement rate of approximately 3%, effective July 1, 1998. The Medicaid census has increased from 5,491 patient days for the first quarter of fiscal 1997 to 5,927 patient days for the three months ended September 30, 1998. The facilities have an average occupancy rate of 82% for the three months ended September 30, 1998, compared to 86% for the same period last year. The East Peoria facility is the only facility which continues to have an occupancy level significantly lower than the other five locations. Management is of the opinion that this trend will continue. The Alton facility reflects a decline in occupancy level as a result of a 60 bed addition which was opened during January 1998. Management is of the opinion that it could take as long as two years to achieve occupancy levels in excess of 95% for the expanded Alton facility. The occupancy level of the facilities for the three months ended September 30, 1998 and 1997 are as follows:
SEPTEMBER 1998 1997 Swansea 96.4 98.7 Galesburg 79.8 78.1 Moline 95.8 93.5 Alton 80.5 96.9 Peoria 82.9 88.9 East Peoria 57.5 62.8 AVERAGE 81.8 86.3
FACILITY OPERATING EXPENSES. Facility operating expenses have increased approximately $306,000 from $5,152,000 (or $95.18 per patient day) for the three months 18 19 ended September 30, 1997, to $5,458,000 (or $97.22 per patient day) for the three months ended September 30, 1998. Administrative expenses have increased approximately $23,000 or when compared to the same three month period last year. The majority of the increase can be accounted for by the increase in payroll and telephone expense. The cost of employee fringe benefits increased $79,000 when compared to the same three month period last year. The major portion of the increase can be accounted for by the increase in the cost of workers' compensation insurance, payroll taxes and vacation pay. Dietary expense increased $54,000 when compared to the same period last year. Wages have increased $27,000 with the balance of the increase due to the increase in raw food costs. Nursing costs have increased $397,000 from $1,822,000 for three month period ended September 30, 1997 to $2,219,000 for the three months ended September 30, 1998. Wages have increased $403,000, while the cost of supplies has decreased $6,000. Included in the increase in wages is approximately $91,000 resulting from additional staff hired to monitor effectively the reporting requirements under the new PPS reimbursement program for Medicare residents previously discussed. Labor costs continue to increase due to the increased pressure on the availability of qualified personnel. Management is of the opinion that this employment trend will continue as long as the economy remains strong. The Companies continue to monitor labor cost closely since it accounts for the major portion of the operating cost of the facilities. The Companies will attempt to adjust daily room rates to offset the increase in costs, while at the same time remaining competitive in the market place. Ancillary services have decreased approximately $370,000 when compared to the same three month period last year. The decrease in costs is the direct result of the reduction in therapy and drug costs brought about by reduction in ancillary services provided to the Medicare qualified residents under the new PPS guidelines. Plant utilities and maintenance have increased $41,000 when compared to the same three month period last year. Wages have increased approximately $3,600, while the cost of utilities has increased $26,000 with the remainder of the increase a result of inflation. The utility increase is the direct result of the 60 bed addition to the Alton facility previously discussed. Housekeeping and laundry costs have increased $65,000 when compared to the same period last year. Wages increased $52,000 while the cost of supplies increased $13,000 compared to the same three month period last year. Social Services and activities costs increased approximately $17,000 when compared to the same three month period last year as a result of increased labor costs. Rent, base management fees, and the Illinois Medicaid Assessments have increased when compared to the same period last year as a result of the opening of the 60 bed addition to the Alton facility. Rent is paid to an affiliated company, Alton Real Estate II, L.L.C., which is not a party to the bond documents. INCENTIVE FEES. Incentive management fees have decreased when compared to the same period last year because of losses generated by the low occupancy at the East Peoria facility which was previously discussed. 19 20 OTHER INCOME AND EXPENSE. Interest Income has decreased $22,000 when compared to the same period last year. The reduction is the result of a decrease in the notes receivable outstanding during most of the period from the affiliated company, Rosewood Care Center Holding Co. The balance of notes due from the affiliate has increased from $6,910,000 on June 30, 1998 to $7,740,000 on September 30, 1998. All of the increase in the notes occurred in the last month of the current three month period ended September 30, 1998. Interest Expense decreased $35,000 when compared to the same three month period last year. The decrease is the result of the decrease in long term debt from $25,561,000 as of June 30, 1998, to $25,240,000 as of September 30, 1998. The Facility Companies file a consolidated income tax return with their parent company, Rosewood Care Center Holding Co. The income of the Real Estate Companies is taxed at the individual shareholder level, as each real estate company is a Subchapter S Corporation. The amount reflected as income taxes is the facilities' portion of federal and state taxes, calculated for the three