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UNITED STATES
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 June 30, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------------- ---------------
Commission File Number: 0-20372
--------------------
RES-CARE, INC.
(Exact name of registrant as specified in its charter)
KENTUCKY 61-0875371
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
10140 LINN STATION ROAD 40223
LOUISVILLE, KENTUCKY (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (502) 394-2100
Indicate by check mark whether the 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 twelve 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 [ ].
The number of shares outstanding of the registrant's common stock, no par value,
as of July 31, 1999, was 24,301,149.
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INDEX
<TABLE>
<CAPTION>
PAGE
PART I. FINANCIAL INFORMATION NUMBER
<S> <C> <C>
Item 1. Unaudited Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 1999
and December 31, 1998.......................................... 2
Condensed Consolidated Statements of Income for the three
months ended June 30, 1999 and 1998 and
six months ended June 30, 1999 and 1998........................ 3
Condensed Consolidated Statements of Cash Flows for the
six months ended June 30, 1999 and 1998........................ 4
Notes to Condensed Consolidated Financial Statements................... 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................. 9
Item 3. Quantitative and Qualitative Disclosure About Market Risk.............. 17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...................................................... 17
Item 4. Submission of Matters to a Vote of Security Holders.................... 18
Item 5. Other Information...................................................... 19
Item 6. Exhibits and Reports on Form 8-K....................................... 20
Index to Exhibits...................................................... 21
Signatures............................................................. 22
</TABLE>
1
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PART I. FINANCIAL INFORMATION
ITEM 1. UNAUDITED FINANCIAL STATEMENTS
RES-CARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
June 30 December 31
1999 1998
--------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 19,659 $ 19,956
Accounts and notes receivable, net 147,308 132,707
Refundable income taxes 5,896 100
Deferred income taxes 12,272 9,257
Prepaid expenses and other current assets 6,131 5,307
--------- ---------
Total current assets 191,266 167,327
--------- ---------
Property and equipment, net 94,210 90,053
Excess of acquisition cost over net assets acquired, net 221,762 213,723
Other assets 27,003 35,005
--------- ---------
$ 534,241 $ 506,108
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 27,633 $ 32,757
Accrued expenses 59,242 42,764
Accrued income taxes -- 3,637
Current portion of long-term debt 4,870 7,080
--------- ---------
Total current liabilities 91,745 86,238
--------- ---------
Long-term liabilities 11,750 11,943
Long-term debt 278,009 251,682
Deferred income taxes 240 1,658
--------- ---------
Total liabilities 381,744 351,521
--------- ---------
Commitments and contingencies
Shareholders' equity:
Preferred shares -- --
Common stock 50,866 50,866
Additional paid-in capital 33,648 31,353
Retained earnings 72,234 76,722
--------- ---------
156,748 158,941
Less cost of common shares in treasury (4,251) (4,354)
--------- ---------
Total shareholders' equity 152,497 154,587
--------- ---------
$ 534,241 $ 506,108
========= =========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
2
<PAGE> 4
RES-CARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------------- -------------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net revenues $ 208,490 $ 174,732 $ 408,673 $ 323,932
Facility and program expenses 178,735 151,036 350,533 280,822
--------- --------- --------- ---------
Facility and program contribution 29,755 23,696 58,140 43,110
Operating expenses (income):
Corporate general and administrative 8,225 7,215 16,008 13,490
Depreciation and amortization 5,389 4,652 10,475 8,018
Merger-related charge 20,498 -- 20,498 --
Other income (46) (28) (41) (19)
--------- --------- --------- ---------
Total operating expenses 34,066 11,839 46,940 21,489
--------- --------- --------- ---------
Operating income (loss) (4,311) 11,857 11,200 21,621
Interest, net 4,663 3,640 8,834 5,655
--------- --------- --------- ---------
Income (loss) from continuing operations
before income taxes (8,974) 8,217 2,366 15,966
Income tax expense (benefit) (2,013) 3,218 2,717 6,311
--------- --------- --------- ---------
Income (loss) from continuing operations (6,961) 4,999 (351) 9,655
Gain from sale of unconsolidated affiliate, net of tax 534 -- 534 --
Cumulative effect of accounting change, net of tax -- -- (3,932) --
--------- --------- --------- ---------
Net income (loss) $ (6,427) $ 4,999 $ (3,749) $ 9,655
========= ========= ========= =========
Basic earnings (loss) per share from
continuing operations $ (0.29) $ 0.21 $ (0.01) $ 0.40
Gain from sale of unconsolidated affiliate, net of tax 0.02 -- 0.02 --
Cumulative effect of accounting change, net of tax -- -- (0.16) --
--------- --------- --------- ---------
Basic earnings (loss) per share $ (0.27) $ 0.21 $ (0.15) $ 0.40
========= ========= ========= =========
Diluted earnings (loss) per share from
continuing operations $ (0.29) $ 0.20 $ (0.01) $ 0.39
Gain from sale of unconsolidated affiliate, net of tax 0.02 -- 0.02 --
Cumulative effect of accounting change, net of tax -- -- (0.16) --
--------- --------- --------- ---------
Diluted earnings (loss) per share $ (0.27) $ 0.20 $ (0.15) $ 0.39
========= ========= ========= =========
Weighted average number of common shares:
Basic 24,218 23,944 24,173 23,880
Diluted 24,218 31,380 24,173 31,007
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
3
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RES-CARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30
-------------------------
1999 1998
--------- ---------
<S> <C> <C>
Cash provided by (used in) operating activities $ (371) $ 13,800
Cash flows from investing activities:
Purchase of property and equipment (6,680) (5,967)
Acquisitions of businesses, net of cash acquired (13,098) (93,122)
Other -- (3,544)
--------- ---------
Cash used in investing activities (19,778) (102,633)
--------- ---------
Cash flows from financing activities:
Net borrowings (repayments) under notes payable
to bank 47,414 46,832
Repayments of notes payable (29,173) (1,397)
Proceeds received from exercise of stock options 1,611 1,880
--------- ---------
Cash provided by financing activities 19,852 47,315
--------- ---------
Decrease in cash and cash equivalents $ (297) $ (41,518)
========= =========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
4
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RES-CARE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
Res-Care, Inc. and its subsidiaries (ResCare or the Company)
are primarily engaged in the delivery of residential, training, educational and
support services to various populations with special needs, including persons
with mental retardation and other developmental disabilities and at-risk and
troubled youth. These services have in the past traditionally been provided by
state and local government agencies and not-for-profit organizations.
The accompanying unaudited condensed consolidated financial
statements of the Company have been prepared in accordance with the instructions
to Form 10-Q and Article 10 of Regulation S-X and do not include all information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation of
financial condition and results of operations for the interim periods have been
included. Operating results for the periods ended June 30, 1999 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1999.
For further information, refer to the consolidated financial
statements and footnotes thereto in ResCare's annual report on Form 10-K for the
year ended December 31, 1998.
NOTE 2. MERGER
On June 28, 1999, ResCare completed a merger with PeopleServe,
Inc. (PeopleServe), which primarily operates facilities and programs for persons
with mental retardation and other developmental disabilities. In the merger, the
Company issued a total of 5.2 million common shares. The merger has been
accounted for as a pooling of interests. Accordingly, the Company's consolidated
financial statements for all periods presented have been restated to include the
combined financial results of ResCare and PeopleServe. For further information
regarding the merger, refer to the Company's final Proxy Statement/Prospectus
dated May 3, 1999 as filed with the Securities and Exchange Commission.
Reference is also made to Item 5 of this Report which contains restated
quarterly financial information for all interim periods in 1998 and the first
quarter of 1999.
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The operating results of the separate companies were as
follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1999 1998 1999 1998
--------- --------- --------- ---------
(In thousands)
<S> <C> <C> <C> <C>
Net revenues:
ResCare ............................ $ 157,644 $ 129,595 $ 308,136 $ 235,533
PeopleServe ........................ 50,846 45,137 100,537 88,399
--------- --------- --------- ---------
$ 208,490 $ 174,732 $ 408,673 $ 323,932
========= ========= ========= =========
Income (loss) from continuing operations:
ResCare ............................ $ 6,133 $ 4,256 $ 11,871 $ 8,093
PeopleServe ........................ 561 743 1,433 1,562
Merger-related charge, net of tax .. (13,655) -- (13,655) --
--------- --------- --------- ---------
$ (6,961) $ 4,999 $ (351) $ 9,655
========= ========= ========= =========
Net income (loss):
ResCare ............................ $ 6,667 $ 4,256 $ 8,473 $ 8,093
PeopleServe ........................ 561 743 1,433 1,562
Merger-related charge, net of tax .. (13,655) -- (13,655) --
--------- --------- --------- ---------
$ (6,427) $ 4,999 $ (3,749) $ 9,655
========= ========= ========= =========
</TABLE>
In connection with the merger, ResCare recorded a pretax
merger-related charge of $20.5 million during the second quarter of 1999. This
consists primarily of $7.3 million in severance and employee-related costs
(principally related to the elimination of PeopleServe's corporate offices and
various other administrative costs), $2.8 million in lease termination costs,
$3.0 million in information system conversion and integration costs and $4.5
million in transaction costs, including investment banking, legal, accounting
and other professional fees and transaction costs.
NOTE 3. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
June 30 December 31
1999 1998
--------------- ------------
(In thousands)
<S> <C> <C>
Revolving credit facilities with banks................................. $ 134,607 $ 87,193
6% convertible subordinated notes due 2004, net of
unamortized discount of $2,531 and $2,765 in
1999 and 1998..................................................... 106,829 106,595
5.9% convertible subordinated notes due 2005........................... 22,000 22,000
Notes payable.......................................................... 11,455 24,340
Obligations under capital leases....................................... 7,966 18,608
Other.................................................................. 22 26
--------------- ----------------
282,879 258,762
Less current portion.............................................. 4,870 7,080
--------------- ----------------
$ 278,009 $ 251,682
=============== ================
</TABLE>
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<PAGE> 8
On June 28, 1999, the Company amended its credit agreement
with a group of banks to permit the merger with PeopleServe and amend certain
financial covenants.
NOTE 4. EARNINGS PER SHARE
The following table sets forth the computation of basic and
diluted earnings per share from continuing operations:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
-------------------------- ---------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
(In thousands)
<S> <C> <C> <C> <C>
Income (loss) available to shareholders for
basic earnings per share........................... $ (6,961) $ 4,999 $ (351) $ 9,655
Interest expense, net of income tax effect,
on convertible subordinated notes.................. -- 1,309 -- 2,437
------------ ------------ ------------ ------------
Income (loss) available to shareholders after
assumed conversion of convertible
subordinated notes................................. $ (6,961) $ 6,308 $ (351) $ 12,092
============ ============ ============ ============
Weighted average number of common shares
used in basic earnings per share................... 24,218 23,944 24,173 23,880
Effect of dilutive securities:
Stock options .................................... -- 770 -- 790
Convertible subordinated notes..................... -- 6,666 -- 6,337
------------ ------------ ------------ ------------
Weighted average number of common shares
and dilutive potential common shares used
in diluted earnings per share...................... 24,218 31,380 24,173 31,007
============ ============ ============ ============
</TABLE>
The average shares listed below were not included in the
computation of diluted earnings per share because to do so would have been
antidilutive for the periods presented.
<TABLE>
<CAPTION>
Convertible Stock
Subordinated Notes Options
------------------ -------
(In thousands)
<S> <C> <C>
Six months ended June 30, 1999.......................... 6,666 987
Three months ended June 30, 1999........................ 6,666 882
</TABLE>
NOTE 5. ACCOUNTING CHANGE
Effective January 1, 1999, the Company adopted the provisions
of Statement of Position (SOP), 98-5, Reporting on the Costs of Start-up
Activities. SOP 98-5 requires that all costs of start-up activities and
organization costs be expensed as incurred. Adoption of SOP 98-5 also required
the write-off of the unamortized value of such costs previously capitalized. The
write-off of $3.9 million ($0.16 per basic share and $0.12 per diluted share,
using the weighted average common shares for the first quarter of 1999), net of
tax, is reflected in the consolidated statement of income as the cumulative
effect of an accounting change. The effect of adopting SOP 98-5 on income before
income taxes and net income for the second quarter of 1999 was determined to be
immaterial.
7
<PAGE> 9
NOTE 6. SEGMENT INFORMATION
The following table sets forth information about reportable segment
profit or loss.
<TABLE>
<CAPTION>
Other
Disabilities Job Youth All Consolidated
QUARTER ENDED JUNE 30: Services Corps Services Other (1) Totals
- ---------------------- -------- ----- -------- --------- ------
(In thousands)
<S> <C> <C> <C> <C> <C>
1999
Net revenues ............ $162,847 $ 32,709 $ 12,934 $ -- $208,490
Segment profit (loss) ... 19,729 3,290 1,702 (8,534) 16,187
1998
Net revenues ............ $141,786 $ 24,015 $ 8,931 $ -- $174,732
Segment profit (loss) ... 15,824 2,620 984 (7,571) 11,857
SIX MONTHS ENDED JUNE 30:
1999
Net revenues ............ $319,273 $ 63,783 $ 25,617 $ -- $408,673
Segment profit (loss) ... 38,936 6,506 2,890 (16,634) 31,698
1998
Net revenues ............ $264,892 $ 42,618 $ 16,422 $ -- $323,932
Segment profit (loss) ... 29,202 4,758 1,773 (14,112) 21,621
</TABLE>
(1) All Other is comprised of corporate general and administrative expenses and
corporate depreciation and amortization. The merger-related charge recorded in
the second quarter of 1999 is excluded from the calculation of segment loss for
the 1999 periods presented.
8
<PAGE> 10
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Res-Care, Inc. (ResCare or the Company) receives revenues primarily
from the delivery of residential, training, education and support services to
populations with special needs. The Company has three reportable operating
segments: (i) disabilities services; (ii) Job Corps program; and (iii) other
youth services programs. Management's discussion and analysis of each segment
follows.
MERGER AND ACQUISITIONS
On June 28, 1999, ResCare completed a merger with PeopleServe, Inc.
(PeopleServe), which primarily operates facilities and programs for persons with
mental retardation and other developmental disabilities. In the merger, ResCare
issued a total of 5.2 million common shares in exchange for preferred stocks,
common stock, and options and warrants which were issued and outstanding prior
to the merger. The merger has been accounted for as a pooling of interests.
Accordingly, the Company's consolidated financial statements and all financial
information included herein have been restated to include the combined financial
results of ResCare and PeopleServe. For further information regarding the
merger, refer to the Company's final Proxy Statement/Prospectus dated May 3,
1999 as filed with the Securities and Exchange Commission.
In connection with the merger, ResCare recorded a pretax merger-related
charge of $20.5 million during the second quarter of 1999. This consists
primarily of $7.3 million in severance and employee-related costs (principally
related to the elimination of PeopleServe's corporate offices and various other
administrative costs), $2.8 million in lease termination costs, $3.0 million in
information system conversion and integration costs and $4.5 million in
transaction costs, including investment banking, legal, accounting and other
professional fees and transaction costs. Through June 30, 1999, approximately
$12.1 million of the charge had been utilized through $7.8 million in cash
payments (principally severance and transaction costs) and $4.3 million in asset
write-downs. The Company believes the remaining balance of accrued
merger-related cost of $8.4 million at June 30, 1999 represents its remaining
cash obligations and expects the balance to be substantially paid by the end of
1999.
In addition to the PeopleServe transaction, during the second quarter
of 1999, the Company's Division for Persons with Disabilities completed four
acquisitions representing programs and facilities serving approximately 200
individuals with special needs. In total during the second quarter of 1999, the
Division for Persons with Disabilities began serving nearly 4,400 new consumers.
9
<PAGE> 11
RESULTS OF OPERATIONS
QUARTER ENDED JUNE 30, 1999 COMPARED TO QUARTER ENDED JUNE 30, 1998
As a result of the transactions described above and a full quarter of
operations for some 1998 acquisitions, the Company achieved record revenues
during the second quarter of 1999. Total net revenues in 1999 increased 19%, or
$33.8 million, to $208.5 million compared to $174.7 million in 1998. Net loss
for the first quarter of 1999, including the merger-related charge, was $6.4
million, compared to net income of $5.0 million for the same period in 1998.
Income from continuing operations before the merger-related charge increased 34%
over 1998. The contribution each segment made to this growth is discussed below.
Disabilities Services
Disabilities services net revenues increased 15%, or $21.0 million, to
$162.8 million in the second quarter of 1999 compared to $141.8 million in 1998.
Revenues increased primarily as a result of the effects of a full quarter of
operating results from programs added during the last half of 1998. As a
percentage of net revenues, disabilities services facility and program expenses
decreased from 86.1% in 1998 to 85.0% in 1999. Overall segment profit increased
25%, or $3.9 million, over 1998 due principally to the volume and efficiencies
achieved through the 1998 acquisitions.
Job Corps Program
Job Corps net revenues in 1999 increased 36%, or $8.7 million, to $32.7
million compared to $24.0 million in 1998. Additionally, segment profit
increased 26%, or $670,000 from 1998 to 1999. The increases in both revenues and
profitability resulted primarily from the addition of the contract to manage the
Treasure Island Job Corps center commencing in the second quarter of 1999 and a
full quarter of operating results from the Earle C. Clements Job Corps center
contract awarded during the second quarter of 1998.
Other Youth Services Programs
Other youth services net revenues in 1999 increased 45%, or $4.0
million, to $12.9 million compared to $8.9 million in 1998. Revenues increased
primarily as a result of the effects of a full quarter of operating results from
some programs added during 1998. Segment profit increased 73% from $1.0 million
in 1998 to $1.7 million in 1999 also as a result of the acquisitions and
improvements realized in operations acquired in 1998.
Corporate Expenses
Corporate general and administrative expenses increased 14%, or $1.0
million, in the second quarter of 1999 compared to 1998. Payroll and
payroll-related expenses represented the majority of the increase due primarily
to the addition of support staff and increases in staff salaries. Corporate
general and administrative expenses in 1999 decreased as a percentage of total
net revenues to 3.9% from 4.1% in 1998.
Interest expense in 1999 increased $900,000 to $4.9 million compared to
$4.0 million for 1998. The increase resulted primarily from borrowings under the
Company's credit facilities.
10
<PAGE> 12
As a result of the loss incurred for the first quarter of 1999 due
primarily to the merger-related charge, the Company recorded an income tax
benefit of $2.0 million in 1999 compared to tax expense of $3.2 million in 1998.
SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO SIX MONTHS ENDED JUNE 30, 1998
In addition to the PeopleServe merger, during the first six months of
1999, the Company completed seven acquisitions and added two new contracts
representing programs and facilities serving approximately 1,700 individuals
with special needs. Total net revenues in 1999 increased 26%, or $84.8 million,
to $408.7 million compared to $323.9 million in 1998. Net loss for the first
half of 1999, including the merger-related charge, was $3.7 million, compared to
net income of $9.6 million for the same period in 1998. Income from continuing
operations before the merger-related charge increased 38% over 1998. The
contribution each segment made to this growth is discussed below.
Disabilities Services
Disabilities services net revenues increased 21%, or $54.4 million, to
$319.3 million in the first six months of 1999 compared to $264.9 million in
1998. Revenues increased primarily as a result of the effects of a full six
months of operating results from programs added during the last half of 1998. As
a percentage of net revenues, disabilities services facility and program
expenses decreased from 86.5% in 1998 to 85.0% in 1999. Overall segment profit
increased 33%, or $9.7 million, over 1998 due principally to the volume and
efficiencies achieved through the 1998 acquisitions.