months ended September 30, 1998, on an annualized basis. Liquidity and Capital Resources ------------------------------- As of September 30, 1998, the Companies had approximately $751,000 in cash and cash equivalents and a net working capital deficit of $437,000. Subsequent to September 30, 1998, the facilities received loan repayments aggregating $2,000,000 from the affiliated company Rosewood Care Center Holding Co., reducing the outstanding notes receivable due from affiliate. These loan repayment proceeds result in increasing the working capital from a deficit to a reserve of $1,563,000 subsequent to September 30, 1998. For the three months ended September 30, 1998, net cash of $63,000 was used in operations. Net cash of $930,000 was used in investing activities, of which $830,000 was loaned to the affiliate Rosewood Care Center Holding Co. and $100,000 was used by the companies for the purchase of equipment used in the operation of the facilities. Net cash used in financing activities aggregated $1,122,000, of which $801,000 was used for the payment of dividends and $321,000 was used to retire debt. Based on the receipt of the payment on the notes from the affiliate and the subsequent settlement received as cost report settlements from Medicare, discussed below, the Companies believe they have adequate capital for operations and replacements for the coming year and foreseeable future. Accounts receivable from private paying residents increased to $1,426,000 as of September 30, 1998, compared to $1,352,000 as of June 30, 1998. Accounts receivable from third party payors increased from $2,766,000 as of June 30, 1998, to $3,505,000 as of September 30, 1998. Subsequent to September 30, 1998, the facilities received $1,007,600 as an interim settlement on the June 30, 1998 cost reports. The Medicare program continues to face intense scrutiny and significant cutbacks. As previously noted, budget legislation passed by Congress in 1997, enacted a new Medicare prospective payment system. This new PPS is intended to help the Medicare program achieve targeted reductions in spending growth of approximately $9.2 billion for skilled nursing facilities over the next five years. Effective July 1, 1998 all of the facilities are subject to the new PPS payment system previously discussed. The Companies are analyzing their 1995 facility rates and the acuity level of the Medicare patients in the facilities. Based on this analysis, the Companies hope to implement changes to lower the cost of providing services to their Medicare residents. Should the Companies be 20 21 unable to execute the changes to reduce costs, PPS could have a material negative effect on the Companies' financial position and results of operations. The Companies had no open lines of credit with any financial institution as of September 30, 1998. The Companies continue to monitor legislative and other health care developments and will attempt to structure contractual arrangements to minimize the impact of reductions in government payment programs. However, changes in the policies of Medicare and Medicaid as a result of budget cuts by federal and state governments or other legislative actions could have a significant adverse effect on the results of operations and cash flow of the Companies. 21 22 PART II OTHER INFORMATION - -------------------------- ITEM 1. LEGAL PROCEEDINGS. There were no material developments with respect to legal proceedings during the quarter ended September 30, 1998. ITEM 2. CHANGES IN SECURITIES. Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. ITEM 5. OTHER INFORMATION. Section 3.17 of the Loan Agreement requires that unless the Companies maintain at least $1,000,000 in shareholders' equity and at least $1,000,000 in cash or cash equivalents, no distributions or dividends or other payments may be made to shareholders or affiliates except for certain limited payments. The financial statements of the Companies for the quarter ending September 30, 1998 reflect that the Companies failed to meet this requirement on September 30, 1998. The temporary cash deficiency was caused by the new Medicare PPS in that, in implementing the new PPS, the intermediary shifted the payment cycle to later in the month. In addition, the intermediary experienced delays in implementing its administration of PPS, which caused further delays in receipt by the Companies of Medicare payments. Medicare payments which would normally have been received by the middle of September, were not received by the Companies until the first week of October, after the end of the quarter. The Companies contract with a related company, Rosewood Therapy Services, Inc. to provide speech, physical and occupational therapy services to the residents of the facilities. Therapy services are provided to the facilities at competitive market rates, on terms and conditions as would be entered into with unrelated therapy companies. Amounts paid by the Companies to Rosewood Therapy Services during the first quarter of the 1999 fiscal year, aggregated $658,000. The 60 bed expansion wing at the Alton Rosewood Care Center opened January 22, 1998. The 60 bed expansion wing at the Galesburg Rosewood Care Center was licensed by the State of Illinois and was opened on October 9, 1998. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) See Index to Exhibits on Page 37. (b) Reports on Form 8-K. None. 22 23 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION, Registrant Dated: November 12, 1998 By: /s/ Larry D. Vander Maten -------------------------------------------- Larry D. Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 23 24 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSEWOOD CARE CENTER, INC. OF SWANSEA, Registrant Dated: November 12, 1998 By: /s/ Larry D. Vander Maten -------------------------------------------- Larry D. Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 24 25 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSEWOOD CARE CENTER, INC. OF GALESBURG, Registrant Dated: November 12, 1998 By: /s/ Larry D. Vander Maten ------------------------------------------ Larry D. Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer 25 26 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSEWOOD CARE CENTER, INC. OF PEORIA, Registrant Dated: November 12, 1998 By: /s/ Larry D. Vander Maten -------------------------------------------- Larry D. Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 26 27 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSEWOOD CARE CENTER, INC. OF EAST PEORIA, Registrant Dated: November 12, 1998 By: /s/ Larry D. Vander Maten -------------------------------------------- Larry D. Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 27 28 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSEWOOD CARE CENTER, INC. OF ALTON, Registrant Dated: November 12, 1998 By: /s/ Larry D. Vander Maten -------------------------------------------- Larry D. Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 28 29 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSEWOOD CARE CENTER, INC. OF MOLINE, Registrant Dated: November 12, 1998 By: /s/ Larry D. Vander Maten -------------------------------------------- Larry D. Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 29 30 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SWANSEA REAL ESTATE, INC., Registrant Dated: November 12, 1998 By: /s/ Larry D. Vander Maten -------------------------------------------- Larry D. Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 30 31 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GALESBURG REAL ESTATE, INC., Registrant Dated: November 12, 1998 By: /s/ Larry D. Vander Maten -------------------------------------------- Larry D. Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 31 32 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PEORIA REAL ESTATE, INC., Registrant Dated: November 12, 1998 By: /s/ Larry D. Vander Maten -------------------------------------------- Larry D. Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 32 33 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. EAST PEORIA REAL ESTATE, INC., Registrant Dated: November 12, 1998 By: /s/ Larry D. Vander Maten -------------------------------------------- Larry D. Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 33 34 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ALTON REAL ESTATE, INC., Registrant Dated: November 12, 1998 By: /s/ Larry D. Vander Maten -------------------------------------------- Larry D. Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 34 35 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MOLINE REAL ESTATE, INC., Registrant Dated: November 12, 1998 By: /s/ Larry D. Vander Maten -------------------------------------------- Larry D. Vander Maten President and Director (Principal Executive Officer and Principal Financial and Accounting Officer) 35 36 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION EXHIBIT INDEX These Exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K
Exhibit Number Description - ------- ----------- 4.1 Reference is made to Article III of the Articles of Incorporation of Rosewood Care Centers Capital Funding Corporation filed on September 28, 1994 as Exhibit 3.1 (and referenced in Exhibit 4.1) of the Form 10-K. 4.2 Reference is made to the Trust Indenture filed on November 29, 1993 as Exhibit 4.2 of the Form 10-Q of Registrants. 4.3 Reference is made to the Bond filed on November 29, 1993 as Exhibit 4.3 of the Form 10-Q of Registrants. 4.4 Reference is made to the Loan Guaranty Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Alton and the additional Loan Guaranty Agreements listed on the Schedule filed on November 29, 1993 as Exhibit 4.4 of the Form 10-Q of Registrants. 4.5 Reference is made to the Note executed by Alton Real Estate, Inc. and the additional Notes listed on the Schedule filed on November 29, 1993 as Exhibit 4.5 of the Form 10-Q of Registrants. 10.1 Reference is made to the Trust Indenture filed on November 29, 1993 as Exhibit 4.2 of the Form 10-Q of Registrants. 10.2 Reference is made to the Collateral Pledge and Security Agreement between Rosewood Care Centers Capital Funding Corporation and Alton Real Estate, Inc. and the additional Collateral Pledge and Security Agreements listed on the Schedule filed on November 29, 1993 as Exhibit 10.2 of the Form 10-Q of Registrants. 10.3 Reference is made to the Mortgage Between Alton Real Estate, Inc. and Rosewood Care Centers Capital Funding Corporation and the additional Mortgages listed on the Schedule filed on November 29, 1993 as Exhibit 10.3 of the Form 10-Q of Registrants. 10.4 Reference is made to the Security Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Alton and the additional Security Agreements listed on the Schedule filed on November 29, 1993 as Exhibit 10.4 of the Form 10-Q of Registrants. 10.5 Reference is made to the Assignment of Rents and Leases between Rosewood Care Centers Capital Funding Corporation and Alton Real Estate, Inc. and the additional Assignments of Rents and Leases listed on the Schedule filed on November 29, 1993 as Exhibit 10.5 of the Form 10-Q of Registrants. 10.6 Reference is made to the Subordination and Attornment Agreement between Rosewood Care Centers Capital Funding Corporation and Alton Real Estate, Inc. and the additional Subordination and Attornment Agreements listed on the Schedule filed on November 29, 1993 as Exhibit 10.6 of the Form 10-Q of Registrants. 