Job Corps Program
Job Corps net revenues in 1999 increased 50% to $63.8 million compared
to $42.6 million in 1998. Additionally, segment profit increased 37%, or $1.7
million, from 1998 to 1999. The increases in both revenues and profitability
resulted primarily from the addition of the contract to manage the Treasure
Island Job Corps center commencing in the second quarter of 1999 and the
addition of the Earle C. Clements Job Corps center contract awarded in the
second quarter of 1998.
Other Youth Services Programs
Other youth services net revenues in 1999 increased 56%, or $9.2
million, to $25.6 million compared to $16.4 million in 1998. Revenues increased
primarily as a result of the effects of a full six months of operating results
from programs added during the last half of 1998. Segment profit increased 61%
from $1.8 million in 1998 to $2.9 million in 1999 also as a result of the
acquisitions and improvements realized in operations acquired in 1998.
Corporate Expenses
Corporate general and administrative expenses increased 19%, or $2.5
million, in the first six months of 1999 compared to 1998. Payroll and
payroll-related expenses represented the majority of the increase due primarily
to the addition of support staff and increases in salaries. Also contributing to
the increase is the lease expense associated with the company-wide deployment of
computer workstations in 1999 as part of the Company's Year 2000 remediation
efforts. Corporate general and administrative expenses in 1999 decreased as a
percentage of total net revenues to 3.9% from 4.2% in 1998.
11
<PAGE> 13
Interest expense in 1999 increased $2.6 million to $9.4 million
compared to $6.8 million for 1998. The increase resulted primarily from interest
on the convertible subordinated notes issued in the March 1998 acquisition of
Normal Life, Inc. as well as borrowings under the Company's credit facilities.
Interest income in 1999 decreased $600,000 to $500,000 from $1.1 million for
1998. This decrease was due primarily to the use of the proceeds from the
issuance in late 1997 of the convertible subordinated notes.
As a result of the loss incurred for the first half of 1999 due
primarily to the merger-related charge, income tax expense decreased to $2.7
million in 1999 compared to $6.3 million in 1998.
LIQUIDITY AND CAPITAL RESOURCES
For the first half of 1999, cash used in operating activities was
$371,000 compared to cash provided of $13.8 million in the second half of 1998,
a decrease of $14.2 million, due primarily to the increase in accounts
receivable. This increase in accounts receivable is primarily related to delays
in payment from certain state Medicaid programs as well as the time required for
payments to commence in acquired operations.
For the first half of 1999, cash used in investing activities was $19.8
million compared to $102.6 million in the second half of 1998, a decrease of
$82.8 million. The decrease was due primarily to the Company's use of stock to
finance its merger with PeopleServe and a corresponding reduction in cash
financed acquisitions. Cash used in investing activities for the first half of
1998 includes funds used in the acquisition of Normal Life, Inc.
For the first half of 1999, cash provided by financing activities was
$19.9 million compared to $47.3 million in the second half of 1998, a decrease
of $27.4 million, due primarily to long-term borrowings for the Normal Life and
other acquisitions during the first quarter of 1998, offset by the borrowings
necessary in 1999 to fund working capital needs primarily resulting from the
increase in accounts receivable noted above.
At June 30, 1999, the Company had $54.2 million available on its
line-of-credit and $19.7 million in cash and cash equivalents. Outstanding at
that date were irrevocable standby letters of credit in the principal amount of
$14.2 million issued in connection with workers' compensation insurance and
certain facility leases.
Net days revenue in accounts receivable was 64 days at June 30, 1999,
compared to 61 days at December 31, 1998. The increase is primarily related to
delays in payment from certain state Medicaid programs as well as the time
required for payments to commence in acquired operations.
The Company has historically satisfied its working capital
requirements, capital expenditures and scheduled debt payments from its
operating cash flow and utilization of its credit facility. Cash requirements
for the acquisition of new business operations have generally been funded
through a combination of these sources, as well as the issuance of long-term
obligations and common stock. The Company believes that cash generated from
operations and availability under its existing credit facility will continue to
be sufficient to meet its working capital, planned capital expenditure, business
acquisition and scheduled debt repayment requirements for at least the next
twelve months.
12
<PAGE> 14
YEAR 2000 ISSUE
Assessment and Remediation Plans
In response to the Year 2000 issue, the Company established a task
force to address Year 2000 issues in the following specific areas: (i)
information systems; (ii) medical equipment and physical facilities; and (iii)
third party relationships.
Information Systems: The Company has completed its assessment of the
capability of its information systems to meet Year 2000 processing requirements.
Based on this assessment, the Company determined that it was required to modify
or replace certain portions of its information systems. The Company has focused
a significant portion of its internal remediation efforts on the aspects of
information systems that affect revenue generation. Management has acquired and
is installing a Year 2000 compliant software program which will be utilized to
generate substantially all invoices electronically and monitor accounts
receivable. A significant number of the Company's operations are currently
utilizing the software and installation and testing for the remaining operations
is expected to be completed by November 30, 1999.
The Company has completed the requisite upgrades to its general ledger
and payroll systems and believes these systems are currently Year 2000
compliant. Substantially all desktop computers, network devices and related
software have been tested and those found to be noncompliant have been replaced.
The Company plans to rely principally on its own staff resources for Year 2000
remediation of its information systems.
Medical Equipment and Physical Facilities: The effort to identify
potential Year 2000 problems within the Company's medical equipment and physical
facilities is ongoing. Vendors, manufacturers and others with whom the Company
conducts business, and where the interruption of such business could have a
material adverse effect on the Company, have been contacted, and cost effective
efforts are being made to remediate or minimize possible problems. The Company
believes that it will be able to remediate any Year 2000 problems in its medical
equipment and physical facilities sufficiently in advance of January 1, 2000.
The target date for completing all such remedial measures is November 30, 1999.
The Company presently believes that with appropriate and timely modifications
and replacements, the Year 2000 issue will not pose significant operational
problems for the Company. The Company plans to rely principally on its own staff
resources for Year 2000 remediation of medical equipment and physical
facilities.
Third Party Relationships: The Company continues to assess the Year
2000 compliance capability of its significant third party payors and vendors.
Because a substantial portion of the Company's revenues are derived from
Medicaid programs, to the extent that certain federal and state and local
governmental agencies are noncompliant, the Company's cash flows, liquidity and
financial condition could be materially adversely affected. The Health Care
Financing Administration has issued guidance requiring state Medicaid agencies
to certify that the state's Medicaid Management Information Systems, and
mission-critical interfaces, were Year 2000 compliant by March 31, 1999. The
Company has received representations from its third party payroll processor, as
well as its significant relationship banks, that their systems will be Year 2000
compliant. There can be no assurance that the systems of these third parties
will be compliant and will not have a material adverse effect on the Company's
operations. An inventory of significant third party payors and vendors is in
process, and questionnaires were mailed during
13
<PAGE> 15
March 1999 requesting representations regarding their Year 2000 readiness. The
Company anticipates completing its assessment and any necessary actions by
November 30, 1999.
Contingency Plans
The Company has not established a formal contingency plan to address
failures in the Company's Year 2000 assessment and remediation plan. The
Company's task force has completed plans for significant portions of the three
areas described in this section, as well as other less significant areas within
the Company. Contingency plans will be developed for any area of the Year 2000
remediation effort where such effort is incomplete, the consequence of a
possible Year 2000 problem is materially adverse and a viable contingency plan
is possible and economically reasonable. As the Company contacts third party
reimbursement sources, it is developing contingency plans to receive temporary
reimbursement in the event of system failures by these entities. The Company's
contingency plans will also cover failures by suppliers and vendors. Further,
each of the Company's operating units has plans to handle emergency situations
such as a loss of utility services or supplies.
Year 2000 Risk
The Company believes the greatest risk posed by the Year 2000 issue is
the timely reimbursement by third party governmental payors. Management believes
that delays in the collection of accounts receivable potentially represent
significant operational risk with respect to the Year 2000 issue. Should cash
collections on accounts receivable from third party payors be significantly
delayed, the Company's working capital could be materially adversely affected.
Management continues to evaluate its financing needs, including needs arising
from Year 2000 problems. While the Company could utilize its existing revolving
credit facility to fund working capital needs, the Company could also be forced
to seek additional external financing. Use of funding sources for working
capital could also materially adversely affect plans to expand the Company's
business through internally-generated growth or acquisitions. No assurance can
be given that additional financing to support working capital, growth or
acquisitions would be available to the Company. Further, in an environment of
significant collection delays, the Company may elect to temporarily reduce its
internal growth or acquisition activities.
Effect of Merger with PeopleServe
As part of the integration of the systems and facilities of PeopleServe
with those of ResCare, the Company has addressed the Year 2000 issues of
PeopleServe in the same three areas discussed above. The significant information
systems of PeopleServe are being discontinued and the data is being incorporated
into ResCare's information systems. Further, the medical equipment, physical
facilities and third party relationships of PeopleServe have been assessed
concurrently with those of ResCare. The Company presently believes that the
merger with PeopleServe will not materially increase the Company's Year 2000
risks beyond those already described above. The cost of remediation efforts with
respect to PeopleServe is not expected to be material.
14
<PAGE> 16
Cost of Plan
The total cost of modifying and replacing information systems is
currently expected to range from $3 million to $4 million. Certain of these
costs will be capitalized and amortized over a three to five year period. Other
costs to remediate the Year 2000 issue will be expensed as incurred. The most
significant portion of the total estimated cost (generally attributable to
replacement equipment) is being leased under an operating lease over a base term
of 60 months. At June 30, 1999, the Company had deployed replacement equipment
with a value of approximately $2.4 million under this operating lease. The total
cost of modifying and replacing medical equipment and physical facility
components is not expected to be material. The Company believes that the total
costs associated with replacing and modifying its current systems will not have
a material adverse effect on its results of operations or liquidity. The costs
of the project and the date on which the Company believes that it will
substantially complete the Year 2000 modifications are based on management's
best estimates using information currently available. Actual results could
differ from those estimates.
CERTAIN RISK FACTORS
The Company's growth in revenues and earnings per share has been
directly related to significant increases in the number of individuals served in
its Division for Persons with Disabilities and its Division for Youth Services.
This growth is primarily dependent upon development-driven activities, including
the acquisitions of other businesses and facilities and of management contract
rights to operate facilities, the award of contracts to open new facilities or
start new operations or to assume management of facilities previously operated
by governmental agencies or other organizations, and the extension and renewal
of contracts previously awarded to the Company. The Company often makes
forward-looking statements regarding its development activities.
Increases in the Company's future revenues depend significantly upon
the success of these development activities, and in particular on the Company's
ability to obtain licenses and other rights to provide services to the special
needs populations it serves. Future revenues also depend on the Company's
ability to delivery quality services, to maintain high levels of occupancy in
its residential programs and high utilization levels in other programs, as well
as to maintain and renew its existing services contracts and its existing
leases. The Company actively seeks acquisitions of other companies, facilities
and assets as a means of increasing the number of individuals served. Changes in
the market for such business opportunities, including increased competition for
and pricing of acquisition prospects, could also adversely affect the timing
and/or viability of future development activities. Additionally, many of the
Company's contracts to provide disabilities and youth services and to operate
Job Corps centers are subject to state or federal government procurement rules
and procedures; changes in procurement policies that may be adopted by one or
more of these agencies may adversely affect the Company's abilities to obtain
and retain these contracts.
Revenues of the Company's Division for Persons with Disabilities are
highly dependent on reimbursement under federal and state Medicaid programs.
Generally, each state has its own Medicaid reimbursement regulations and
formula. The Company's revenues and operating profitability are dependent upon
the Company's ability to maintain its existing reimbursement levels and to
obtain periodic increases in reimbursement rates. Changes in the manner in which
Medicaid reimbursement rates are established in one or more of the states in
which the Company conducts its operations could adversely affect revenues and
profitability. Other changes in the manner in which federal and state
reimbursement programs are operated and in the manner in
15
<PAGE> 17
which billings/costs are reviewed and audited could also affect revenues and
operating profitability.
The Company's cost structure and ultimate operating profitability are
significantly dependent on its labor costs, the availability of qualified
personnel in each geographic area and the effective utilization of its labor
force, and may be adversely affected by a variety of factors, including local
competitive forces, changes in minimum wages or other direct personnel costs,
strikes or work stoppages by certain of its employees represented by labor
unions, the Company's future effectiveness in managing its direct service staff,
and changes in consumer services models, such as the trends toward supported
living and managed care.
Additionally, the Company's continued expansion of its business and its
ability to serve populations utilizing the Company's core competencies, are
dependent upon the continuation of current trends toward downsizing,
privatization and consolidation and the Company's ability to tailor its service
models to meet the changing needs of these populations and the requirements of
government payors. The Company's future operating performance will be subject to
a variety of political, economic, social and legal pressures, including desires
of governmental agencies to reduce costs and increase levels of services,
federal, state and local budgetary constraints and actions brought by advocacy
groups and the courts to change existing service delivery systems. Material
changes resulting from these trends and pressures could adversely affect the
demand for and reimbursement of the Company's services and its operating
flexibility, and ultimately its revenues and profitability. As discussed above
under "Year 2000 Issue", the Company's operations and liquidity may also be
significantly affected by the ability of third party governmental payors to
timely reimburse the Company for the services it provides to many of its
consumers.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-Q
which are not statements of historical fact constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
(the Act). In addition, certain statements in future filings by the Company with
the Securities and Exchange Commission, in press releases, and in oral and
written statements made by or with the approval of the Company which are not
statements of historical fact constitute forward-looking statements within the
meaning of the Act. Examples of forward-looking statements include, but are not
limited to: (1) projections of revenues, income or loss, earnings or loss per
share, capital structure and other financial items; (2) statements of plans and
objectives of the Company or its management or Board of Directors; (3)
statements of future actions or economic performance; and (4) statements of
assumptions underlying such statements. Words such as "believes," "anticipates,"
"expects," "intends," "plans," "targeted," and similar expressions are intended
to identify forward-looking statements but are not the exclusive means of
identifying such statements.
Forward-looking statements involve risks and uncertainties which may
cause actual results to differ materially from those in such statements. Some of
the events or circumstances that could cause actual results to differ from those
discussed in the forward-looking statements are discussed in the "Certain Risk
Factors" and "Year 2000 Issue" sections above. Such forward-looking statements
speak only as of the date on which such statements are made, and the Company
undertakes no obligation to update any forward-looking statement to reflect
events or circumstances after the date on which such statement is made to
reflect the occurrence of unanticipated events.
16
<PAGE> 18
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
While the Company is exposed to changes in interest rates as a result
of its outstanding variable rate debt, the Company does not currently utilize
any derivative financial instruments related to its interest rate exposure. The
Company believes that its exposure to market risk will not result in a material
adverse effect on the Company's consolidated financial condition, results of
operations or liquidity.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, the Company (or a provider with whom the Company
has a management agreement), becomes a party to legal and/or administrative
proceedings involving state program administrators and others that, in the event
of unfavorable outcomes, may adversely affect revenues and period to period
comparisons.
In August 1998, with the approval of the State of Indiana, the Company
relocated approximately 100 individuals from three of its larger facilities to
community-based settings. In June 1999, the owner of these facilities filed suit
against the Company in U.S. District Court, Southern District of Indiana,
alleging in connection therewith breach of contract, conversion and fraudulent
concealment and seeking damages of approximately $54 million. Management
believes that this lawsuit is without merit and will defend it vigorously. The
Company does not believe the ultimate resolution of this matter is likely to
have a material adverse effect on its consolidated financial condition, results
of operations or liquidity.
The Texas Attorney General, on behalf of the Texas Department of Human
Services, filed suit in the District Court of Harris County, Texas seeking civil
penalties of approximately $2.7 million in connection with the operation of one
group home in Texas. The complaint alleges that the Company failed to ensure
that the needs of the individuals residing in this home were being adequately
assessed and provided for, including appropriate medical care. The Company does
not believe that the Attorney General has a factual basis to seek civil
penalties in this amount and, for this and other reasons, does not believe that
the ultimate resolution of this matter with the State is likely to have a
material adverse effect on its consolidated financial condition, results of
operations or liquidity.
In addition, the Company is a party to various other legal proceedings
arising out of the operation of its facilities and programs and arising in the
ordinary course of business. The Company believes that most of these claims are
without merit. Further, many of such claims may be covered by insurance. The
Company does not believe the results of these proceedings or claims,
individually or in the aggregate, are likely to have a material adverse effect
on its consolidated financial condition, results of operations or liquidity.
17
<PAGE> 19
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The regular annual meeting of shareholders of ResCare was held in
Louisville, Kentucky on June 14, 1999. Represented at the meeting, either in
person or by proxy, were 17,339,785 voting shares out of a total of 18,986,349
voting shares outstanding. The matters voted upon at the meeting are described
in (c) below.
(b) Proxies for the meeting were solicited pursuant to Section 14(a) of
the Securities Exchange Act of 1934 and there was no solicitation in opposition
to management's nominees as listed in the proxy statement.
(c) Three proposals were submitted to a vote of stockholders as
follows:
1. The stockholders approved the issuance of ResCare common
shares in connection with the merger of its wholly-owned
subsidiary, Res-Care Sub, Inc., with PeopleServe, Inc. and in
exchange for PeopleServe, Inc. stock options:
Votes For Proposal 15,311,456
Votes Against Proposal 30,728
Votes Abstaining 106,359
Broker Non-votes 1,891,242
2. The stockholders approved the election of the following
persons as directors of the Company:
<TABLE>
<CAPTION>
NAME FOR WITHHELD
<S> <C> <C>
James R. Fornear 17,286,763 53,022
Ronald G. Geary 17,287,301 52,484
E. Halsey Sandford 17,284,804 54,981
Spiro B. Mitsos 17,285,254 54,531
Seymour L. Bryson 17,309,604 30,181
W. Bruce Lunsford 17,184,376 155,409
Olivia F. Kirtley 17,308,616 31,169
</TABLE>
3. To approve the proposal to ratify the selection of KPMG LLP as
the Company's independent auditors for the fiscal year ending
December 31, 1999:
Votes For Proposal 17,320,504
Votes Against Proposal 10,534
Votes Abstaining 8,747
18
<PAGE> 20
ITEM 5. OTHER INFORMATION
The following unaudited consolidated statements of income of ResCare
have been restated to reflect the inclusion of the results of operations of
PeopleServe for all periods presented. This information is provided
supplementally and is not a required part of this Quarterly Report on Form 10-Q.
<TABLE>
<CAPTION>
Quarter Ended
------------------------------------------------------------------------
3/31/99 12/31/98 9/30/98 6/30/98 3/31/98
--------- --------- --------- --------- ---------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Net revenues $ 200,183 $ 195,738 $ 186,580 $ 174,732 $ 149,200
Facility and program expenses 171,798 166,970 160,303 151,036 129,786
--------- --------- --------- --------- ---------
Facility and program contribution 28,385 28,768 26,277 23,696 19,414
Operating expenses (income):
Corporate general and administrative 7,783 7,325 6,776 7,215 6,275
Depreciation and amortization 5,086 5,576 4,967 4,652 3,366
Other (income) expense 5 39 (327) (28) 9
--------- --------- --------- --------- ---------
Total operating expenses 12,874 12,940 11,416 11,839 9,650
--------- --------- --------- --------- ---------
Operating income 15,511 15,828 14,861 11,857 9,764
Interest, net 4,171 4,359 3,878 3,640 2,015
--------- --------- --------- --------- ---------
Income from continuing operations
before income taxes 11,340 11,469 10,983 8,217 7,749
Income tax expense 4,730 4,698 4,474 3,218 3,093
--------- --------- --------- --------- ---------
Income from continuing operations 6,610 6,771 6,509 4,999 4,656
Cumulative effect of accounting change,
net of tax of $2,226 (3,932) -- -- -- --
--------- --------- --------- --------- ---------
Net income $ 2,678 $ 6,771 $ 6,509 $ 4,999 $ 4,656
========= ========= ========= ========= =========
Basic earnings per share from continuing
operations $ 0.27 $ 0.28 $ 0.27 $0.21 $ 0.20
Cumulative effect of accounting change,
net of tax (0.16) -- -- -- --
--------- --------- --------- --------- ---------
Basic earnings per share $ 0.11 $ 0.28 $ 0.27 $ 0.21 $ 0.20
========= ========= ========= ========= =========
Diluted earnings per share from continuing
operations $ 0.25 $ 0.25 $ 0.25 $ 0.20 $ 0.19
Cumulative effect of accounting change,
net of tax (0.12) -- -- -- --
--------- --------- --------- --------- ---------
Diluted earnings per share $ 0.13 $ 0.25 $ 0.25 $ 0.20 $ 0.19
========= ========= ========= ========= =========
Weighted average number of common shares:
Basic 24,128 24,071 23,974 23,944 23,814
Diluted 31,883 31,784 31,251 31,380 30,629
</TABLE>
19
<PAGE> 21
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10.1 1999A Amendment to Loan Instruments
by and between PNC Bank, National Association; the Banks identified on Schedule
1 thereto; and Res-Care, Inc., dated June 28, 1999.