36 37 10.7 Reference is made to the Acknowledgment and Consent between Rosewood Care Centers Capital Funding Corporation and Hovan Enterprises, Inc. filed on November 29, 1993 as Exhibit 10.7 of the Form 10-Q of Registrants. 10.8 Reference is made to the Administrative Services Agreement between Hovan Enterprises, Inc. and Alton Real Estate, Inc. and the additional Administrative Services Agreements listed on the Schedule filed on November 29, 1993 as Exhibit 10.8 of the Form 10-Q of Registrants. 10.9 Reference is made to the Revised and Restated Management Agreement between Rosewood Care Center, Inc. of Alton and Hovan Enterprises, Inc. and the additional Revised and Restated Management Agreements listed on the Schedule filed on November 29, 1993 as Exhibit 10.9 of the Form 10-Q of Registrants. 10.10 Reference is made to the Lease between Alton Real Estate, Inc. and Rosewood Care Center, Inc. of Alton and the additional Leases listed on the Schedule filed on November 29, 1993 as Exhibit 10.10 of the Form 10-Q of Registrants. 10.11 Reference is made to the Assignment of Management Agreement between Rosewood Care Center, Inc. of Alton and Mercantile Bank and the additional Assignments of Management Agreement listed on the Schedule filed on November 29, 1993 as Exhibit 10.11 of the Form 10-Q of Registrants. 10.12 Reference is made to the Contract between Resident and Facility filed on July 13, 1993 as Exhibit 10.12 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 10.13 Reference is made to the Loan Agreement among Rosewood Care Centers Capital Funding Corporation and Alton Real Estate, Inc., Swansea Real Estate, Inc., Peoria Real Estate, Inc., East Peoria Real Estate, Inc., Moline Real Estate, Inc., and Galesburg Real Estate, Inc. filed on November 29, 1993 as Exhibit 10.13 of the Form 10-Q of Registrants. 10.14 Reference is made to the Loan Guaranty Agreement filed on November 29, 1993 as Exhibit 4.4 of the Form 10-Q of Registrants. 10.15 Reference is made to the Letter of Credit issued by Sun Bank, National Association to Mercantile Bank of St. Louis N.A. as Trustee under the Trust Indenture on December 6, 1993 and substituted for the cash in the Debt Service Reserve Fund on December 9, 1993, filed on February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the Registrants. 10.16 Reference is made to the renewal of the Letter of Credit filed on February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the Registrants, which renewal was filed on February 14, 1995 as Exhibit 10.16 of the Form 10-Q of the Registrants. 10.17 Reference is made to the renewal of the Letter of Credit filed on February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the Registrants, which renewal was filed on February 13, 1996 as Exhibit 10.17 of the Form 10-Q of the Registrants. 10.18 Reference is made to the renewal of the Letter of Credit filed on February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the Registrants, which renewal was filed on November 13, 1996 as Exhibit 10.18 of the Form 10-Q of the Registrants. 37 38 10.19 Reference is made to the Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Alton filed on November 12, 1997 as Exhibit 10.19 to the Form 10-Q of the Registrants.(Additional Consultant Services Agreements listed on the Schedule). 10.20 Reference is made to Renewal of the Letter of Credit filed on February 11, 1994 as Exhibit 10.15 on the Form 10-Q of the Registrants, which renewal was filed on February 11, 1998 as Exhibit 10.20 of the Form 10-Q of the Registrants. 10.21 Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Alton (Revised) (Additional Consultant Services Agreements listed on the Schedule). 27.1 Financial Data Schedule of Rosewood Care Center Capital Funding Corporation. 27.2 Financial Data Schedule of Rosewood Care Center of Galesburg. 27.3 Financial Data Schedule of Rosewood Care Center of Swansea. 27.4 Financial Data Schedule of Rosewood Care Center of East Peoria. 27.5 Financial Data Schedule of Rosewood Care Center of Peoria. 27.6 Financial Data Schedule of Rosewood Care Center of Alton. 27.7 Financial Data Schedule of Rosewood Care Center of Moline. 27.8 Financial Data Schedule of Swansea Real Estate. 27.9 Financial Data Schedule of Galesburg Real Estate. 27.10 Financial Data Schedule of East Peoria Real Estate. 27.11 Financial Data Schedule of Peoria Real Estate. 27.12 Financial Data Schedule of Alton Real Estate. 27.13 Financial Data Schedule of Moline Real Estate. 99.1 Reference is made to the Amended and Restated License Agreement filed September 28, 1994 as Exhibit 99.1 of Form 10-K of Registrants. 99.2 Reference is made to the Medicare Provider Agreement between The Secretary of Health and Human Services and Rosewood Care Center, Inc. of Swansea filed on July 13, 1993 as Exhibit 99.2 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.3 Reference is made to the Medicare Provider Agreement between The Secretary of Health and Human Services and Rosewood Care Center, Inc. of Alton filed on July 13, 1993 as Exhibit 99.3 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.4 Reference is made to the Medicare Provider Agreement between The Secretary of Health and Human Services and Rosewood Care Center, Inc. of East Peoria filed on 38 39 July 13, 1993 as Exhibit 99.4 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.5 Reference is made to the Medicare Provider Agreement between The Secretary of Health and Human Services and Rosewood Care Center, Inc. of Peoria filed on July 13, 1993 as Exhibit 99.5 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.6 Reference is made to the Medicare Provider Agreement between The Secretary of Health and Human Services and Rosewood Care Center, Inc. of Galesburg filed on July 13, 1993 as Exhibit 99.6 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.7 Reference is made to the Medicare Provider Agreement between The Secretary of Health and Human Services and Rosewood Care Center, Inc. of Moline filed on July 13, 1993 as Exhibit 99.7 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.8 Reference is made to the Medicaid Provider Agreement between The Illinois Department of Public Aid and Rosewood Care Center, Inc. of Swansea filed on July 13, 1993 as Exhibit 99.8 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.9 Reference is made to the Medicaid Provider Agreement between The Illinois Department of Public Aid and Rosewood Care Center, Inc. of Alton filed on July 13, 1993 as Exhibit 99.9 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.10 Reference is made to the Medicaid Provider Agreement between The Illinois Department of Public Aid and Rosewood Care Center, Inc. of East Peoria filed on July 13, 1993 as Exhibit 99.10 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.11 Reference is made to the Medicaid Provider Agreement between The Illinois Department of Public Aid and Rosewood Care Center, Inc. of Peoria filed on July 13, 1993 as Exhibit 99.11 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.12 Reference is made to the Medicaid Provider Agreement between The Illinois Department of Public Aid and Rosewood Care Center, Inc. of Galesburg filed on July 13, 1993 as Exhibit 99.12 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.13 Reference is made to the Medicaid Provider Agreement between The Illinois Department of Public Aid and Rosewood Care Center, Inc. of Moline filed on July 13, 1993 as Exhibit 99.13 of the Registration Statement of Registrants (No. 33-65948) declared effective October 14, 1993. 99.14 Reference is made to the Lease Agreement filed on September 28, 1994 as Exhibit 99.14 of the Form 10-K of Registrants. 99.15 Reference is made to the Revised and Restated Grant and Declaration of Easements filed on September 28, 1994 as Exhibit 99.15 of the Form 10-K of Registrants. 39 40 99.16 Reference is made to the Managed Care Agreement between Rosewood Care Center, Inc. of Moline, Heritage National Health Plan, Inc., John Deere Family Health Plan and Deere and Company filed on May 15, 1995 as Exhibit 99.16 of the Form 10-Q of Registrants. 99.17 Reference is made to the Skilled Nursing Facility Agreement between Health Care Service Corporation and Rosewood Care Center, et al filed on June 30, 1996 as Exhibit 99.17 of the Form 10-K of Registrants. SCHEDULE THE FOLLOWING DOCUMENTS ARE SUBSTANTIALLY IDENTICAL TO THE DOCUMENT FILED AS THE CORRESPONDING EXHIBIT IN THE 10-Q OF THE REGISTRANTS FILED ON NOVEMBER 23, 1993 10-Q. 4.4 Loan Guaranty Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Swansea Loan Guaranty Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Peoria Loan Guaranty Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of East Peoria Loan Guaranty Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Moline Loan Guaranty Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Galesburg 4.5 Note executed by Swansea Real Estate, Inc. Note executed by Peoria Real Estate, Inc. Note executed by East Peoria Real Estate, Inc. Note executed by Moline Real Estate, Inc. Note executed by Galesburg Real Estate, Inc. 10.2 Collateral Pledge and Security Agreement between Rosewood Care Centers Capital Funding Corporation and Swansea Real Estate, Inc. Collateral Pledge and Security Agreement between Rosewood Care Centers Capital Funding Corporation and Peoria Real Estate, Inc. Collateral Pledge and Security Agreement between Rosewood Care Centers Capital Funding Corporation and East Peoria Real Estate, Inc. Collateral Pledge and Security Agreement between Rosewood Care Centers Capital Funding Corporation and Moline Real Estate, Inc. Collateral Pledge and Security Agreement between Rosewood Care Centers Capital Funding Corporation and Galesburg Real Estate, Inc. 10.3 Mortgage Between Swansea Real Estate, Inc. and Rosewood Care Centers Capital Funding Corporation 40 41 Mortgage Between Peoria Real Estate, Inc. and Rosewood Care Centers Capital Funding Corporation Mortgage Between East Peoria Real Estate, Inc. and Rosewood Care Centers Capital Funding Corporation Mortgage Between Moline Real Estate, Inc. and Rosewood Care Centers Capital Funding Corporation Mortgage Between Galesburg Real Estate, Inc. and Rosewood Care Centers Capital Funding Corporation 10.4 Security Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Swansea Security Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Peoria Security Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of East Peoria Security Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Moline Security Agreement between Rosewood Care Centers Capital Funding Corporation and Rosewood Care Center, Inc. of Galesburg 10.5 Assignment of Rents and Leases between Rosewood Care Centers Capital Funding Corporation and Swansea Real Estate, Inc. Assignment of Rents and Leases between Rosewood Care Centers Capital Funding Corporation and Peoria Real Estate, Inc. Assignment of Rents and Leases between Rosewood Care Centers Capital Funding Corporation and East Peoria Real Estate, Inc. Assignment of Rents and Leases between Rosewood Care Centers Capital Funding Corporation and Moline Real Estate, Inc. Assignment of Rents and Leases between Rosewood Care Centers Capital Funding Corporation and Galesburg Real Estate, Inc. 10.6 Subordination and Attornment Agreement between Rosewood Care Centers Capital Funding Corporation and Swansea Real Estate, Inc. Subordination and Attornment Agreement between Rosewood Care Centers Capital Funding Corporation and Peoria