10.2 1999B Amendment to Loan Instruments by and
between PNC Bank, National Association; the Banks identified on Schedule 1
thereto; and Res-Care, Inc., dated June 28, 1999.
27.1 Financial Data Schedule - June 30, 1999
27.2 Financial Data Schedule - June 30, 1998
(Restated)
(b) Reports on Form 8-K:
On July 13, 1999, the Company filed a report on Form
8-K to report that the Company had completed the merger with PeopleServe, Inc.
In connection with the transaction, Vincent D. Pettinelli, the principal
stockholder of PeopleServe, received approximately 2.3 million common shares and
was elected to the board of directors of Res-Care effective August 1, 1999. This
Form 8-K stated that the financial statements required by Item 7 of Form 8-K
would be filed within 60 days of the due date of the initial filing as required
by the instructions to Form 8-K.
20
<PAGE> 22
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ -----------------------
10.1 1999A Amendment to Loan Instruments by and between PNC Bank,
National Association; the Banks identified on Schedule 1
thereto; and Res-Care, Inc., dated June 28, 1999.
10.2 1999B Amendment to Loan Instruments by and between PNC Bank,
National Association; the Banks identified on Schedule 1
thereto; and Res-Care, Inc., dated June 28, 1999.
27.1 Financial Data Schedule - June 30, 1999
27.2 Financial Data Schedule - June 30, 1998 (Restated)
21
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
RES-CARE, INC.
Registrant
Date: AUGUST 13, 1999 By: /s/ Ronald G. Geary
-------------------- ---------------------------
Ronald G. Geary
Chairman, President and
Chief Executive Officer
Date: AUGUST 13, 1999 By:/s/ Ralph G. Gronefeld, Jr.
-------------------- ---------------------------
Ralph G. Gronefeld, Jr.
Executive Vice President of Finance &
Administration and Chief Financial Officer
22
<PAGE> 1
Exhibit 10.1
1999A AMENDMENT TO LOAN INSTRUMENTS
This 1999A Amendment to Loan Instruments (this "Amendment" or the
"1999A Amendment"), is made and entered into as of the __ day of June, 1999, by
and among (i) PNC BANK, NATIONAL ASSOCIATION, in its capacity as the
administrative bank hereunder (in such capacity the "Administrative Bank"); (ii)
the Banks identified on SCHEDULE I hereto (all of such Banks are hereinafter
collectively referred to as the "Banks", and each is hereinafter individually
referred to as a "Bank"); and (iii) RES-CARE, INC., a Kentucky corporation with
principal office and place of business in Louisville, Kentucky ("Res-Care") and
each of the Consolidated Subsidiaries of Res-Care identified on SCHEDULES II AND
IIA hereto (Res-Care and each Consolidated Subsidiary, a "Borrower," and all of
the foregoing collectively, the "Borrowers").
PRELIMINARY STATEMENT
A. Res-Care and certain other Existing Borrowers (defined herein)
obtained from the Administrative Bank and certain of the Banks credit
accommodations pursuant to a Loan Agreement dated as of December 23, 1996 (the
"1996 Loan Agreement") including the following: (i) a revolving line of credit
in the principal amount of Sixty Five Million Dollars ($65,000,000) (the
"Original Revolving Credit Facility"), (ii) a commitment to issue letters of
credit for the account of the Borrowers in an aggregate outstanding amount of up
to Ten Million Dollars ($10,000,000) and (iii) a swing revolving line of credit
in the principal amount of Seven Million Five Hundred Thousand Dollars
($7,500,000) (the "Original Swing Line Credit Facility").
B. Res-Care and certain other Existing Borrowers and the Administrative
Bank and certain of the Banks amended the 1996 Loan Agreement pursuant to a
First Amendment to Loan Instruments dated as of June 23, 1997 (the "First
Amendment to Loan Instruments"), providing for, among other things, (i) the
increase of the principal amount of the Original Revolving Credit Facility to
One Hundred Million Dollars ($100,000,000), (ii) the increase of the principal
amount of the Original Swing Line Credit Facility to Twelve Million Five Hundred
Thousand Dollars ($12,500,000), (iii) the amendment of certain financial
covenants and (iv) the addition of certain New Borrowers as parties to the Loan
Instruments.
C. Res-Care and certain other Existing Borrowers and the Administrative
Bank and certain of the Banks further amended the 1996 Loan Agreement pursuant
to a Second Amendment to Loan Instruments dated as of November 20, 1997 (the
"Second Amendment to Loan Instruments"), providing for, among other things, (i)
the consent of the Banks to the Borrowers' incurring of subordinated
indebtedness, (ii) the amendment of certain financial covenants and (iii) the
addition of certain other New Borrowers as parties to the Loan Instruments.
D. Res-Care and certain other Existing Borrowers and the Administrative
Bank and
<PAGE> 2
certain of the Banks further amended the 1996 Loan Agreement pursuant to a Third
Amendment to Loan Instruments dated as of March 12, 1998 (the "Third Amendment
to Loan Instruments"), providing for, among other things, the Existing Borrowers
to add certain New Borrowers and to make certain other amendments. The 1996 Loan
Agreement, as amended by the First Amendment to Loan Instruments, the Second
Amendment to Loan Instruments and the Third Amendment to Loan Instruments, is
referred to as the "Old Loan Agreement."
E. Res-Care and certain other Existing Borrowers and the Administrative
Bank and certain of the Banks amended and restated the Old Loan Agreement
pursuant to the 1998 Amended and Restated Loan Agreement dated as of June 30,
1998 (the "Loan Agreement"), providing for, among other things, (i) the increase
of the principal amount of the Original Revolving Credit Facility to One Hundred
Seventy Five Million Dollars ($175,000,000), (ii) the increase of the principal
amount of the Original Swing Line Credit Facility to Fifteen Million Dollars
($15,000,000), (iii) the creation of a new revolving credit facility in the
principal amount of Twenty Five Million Dollars ($25,000,000) with a 364-day
term, (iv) the amendment of certain financial covenants and (v) the addition of
certain New Borrowers as parties to the Loan Instruments. Each capitalized term
used herein, unless otherwise expressly defined herein, shall have the meaning
set forth in the Loan Agreement.
F. Res-Care has entered into an agreement to acquire all of the stock
of PeopleServe, Inc. PeopleServe provides residential, vocational and other
training, education, support and related programs and services (including
habilitation, rehabilitation and required medical services) to persons with
developmental and other neurological disabilities (including individuals with
mental retardation, dual diagnosis, acquired brain injury and other special
needs) in the following states: Delaware, Florida, Indiana, Maryland, Missouri,
Nevada, New Jersey, New Mexico, North Carolina, Ohio, Texas, West Virginia and
Washington, D.C.
G. Res-Care and the Existing Borrowers wish to amend the Loan Agreement
and the Loan Instruments to (i) amend certain financial covenants, (ii) to amend
the Pricing Levels, which are used in determining applicable interest rates and
fees and (iii) to make certain other amendments. The Administrative Bank and the
Banks are agreeable to such amendments, upon satisfaction of the terms and
conditions set forth herein.
Now, therefore, in consideration of the premises and the mutual
covenants and agreements set forth herein and in the Loan Agreement and for
other good and valuable consideration, the mutuality, receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
I. AMENDMENTS TO LOAN AGREEMENT
A. SECTION 1 - DEFINITIONS AND CROSS REFERENCE. The following
definitions and provisions of Section 1 of the Loan Agreement are hereby amended
and restated as follows:
"1.27 "Cash Flow from Operations" means the sum of the amounts
for the
2
<PAGE> 3
period in question of (i) Net Income, (ii) Interest Expense, (iii)
provisions for taxes based on income, (iv) depreciation, amortization
and other non-cash charges to Net Income, and (v) Operating
Lease/Rental Expense minus non-cash credits to Net Income, of the
Borrowers on a consolidated basis in accordance with GAAP, determined
as of the end of each month, for the previous 12 months. The Borrowers
may include in the calculation of "Cash Flow from Operations" the sum
of (i), (ii), (iii), (iv) and (v) for the 12 months preceding the date
of calculation for any entity that has been acquired in a Permitted
Business Combination; provided, however, that:
(a) until such time as section (b) below is
applicable, if the portion of the sum of (i), (ii), (iii),
(iv) and (v) that is based upon pre-acquisition unaudited
financial results of entities acquired in Permitted Business
Combinations (the "Pre-Acquisition Cash Flow from Operations")
equals or exceeds twenty five percent (25%) (the "Cash Flow
from Operations Limitation") of the total "Cash Flow from
Operations" of the Borrowers for the period being measured,
then the calculation of total "Cash Flow from Operations" may
include the portion of the Pre-Acquisition Cash Flow from
Operations that is equal to the Cash Flow from Operations
Limitation but must exclude the portion of Pre-Acquisition
Cash Flow from Operations that exceeds the Cash Flow from
Operations Limitation;
(b) if the calculation of "Cash Flow from
Operations" is performed at any time from the beginning of the
seventh month after the date of acquisition of an entity until
the end of the twelfth month following the acquisition, the
calculation with respect to such entity shall be based upon
the actual financial results of such entity for the period
occurring after the acquisition, annualized on a 12-month
basis;
(c) Net Income for purposes of the calculation of
Cash Flow from Operations shall not include any Net Income of
a Borrower derived from such Borrower's ownership of a Person
that is not a Consolidated Subsidiary except to the extent
such Borrower has received a distribution of such Net Income
from such Person; and
(d) Net Income for purposes of the calculation of
"Cash Flow from Operations" may include an adjustment, subject
to the approval of the Administrative Bank in its discretion
exercised reasonably, to increase Net Income by the amount of
certain extraordinary or non-recurring expenses as were
incurred by entities acquired in Permitted Business
Combinations during the 12 months preceding the date of
calculation, to the extent that the Borrowers have
demonstrated to the reasonable satisfaction of the
Administrative Bank that such extraordinary or non-recurring
expenses will not continue during the period after the
acquisition.
1.53 "Existing Borrowers" means any and all Borrowers
party to the Loan Agreement as of June 30, 1998, but does not
currently include the entities
3
<PAGE> 4
listed on SCHEDULE IIB attached to the 1999A Amendment.
1.60 "Fixed Charge Coverage Ratio" means, as of any
Date of Determination thereof, the ratio of (i) the Borrowers'
Cash Flow from Operations to (ii) the sum of the Borrowers'
Interest Expense, Operating Lease/Rental Expense and Current
Maturities of Long Term Debt.
1.74 "Letter of Credit Subfacility" means the
commitment of PNC, to issue Letters of Credit for the account
for Res-Care or a Subsidiary up to an aggregate amount at any
one time outstanding of Twenty Five Million Dollars
($25,000,000). The Letter of Credit Subfacility is a sublimit
of Revolving Credit Facility A.
1.85 "New Borrowers" means certain Subsidiaries
created or acquired since June 30, 1998, specifically
identified as all of the entities on SCHEDULE IIA attached to
the 1999A Amendment.
1.96 "Pricing Level I" means the Pricing Level that
will be in effect for the applicable Pricing Period if, as at
the relevant Date of Determination, the ratio of the
Borrowers' Adjusted Indebtedness as measured on such Date of
Determination, to the Borrowers' Cash Flow from Operations as
measured on such Date of Determination, is less than 2.50 to
1.00.
1.97 "Pricing Level II" means the Pricing Level that
will be in effect for the applicable Pricing Period if, as at
the relevant Date of Determination, the ratio of the
Borrowers' Adjusted Indebtedness as measured on such Date of
Determination, to the Borrowers' Cash Flow from Operations as
measured on such Date of Determination, is equal to or greater
than 2.50 to 1.00, but is less than 3.00 to 1.00.
1.98 "Pricing Level III" means the Pricing Level that
will be in effect for the applicable Pricing Period if, as at
the relevant Date of Determination, the ratio of the
Borrowers' Adjusted Indebtedness as measured on such Date of
Determination, to the Borrowers' Cash Flow from Operations as
measured on such Date of Determination, is equal to or greater
than 3.00 to 1.00, but is less than 3.50 to 1.00.
1.99 "Pricing Level IV" means the Pricing Level that
will be in effect for the applicable Pricing Period if, as of
the relevant Date of Determination, the ratio of the
Borrowers' Adjusted Indebtedness as measured on such Date of
Determination, to the Borrowers' Cash Flow from Operations as
measured on such Date of Determination, is equal to or greater
than 3.50 to 1.00, but less than 4.00 to 1.00.
1.100 "Pricing Level V" means the Pricing Level that
will be in effect
4
<PAGE> 5
for the applicable Pricing Period if, as of the relevant Date
of Determination, the Borrowers' Adjusted Indebtedness as
measured on such Date of Determination, to the Borrowers' Cash
Flow from Operations as measured on such Date of
Determination, is equal to or greater than 4.00 to 1.00, but
less than 4.50 to 1.00.
1.101 "Pricing Level VI" means the Pricing Level that
will be in effect for the applicable Pricing Period if, as of
the relevant Date of Determination, the Borrowers' Adjusted
Indebtedness as measured on such Date of Determination, to the
Borrowers' Cash Flow from Operations as measured on such Date
of Determination, is equal to or greater than 4.50 to 1.00,
but less than 5.00 to 1.00.
1.102 "Pricing Level VII" means the Pricing Level
that will be in effect for the applicable Pricing Period if,
as of the relevant Date of Determination, the Borrowers'
Adjusted Indebtedness as measured on such Date of
Determination, to the Borrowers' Cash Flow from Operations as
measured on such Date of Determination, is equal to or greater
than 5.00 to 1.00."
The following definitions and provisions are hereby added to Section 1 of the
Loan Agreement as follows:
"1.147 "1999A Amendment" means the 1999A Amendment to
Loan Instruments made and entered into as of June __, 1999, by
and among the Banks, the Administrative Bank and the
Borrowers.
1.148 "1999A Amendment Closing Date" means the date
on which the 1999A Amendment to Loan Instruments has been
executed and delivered by the parties thereto, June __, 1999.
The closing of the 1999A Amendment shall not occur unless the
acquisition of PeopleServe also occurs.
1.149 "Adjusted Indebtedness" means, with respect to
the Borrowers on a consolidated basis in accordance with GAAP,
(i) all indebtedness for borrowed money, including, without
limitation, all Revolving Credit Loans, all Swing Line Loans,
all reimbursement obligations of the Borrowers in respect of
all letters of credit, including the Letters of Credit, issued
for the account of the Borrowers, (ii) that portion of
obligations with respect to Capital Leases which is properly
classified as a liability on a balance sheet in conformity
with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing
obligations for borrowed money, (iv) any obligation owed for
all or any part of the deferred purchase price of property or
services which purchase price is (y) due more than six months
from the date of incurrence of the obligation in respect
thereof, or (z) evidenced by a note or similar written
instrument, but excluding trade payables incurred in the
ordinary course of business, (v) all indebtedness secured by
any lien on any property or asset owned by the Borrowers
regardless of whether the indebtedness secured thereby shall
have been assumed by the Borrowers or is non-recourse to the
credit of the Borrowers but
5
<PAGE> 6
only to the extent of the fair market value of any such
property or assets, (vi) all other Contingent Obligations of
the Borrowers not otherwise included in clauses (i) through
(v) of this Section and (vii) Operating Lease/Rental Expense
multiplied by 8; PROVIDED, HOWEVER Adjusted Indebtedness shall
be reduced by an amount equal to the difference (if positive)
between (i) the value of the Borrowers' cash and marketable
securities and (ii) $10,000,000.
1.150 "Adjusted Senior Indebtedness" means, with
respect to the Borrowers on a consolidated basis in accordance
with GAAP, all Adjusted Indebtedness, excluding, however, all
(i) Convertible Subordinated Notes, (ii) Convertible
Subordinated Notes (Normal Life) and (iii) other subordinated
indebtedness which may be excluded from the calculation of
"Adjusted Senior Indebtedness" by written consent of the
Administrative Bank."
B. SECTION 2.1A - REVOLVING CREDIT FACILITY A - REVOLVING
CREDIT FACILITY A LOAN COMMITMENTS. Section 2.1A of the Loan Agreement is hereby
amended and restated by replacing subparagraph (iv) at the end of such section
with the following:
"(iv) At no time shall the Banks be required to make Revolving
Loans under Revolving Credit Facility A if the making of such
Revolving Loans would cause the ratio of Adjusted Indebtedness
as of the end of any rolling twelve (12) month period ending
during one of the periods set forth below to Cash Flow from
Operations for such rolling twelve (12) month period to exceed
the applicable ratio:
<TABLE>
<CAPTION>
PERIOD APPLICABLE RATIO
<S> <C> <C>
3/31/99-12/31/99 5.50 to 1.0
1/01/00-12/30/00 5.25 to 1.0
12/31/00 and thereafter 5.00 to 1.0"
</TABLE>
C. SECTION 2.1B - REVOLVING CREDIT FACILITY B - REVOLVING
CREDIT FACILITY B LOAN COMMITMENTS. Section 2.1B of the Loan Agreement is hereby
amended and restated by replacing subparagraph (ii) at the end of such section
with the following:
"(ii) At no time shall the Banks be required to make Revolving
Loans under Revolving Credit Facility B if the making of such
Revolving Loans would cause the ratio of Adjusted Indebtedness
as of the end of any rolling twelve (12) month period ending
during one of the periods set forth below to Cash Flow from
Operations for such rolling twelve (12) month period to exceed
the applicable ratio:
6
<PAGE> 7
<TABLE>
<CAPTION>
PERIOD APPLICABLE RATIO
<S> <C> <C>
3/31/99-12/31/99 5.50 to 1.0
1/01/00-12/30/00 5.25 to 1.0
12/31/00 and thereafter 5.00 to 1.0"
</TABLE>
D. SECTION 2.7 - LETTERS OF CREDIT. Section 2.7A(i) is hereby
amended and restated as follows:
"(i) The Borrowers may not request that PNC issue any Letter
of Credit if, after giving effect to such issuance, (y) the
total Letter of Credit Usage would exceed Twenty Million Five
Dollars ($25,000,000.00), or (z) the Total Utilization of
Revolving Credit Facility A Loan Commitments would exceed the
Revolving Credit Facility A Loan Commitments, as the amount
available under such Revolving Credit Facility A Loan
Commitments may be reduced from time to time pursuant to
Section 2.4C hereof."