Real Estate, Inc. Subordination and Attornment Agreement between Rosewood Care Centers Capital Funding Corporation and East Peoria Real Estate, Inc. Subordination and Attornment Agreement between Rosewood Care Centers Capital Funding Corporation and Moline Real Estate, Inc. 41 42 Subordination and Attornment Agreement between Rosewood Care Centers Capital Funding Corporation and Galesburg Real Estate, Inc. 10.8 Administrative Services Agreement between Hovan Enterprises, Inc. and Swansea Real Estate, Inc. Administrative Services Agreement between Hovan Enterprises, Inc. and Peoria Real Estate, Inc. Administrative Services Agreement between Hovan Enterprises, Inc. and East Peoria Real Estate, Inc. Administrative Services Agreement between Hovan Enterprises, Inc. and Moline Real Estate, Inc. Administrative Services Agreement between Hovan Enterprises, Inc. and Galesburg Real Estate, Inc. 10.9 Revised and Restated Management Agreement between Rosewood Care Center, Inc. of Swansea and Hovan Enterprises, Inc. Revised and Restated Management Agreement between Rosewood Care Center, Inc. of Peoria and Hovan Enterprises, Inc. Revised and Restated Management Agreement between Rosewood Care Center, Inc. of East Peoria and Hovan Enterprises, Inc. Revised and Restated Management Agreement between Rosewood Care Center, Inc. of Moline and Hovan Enterprises, Inc. Revised and Restated Management Agreement between Rosewood Care Center, Inc. of Galesburg and Hovan Enterprises, Inc. 10.10 Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc. of Swansea Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc. of Peoria Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc. of East Peoria Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc. of Moline Lease between Swansea Real Estate, Inc. and Rosewood Care Center, Inc. of Galesburg 10.11 Assignment of Management Agreement between Rosewood Care Center, Inc. of Swansea and Mercantile Bank Assignment of Management Agreement between Rosewood Care Center, Inc. of Peoria and Mercantile Bank 42 43 Assignment of Management Agreement between Rosewood Care Center, Inc. of East Peoria and Mercantile Bank Assignment of Management Agreement between Rosewood Care Center, Inc. of Moline and Mercantile Bank Assignment of Management Agreement between Rosewood Care Center, Inc. of Galesburg and Mercantile Bank THE FOLLOWING DOCUMENTS ARE SUBSTANTIALLY IDENTICAL TO THE DOCUMENT FILED AS THE CORRESPONDING EXHIBIT IN THE 10-Q OF THE REGISTRANTS FILED ON NOVEMBER 12, 1997 10.19 Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Swansea Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Moline Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Galesburg Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Peoria Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of East Peoria THE FOLLOWING DOCUMENTS ARE SUBSTANTIALLY IDENTICAL TO THE DOCUMENT FILED AS THE CORRESPONDING EXHIBIT IN THE 10-Q OF THE REGISTRANTS FILED ON NOVEMBER 12, 1998 10.21 Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Swansea (Revised) Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Moline (Revised) Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Galesburg (Revised) Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of Peoria (Revised) Consultant Services Agreement between Rosewood Therapy Services, Inc. and Rosewood Care Center, Inc. of East Peoria (Revised)
43 EX-10.21 2 CONSULTANT AGREEMENT 1 EXHIBIT 10.21 44 2 CONSULTANT SERVICES AGREEMENT BETWEEN ROSEWOOD THERAPY SERVICES, INC. AND ROSEWOOD CARE CENTER, INC. OF ALTON THIS CONSULTANT SERVICES AGREEMENT (Agreement) is made and entered into this 1st day of July, 1998, by and between ROSEWOOD THERAPY SERVICES, INC. ("RTS") and ROSEWOOD CARE CENTER, INC. OF ALTON ("Rosewood"). W I T N E S S E T H - - - - - - - - - - WHEREAS, Rosewood is a skilled nursing facility that provides comprehensive rehabilitation and long term care services to persons needing such services, including where medically indicated, physical, occupational and speech therapy services (collectively "the Services"); WHEREAS, RTS employs and/or contracts with persons possessing the requisite licenses, education and training to provide the Services to patients of Rosewood, and WHEREAS, Rosewood and RTS desire to enter into this Agreement for RTS to provide the Services to patients of Rosewood according to the terms and conditions set forth in this Agreement; NOW, THEREFORE, in consideration of the mutual covenants and conditions herein set forth, and other good and valuable consideration, the receipt and sufficiency of which is hereby expressly acknowledged, the parties covenant and agree as follows: 1. SERVICES OF RTS. RTS shall provide the Services at the fee set --------------- forth in Exhibit A, copies of which is attached hereto and incorporated herein by reference, with the same care and attention that is customarily provided by RTS to all RTS patients. RTS shall provide the Services in accordance with all applicable clinical, legal and ethical standards and within the standards of practice for quality care generally recognized within the community in which the Services are provided. 2. NO DISCRIMINATION. RTS shall provide the Services without ----------------- differentiation or discrimination because of race, color, sex, national origin, religion, political affiliation, age, disability or method of payment. 3. REIMBURSEMENT FOR SERVICES. Rosewood shall compensate RTS for the -------------------------- Services provided under this Agreement as set forth on Exhibit A. 4. RECORDS RETENTION. RTS shall keep and maintain at the Rosewood ----------------- facility such records of the Services rendered by RTS under this Agreement as may be required by federal, state or local governmental agencies or by Rosewood or its auditors. Pursuant to Section 1395x(V)(1)(1) of Title 42 of the United States Code, with respect to any Services furnished under the terms of the Agreement, the value or cost of which is ten thousand dollars ($10,000.00) or more over a twelve (12) month period, until the expiration of four (4) Year(s) after the termination of this Agreement, RTS shall make available, upon written request of the Secretary of the United Sates Department of Health and Human Services, or upon request of the Comptroller General of the United States General Accounting Office, or any of their duly authorized representatives, a 45 3 copy of this Agreement and such books, documents and records as are necessary to certify the nature and extent of the costs of the Services provided by RTS under this Agreement. 5. RELATIONSHIP OF PARTIES. The relationship between Rosewood and RTS ----------------------- is solely that of two independent parties contracting with each other at arm's length for the purpose of effectuating the provisions of this Agreement. None of the provisions of this Agreement are intended to create, nor shall be deemed or construed to create, any other relationship; neither party, nor their respective agents, employees or representative shall be deemed the agent, employee or representative of the other (except as expressly provided herein), and no joint venture or partnership shall result from this Agreement. Each party shall be solely responsible for and shall comply with all state and federal laws pertaining to employment taxes, income withholding, unemployment compensation contributions and other employment- related statutes applicable to that party. 6. INSURANCE. Each party shall, at such party's sole cost and --------- expense, maintain general and professional liability insurance in such amounts as are necessary to insure the other party and such other party's agents, servants and employees, against any claim for damages arising from or as a result of the performance by the insuring party or the failure of the insuring party to perform any of its obligations under this Agreement. 7. TERM OF AGREEMENT. This Agreement shall become effective on July ----------------- 1, 1998, and terminate on June 30, 1999, unless earlier terminated as set forth in Section 8. This Agreement is automatically renewed annually unless Notice of Termination is given by either party at least ninety (90) days' prior to the anniversary date. 8. TERMINATION. Either party may terminate this Agreement if they are ----------- unable to agree to changes in the Fee Schedule set forth on Exhibit A to this Agreement during the applicable time period. Upon such termination, no party shall have any further obligations hereunder, except for obligations accruing prior to the date of termination. 9. GOVERNING LAW. This Agreement shall be governed by and construed ------------- in accordance with the laws of the State of Illinois. 46 4 10. AMENDMENTS. This Agreement may be amended or modified only by a ---------- writing signed by both parties. 11. SEVERABILITY. This Agreement shall be construed to be in ------------ accordance with federal and state statutes and Medicare, Medicaid and intermediary carrier rules, regulations, principles and interpretations regarding reimbursement and rates charged to patients. If any provision of this Agreement, or any portion thereof, is found to be invalid, illegal or unenforceable, under any applicable statute or rule of law, then such provision or portion thereof shall be deemed omitted, and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 12. NO OBLIGATION TO THIRD PARTIES. None of the obligations and ------------------------------ duties of Rosewood or RTS under this Agreement shall in any manner be deemed to create any obligation of Rosewood or RTS to, or any rights in, any person or entity not a party to this Agreement. 13. TERMINATION FOR LOAN DEFAULT. RTS and Rosewood agree that the ---------------------------- holder of any mortgage on the real estate which constitutes the skilled nursing facility premises operated by Rosewood may terminate this Agreement upon thirty (30) days' prior written notice of such termination if there is a default under the loan documents. IN WITNESS WHEREOF, the undersigned have executed or caused this Agreement to be executed on the day and year first written above. ROSEWOOD THERAPY ROSEWOOD CARE CENTER, INC. OF SERVICES, INC. ALTON By:/s/ Larry Vander Maten By:/s/ Larry Vander Maten -------------------------------- --------------------------------- Larry Vander Maten Larry Vander Maten President President 47 5 EXHIBIT A --------- FEE SCHEDULE ------------ Rosewood agrees to pay for billable direct patient services performed on one or more of the following basis, as determined by agreement of the parties. Charges will be based on rates as set forth below: PLEASE NOTE THAT THIS SCHEDULE COVERS PATIENTS WITH MEDICARE, PRIVATE PAY, MANAGED CARE AND ALL OTHER COVERAGES. 1. Physical Therapy Services Compensation: Rate of $45.00 per hour 2. Occupational Therapy Services Compensation: Rate of $45.00 per hour 3. Speech Therapy Services Compensation: Rate of $45.00 per hour All charges set forth above may be changed by RTS at any time upon not less that sixty (60) days notice to Rosewood. If Rosewood objects to such increase and RTS and Rosewood cannot otherwise reach an agreement, notification of such increase shall constitute "cause" for purposes of termination under Paragraph 8 of the Agreement. Rosewood Care Center, Inc. of Alton Rosewood Therapy Services, Inc. /s/ Larry Vander Maten /s/ Larry Vander Maten - --------------------------------- -------------------------------------- President President July 1, 1998 July 1, 1998 - --------------------------------- -------------------------------------- Date Date 48 EX-27.1 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Financial Statements at September 30, 1998 for the period ended September 30, 1998 and is qualified in its entirety by reference to such financial statements. 0000909110 ROSEWOOD CARE CENTERS CAPITAL FUNDING CORPORATION 1000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 262 0 25,240 0 0 262 0 0 25,502 152 25,347 1 0 0 0 25,502 0 0 0 0 0 0 461 0 0 0 0 0 0 0 0 0