E. SECTION 8.2 -INDEBTEDNESS, ETC. Section 8.2 of the Loan
Agreement is hereby amended and restated as follows:
"8.2 INDEBTEDNESS, ETC. The Borrowers will not, without the
prior written consent of the Majority Banks, directly or
indirectly, create, incur, assume, guarantee, agree to
purchase or repurchase or provide funds in respect of, or
otherwise become liable with respect to any Indebtedness other
than:
(i) The Revolving Credit Facilities;
(ii) The Swing Line Credit Facility;
(iii) The Capital Leases in the aggregate amount not
exceeding Twenty Five Million Dollars ($25,000,000);
(iv) Current liabilities of the Borrowers (other than
for borrowed money) incurred in the ordinary course of their
businesses and in accordance with customary trade practices;
(v) Purchase money indebtedness incurred or assumed
by the Borrowers in connection with acquisition of tangible
and intangible personal and real property (acquired in a
Permitted Business Combination that meets the requirements of
Section 8.11 hereof or in circumstances other than in
connection with a Permitted Business Combination), to the
extent that such tangible and intangible personal and real
property are to be used by the Borrowers in businesses
permitted under Section 8.5 hereof, in an aggregate principal
amount not to exceed Seven Million Five Hundred Thousand
Dollars ($7,500,000);
(vi) Unsubordinated promissory notes or other
evidence of
7
<PAGE> 8
unsubordinated indebtedness issued by one or more of the
Borrowers as all or part of the Business Combination
Consideration in connection with a Permitted Business
Combination that meets the requirements of Section 8.11 hereof
in an aggregate principal amount not to exceed Twelve Million
Five Hundred Thousand Dollars ($12,500,000);
(vii) Promissory notes or other evidence of
indebtedness that has been subordinated to the Obligations
owed to the Banks, in a form acceptable to the Administrative
Bank, issued by one or more of the Borrowers as all or part of
the Business Combination Consideration in connection with a
Permitted Business Combination that meets the requirements of
Section 8.11 hereof;
(viii) The advances, loans and guarantees permitted
under Section 8.12 hereof;
(ix) Convertible Subordinated Notes that meet all of
the following criteria:
(a) The principal amount of such Convertible
Subordinated Notes may not exceed $115,000,000; and
(b) Neither the Convertible Subordinated
Notes nor the Indenture may be amended in any manner
that could reasonably be expected to be adverse to
the interests of the Banks without prior written
consent of the Administrative Bank; and
(x) the Convertible Subordinated Notes (Normal Life)
that meet the following criteria:
(a) The principal amount of such Convertible
Subordinated Notes (Normal Life) may not, in the
aggregate, exceed $22,000,000; and
(b) The Convertible Subordinated Notes
(Normal Life) may not be amended in any manner that
could reasonably be expected to be adverse to the
interests of the Banks without prior written consent
of the Administrative Bank."
F. SECTION 8.7 - RATIO OF ADJUSTED INDEBTEDNESS TO CASH FLOW
FROM OPERATIONS. Section 8.7 of the Loan Agreement is hereby amended and
restated as follows:
"8.7 RATIO OF ADJUSTED INDEBTEDNESS TO CASH FLOW FROM
OPERATIONS. The Borrowers shall not permit, for any rolling
twelve (12) month period ending during one of the periods set
forth below, the ratio of Adjusted Indebtedness as of the end
of such rolling twelve (12) month period to Cash Flow from
Operations
8
<PAGE> 9
for such rolling twelve (12) month period to exceed the
applicable ratio:
<TABLE>
<CAPTION>
PERIOD APPLICABLE RATIO
<S> <C> <C>
3/31/99-12/31/99 5.50 to 1.0
1/01/00-12/30/00 5.25 to 1.0
12/31/00 and thereafter 5.00 to 1.0"
</TABLE>
G. SECTION 8.8 - RATIO OF ADJUSTED SENIOR INDEBTEDNESS TO CASH
FLOW FROM OPERATIONS. Section 8.8 of the Loan Agreement is hereby amended and
restated as follows:
"8.8 RATIO OF ADJUSTED SENIOR INDEBTEDNESS TO CASH FLOW FROM
OPERATIONS. The Borrowers shall not permit, for any rolling
twelve (12) month period ending during one of the periods set
forth below, the ratio of Adjusted Senior Indebtedness as of
the end of any such rolling twelve (12) month period to Cash
Flow from Operations for such rolling twelve (12) month period
to exceed the applicable ratio:
<TABLE>
<CAPTION>
PERIOD APPLICABLE RATIO
<S> <C> <C>
3/31/99-12/31/99 4.50 to 1.0
1/01/00 and thereafter 4.25 to 1.0"
</TABLE>
H. SECTION 8.9 - RATIO OF DEBT TO CAPITALIZATION. Section 8.9
of the Loan Agreement is hereby amended and restated as follows:
"8.9 RATIO OF DEBT TO CAPITALIZATION. The Borrowers shall not
permit, for any calendar month, the ratio of Debt as of the
end of such calendar month to Capitalization as of the end of
such calendar month to exceed the applicable ratio:
<TABLE>
<CAPTION>
PERIOD APPLICABLE RATIO
<S> <C> <C>
3/31/99-12/31/99 .70 to 1.0
1/01/00-12/30/00 .675 to 1.0
12/31/00 and thereafter .60 to 1.0
</TABLE>
Notwithstanding the foregoing, if Res-Care engages in a public
offering of common stock subsequent to the 1999A Amendment
Closing Date that results in Res-Care receiving net proceeds
in excess of $10,000,000, the applicable ratios set forth in
this Section 8.9 shall be modified to reduce such applicable
ratios by an amount equal to the difference between (i) the
ratio of Debt to Capitalization as of the end of the calendar
month immediately prior to the offering of common stock and
(ii) the ratio of Debt to Capitalization as of the end of the
calendar month immediately following the offering of common
stock. However, such an
9
<PAGE> 10
offering of common stock shall not (i) cause the applicable
ratios under this Section 8.9 to be reduced below .60 to 1.0
prior to 12/31/00 or (ii) cause the applicable ratios to be
less than .50 to 1.0 after 12/31/00.
Further notwithstanding the foregoing, if the Convertible
Subordinated Notes shall be converted to equity at any time,
the foregoing shall be modified to substitute the following as
the applicable ratios:
<TABLE>
<CAPTION>
PERIOD APPLICABLE RATIO
<S> <C> <C>
3/31/99-12/31/99 .60 to 1.0
1/01/00-12/30/00 .55 to 1.0
12/31/00 and thereafter .50 to 1.0"
</TABLE>
I. APPROVAL AND WAIVER OF CERTAIN REQUIREMENTS OF SECTION 8.11
IN REGARD TO BUSINESS COMBINATION WITH PEOPLESERVE,INC. The Administrative Bank
and the Banks approve Res-Care's Business Combination with PeopleServe, Inc. (to
be accounted for as a pooling of interests), and waive the current $15,000,000
per transaction limitation of Section 8.11(v) of the Loan Agreement with respect
to such Business Combination and waive the $100,000,000 aggregate limitation of
Section 8.11(iv) of the Loan Agreement with respect to Business Combinations
occurring between July 1, 1998 and June 30, 1999.
J. SECTION 8.11 - PERMITTED BUSINESS COMBINATIONS. Section
8.11 of the Loan Agreement is hereby amended and restated as follows:
"8.11 PERMITTED BUSINESS COMBINATIONS. Res-Care and its
Subsidiaries shall not, without the prior written consent of
the Majority Banks (as defined in Section 15.11 hereof),
engage in any Business Combination unless all of the following
conditions are met, in which case the proposed Business
Combination shall be deemed a "Permitted Business
Combination":
(i) the Business Combination shall be with a Person
that is engaged in a business of the type described
in Section 8.5 hereof;
(ii) the Business Combination shall be accomplished
through consensual (non-hostile) agreement with the
seller;
(iii) the Business Combination shall result in
Res-Care being the surviving entity such that it
reports the results of the acquisition on a
consolidated basis in accordance with GAAP or the
equity basis of accounting in accordance with GAAP;
(iv) the Business Combination Consideration
associated with the
10
<PAGE> 11
proposed Business Combination plus the aggregate
Business Combination Consideration associated with
Permitted Business Combinations that have been
completed in the current Loan Year does not exceed
One Hundred Fifty Million Dollars ($150,000,000);
(v) the Business Combination Consideration associated
with the proposed Business Combination does not
exceed Twenty Million Dollars ($20,000,000); and
(vi) if the Business Combination involves acquisition
of interests in a Person that will not treated be as
a Consolidated Subsidiary of Res-Care subsequent to
the Business Combination, the aggregate amount of
Business Combination Consideration associated with
all such Business Combinations in any Fiscal Year
cannot exceed Three Million Dollars ($3,000,000)."
K. SECTION 8.12 - LOANS, ADVANCES AND GUARANTIES BY BORROWERS.
Section 8.12 of the Loan Agreement is hereby amended and restated by deleting
the words "One Million Five Hundred Thousand Dollars ($1,500,000)" and
substituting "Five Million Dollars ($5,000,000)" therefor.
Section 8.12 is further amended to add the following at the end
thereof:
"Notwithstanding the foregoing, upon consummation of the PeopleServe,
Inc. acquisition by Res-Care, the guaranties delivered by Voca Corp., Voca
Corporation of North Carolina, Voca Corporation of Ohio, Voca Corporation of
Washington D.C. and Voca Corporation of West Virginia, Inc. in favor of National
City Bank guarantying repayment of reimbursement obligations on a letter of
credit issued by National City and in favor of Chase Manhattan Trust Company,
National Association, guarantying repayment of amounts due with respect to
certain Mortgage Notes (collectively, the "Voca Guaranties"), shall be treated
as "guaranties" under this Section 8.12 but the aggregate amount thereof (i)
shall not be included for purposes of the $5,000,000 limitation on guaranties
under the first paragraph of Section 8.12 or as "undeferred" obligations, and
(ii) shall not be included for purposes of the $7,500,000 limitation on
assumption or guaranties of minimum working capital obligations under the second
paragraph of Section 8.12. The Voca Guaranties shall not be considered
"Indebtedness" for purpose of calculating "Indebtedness" for use in connection
with Pricing Levels and financial covenants herein."
L. SCHEDULE I - LIST OF BANKS. SCHEDULE I to the Loan
Agreement is hereby amended and replaced in its entirety by SCHEDULE I attached
to this Amendment.
M. SCHEDULE IA - 1999A AMENDMENT CLOSING FEES. SCHEDULE IA to
is hereby added to the Loan Agreement.
N. SCHEDULE II - LIST OF BORROWERS OTHER THAN RES-CARE.
11
<PAGE> 12
SCHEDULE II to the Loan Agreement is hereby amended and replaced in its entirety
by SCHEDULE II attached to this Amendment
O. SCHEDULE IIA - LIST OF NEW BORROWERS. SCHEDULE IIA
containing a list of New Borrowers as of the 1999A Amendment Closing Date, is
hereby added to the Loan Agreement by SCHEDULE IIA attached to this Amendment.
P. SCHEDULE IIB - LIST OF CERTAIN ENTITIES WHICH CURRENTLY ARE
NOT INCLUDED IN DEFINITION OF BORROWERS OR NEW BORROWERS. SCHEDULE IIB is hereby
amended and replaced in its entirety by SCHEDULE IIB attached hereto.
Q. SCHEDULE 6.13 - CONSOLIDATED SUBSIDIARIES OF RES-CARE, INC.
SCHEDULE 6.13 is hereby amended and restated in its entirety by Schedule 6.13
attached hereto.
R. RATIFICATION. The Loan Agreement, as amended by this
Amendment, remains in full force and effect and the Borrowers reaffirm and
ratify their obligations under the Loan Agreement, as amended by this Amendment.
II. STOCK PLEDGE AGREEMENT (RES-CARE)
A. EXHIBIT A TO STOCK PLEDGE AGREEMENT (RES-CARE). EXHIBIT A
to the Stock Pledge Agreement (Res-Care) is amended and restated in its entirety
by EXHIBIT A to this Amendment.
B. DELIVERY OF STOCK CERTIFICATES OF NEW BORROWERS TO
ADMINISTRATIVE BANK. Res-Care covenants to deliver or to cause to be delivered
all common stock of the New Borrowers (which common stock is specifically
identified in Exhibit A hereto) to the Administrative Bank on the 1999A
Amendment Closing Date.
C. RATIFICATION. The Stock Pledge Agreement (Res-Care), as
amended by this Amendment, remains in full force and effect and Res-Care
reaffirms and ratifies its obligations under the Stock Pledge Agreement, as
amended by this Amendment.
III. AMENDMENT AND RATIFICATION OF SECURITY AGREEMENTS
Each of the Security Agreements remains in full force and
effect and each Borrower reaffirms and ratifies its obligations under the
Security Agreement to which it is a party. Each Borrower agrees that the
Security Agreement to which it is a party shall continue to secure all
indebtedness of the Borrower to the Banks evidenced by the Revolving Credit
Notes, the Swing Line Note, the Applications and Agreements for Letters of
Credit and the Loan Agreement, all as they may be amended by this Amendment.
Additionally, each of the New
12
<PAGE> 13
Borrowers, as of the date of the 1999A Amendment, shall have executed and
delivered to the Administrative Bank a Security Agreement and UCC-1 financing
statements in favor of the Banks, in form and substance satisfactory to the
Banks.
IV. RATIFICATION OF OTHER LOAN INSTRUMENTS
The Borrowers hereby reaffirm and ratify all of their obligations under
the other Loan Instruments not expressly modified hereinabove.
V. CLOSING CONDITIONS
The establishment of the Revolving Credit Facility by the Banks in
favor of the Borrowers, the obtaining of the Revolving Credit Loans and/or
Letters of Credit by the Borrowers thereunder, the making of the Swing Line
Loans by PNC to the Borrowers, all as amended by this Amendment, are subject to
the satisfaction of all the following conditions (in addition to the conditions
set forth in the Loan Agreement):
A. CONDITIONS TO CLOSING OF THIS AMENDMENT. The obligation of the Banks
to make the Revolving Credit Loans to the Borrowers and to make the Swing Line
Loans to the Borrowers are subject to the condition that, in addition to the
satisfaction of the conditions precedent specified in Section 5.1 of the Loan
Agreement, and with respect to the Swing Line Loan, the conditions precedent
specified in Section 3.1D of the Loan Agreement, as of the 1999A Amendment
Closing Date, the Banks shall have received the following from the Borrowers,
dated the 1999A Amendment Closing Date or such other date as shall be acceptable
to the Banks:
(1) This Amendment, duly executed and delivered by
the each of the Borrowers.
(2) Stock certificates evidencing all of the issued
and outstanding shares of the common stock of all New Borrowers identified on
SCHEDULE IIA, and executed blank stock powers appended thereto.
(3) Security Agreements, executed and delivered by
all New Borrowers identified on SCHEDULE IIA.
(4) UCC-1 financing statements appropriate for filing
in filing offices designated by the Administrative Bank, executed and delivered
by all New Borrowers identified on SCHEDULE IIA.
(5) [New Stock Pledge Agreements, executed and
delivered by any first tier Subsidiaries that own stock of second tier
Subsidiaries that are New Borrowers].
13
<PAGE> 14
(6) A Certificate of the Secretary or Assistant
Secretary of Res-Care certifying as to the authenticity, completeness and
accuracy of, and attaching copies of any amendments to the Articles of
Incorporation or Bylaws since June 30, 1998, and Resolutions of the Board of
Directors of Res-Care authorizing such Borrower's execution, delivery and
performance of this Amendment and any other Loan Instruments to which such
Borrower is a party, and certifying the names and true signatures of the
officers of such Borrower authorized to execute and deliver the Loan Instruments
to which the Borrower is a party, on behalf of such Borrower.
(7) A Certificate of the Secretary or Assistant
Secretary of each New Borrower certifying as to the authenticity, completeness
and accuracy of, and attaching copies of their respective Certificates of
Incorporation and Bylaws, together with any amendments thereto, and Resolutions
of the Board of Directors of each New Borrower authorizing such New Borrower's
execution, delivery and performance of this Amendment and any other Loan
Instruments to which such New Borrower is a party, and certifying the names and
true signatures of the officers of such New Borrower authorized to execute and
deliver the Loan Instruments to which the New Borrower is a party, on behalf of
such New Borrower.
(8) An opinion from counsel to the Borrowers, in form
and substance satisfactory to the Banks, giving substantially the same opinions
as were given in connection with the execution and delivery of the Loan
Agreement dated as of June 30, 1998, but to be given with respect to the
execution and delivery of this Amendment and related documents.
(9) Such other documents as the Administrative Bank
may reasonably request.
B. 1999A AMENDMENT CLOSING FEES. The Borrowers shall pay to the
Administrative Bank on the 1999A Amendment Closing Date, for the benefit of the
Banks, closing fees in regard to the 1999A Amendment in the total amount of
$250,000. Upon receipt of such moneys, the Administrative Bank shall remit the
closing fees set forth in SCHEDULE IA hereof to the Banks. The Borrowers shall
have no liability to any Bank for any closing fees paid to the Administrative
Bank which the Administrative Bank does not properly remit to such Bank pursuant
to SCHEDULE IA, and such Bank's sole remedy in respect thereof shall be against
the Administrative Bank. Pursuant to this Section of this Amendment and Section
15.10 of the Loan Agreement, the Borrowers also agree to pay to the
Administrative Bank on the 1999A Amendment Closing Date the reasonable fees and
expenses of the Administrative Bank's counsel in negotiating, drafting and
closing this Amendment and related documents.
VI. REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF BORROWER AND
CONSOLIDATED SUBSIDIARIES. To induce the Banks to enter into this Amendment, the
Borrowers represent and warrant to the Banks as follows:
(1) Each Borrower has full power, authority, and
capacity to enter into
14
<PAGE> 15
this Amendment, and this Amendment constitutes the legal, valid and binding
obligations of each Borrower, enforceable against each in accordance with its
terms.
(2) No Event of Default under the Loan Agreement or
any of the other Loan Instruments has occurred which continues unwaived by the
Banks, and no event which with the passage of time, the giving of notice or both
would constitute an Event of Default, exists as of the date hereof.
(3) The person executing this Amendment on behalf of
each Borrower is duly authorized to do so. Each such person has been duly
authorized pursuant to resolutions of the Borrowers approved by the directors of
the Borrowers to execute and deliver minor amendments to the Loan Instruments of
the sort set forth in this Amendment without the necessity of further action by
the respective boards of directors.
(4) The representations and warranties made by each
Borrower in all of the Loan Instruments are hereby remade and restated as of the
date hereof.
(5) There are no material actions, suits, legal,
equitable, arbitration or administrative proceedings pending or threatened
against any Borrower, the adverse determination of which could have a material
adverse effect on the Loan Instruments, the business operations or financial
condition of the Borrowers or the ability of the Borrowers to fulfill their
obligations under the Loan Instruments.
VII. LEGAL EFFECT OF THIS AMENDMENT. Although this Amendment is to be
executed by the Banks and the Borrowers prior to the consummation of the
acquisition of PeopleServe, Inc. by Res-Care, this Amendment shall not have
legal effect until such time as the such acquisition has been consummated. To
the extent that this Amendment involves execution and delivery of documents and
stock certificates by PeopleServe, Inc. and its subsidiaries, such documents and
stock certificates shall be executed and delivered to the Administrative Bank
contemporaneous with or within seven days after the consummation of the
PeopleServe, Inc. acquisition.
VIII. MISCELLANEOUS. The provisions of Section XV of the Loan Agreement
are hereby incorporated by reference and made applicable to this Amendment as
fully as if set forth herein verbatim.
Notwithstanding anything herein to the contrary, the parties
acknowledge that General Health Corporation is not in good standing under the
laws of the state of Arizona. The Borrowers covenant to provide a good standing
certificate within 30 days after the 1999A Amendment Closing Date.
IN WITNESS WHEREOF, the Borrowers, the Administrative Bank and the
Banks have each caused this Amendment to be duly executed as of the date and
year first hereinabove written.
15
<PAGE> 16
RES-CARE, INC.
(a "Borrower")
------------------------------------
By: Authorized Officer
Name: Ralph G. Gronefeld
Assistant Treasurer
16
<PAGE> 17
COMMUNITY ALTERNATIVES INDIANA, INC.
COMMUNITY ALTERNATIVES NEBRASKA, INC.
COMMUNITY ADVANTAGE, INC.
TEXAS HOME MANAGEMENT, INC.
CAPITAL TX INVESTMENTS, INC.
THM HOMES, INC.
RES-CARE NEW MEXICO, INC.
RES-CARE OHIO, INC.
CATX PROPERTIES, INC.
RES-CARE CALIFORNIA, INC.
COMMUNITY ALTERNATIVES VIRGINIA, INC.
RSCR CALIFORNIA, INC.
RES-CARE KANSAS, INC.
RES-CARE ILLINOIS, INC.
RES-CARE OKLAHOMA, INC.
RES-CARE TENNESSEE, INC.
RES-CARE TRAINING TECHNOLOGIES, INC.
YOUTHTRACK, INC.
RES-CARE PREMIER, INC.
RES-CARE NEW JERSEY, INC.
COMMUNITY ALTERNATIVES KENTUCKY, INC.
ALTERNATIVE YOUTH SERVICES, INC.
COMMUNITY ALTERNATIVES TEXAS
PARTNERS, INC.
RSCR WEST VIRGINIA, INC.
COMMUNITY ALTERNATIVES MISSOURI, INC.
f/k/a RAIMENT, INC.
RES-CARE AVIATION, INC.
COMMUNICATIONS NETWORK CONSULTANTS, INC.
THE ACADEMY FOR INDIVIDUAL
EXCELLENCE, INC.
RES-CARE OTHER OPTIONS, INC.
SOUTHERN HOME CARE SERVICES, INC.
GENERAL HEALTH CORPORATION d/b/a Arizona
Youth Associates, Inc.
BALD EAGLE ENTERPRISES, INC.
BRINKLEY GROUP HOMES, INC.
NORMAL LIFE, INC.
NORMAL LIFE OF SOUTHERN INDIANA, INC.
NORMAL LIFE OF CENTRAL INDIANA, INC.
NORMAL LIFE OF LOUISIANA, INC.
NORMAL LIFE OF LAFAYETTE, INC.
NORMAL LIFE OF LAKE CHARLES, INC.
RES-CARE FLORIDA, INC.
17
<PAGE> 18
NORMAL LIFE OF KENTUCKY, INC.
NORMAL LIFE OF NORTH TEXAS, INC.
NORMAL LIFE OF NEW MEXICO, INC.
NORMAL LIFE OF TENNESSEE, INC.
CAREERS IN PROGRESS, INC.
NORMAL LIFE FAMILY SERVICES, INC.
NORMAL LIFE OF CALIFORNIA, INC.
NORMAL LIFE OF GEORGIA, INC.
NORMAL LIFE MANAGEMENT, INC.
NL DELAWARE, INC.
NORMAL LIFE OF OHIO, INC.
BOLIVAR DEVELOPMENT TRAINING CENTER, INC.
HYDESBURG ESTATES, INC.
OAK WOOD SUITES OF BOLIVAR, INC.
WILLARD ESTATES, INC.
BOLIVAR ESTATES, INC.
SKYVIEW ESTATES, INC.
RIVER BLUFF ESTATES, INC.
MEADOW LANE ESTATES, INC.
EBENEZER ESTATES, INC.
HILLSIDE ESTATES, INC.
PEBBLE CREEK ESTATES, INC.
FORT MASON ESTATES, INC.
SHA-REE ESTATES, INC.
BAKER MANAGEMENT, INC.
MISSOURI PROGRESSIVE SERVICES, INC.
OAKVIEW ESTATES OF BOLIVAR, INC.
UPWARD BOUND, INC.
INDIVIDUALIZED SUPPORTED LIVING, INC.
RES-CARE WASHINGTON, INC.
RES-CARE ALABAMA, INC.
TANGRAM REHABILITATION NETWORK, INC.
BUMPERSHOOT ENTERPRISES, INC.
RS PALMER CORPORATION d/b/a TEXAS LIVING CENTERS
ALTERNATIVE CHOICES, INC.
ROCKCREEK, INC.
ACCESS, INC.
RESCARE PREMIER CANADA, INC.
OPTIMAL SPACE, INC.
J&J CARE CENTERS, INC.
RAISE GEAUGA, INC.
COMMUNITY ALTERNATIVES ILLINOIS, INC.
GENERAL HEALTH CORPORATION d/b/a ARIZONA YOUTH ASSOCIATES
(each a "Borrower")
18
<PAGE> 19
- -----------------------------
By: Authorized Officer
Name: Ralph G. Gronefeld
Assistant Treasurer of each Borrower
listed above beginning with Community Alternatives Indiana, Inc. and ending with
General Health Corporation d/b/a Arizona Youth Associates, on behalf of each
such Borrower
CREATIVE NETWORKS, LLC
an Arizona limited liability company
(a "Borrower")
By: Authorized Officer
NORMAL LIFE OF INDIANA
a general partnership
(a "Borrower")
By: NORMAL LIFE OF SOUTHERN INDIANA, INC.
one of its General Partners
By: Authorized Officer
and
By: NORMAL LIFE OF CENTRAL INDIANA, INC.
its other General Partner
By: Authorized Officer
TEXAS COMMUNITY ALTERNATIVES LIMITED PARTNERSHIP
(a Borrower)
By: COMMUNITY ALTERNATIVES TEXAS PARTNER, INC.
19
<PAGE> 20
its General Partner
By: Authorized Officer
20
<PAGE> 21
PEOPLESERVE, INC.
P.S.I. HOLDINGS, INC.
VOCA CORP. VOCA CORPORATION OF AMERICA VOCA CORPORATION OF FLORIDA VOCA
CORPORATION OF INDIANA VOCA OF INDIANA LLC VOCA CORPORATION OF MARYLAND
VOCA CORPORATION OF NEW JERSEY VOCA CORPORATION OF NORTH CAROLINA VOCA
CORPORATION OF OHIO VOCA CORPORATION OF WASHINGTON D.C.
VOCA CORPORATION OF WEST VIRGINIA, INC.
VOCA RESIDENTIAL SERVICES, INC.
EDUCARE COMMUNITY LIVING CORPORATION - AMERICA
EDUCARE COMMUNITY LIVING CORPORATION - GULF COAST
EDUCARE COMMUNITY LIVING CORPORATION - MISSOURI
EDUCARE COMMUNITY LIVING CORPORATION - TEXAS
EDUCARE COMMUNITY LIVING CORPORATION - NEW MEXICO
EDUCARE COMMUNITY LIVING CORPORATION - NORTH CAROLINA
EDUCARE COMMUNITY LIVING CORPORATION - NEVADA
THE CITADEL GROUP, INC.
B.W.J. OPPORTUNITY CENTERS, INC.
(each a "Borrower")
-------------------------------------------
By: Authorized Officer
Name:
Title:
listed above beginning with PeopleServe, Inc. and ending with B.W.J.
Opportunity Centers, Inc., on behalf of each such Borrower
21
<PAGE> 22
PNC BANK, NATIONAL ASSOCIATION
as Administrative Bank
By: Benjamin A. Willingham
Vice President
PNC BANK, NATIONAL ASSOCIATION
as a Bank
By: Benjamin A. Willingham
Vice President
22
<PAGE> 23
AMSOUTH BANK
("AmSouth")
- -------------------------------------------
By: Cathy Wind
Its: Vice President
23
<PAGE> 24
BANQUE PARIBAS
("Paribas")
- --------------------------------------------
David Canavan
Its:
----------------------------------------
24
<PAGE> 25
BANK ONE, KENTUCKY, NA
("Bank One")
- -------------------------------------------
By: Todd D. Munson
Senior Vice President
25
<PAGE> 26
FIRST AMERICAN NATIONAL BANK
("First American")
- -------------------------------------------
By: Kent Wood
Vice President
26
<PAGE> 27
FIRST UNION NATIONAL BANK
("First Union")
- -------------------------------------------
By: Valerie Cline
Director
27
<PAGE> 28
FIRSTAR BANK, N.A.
("Firstar")
- ------------------------------------------
By: Toby Rau
Assistant Vice President
28
<PAGE> 29
FLEET NATIONAL BANK
("Fleet")
- -------------------------------------------
By: Ginger Stolzenthaler
Senior Vice President
29
<PAGE> 30
KEY CORPORATE CAPITAL, INC.
("Key")
- -------------------------------------------
By: Mark Mullen
Vice President
30
<PAGE> 31
NATIONAL CITY BANK OF KENTUCKY
("National City")
- ------------------------------------------
By: Deroy Scott
Vice President
31
<PAGE> 32
SUNTRUST BANK, NASHVILLE, N.A.
("SunTrust")
- -------------------------------------------
By: W. Brooks Hubbard
Its:
32
<PAGE> 33
UNION BANK OF CALIFORNIA
("Union Bank")
- -------------------------------------------
By: Lynn Vine
Vice President
33
<PAGE> 34
WACHOVIA BANK, N.A.
("Wachovia")
- ------------------------------------------
By: John Tibe
Assistant Vice President
34
<PAGE> 35
SCHEDULE I
ADMINISTRATIVE BANK
PNC BANK, NATIONAL ASSOCIATION ("PNC")
500 West Jefferson Street
Louisville, KY 40202
Attn: Benjamin A. Willingham, Vice President
LIST OF BANKS
AMSOUTH BANK ("AmSouth")
333 Union Street
2nd Floor
Nashville, TN 37021
Attn: Cathy Wind, Vice President
BANK ONE, KENTUCKY, NA ("Bank One")
416 West Jefferson
Louisville, Kentucky 40202
Attn: Todd D. Munson, Senior Vice President
BANQUE PARIBAS ("Paribas")
787 Seventh Avenue
New York, NY 10019
Attn: David Canavan
FIRST AMERICAN NATIONAL BANK ("First American")
First American Center
Nashville, TN 37237
Attn: Kent Wood, Vice President
FIRSTAR BANK, N.A. ("Firstar")
One Financial Square
Louisville, KY 40202
FIRST UNION NATIONAL BANK ("First Union")
One 1st Union Center
301 S. College Street
Charlotte, NC 28288-0735
Attn: Valerie Cline, Director
FLEET NATIONAL BANK ("Fleet")
35
<PAGE> 36
1 Federal Street
Boston, MA 02110
Attn: Ginger Stolzenthaler, Vice President
KEY CORPORATE CAPITAL, INC. ("Key")
525 Vine Street
Cincinnati, OH 40202
Attn: Mark Mullen, Vice President
NATIONAL CITY BANK OF KENTUCKY ("National City")
101 South Fifth Street
Louisville, KY 40202
Attn: Deroy Scott, Vice President
PNC BANK, NATIONAL ASSOCIATION ("PNC")
500 West Jefferson Street
Louisville, KY 40202
Attn: Benjamin A. Willingham, Vice President
SUNTRUST BANK, NASHVILLE, N.A. ("SunTrust")
201 Fourth Avenue North, 3rd Floor
Nashville, TN 37219
Attn: W. Brooks Hubbard
UNION BANK OF CALIFORNIA, NATIONAL ASSOCIATION ("Union Bank")
445 S. Figueroa
16th Floor
Los Angeles, CA 90071
Attn: Virginia Hart, Vice President
WACHOVIA BANK, N. A. ("Wachovia")
191 Peachtree Street, 29th Floor
Atlanta, Georgia 30303-1757
Attn: John Tibe
36
<PAGE> 37
SCHEDULE IA
SCHEDULE OF 1999A AMENDMENT CLOSING FEES
The Banks identified below will receive a payment of 1999A Amendment
Closing Fees under this SCHEDULE IA, based upon the total commitments of each
Bank under the Loan Agreement, multiplied by 125/1000 of one percent (0.125%),
as set forth in the table below. The aggregate Closing Fees payable under this
SCHEDULE IA total $250,000 ($200,000,000 x 0.125%).
<TABLE>
<CAPTION>
APPLICABLE
NAME OF BANK COMMITMENT PERCENTAGE CLOSING FEE
- ------------ ---------- ---------- -----------
<S> <C> <C> <C>
PNC $ 30,000,000 15.00% $ 37,500.00
Bank One 25,000,000 12.50% 31,250.00
National City 25,000,000 12.50% 31,250.00
SunTrust 20,000,000 10.00% 25,000.00
First Union 17,500,000 8.75% 21,875.00
Wachovia 15,000,000 7.50% 18,750.00
AmSouth 12,500,000 6.25% 15,625.00
Key 12,500,000 6.25% 15,625.00
Firstar 12,500,000 6.25% 15,625.00
Banque Paribas 7,500,000 3.75% 9,375.00
First American 7,500,000 3.75% 9,375.00
Fleet 7,500,000 3.75% 9,375.00
Union Bank 7,500,000 3.75% 9,375.00
Totals 200,000,000 100.00% 250,000.00
</TABLE>
37
<PAGE> 38
SCHEDULE II
LIST OF BORROWERS OTHER THAN RES-CARE, INC.
1. COMMUNITY ALTERNATIVES INDIANA, INC., a Delaware corporation with
principal office and place of business in Louisville, Kentucky ("CAI").
2. COMMUNITY ALTERNATIVES NEBRASKA, INC., a Delaware corporation, with
principal office and place of business in Louisville, Kentucky ("CAN").
3. COMMUNITY ADVANTAGE, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("CA").
4. TEXAS HOME MANAGEMENT, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("THM").
5. CAPITAL TX INVESTMENTS, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("CTXI").
6. THM HOMES, INC., a Delaware corporation with principal office and
place of business in Louisville, Kentucky ("THMH").
7. RES-CARE NEW MEXICO, INC., a Delaware corporation with principal
office and place of business of Louisville, Kentucky ("RCNM").
8. RES-CARE OHIO, INC., a Delaware corporation with principal office
and place of business in Louisville, Kentucky ("RCO").
9. CATX PROPERTIES, INC., a Delaware corporation with principal office
and place of business in Louisville, Kentucky ("CATXP").
10. RES-CARE CALIFORNIA, INC., d/b/a RCCA Services, a Delaware
corporation with principal office and place of business in Louisville, Kentucky
("RCC").
11. COMMUNITY ALTERNATIVES VIRGINIA, INC. f/k/a RES-CARE FLORIDA, INC.,
a Delaware corporation with principal office and place of business in
Louisville, Kentucky ("CAV").
12. RSCR CALIFORNIA, INC., a Delaware corporation with principal office
and place of business in Louisville, Kentucky ("RSCRC").
13. RES-CARE KANSAS, INC., a Delaware corporation with principal office
and
38
<PAGE> 39
place of business in Louisville, Kentucky ("RCK").
14. RES-CARE ILLINOIS, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RCI").
15. RES-CARE OKLAHOMA, INC. a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RCOK").
16. RES-CARE TENNESSEE, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RCT").
17. RES-CARE TRAINING TECHNOLOGIES, INC., a Delaware corporation with
principal office and place of business in Louisville, Kentucky ("RCTT").
18. YOUTHTRACK, INC., a Delaware corporation with principal office and
place of business in Louisville, Kentucky ("YT").
19. RES-CARE PREMIER, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RCP").
20 RES-CARE NEW JERSEY, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RCNJ").
21 COMMUNITY ALTERNATIVES KENTUCKY, INC., a Delaware corporation with
principal office and place of business in Louisville, Kentucky ("CAK").
22 ALTERNATIVE YOUTH SERVICES, INC., a Delaware corporation with
principal office and place of business in Louisville, Kentucky ("AYS")
23 COMMUNITY ALTERNATIVES TEXAS PARTNER, INC. (f/k/a Community
Alternatives Virginia, Inc.), a Delaware corporation with principal office and
place of business in Louisville, Kentucky ("CATP").
24 RSCR WEST VIRGINIA, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RSCRWV").
25 COMMUNITY ALTERNATIVES MISSOURI, INC. f/k/a RAIMENT, INC., a
Missouri corporation with principal office and place of business in Louisville,
Kentucky ("R").
26 RES-CARE AVIATION, INC., a Kentucky corporation with principal
office and place of business in Louisville, Kentucky ("RCA").
27 COMMUNICATIONS NETWORK CONSULTANTS, INC., a Rhode Island corporation
with principal office and place of business in Louisville, Kentucky ("CNC").
28 THE ACADEMY FOR INDIVIDUAL EXCELLENCE, INC., a Delaware corporation
with principal office and place of business in Louisville, Kentucky ("AIE").
39
<PAGE> 40
29 RES-CARE OTHER OPTIONS, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("ROO").
30 SOUTHERN HOME CARE SERVICES, INC. d/b/a Eldercare, a Georgia
corporation with principal office and place of business in Louisville, Kentucky
("SHCS").
31. GENERAL HEALTH CORPORATION d/b/a Arizona Youth Associates, Inc., an
Arizona corporation with principal office and place of business in Louisville,
Kentucky ("AYA")
32. BALD EAGLE ENTERPRISES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("BEE").
.
33. BRINKLEY GROUP HOMES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("BGH") .
34. CREATIVE NETWORKS, LLC, an Arizona limited liability company with
principal office and place of business in Louisville, Kentucky ("CN").
35. NORMAL LIFE, INC., a Kentucky corporation with principal office and
place of business in Louisville, Kentucky ("NL").
36. NORMAL LIFE OF SOUTHERN INDIANA, INC., an Indiana corporation with
principal office and place of business in Louisville, Kentucky ("NLSI").
37. NORMAL LIFE OF CENTRAL INDIANA, INC., successor by merger of Normal
Life of Terre Haute, Inc. and Normal Life of Sheridan, Inc., an Indiana
corporation with principal office and place of business in Louisville, Kentucky
("NLCI").
38. NORMAL LIFE OF LOUISIANA, INC., a Louisiana corporation with
principal office and place of business in Louisville, Kentucky ("NLL").
39. NORMAL LIFE OF LAFAYETTE, INC., a Louisiana corporation with
principal office and place of business in Louisville, Kentucky ("NLLAF").
40. NORMAL LIFE OF LAKE CHARLES, INC., a Louisiana corporation with
principal office and place of business in Louisville, Kentucky ("NLLC").
41. RES-CARE FLORIDA, INC., f/k/a NORMAL LIFE OF FLORIDA, INC., a
Florida corporation with principal office and place of business in Louisville,
Kentucky ("NLF").
42. NORMAL LIFE OF KENTUCKY, INC., a Kentucky corporation with
principal
43 NORMAL LIFE OF NORTH TEXAS, INC., a Texas corporation with principal
40
<PAGE> 41
office and place of business in Louisville, Kentucky ("NLK").
44. NORMAL LIFE OF NEW MEXICO, INC., a New Mexico corporation with
principal office and place of business in Louisville, Kentucky ("NLNM").
45. NORMAL LIFE OF TENNESSEE, INC., a Tennessee corporation with
principal office and place of business in Louisville, Kentucky ("NLT").
46. CAREERS IN PROGRESS, INC., a Louisiana corporation with principal
office and place of business in Louisville, Kentucky ("CP").
47. NORMAL LIFE FAMILY SERVICES, INC. a Louisiana corporation with
principal office and place of business in Louisville, Kentucky ("NLFS").
48. NORMAL LIFE OF INDIANA, a general partnership a corporation duly
organized and existing under the laws of the state of Indiana, with principal
office and place of business in Louisville, Kentucky ("NLIND").
49. NORMAL LIFE OF CALIFORNIA, INC., a California corporation with
principal office and place of business in Louisville, Kentucky ("NLC").