EX-27.2 4 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at September 30, 1998 for the period ended September 30, 1998 and is qualified in its entirety by reference to such financial statements. 0000909114 ROSEWOOD CARE CENTER OF GALESBURG 1000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 751 0 5,099 168 0 6,285 25,364 8,506 31,692 6,722 0 65 0 0 1,839 31,692 7,911 8,058 0 6,644 0 0 461 953 71 0 0 0 0 882 14 0
EX-27.3 5 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at September 30, 1998 for the period ended September 30, 1998 and is qualified in its entirety by reference to such financial statements. 0000909113 ROSEWOOD CARE CENTER OF SWANSEA 1000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 751 0 5,099 168 0 6,285 25,364 8,506 31,692 6,722 0 65 0 0 1,839 31,692 7,911 8,058 0 6,644 0 0 461 953 71 0 0 0 0 882 14 0
EX-27.4 6 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at September 30, 1998 for the period ended September 30, 1998 and is qualified in its entirety by reference to such financial statements. 0000909115 ROSEWOOD CARE CENTER OF EAST PEORIA 1000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 751 0 5,099 168 0 6,285 25,364 8,506 31,692 6,722 0 65 0 0 1,839 31,692 7,911 8,058 0 6,644 0 0 461 953 71 0 0 0 0 882 14 0
EX-27.5 7 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at September 30, 1998 for the period ended September 30, 1998 and is qualified in its entirety by reference to such financial statements. 0000909116 ROSEWOOD CARE CENTER OF PEORIA 1000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 751 0 5,099 168 0 6,285 25,364 8,506 31,692 6,722 0 65 0 0 1,839 31,692 7,911 8,058 0 6,644 0 0 461 953 71 0 0 0 0 882 14 0
EX-27.6 8 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at September 30, 1998 for the period ended September 30, 1998 and is qualified in its entirety by reference to such financial statements. 0000909117 ROSEWOOD CARE CENTER OF ALTON 1000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 751 0 5,099 168 0 6,285 25,364 8,506 31,692 6,722 0 65 0 0 1,839 31,692 7,911 8,058 0 6,644 0 0 461 953 71 0 0 0 0 882 14 0
EX-27.7 9 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at September 30, 1998 for the period ended September 30, 1998 and is qualified in its entirety by reference to such financial statements. 0000909118 ROSEWOOD CARE CENTER OF MOLINE 1000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 751 0 5,099 168 0 6,285 25,364 8,506 31,692 6,722 0 65 0 0 1,839 31,692 7,911 8,058 0 6,644 0 0 461 953 71 0 0 0 0 882 14 0
EX-27.8 10 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at September 30, 1998 for the period ended September 30, 1998 and is qualified in its entirety by reference to such financial statements. 0000909120 SWANSEA REAL ESTATE 1000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 751 0 5,099 168 0 6,285 25,364 8,506 31,692 6,722 0 65 0 0 1,839 31,692 7,911 8,058 0 6,644 0 0 461 953 71 0 0 0 0 882 14 0
EX-27.9 11 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at September 30, 1998 for the period ended September 30, 1998 and is qualified in its entirety by reference to such financial statements. 0000909121 GALESBURG REAL ESTATE 1000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 751 0 5,099 168 0 6,285 25,364 8,506 31,692 6,722 0 65 0 0 1,839 31,692 7,911 8,058 0 6,644 0 0 461 953 71 0 0 0 0 882 14 0
EX-27.10 12 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at September 30, 1998 for the period ended September 30, 1998 and is qualified in its entirety by reference to such financial statements. 0000909122 EAST PEORIA REAL ESTATE 1000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 751 0 5,099 168 0 6,285 25,364 8,506 31,692 6,722 0 65 0 0 1,839 31,692 7,911 8,058 0 6,644 0 0 461 953 71 0 0 0 0 882 14 0
EX-27.11 13 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at September 30, 1998 for the period ended September 30, 1998 and is qualified in its entirety by reference to such financial statements. 0000909123 EAST PEORIA REAL ESTATE 1000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 751 0 5,099 168 0 6,285 25,364 8,506 31,692 6,722 0 65 0 0 1,839 31,692 7,911 8,058 0 6,644 0 0 461 953 71 0 0 0 0 882 14 0
EX-27.12 14 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at September 30, 1998 for the period ended September 30, 1998 and is qualified in its entirety by reference to such financial statements. 0000909124 ALTON REAL ESTATE 1000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 751 0 5,099 168 0 6,285 25,364 8,506 31,692 6,722 0 65 0 0 1,839 31,692 7,911 8,058 0 6,644 0 0 461 953 71 0 0 0 0 882 14 0
EX-27.13 15 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Combined Financial Statements at September 30, 1998 for the period ended September 30, 1998 and is qualified in its entirety by reference to such financial statements. 0000909125 MOLINE REAL ESTATE 1000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 751 0 5,099 168 0 6,285 25,364 8,506 31,692 6,722 0 65 0 0 1,839 31,692 7,911 8,058 0 6,644 0 0 461 953 71 0 0 0 0 882 14 0
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