50. NORMAL LIFE OF GEORGIA, INC., a Georgia corporation with principal
office and place of business in Louisville, Kentucky ("NLG").
51. NORMAL LIFE MANAGEMENT, INC., a Kentucky corporation with principal
office and place of business in Louisville, Kentucky ("NLM").
52. NL DELAWARE, INC., a Delaware corporation with principal office and
place of business in Louisville, Kentucky ("NLD").
53. NORMAL LIFE OF OHIO, INC., an Ohio corporation with principal
office and place of business in Louisville, Kentucky ("NLO").
54. BOLIVAR DEVELOPMENT TRAINING CENTER, INC., a Missouri corporation
with principal office and place of business in Louisville, Kentucky ("BSTC").
55. HYDESBURG ESTATES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("HE").
56. OAK WOOD SUITES OF BOLIVAR, INC., a Missouri corporation with
principal office and place of business in Louisville, Kentucky ("OWSB").
57. WILLARD ESTATES, INC., a Missouri corporation with principal office
and place of business in Louisville, Kentucky ("WE").
41
<PAGE> 42
58. BOLIVAR ESTATES, INC., a Missouri corporation with principal office
and place of business in Louisville, Kentucky ("BE").
59. SKYVIEW ESTATES, INC., a Missouri corporation with principal office
and place of business in Louisville, Kentucky ("SE").
60. RIVER BLUFF ESTATES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("RBE").
61. MEADOW LANE ESTATES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("MLE").
62. EBENEZER ESTATES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("EE").
63. HILLSIDE ESTATES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("HE").
64. PEBBLE CREEK ESTATES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("PCE").
65. FORT MASON ESTATES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("FME").
66. SHA-REE ESTATES, INC., a Missouri corporation with principal office
and place of business in Louisville, Kentucky ("SRE").
67. BAKER MANAGEMENT, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("BM").
68. MISSOURI PROGRESSIVE SERVICES, INC., a Missouri corporation with
principal office and place of business in Louisville, Kentucky ("MPS").
69. OAKVIEW ESTATES OF BOLIVAR, INC., a Missouri corporation with
principal office and place of business in Louisville, Kentucky ("OEB").
70. UPWARD BOUND, INC., a Missouri corporation with principal office
and place of business in Louisville, Kentucky ("UB").
71. INDIVIDUALIZED SUPPORTED LIVING, INC., a Missouri corporation with
principal office and place of business in Louisville, Kentucky ("ISL").
72. RES-CARE WASHINGTON, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RCWASH").
42
<PAGE> 43
73. RES-CARE ALABAMA, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RCALA").
43
<PAGE> 44
SCHEDULE II.A
LIST OF NEW BORROWERS
as of June __, 1999
74. TANGRAM REHABILITATION NETWORK, INC., a Texas corporation with
principal office and place of business in Louisville, Kentucky.
75. TEXAS COMMUNITY ALTERNATIVES LIMITED PARTNERSHIP, a Kentucky
limited partnership with principal office and place of business in Louisville,
Kentucky.
76. BUMPERSHOOT ENTERPRISES, INC., a California corporation with
principal office and place of business in Louisville, Kentucky.
77. RS PALMER CORPORATION d/b/a TEXAS LIVING CENTERS, a Texas
corporation with principal office and place of business in Louisville, Kentucky.
78. ALTERNATIVE CHOICES, INC., a California corporation with principal
office and place of business in Louisville, Kentucky.
79. ROCKCREEK, INC., a California corporation with principal office and
place of business in Louisville, Kentucky.
80. ACCESS, INC., a North Carolina corporation with principal office
and place of business in Louisville, Kentucky.
81. RESCARE PREMIER CANADA, INC., an Ontario (Canada) corporation with
principal office and place of business in Louisville, Kentucky.
82. OPTIMAL SPACE, INC., an Ontario (Canada) corporation with principal
office and place of business in Ontario, Canada.
83. J&J CARE CENTERS, INC., a California corporation with principal
office and place of business in Louisville, Kentucky.
84. RAISE GEAUGA, INC., an Ohio corporation with principal office and
place of business in Louisville, Kentucky.
85. COMMUNITY ALTERNATIVES ILLINOIS, INC., a Delaware corporation with
principal office and place of business in Louisville, Kentucky.
86. PEOPLESERVE, INC., a Delaware corporation with principal office and
place of business in Louisville, Kentucky.
87. P.S.I. HOLDINGS, INC., an Ohio corporation with principal office
and place of business in Louisville, Kentucky.
44
<PAGE> 45
88. VOCA CORP., an Ohio corporation with principal office and place of
business in Louisville, Kentucky.
89. VOCA CORPORATION OF AMERICA., an Ohio corporation with principal
office and place of business in Louisville, Kentucky.
90. VOCA CORPORATION OF FLORIDA, a Florida corporation with principal
office and place of business in Louisville, Kentucky.
91. VOCA CORPORATION OF INDIANA, an Indiana corporation with principal
office and place of business in Louisville, Kentucky.
92. VOCA OF INDIANA, LLC, an Indiana limited liability company with
principal office and place of business in Louisville, Kentucky.
93. VOCA CORPORATION OF MARYLAND, a Maryland corporation with principal
office and place of business in Louisville, Kentucky.
94. VOCA CORPORATION OF NEW JERSEY, a New Jersey corporation with
principal office and place of business in Louisville, Kentucky.
95. VOCA CORPORATION OF NORTH CAROLINA, a North Carolina corporation
with principal office and place of business in Louisville, Kentucky.
96. VOCA CORPORATION OF OHIO, an Ohio corporation with principal office
and place of business in Louisville, Kentucky.
97. VOCA CORPORATION OF WASHINGTON D.C., a District of Columbia
corporation with principal office and place of business in Louisville, Kentucky.
98. VOCA CORPORATION OF WEST VIRGINIA, INC., a West Virginia
corporation with principal office and place of business in Louisville, Kentucky.
99. VOCA RESIDENTIAL SERVICES, INC., an Ohio corporation with principal
office and place of business in Louisville, Kentucky.
100. EDUCARE COMMUNITY LIVING CORPORATION - AMERICA, a Delaware
corporation with principal office and place of business in Louisville, Kentucky.
101. EDUCARE COMMUNITY LIVING CORPORATION - GULF COAST, a Texas
corporation with principal office and place of business in Louisville, Kentucky.
102. EDUCARE COMMUNITY LIVING CORPORATION - MISSOURI, a Missouri
corporation with principal office and place of business in Louisville, Kentucky.
45
<PAGE> 46
103. EDUCARE COMMUNITY LIVING CORPORATION - TEXAS, a Texas corporation
with principal office and place of business in Louisville, Kentucky.
104. EDUCARE COMMUNITY LIVING CORPORATION - NEW MEXICO, a New Mexico
corporation with principal office and place of business in Louisville, Kentucky.
105. EDUCARE COMMUNITY LIVING CORPORATION - NORTH CAROLINA, a North
Carolina corporation with principal office and place of business in Louisville,
Kentucky.
106. EDUCARE COMMUNITY LIVING CORPORATION - NEVADA, a Nevada
corporation with principal office and place of business in Louisville, Kentucky.
107. THE CITADEL GROUP, INC., a Texas corporation with principal office
and place of business in Louisville, Kentucky.
108. B.W.J. OPPORTUNITY CENTERS, INC., a Texas corporation with
principal office and place of business in Louisville, Kentucky.
46
<PAGE> 47
SCHEDULE II.B
Certain Entities which Currently are not Included in
Definition of "Existing Borrowers" or "New Borrowers"
(1) Employ - Ability Unlimited, Inc., a New Jersey non-profit
corporation.
Refraining from including those entities within the definition of "New
Borrowers", "Existing Borrowers" or "Borrowers" does not prevent the Banks from
later exercising any rights under the Loan Instruments to require them to become
Borrowers.
47
<PAGE> 48
SCHEDULE 1.32
CONTINGENT OBLIGATIONS OF RES-CARE, INC.
48
<PAGE> 49
SCHEDULE 6.7
INDEBTEDNESS
[TANGRAM INDEBTEDNESS]
[PEOPLESERVE CAPITAL LEASES]
49
<PAGE> 50
SCHEDULE 6.13
CONSOLIDATED SUBSIDIARIES OF RES-CARE, INC.
1. COMMUNITY ALTERNATIVES INDIANA, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: None
Qualified to do business in: Indiana
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Delaware
Secretary of State and (iii) Indiana Secretary of State
2. COMMUNITY ALTERNATIVES NEBRASKA, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Lincoln, Nebraska
Qualified to do business in: Nebraska
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Nebraska
Secretary of State and (iii) Delaware Secretary of State
3. COMMUNITY ADVANTAGE, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Longmont, Colorado, (ii) Brighton,
Colorado, (iii) Greeley, Colorado, (iv) Weld County, Adams County,
Boulder, Jefferson, Thornton, and Evans Counties, Colorado.
Qualified to do business in: Colorado
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Colorado
Secretary of State and (iii) Delaware Secretary of State
4. TEXAS HOME MANAGEMENT, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: various in Texas (59 group homes)
Qualified to do business in: Texas
50
<PAGE> 51
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Texas
Secretary of State and (iii) Delaware Secretary of State
5. CAPITAL TX INVESTMENTS, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: owns property in various Texas locations - (i)
Bexar County, (ii) Tarrant, (iii) Angelina, (iv) Travis, (v) Caldwell,
(vi) Harris, (vii) Nacogdoches, (viii) Anderson, (ix) Parker, (x)
Gonzalez and (xi) Plano Counties
Qualified to do business in: Texas
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Texas
Secretary of State and (iii) Delaware Secretary of State
6. THM HOMES, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: owns property in various Texas locations: (i)
Lubbock, (ii) Bexar, (iii) Williamson, (iv) Taylor, (v) Tarrant and
(vi) Anderson Counties
Qualified to do business in: Texas
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Texas
Secretary of State and (iii) Delaware Secretary of State
7. RES-CARE NEW MEXICO, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Albuquerque, (ii) Rosewell, (iii) Clovis,
(iv) Santa Fe, (v) LasVegas, (vi) Espanola, and (vii) Rio Rancho, New
Mexico
Qualified to do business in: New Mexico
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State and (ii) New
Mexico Secretary of State
8. RES-CARE OHIO INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
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Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Fairfield, (ii) Williamsburg, (iii)
Hamilton, (iv) Middletown, (v) Cincinnati area, (vi) Xenia, (vii)
Menton, (viii) Lake County and (ix) Geauga County, Ohio
Qualified to do business in: Ohio
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Ohio
Secretary of State and (iii) Delaware Secretary of State
9. CATX PROPERTIES, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: owns property in various Texas locations -
Wichita and Tarrant Counties
Qualified to do business in: Texas
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Texas
Secretary of State and (iii) Delaware Secretary of State
10. RES-CARE CALIFORNIA, INC. D/B/A RCCA SERVICES
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Sacramento, (ii) San Mateo, (iii) Sutter,
(iv) Nevada, (v) Placer and (vi) Santa Clara Counties, CA
Qualified to do business in: California
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: RCCA Services
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) California
Secretary of State and (iii) Delaware Secretary of State
11. COMMUNITY ALTERNATIVES VIRGINIA (F/K/A RES-CARE FLORIDA, INC.)
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky Qualified/not qualified to do business in
Kentucky: Not qualified
Locations of operations: none
Qualified to do business in: Virginia
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Florida
Secretary of State and (iii) Delaware Secretary of State
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12. RSCR CALIFORNIA, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Los Angeles, (ii) San Bernardino, (iii)
San Luis Obispo and (iv) Orange Counties
Qualified to do business in: California
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State (ii) Delaware
Secretary of State and (iii) California Secretary of State
13. RES-CARE KANSAS, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Sherman, (ii) Neosho, (iii) Stafford ,
(iv) Cowley (v) Sedgwick, (vi) Crawford, (vii) LaBette Counties, Kansas
Qualified to do business in: Kansas
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Connections, Pathways, Life Choices
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Kansas
Secretary of State and (iii) Delaware Secretary of State
14. RES-CARE ILLINOIS, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Jackson and (ii) Vermilion Counties,
Illinois
Qualified to do business in: Illinois
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Delaware
Secretary of State and (iii) Illinois Secretary of State
15. RES-CARE OKLAHOMA, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Tulsa, (ii) Seminole, (iii) Oklahoma, (iv)
Rogers, (v) Creek and (vi) Garfield Counties, Oklahoma
Qualified to do business in: Oklahoma
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Delaware
Secretary of State
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and (iii) County Clerk of Oklahoma County, Oklahoma
16. RES-CARE TENNESSEE, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Nashville, (ii) Jackson (Madison County),
(iii) Knox County, (iv) Haywood County, (v) Hamilton County, (vi)
Madison County, (vii) Hardeman County, (viii) Shelby County, (ix)
Sumner County, (x) Wilson County, (xi) Smyrna County and (xii) Davidson
County, Tennessee
Qualified to do business in: Tennessee
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Res-Care Other Options
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Tennessee
Secretary of State and (iii)
Delaware Secretary of State
17. RES-CARE TRAINING TECHNOLOGIES, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Qualified
Location of registered agent in Kentucky: Louisville
Locations of operations: Louisville
Qualified to do business in: Kentucky only
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Clerk of Jefferson County, Kentucky and (ii)
Delaware Secretary of State
18. YOUTHTRACK, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville Kentucky
Qualified/not qualified to do business in Kentucky: Qualified
Locations of operations: (i) Arapahoe, (ii) Denver, (iii) Mesa, (iv) El
Paso, (v) Jefferson , (vi) Garfield Counties, Colorado, (vii) Brigham
City, Utah, (viii) St. Augustine Florida, (ix) Puerto Rico.
Qualified to do business in: Colorado, Kentucky, Puerto Rico, Utah,
Idaho, Arizona, Nevada, Florida
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Clerk of Jefferson County, Kentucky, (ii)
Colorado Secretary of State, (iii) Delaware Secretary of State and (iv)
Utah Secretary of State
19. RES-CARE PREMIER, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
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Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) St. Louis, Missouri, (ii) Cape Giradeau,
Missouri, (iii) Chicago, Illinois, (iv) Plantation, Florida,
(v) Altoona, Iowa
Qualified to do business in: Massachusetts, Illinois, Florida, Missouri
and Iowa
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Victorian Acres
UCC Filing Locations: (i) Kentucky Secretary of State (ii) Delaware
Secretary of State, (iii) Missouri Secretary of State, (iii) Clerk of
St. Louis County, Missouri and (iv) Secretary of State of Illinois
20. RES-CARE NEW JERSEY, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Mercer, (ii) Burlington, (iii) Middlesex,
(iv) Warren, (v) Ocean, (vi) Union, (vii) Monmouth, and (viii) Somerset
Counties; Towns of: (i) Hillsborough, (ii) Howell, (iii) Perberton,,
(iv) Chatsworth and (v) Trenton
Qualified to do business in: New Jersey
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Delaware
Secretary of State and (iii) New Jersey Secretary of State
21. COMMUNITY ALTERNATIVES KENTUCKY, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Qualified
Locations of operations: (i) Bowling Green, (ii) Frankfort, (iii)
Morehead, (iv) Owensboro, (v) Louisville, (vi) Elizabethtown, (vii)
Symsonia, and (viii) Madisonville, Kentucky Counties: (i) Franklin,
(ii) Fayette, (iii) Warren, (iv) Daviess, (v) Jefferson, (vi) Hardin,
(vii) Mason, (viii) Rowan, (ix) Montgomery, (x) Carter, (xi) Morgan,
(xii) Hoskins, (xiii) Livingston, (xiv) Graves, (xv) Calloway, (xvi)
Fulton, (xvii) Marshall, and and (xviii) McCracken
Qualified to do business in: No other states
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Clerk of Jefferson County, Kentucky,
(ii) Kentucky Secretary of State and (iii) Delaware Secretary of State
22. ALTERNATIVE YOUTH SERVICES, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Qualified
Locations of operations: Kentucky, Tennessee, Lawrence County, Ohio,
Georgia, Jackson, Mississippi and Hinds County, Madison County, and
Rankin County,
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Mississippi.
Qualified to do business in: (i) Georgia, (ii) Ohio, (iii) Tennessee,
(iv) Kentucky, (v) Maryland, (vi) California (vii) Mississippi,
(viii) Washington D.C., and (ix) Indiana
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: In Maryland - d/b/a Res-Care Other Options,
Inc., Magnolia Academy (Tenn.) Georgia Center for Youth, Kentucky SAFE,
Ohio SAFE, Children's Sanctuary, New Summit School, Community Youth
Service.
UCC Filing Locations: (i) Clerk of Jefferson County, Kentucky,
(ii) Kentucky Secretary of State, (iii) Delaware Secretary of State,
(iv) Maryland Secretary of State (v) Tennessee Secretary of State,
(vi) Ohio Secretary of State (vii) Clerk of Lawrence County, Ohio,
(viii) Clerk of Superior Court of Fulton County, Georgia,
(ix) Mississippi Secretary of State and (x) Arizona Secretary of State.
23. COMMUNITY ALTERNATIVES VIRGINIA, INC. (K/N/A COMMUNITY ALTERNATIVES
TEXAS PARTNERS, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: None yet
Qualified to do business in: Virginia and Texas
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Community Alternatives Virginia, Inc.
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Delaware
Secretary of State and (iii) State Corporation Commission of Virginia
24. RSCR WEST VIRGINIA, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: West Virginia - various
Qualified to do business in: West Virginia
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Yellow Springs
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) West
Virginia Secretary of State and (iii) Delaware Secretary of State
25. COMMUNITY ALTERNATIVES MISSOURI, INC. F/K/A RAIMENT, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Polk, Green, Marion, Ralls, Adair, Sullivan
and Cape Girardeau Counties, Missouri
Qualified to do business in: N/A
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Raiment, Inc.
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UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) County Recorder of St. Francois and Cape
Girardeau, Missouri
26. RES-CARE AVIATION, INC.
State of incorporation: Kentucky
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: N/A
Locations of operations: Kentucky
Qualified to do business in: N/A
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: Clerk of Jefferson County, Kentucky
27. COMMUNICATIONS NETWORK CONSULTANTS, INC.
State of incorporation: Rhode Island
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: N/A
Locations of operations: Yancey, Mitchell, Madison, Buncombe, Jackson,
Haywood, Transylvania, Henderson, Ashe, Alleghany, Watauga, Wilkes,
Avery, Burke, Caldwell, McDowell, Alexander, Cleveland, Rutherford,
Polk, Catawba, Surrey, Yadkin, Iredell, Foryth, Stokes, Davie, Rowan,
Cabarrus, Stanley, Union, Mecklenburg, Guilford, Alamance, Caswell,
Orange, Person, Chatham, Durham, Wake, Sampson, Duplin, Nash,
Edgecombe, Wayne, Pender, New Hanover and Brunswick Counties, North
Carolina
Qualified to do business in: North Carolina and Virginia
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Rhode
Island Secretary of State (iii) North Carolina Secretary of State
28. THE ACADEMY FOR INDIVIDUAL EXCELLENCE, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Qualified
Locations of operations: Kentucky
Qualified to do business in: No other state
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Clerk of Jefferson County, Kentucky and
(ii) Delaware Secretary of State
29. RES-CARE OTHER OPTIONS, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Montgomery and Philadelphia Counties,
Pennsylvania, (ii)
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Durham, Davidson, Orange, Person, Chatam, Wake Cumberland, Forsyth and
Stokes Counties, North Carolina, (iii) Oregon Secretary of State
Qualified to do business in: (i) Oregon, (ii) North Carolina,
(iii) Pennsylvania and (iv) Maryland.
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Delaware
Secretary of State, (iii) Secretary of the Commonwealth of
Pennsylvania, (iv) Prothonotary of Montgomery and Philadelphia
Counties, Pennsylvania, and (v) North Carolina Secretary of State
THE FOLLOWING (#30-71) ARE BORROWERS THAT JOINED IN THE LOAN DOCUMENTS EFFECTIVE
WITH THE THIRD AMENDMENT TO LOAN INSTRUMENTS (3/12/98).
30. SOUTHERN HOME CARE SERVICES, INC.
State of incorporation: Georgia
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Georgia and (ii) South Carolina Qualified
to do business in (other than state of incorporation): South Carolina
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: L. Miller Management, Eldercare
UCC filing locations: (i) Kentucky Secretary of State, (ii) Clerk of
the Superior Court of Fulton County Georgia, (iii) South Carolina
Secretary of State
31. GENERAL HEALTH CORPORATION
State of incorporation: Arizona
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Arizona
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Arizona Youth Associates, Inc.
UCC Filing Locations: (i) Kentucky Secretary of State, (ii) Arizona
Secretary of State
32. BALD EAGLE ENTERPRISES, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii) Missouri
Secretary of State
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33. BRINKLEY GROUP HOMES, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Sullivan County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) Clerk of Sullivan County, Missouri
34. CREATIVE NETWORKS, LLC
State of formation: Arizona
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Arizona
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Arizona
Secretary of State
35. NORMAL LIFE, INC.
State of incorporation: Kentucky
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: N/A, Kentucky
corporation
Locations of operations: KY
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing location: Clerk of Jefferson County, Kentucky
36. NORMAL LIFE OF SOUTHERN INDIANA, INC.
State of incorporation: Indiana
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Vanderburgh County, Indiana and (ii)
Warwick County, Indiana
Qualified to do business in (other than state of incorporation):
None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Normal Life of Indiana, Inc.
UCC filing locations: (i) Kentucky Secretary of State, (ii) Indiana
Secretary of State and (iii) Clerk of Vanderburgh County, Indiana
37. NORMAL LIFE OF CENTRAL INDIANA, INC.
State of incorporation: Indiana
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Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not
qualified
Locations of operations: (i)Vigo, (ii) Hamilton, (iii) Clay and (iv)
Montgomery Counties, Indiana
Qualified to do business in (other than state of incorporation):
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Normal Life of Sheridan, Inc.; Normal Life
of Terre Haute, Inc. (merger)
UCC filing locations: (i) Kentucky Secretary of State, (ii) Indiana
Secretary of State, (iii) Clerk of Vigo County, Indiana and (iv)
Clerk of Hamilton County, Indiana
38. NORMAL LIFE OF LOUISIANA, INC.
State of incorporation: Louisiana
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Jefferson Parish, (ii) Orleans Parish and
(iii) St. Bernard Parish, Louisiana
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii)
Clerk of Jefferson Parish, Louisiana
39. NORMAL LIFE OF LAFAYETTE, INC.
State of incorporation: Louisiana
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Lafayette Parish and (ii) St. Landry
Parish, Louisiana
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii) Clerk of
Lafayette Parish, Louisiana
40. NORMAL LIFE OF LAKE CHARLES, INC.
State of incorporation: Louisiana
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Calcasieu Parish, (ii) Beauregard Parish
and (iii) Vernon Parish, Louisiana
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii) Clerk of
Calcasieu Parish, Louisiana
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41. RES-CARE FLORIDA, INC., F/K/A NORMAL LIFE OF FLORIDA, INC.
State of incorporation: Florida
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Pinellas and (ii) Hillsborough Counties,
Florida
Qualified to do business in (other than state of incorporation):
None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Normal Life of Florida, Inc.
UCC filing locations: (i) Kentucky Secretary of State, (ii) Florida
Secretary of State, (iii) Clerk of Pinellas County, Florida and (iv)
Clerk of Hillsborough County, Florida
42. NORMAL LIFE OF KENTUCKY, INC.
State of incorporation: Kentucky
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: N/A, Kentucky
corporation
Locations of operations: Jefferson County, Kentucky
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Jefferson County, Kentucky
43. NORMAL LIFE OF NORTH TEXAS, INC.
State of incorporation: Texas
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Cameron, (ii) Val Verde, (iii) Tarrant,
(iv) Collin, (v) Walde, (vi) Medina, (vii) El Paso, (viii) Bell, (ix)
Navarro and (x) Dallas Counties, Texas.
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii) Texas
Secretary of State
44. NORMAL LIFE OF NEW MEXICO, INC.
State of incorporation: New Mexico
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: None
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii) New
Mexico Secretary of State
45. NORMAL LIFE OF TENNESSEE, INC.
State of incorporation: Tennessee
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Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: None
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii)
Tennessee Secretary of State
46. CAREERS IN PROGRESS, INC.
State of incorporation: Louisiana
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Jefferson Parish, Louisiana
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii) Clerk of
Jefferson Parish, Louisiana
47. NORMAL LIFE FAMILY SERVICES, INC.
State of incorporation: Louisiana
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Jefferson Parish, Louisiana
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii) Clerk of
Jefferson Parish, Louisiana
48. NORMAL LIFE OF INDIANA, a general partnership
State of formation: Indiana
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Vanderburgh, (ii) Vigo, (iii) Hamilton,
(iv) Warrick, (v) Clay and (vi) Montgomery Counties, Indiana.
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Indiana
Secretary of State, (iii) Clerk of Vanderburgh County, Indiana, (iv)
Clerk of Vigo County, Indiana and (v) Clerk of Hamilton County, Indiana
49. NORMAL LIFE OF CALIFORNIA, INC.
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State of incorporation: California
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) San Louis Obispo and (ii) Ventura
Counties, California.
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii)
California Secretary of State
50. NORMAL LIFE OF GEORGIA, INC.
State of incorporation: Georgia
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: (i) Fulton, (ii) Loundes, (iii) DeKalb, (iv)
Gwinett, (v) Douglas and (vi) Forsyth Counties, Georgia.
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years:
UCC filing locations: (i) Kentucky Secretary of State and (ii) Clerk of
Superior Court of Fulton County, Georgia
51. NORMAL LIFE MANAGEMENT, INC.
State of incorporation: Kentucky
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: N/A, Kentucky
corporation
Locations of operations: None
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years:
UCC filing locations: Jefferson County, Kentucky
52. NL OF DELAWARE, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Location of Operations: Delaware
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years:
UCC filing locations: (i) Kentucky Secretary of State and (ii) Delaware
Secretary of State
53. NORMAL LIFE OF OHIO, INC.
State of incorporation: Ohio
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
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Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: None
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Ohio
Secretary of State and (iii) Clerk of Cuyahoga County, Ohio
54. BOLIVAR DEVELOPMENTAL TRAINING CENTER, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Polk County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) Clerk of Polk County, Missouri
55. HYDESBURG ESTATES, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Marion County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State, and (iii) Clerk of Marion County, Missouri
56. OAKWOOD SUITES OF BOLIVAR, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Marion County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) Clerk of Marion County, Missouri
57. WILLARD ESTATES, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
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Locations of operations: Greene County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State, and (iii) Clerk of Greene County, Missouri
58. BOLIVAR ESTATES, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Polk County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) Clerk of Polk County, Missouri
59. SKYVIEW ESTATES, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Marion County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) Clerk of Marion County, Missouri
60. RIVER BLUFF ESTATES, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Polk County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) Clerk of Polk County, Missouri
61. MEADOW LANE ESTATES, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Adair County, Missouri
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Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State; (ii) Missouri
Secretary of State; and (iii) Clerk of Adair County, Missouri
62. EBENEZER ESTATES, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Greene County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) Clerk of Greene County, Missouri
63. HILLSIDE ESTATES, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Polk County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) Clerk of Polk County, Missouri
64. PEBBLE CREEK ESTATES, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Polk County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) Clerk of Polk County, Missouri
65. FORT MASON ESTATES, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Ralls County, Missouri
Qualified to do business in (other than state of incorporation): None
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Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) Clerk of Ralls County, Missouri
66. SHA-REE ESTATES, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Polk County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) Clerk of Polk County, Missouri
67. BAKER MANAGEMENT, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Polk County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State; (ii) Missouri
Secretary of State; and (iii) Clerk of Polk County, Missouri
68. MISSOURI PROGRESSIVE SERVICES, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Polk County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State; (ii) Missouri
Secretary of State; and (iii) Clerk of Polk County, Missouri
69. OAKVIEW ESTATES OF BOLIVAR, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Polk County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five
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(5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) Clerk of Polk County, Missouri
70. UPWARD BOUND, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Marion County, Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) Clerk of Marion County, Missouri
71. INDIVIDUALIZED SUPPORTED LIVING, INC.
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Marion, Adair, Polk and Greene County,
Missouri
Qualified to do business in (other than state of incorporation): None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State and (iii) Clerk of Marion County, Missouri
THE FOLLOWING (#72-73) ARE BORROWERS THAT JOINED IN THE LOAN DOCUMENTS EFFECTIVE
WITH THE 1998 AMENDED AND RESTATED LOAN AGREEMENT (6/30/98):
72. RES-CARE WASHINGTON, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Seattle, Washington, and Puyallup, Washington
Qualified to do business in (other than state of incorporation):
Washington
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Creative Living Service
UCC filing locations: (i) Kentucky Secretary of State and (ii)
Washington Secretary of State
73. RES-CARE ALABAMA, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Birmingham, Demopolis, Jasper, Hoover, Lyndon,
and Irondale
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Qualified to do business in (other than state of incorporation):
Alabama
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Alabama
Secretary of State, (iii) Clerk of Walker County (iv) Clerk of
Jefferson County and (v) Clerk of Marengo County
THE FOLLOWING (#74-85) ARE BORROWERS THAT JOINED IN THE LOAN DOCUMENTS EFFECTIVE
WITH THE 1999A AMENDED AND RESTATED LOAN AGREEMENT (6/_/99):
74. TANGRAM REHABILITATION NETWORK, INC.
State of incorporation: Texas
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Maxwell, San Marcos, Seguin, Texas (counties -
Guadalupe, Hays, and Caldwell)
Qualified to do business in: N/A
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Texas
Secretary of State.
75. TEXAS COMMUNITY ALTERNATIVES LIMITED PARTNERSHIP
State of partnership: Kentucky
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: OK (various)
Qualified to do business in: Texas
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Texas Home Management, Inc.; RSCR Texas,
Inc.; Community Alternatives Texas, Inc.; Willows Developmental Center;
Canton Residential Center; Childrens Center of Austin; Alternative
Business Service
UCC filing locations: (i) Jefferson County, Kentucky (ii) Kentucky
Secretary of State, (iii) Texas Secretary of State.
76. BUMPERSHOOT ENTERPRISES, INC.
State of incorporation: California
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Riverside, CA
Qualified to do business in: N/A
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A UCC filing locations: (i) Kentucky
Secretary of State, (ii) California Secretary of State
77. RS PALMER CORPORATION D/B/A TEXAS LIVING CENTERS
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State of incorporation: Texas
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Garland, Mesquite, Dallas, Rowlett, Texas
(counties - Dallas and Rockwall)
Qualified to do business in: N/A
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Texas Living Centers
UCC filing locations: (i) Kentucky Secretary of State, (ii) Texas
Secretary of State.
78. ALTERNATIVE CHOICES, INC.
State of incorporation: California
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Grand Terrace, CA
Qualified to do business in: N/A
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) California
Secretary of State.
79. ROCKCREEK, INC.
State of incorporation: California
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Los Angeles and San Bernardino Counties, CA
Qualified to do business in: N/A
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) California
Secretary of State.
80. ACCESS, INC.
State of incorporation: North Carolina
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Hickory, NC
Qualified to do business in: N/A
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) North
Carolina Secretary of State and (iii) Catawba County, North Carolina.
81. RESCARE PREMIER CANADA, INC.
State of incorporation: Ontario, Canada
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
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Locations of operations: Ontario, Niagara-on-the-Lake
Qualified to do business in: N/A
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Anagram
UCC filing locations: (i) Kentucky Secretary of State, (ii) Ontario,
Canada.
82. OPTIMAL SPACE, INC.
State of incorporation: Ontario, Canada
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Ontario, Niagara-on-the-Lake
Qualified to do business in: N/A
Any name, other than name of Corporation, used for conducting business
in the last five (5) years:
UCC filing locations: (i) Kentucky Secretary of State, (ii) Ontario,
Canada.
83. J&J CARE CENTERS, INC.
State of incorporation: California
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Penryn, CA (Placer County)
Qualified to do business in: N/A
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) California
Secretary of State.
84. RAISE GEAUGA, INC.
State of incorporation: Ohio
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Geauga County
Qualified to do business in: N/A
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Ohio
Secretary of State and (iii) Geauga County, Ohio
85. COMMUNITY ALTERNATIVES ILLINOIS, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Vermilion and Jackson Counties
Qualified to do business in: Illinois
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
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UCC filing locations: (i) Kentucky Secretary of State, (ii) Delaware
Secretary of State and (iii) Illinois Secretary of State
86. PEOPLE SERVE, INC.
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Multiple locations in Ohio
Qualified to do business in: Ohio
Any name, other than name of Corporation, used for conducting
business in the last five (5) years: VOCA Holdings, Inc.
UCC filing locations: (i) Kentucky Secretary of State, (ii) Delaware
Secretary of State and (iii) Ohio Secretary of State.
87. P.S.I. HOLDINGS, INC.
State of incorporation: Ohio
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: None
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii) Ohio
Secretary of State.
88. VOCA CORP
State of incorporation: Ohio
Location of principal office
and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do
business in Kentucky: Not qualified
Locations of operations: New Castle Co., DE., Seneca Co., OH,
Franklin Co., OH, Montgomery Co., OH,
Madison Co., OH, Ottawa Co., OH, Gallia
Co., OH, Lawrence Co., OH, Carrsee Co.,
OH, Stark Co., OH, and Higland Co., OH
Qualified to do business in: Delaware, Washington D.C., Indiana,
Maryland, Missouri, New Jersey, North
Carolina, Tennessee, West Virginia.
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: VOCA Corporation
UCC filing locations: (i) Kentucky Secretary of State, (ii) Ohio
Secretary of State and (iii) Delaware Secretary of State.
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89. VOCA CORPORATION OF AMERICA
State of incorporation: Ohio
Location of principal office
and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: None
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii) Ohio
Secretary of State.
90. VOCA CORPORATION OF FLORIDA
State of incorporation: Florida
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Wauchula, Lake Worth Port, Charlotte and St.
Petersburg, Florida
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii) Florida
Secretary of State
91. VOCA CORPORATION OF INDIANA
State of incorporation: Indiana
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Indianapolis, Ft. Wayne (Allen Co.), Whitley
Co., Koscuslco Co., Muncie (Delaware Co.)
Jefferson Co., Dearborn Co., Jennings Co.,
Wayne Co.
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: RMS of Indiana, Inc.
UCC filing locations: (i) Kentucky Secretary of State and (ii) Indiana
Secretary of State.
92. VOCA OF INDIANA LLC
State of incorporation: Indiana
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: None
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five
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(5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, and (ii)
Indiana Secretary of State.
93. VOCA CORPORATION OF MARYLAND
State of incorporation: Maryland
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Lanham, Laurel, Hyattsville, and Adelphi,
Maryland
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, and (ii)
Maryland Department of Assessments and Taxation.
94. VOCA CORPORATION OF NEW JERSEY
State of incorporation: New Jersey
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Medford (Burlington Co.), W. Trenton,
Tabernacle (Burlington Co.), Seaville (Cape
May Co.), Cherry Hill, Cumberland, Hamilton,
Ewing Township, Manchester Township and
Marlton (Burlington Co.), New Jersey.
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii) New
Jersey
95. VOCA CORPORATION OF NORTH CAROLINA
State of incorporation: North Carolina
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Charlotte, Raleigh, Greensboro, Durham,
Smithfield, Sanford, Boone, Wilkesboro,
Apex, Banner Elk, Hickory Hudson, Morganton,
Shelby, Forest City, Gastonia, Ashurtle,
Dallas, Lincolnton, Granite Falls,
Rutherfordton, Holly Springs, Furguay Varina
and Apex, North Carolina.
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii) North
Carolina Secretary of State.
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96. VOCA CORPORATION OF OHIO
State of incorporation: Ohio
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Cadiz, Masillon, St. Clairsville, Canton,
Louisville, Columbus, Marietta, Marion,
Ohio.
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii) Ohio
Secretary of State.
97. VOCA CORPORATION OF WASHINGTON, D.C.
State of incorporation: D.C.
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: D.C.
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, and (ii)
District of Columbia.
98. VOCA CORPORATION OF WEST VIRGINIA, INC.,
State of incorporation: W.Va.
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Beckley, Princeton, Accoville, Lewisburg,
Morgantown, Clarksburg, Fairmont,
Huntington, Charleston, Summersville,
Kenova, Amberstdale and Oak Hill, West
Virginia
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, and (ii)
West Virginia Secretary of State.
99. VOCA RESIDENTIAL SERVICES, INC.
State of incorporation: Ohio
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations:
Qualified to do business in: IN, DC, NC
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Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State and (ii)
Ohio Secretary of State.
100. EDUCARE COMMUNITY LIVING CORPORATION - AMERICA
State of incorporation: Delaware
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: None
Qualified to do business in: Texas
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: EduCare Community Living Corporation
UCC filing locations:(i) Kentucky Secretary of State and (ii)
Delaware Secretary of State.
101. EDUCARE COMMUNITY LIVING CORPORATION - GULF COAST
State of incorporation: Texas
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Houston, League City, Katy, Cypress, Alvin,
Pearland and Friendwood, TX.
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Texas
Secretary of State.
102. EDUCARE COMMUNITY LIVING CORPORATION - MISSOURI
State of incorporation: Missouri
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Aurora, Bolivia, Jefferson City, El Dorado,
Clinton and Joplin, Missouri
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Missouri
Secretary of State.
103. EDUCARE COMMUNITY LIVING CORPORATION - TEXAS
State of incorporation: Texas
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Austin, San Antonio, Beaumont, Flower
Mountain, Denton,
76
<PAGE> 77
Ft. Worth, Sequin, Dallas, El Paso, Grand
Prairie, Edinburg, Paris, McAllen, Live Oak,
Converse, Krum, Alvarado, Sanger and
Cleburne, Texas.
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Texas
Secretary of State.
104. EDUCARE COMMUNITY LIVING CORPORATION - NEW MEXICO
State of incorporation: New Mexico
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Las Cruces, Albuquerque, Alamagordo, Rio
Rancho, Carlsbad and Farmington, New Mexico
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, and (ii) New
Mexico Secretary of State.
105. EDUCARE COMMUNITY LIVING CORPORATION - NORTH CAROLINA
State of incorporation: North Carolina
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Apex, Raleigh, Burlington, Rocky Mount,
Concord, Kannapolis, Charlotte, Greensboro,
Stanfield, Cary, Garner, Roanoke, Rapids,
Eden, Gastonia, and Mattews, North Carolina
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) North
Carolina Secretary of State.
106. EDUCARE COMMUNITY LIVING CORPORATION - NEVADA
State of incorporation: Nevada
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Carson City, Reno, Elks, Fallon, Sparks, and
Las Vegas, Nevada
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting
business in the last five
77
<PAGE> 78
(5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Nevada
Secretary of State.
107. THE CITADEL GROUP, INC.
State of incorporation: Texas
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: Angleton, Austin, El Paso, Brownsville, Ft.
Worth, Rosenberg, Edenberg, San Antonio, and
Texas City, Texas.
Qualified to do business in:
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: Citadel Mental Health Service
UCC filing locations: (i) Kentucky Secretary of State, (ii) Texas
Secretary of State.
108. B.W.J. OPPORTUNITY CENTER, INC.
State of incorporation: Texas
Location of principal office and records: 10140 Linn Station Road
Louisville, Kentucky 40223
Qualified/not qualified to do business in Kentucky: Not qualified
Locations of operations: None
Qualified to do business in: None
Any name, other than name of Corporation, used for conducting business
in the last five (5) years: N/A
UCC filing locations: (i) Kentucky Secretary of State, (ii) Texas
Secretary of State.
78
<PAGE> 79
EXHIBIT A
Exhibit A
to Stock Pledge Agreement (Res-Care)
between Res-Care, Inc.
and
PNC Bank, National Association,
AS ADMINISTRATIVE BANK
I. PLEDGED SHARES DELIVERED TO ADMINISTRATIVE BANK AS OF 12/31/96
[CAPTION]
<TABLE>
NUMBER
CERTIFICATE OF
CONSOLIDATED SUBSIDIARY NUMBER SHARES OWNED BY
----------------------- ------ ------ --------
<S> <C> <C> <C>
Community Alternatives Indiana, Inc. 1 1,000 Res-Care, Inc.
Community Alternatives Nebraska, Inc. 1 1,000 Res-Care, Inc.
Community Advantage, Inc. 1 1,000 Res-Care, Inc.
Texas Home Management, Inc. 1 1,000 Res-Care, Inc.
Capital TX Investments, Inc. 1 1,000 Res-Care, Inc.
THM Homes, Inc. 1 1,000 Res-Care, Inc.
Res-Care New Mexico, Inc. 1 1,000 Res-Care, Inc.
Res-Care Ohio, Inc. 1 1,000 Res-Care, Inc.
Community Alternatives of Texas, Inc. 1 1,000 Res-Care, Inc.
CATX Properties, Inc. 1 1,000 Res-Care, Inc.
Res-Care California, Inc. 1 1,000 Res-Care, Inc.
Res-Care Florida, Inc. 1 1,000 Res-Care, Inc.
RSCR California, Inc. 1 1,000 Res-Care, Inc.
Res-Care Kansas, Inc. 1 1,000 Res-Care, Inc.
</TABLE>
79
<PAGE> 80
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Res-Care Illinois, Inc. 1 1,000 Res-Care, Inc.
RSCR Texas, Inc. 1 1,000 Res-Care, Inc.
Res-Care Oklahoma, Inc. 1 1,000 Res-Care, Inc.
Res-Care Tennessee, Inc. 1 1,000 Res-Care, Inc.
Res-Care Training Technologies, Inc. 1 1,000 Res-Care, Inc.
Youthtrack, Inc. 1 800 Res-Care, Inc.
Res-Care Premier, Inc. 1 1,000 Res-Care, Inc.
Res-Care New Jersey, Inc. 1 1,000 Res-Care, Inc.
Community Alternatives Kentucky, Inc. 1 1,000 Res-Care, Inc.
Alternative Youth Services, Inc. 1 1,000 Res-Care, Inc.
Community Alternatives Virginia, Inc. 1 1,000 Res-Care, Inc.
RSCR West Virginia, Inc. 1 1,000 Res-Care, Inc.
Community Alternatives Missouri, Inc. f/k/a 1 500 Res-Care, Inc.
Raiment, Inc.
Res-Care Aviation, Inc. 1 1,000 Res-Care, Inc.
Communication Network Consultants, Inc. 1 100 Res-Care, Inc.
II. PLEDGED SHARES DELIVERED TO ADMINISTRATIVE BANK AT SECOND AMENDMENT CLOSING
DATE
The Academy for Individual Excellence, Inc. 1 1,000 Res-Care, Inc.
Res-Care Other Options, Inc. 1 1,000 Res-Care, Inc.
III. PLEDGED SHARES DELIVERED TO ADMINISTRATIVE BANK AS OF THIRD AMENDMENT CLOSING DATE (3/12/98)
Southern Home Care Services, Inc. 2 1,543 Res-Care, Inc.
Normal Life, Inc. 97 906,833 Res-Care, Inc.
IV. PLEDGED SHARES DELIVERED TO ADMINISTRATIVE BANK AS OF 1999A AMENDMENT CLOSING
DATE (6/__/99)
</TABLE>
80
<PAGE> 81
<TABLE>
<S> <C> <C> <C> <C>
Tangram 1111 Res-Care, Inc.
Palmer 1111 4 1,000 Normal Life of
Texas, Inc.
Alternative Choices 1111 2 10,000 RSCR California, Inc.
Rockcreek 1111 3 200 RSCR California, Inc.
Access 1111 6 16,500 Community Network
Consultants
Communications Network Consultants 1111 Res-Care, Inc.
Optimal Space 1111 Res-Care, Inc.
J & J 1111 4 20,000 Res-Care, Inc.
Raise Geauga 1111 2 100 Res-Care Ohio, Inc.
Community Alt. Illinois 1111 1 1,000 Res-Care, Inc.
General Health 1111 10 4,000 Alternative Youth Services,
Inc.
Bumpershoot 1111 4 3 RSCR California, Inc.
</TABLE>
81
<PAGE> 1
Exhibit 10.2
1999B AMENDMENT TO LOAN INSTRUMENTS
This 1999B Amendment to Loan Instruments (this "Amendment" or the
"1999B Amendment"), is made and entered into as of the 28th day of June, 1999,
by and among (i) PNC BANK, NATIONAL ASSOCIATION, in its capacity as the
administrative bank hereunder (in such capacity the "Administrative Bank"); (ii)
the Banks identified on SCHEDULE I hereto (all of such Banks are hereinafter
collectively referred to as the "Banks", and each is hereinafter individually
referred to as a "Bank"); and (iii) RES-CARE, INC., a Kentucky corporation with
principal office and place of business in Louisville, Kentucky ("Res-Care") and
each of the Consolidated Subsidiaries of Res-Care identified on SCHEDULE II
hereto (Res-Care and each Consolidated Subsidiary, a "Borrower," and all of the
foregoing collectively, the "Borrowers").
PRELIMINARY STATEMENT
A. Res-Care and certain other Existing Borrowers (defined herein)
obtained from the Administrative Bank and certain of the Banks credit
accommodations pursuant to a Loan Agreement dated as of December 23, 1996 (the
"1996 Loan Agreement") including the following: (i) a revolving line of credit
in the principal amount of Sixty Five Million Dollars ($65,000,000) (the
"Original Revolving Credit Facility"), (ii) a commitment to issue letters of
credit for the account of the Borrowers in an aggregate outstanding amount of up
to Ten Million Dollars ($10,000,000) and (iii) a swing revolving line of credit
in the principal amount of Seven Million Five Hundred Thousand Dollars
($7,500,000) (the "Original Swing Line Credit Facility").
B. Res-Care and certain other Existing Borrowers and the Administrative
Bank and certain of the Banks amended the 1996 Loan Agreement pursuant to a
First Amendment to Loan Instruments dated as of June 23, 1997 (the "First
Amendment to Loan Instruments"), providing for, among other things, (i) the
increase of the principal amount of the Original Revolving Credit Facility to
One Hundred Million Dollars ($100,000,000), (ii) the increase of the principal
amount of the Original Swing Line Credit Facility to Twelve Million Five Hundred
Thousand Dollars ($12,500,000), (iii) the amendment of certain financial
covenants and (iv) the addition of certain New Borrowers as parties to the Loan
Instruments.
C. Res-Care and certain other Existing Borrowers and the Administrative
Bank and certain of the Banks further amended the 1996 Loan Agreement pursuant
to a Second Amendment to Loan Instruments dated as of November 20, 1997 (the
"Second Amendment to Loan Instruments"), providing for, among other things, (i)
the consent of the Banks to the Borrowers' incurring of subordinated
indebtedness, (ii) the amendment of certain financial covenants and (iii) the
addition of certain other New Borrowers as parties to the Loan Instruments.
D. Res-Care and certain other Existing Borrowers and the Administrative
Bank and certain of the Banks further amended the 1996 Loan Agreement pursuant
to a Third Amendment
<PAGE> 2
to Loan Instruments dated as of March 12, 1998 (the "Third Amendment to Loan
Instruments"), providing for, among other things, the Existing Borrowers to add
certain New Borrowers and to make certain other amendments. The 1996 Loan
Agreement, as amended by the First Amendment to Loan Instruments, the Second
Amendment to Loan Instruments and the Third Amendment to Loan Instruments, is
referred to as the "Old Loan Agreement."
E. Res-Care and certain other Existing Borrowers and the Administrative
Bank and certain of the Banks amended and restated the Old Loan Agreement
pursuant to the 1998 Amended and Restated Loan Agreement dated as of June 30,
1998 (the "Loan Agreement"), providing for, among other things, (i) the increase
of the principal amount of the Original Revolving Credit Facility to One Hundred
Seventy Five Million Dollars ($175,000,000), (ii) the increase of the principal
amount of the Original Swing Line Credit Facility to Fifteen Million Dollars
($15,000,000), (iii) the creation of a new revolving credit facility in the
principal amount of Twenty Five Million Dollars ($25,000,000) with a 364-day
term, (iv) the amendment of certain financial covenants and (v) the addition of
certain New Borrowers as parties to the Loan Instruments. Each capitalized term
used herein, unless otherwise expressly defined herein, shall have the meaning
set forth in the Loan Agreement.
F. Res-Care and certain other Existing Borrowers and the Administrative
Bank and certain of the Banks further amended the Loan Agreement pursuant to a
1999A Amendment to Loan Instruments dated as of June 28, 1999 (the "1999A
Amendment to Loan Instruments"), providing for, among other things, (i) the
amendment of certain financial covenants, (ii) the amendment of Pricing Levels,
which are used in determining applicable interest rates and fees and (iii) to
certain other amendments necessitated by Res-Care's acquisition of PeopleServe.
G. Res-Care and the Existing Borrowers wish to amend the Loan Agreement
and the Loan Instruments to (i) reduce the Revolving Credit Facility B Loan
Commitments from $25,000,000 to $24,062,500 (subject to future increase back to
$25,000,000) and (ii) to extend the term of Revolving Credit Facility B for an
additional 364 days.
Now, therefore, in consideration of the premises and the mutual
covenants and agreements set forth herein and in the Loan Agreement and for
other good and valuable consideration, the mutuality, receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
I. AMENDMENTS TO LOAN AGREEMENT
A. SECTION 1 - DEFINITIONS AND CROSS REFERENCE. The following
definitions and provisions of Section 1 of the Loan Agreement are hereby amended
and restated as follows:
1.115 "Revolving Credit Facility B" means the revolving line of credit
established by the Banks in favor of the Borrowers originally in the principal
amount of Twenty Five Million Dollars ($25,000,000), reduced to Twenty Four
Million Sixty Two Thousand Five Hundred Dollars ($24,062,500) as of the 1999B
Amendment to Loan Instruments Closing Date, pursuant
<PAGE> 3
to which the Borrowers may obtain Revolving Credit Loans from the Banks during
the term of Revolving Credit Facility B upon the terms and conditions set forth
in this Loan Agreement.
1.117 "Revolving Credit Facility B Loan Commitments" means each Bank's
commitment to maintain or make Revolving Credit Loans under Revolving Credit
Facility B as set forth in Section 2.2 hereof. Schedule 2.1 reflects the
Revolving Credit Facility B Loan Commitments as of the 199b Amendment to Loan
Instruments Closing Date. The total Revolving Credit Facility B Loan Commitments
may be increased to $25,000,000 if an existing or a new Bank agrees to assume an
additional Revolving Credit Facility B Loan Commitment in the amount of $937,500
subsequent to the 1999B Amendment to Loan Instruments Closing Date.
"1.118 "Revolving Credit Facility B Termination Date" means the
Revolving Credit Facility B Termination Date then in effect, which shall be the
earliest of (i) June 28, 2000, subject to extension thereof as provided in
Section 2.1C hereof, (ii) the date as of which the Obligations shall have become
immediately due and payable pursuant to Section 9 of the Loan Agreement and
(iii) the date on which all of the Obligations are paid in full (including,
without limitation, the repayment, expiration, termination or cash
collateralization of Letters of Credit pursuant to this Loan Agreement) and the
Revolving Credit Facility B Loan Commitments are reduced to zero."
The following definitions and provisions are hereby added to Section 1 of the
Loan Agreement as follows:
1.151 "1999B Amendment" means the 1999B Amendment to Loan Instruments
made and entered into as of June 28, 1999, by and among the Banks, the
Administrative Bank and the Borrowers.
1.152 "1999B Amendment Closing Date" means the date on which the 1999B
Amendment to Loan Instruments has been executed and delivered by the parties
thereto, June 28, 1999.
B. SECTION 2.1B REVOLVING CREDIT FACILITY B - REVOLVING CREDIT FACILITY
B LOAN COMMITMENTS. Section 2.1B is hereby amended and restated as follows:
"B. REVOLVING CREDIT FACILITY B - REVOLVING CREDIT FACILITY B
LOAN COMMITMENTS. Each Bank severally agrees, subject to the limitations set
forth below with respect to the maximum amount of Revolving Credit Loans
permitted to be outstanding from time to time under Revolving Credit Facility B,
to lend to the Borrowers from time to time during the period from the Closing
Date to but excluding the Revolving Credit Facility B Termination Date an
aggregate amount not exceeding its Revolving Credit Facility Pro Rata Share of
the aggregate Revolving Credit Facility B Loan Commitments. The amount of each
Bank's Revolving Credit Facility B Loan Commitment is set forth opposite its
name on SCHEDULE 2.1 annexed to this Loan Agreement. The aggregate amount of the
Revolving Credit Facility B Loan Commitments is $24,062,500 as of the 1999B
Amendment to Loan Instruments Closing Date; provided that the aggregate amount
of the Revolving Credit Facility B Loan Commitments
<PAGE> 4
may be increased to $25,000,000 if an existing or a new Bank agrees to assume an
additional Revolving Credit Facility B Loan Commitment in the amount of $937,500
subsequent to the 1999B Amendment to Loan Instruments Closing Date. Because the
Banks had initially approved aggregate Revolving Credit Facility B Loan
Commitments in the amount of $25,000,000, the Banks agree that such increase may
be effected without the need for further approval of any entities other than the
Administrative Bank and Res-Care. The amount of the Revolving Credit Facility B
Loan Commitments shall be reduced from time to time by the amount of any
reductions that are made pursuant to Section 2.4C hereof (it being understood
that all references to the Revolving Credit Facility B Loan Commitments of the
Banks set forth in this Loan Agreement shall mean the initial Revolving Credit
Facility B Loan Commitments of the Banks set forth on SCHEDULE 2.1 annexed to
this Loan Agreement as reduced by the voluntary reductions of the Revolving
Credit Facility B Loan Commitments effected by the Borrowers pursuant to Section
2.4C of the Loan Agreement). Each Bank's Revolving Credit Facility B Loan
Commitment shall expire on the Revolving Credit Facility B Termination Date and
all Revolving Credit Loans under Revolving Credit Facility B shall be paid in
full no later than that date. Amounts borrowed under this Section 2.lB may be
repaid and reborrowed to but excluding the Revolving Credit Facility B
Termination Date, subject to the provisions of Section 2.4C hereof.
Anything contained in this Loan Agreement to the contrary
notwithstanding, the Revolving Credit Loans under Revolving Credit Facility B
and the Revolving Credit Facility B Loan Commitments shall be subject to the
following limitations:
(i)The Total Utilization of Revolving Credit
Facility B Loan Commitments shall not exceed the aggregate Revolving Credit
Facility B Loan Commitments; and
(ii) At no time shall the Banks be required to make
Revolving Loans under Revolving Credit Facility B if the making of such
Revolving Loans would cause the ratio of Adjusted Indebtedness as of the end of
any rolling twelve (12) month period ending during one of the periods set forth
below to Cash Flow from Operations for such rolling twelve (12) month period to
exceed the applicable ratio:
<TABLE>
<CAPTION>
PERIOD APPLICABLE RATIO
------ ----------------
<S> <C> <C>
3/31/99-12/31/99 5.50 to 1.0
1/01/00-12/30/00 5.25 to 1.0
12/31/00 and thereafter 5.00 to 1.0"
</TABLE>
C. SCHEDULE 2.1. Schedule 2.1 to the Loan Agreement is replaced by
Schedule 2.1 attached hereto.
D. RATIFICATION. The Loan Agreement, as amended by this
Amendment, remains in full force and effect and the Borrowers reaffirm and
ratify their obligations under the Loan Agreement, as amended by this Amendment.
<PAGE> 5
II. STOCK PLEDGE AGREEMENT (RES-CARE)
The Stock Pledge Agreement (Res-Care), as amended by this
Amendment, remains in full force and effect and Res-Care reaffirms and ratifies
its obligations under the Stock Pledge Agreement, as amended by this Amendment.
III. AMENDMENT AND RATIFICATION OF SECURITY AGREEMENTS
Each of the Security Agreements remains in full force and
effect and each Borrower reaffirms and ratifies its obligations under the
Security Agreement to which it is a party. Each Borrower agrees that the
Security Agreement to which it is a party shall continue to secure all
indebtedness of the Borrower to the Banks evidenced by the Revolving Credit
Notes, the Swing Line Note, the Applications and Agreements for Letters of
Credit and the Loan Agreement, all as they may be amended by this Amendment.
IV. RATIFICATION OF REVOLVING CREDIT B NOTES
The Borrowers hereby confirm and agree that the Revolving Credit B
Notes have been extended to June 28, 2000, by virtue of the amendment of the
term Revolving Credit Facility B Termination Date" set forth herein; with the
exception of the Revolving Credit B Note in favor of Banque Paribas, which is
not extended. The Borrowers hereby reaffirm and ratify all of their obligations
under the Revolving B Notes as extended.
V. RATIFICATION OF OTHER LOAN INSTRUMENTS
The Borrowers hereby reaffirm and ratify all of their obligations under
the other Loan Instruments not expressly modified hereinabove.
VI. CLOSING CONDITIONS
The establishment of the Revolving Credit Facility by the Banks in
favor of the Borrowers, the obtaining of the Revolving Credit Loans and/or
Letters of Credit by the Borrowers thereunder, the making of the Swing Line
Loans by PNC to the Borrowers, all as amended by this Amendment, are subject to
the satisfaction of all the following conditions (in addition to the conditions
set forth in the Loan Agreement):
A. CONDITIONS TO CLOSING OF THIS AMENDMENT. The obligation of the Banks
to make the Revolving Credit Loans to the Borrowers and to make the Swing Line
Loans to the Borrowers are subject to the condition that, in addition to the
satisfaction of the conditions precedent specified in Section 5.1 of the Loan
Agreement, and with respect to the Swing Line Loan, the conditions precedent
specified in Section 3.1D of the Loan Agreement, as of the 1999B Amendment
Closing Date, the Banks shall have received the following from the Borrowers,
dated the 1999B Amendment Closing Date or such other date as shall be acceptable
to the Banks:
(1) This Amendment, duly executed and delivered by
the each of the
<PAGE> 6
Borrowers.
(2) A Certificate of the Secretary or Assistant
Secretary of Res-Care certifying as to the authenticity, completeness and
accuracy of, and attaching copies of any amendments to the Articles of
Incorporation or Bylaws since June 30, 1998, and Resolutions of the Board of
Directors of Res-Care authorizing such Borrower's execution, delivery and
performance of this Amendment and any other Loan Instruments to which such
Borrower is a party, and certifying the names and true signatures of the
officers of such Borrower authorized to execute and deliver the Loan Instruments
to which the Borrower is a party, on behalf of such Borrower.
(3) A Certificate of the Secretary or Assistant
Secretary of each other Borrower certifying as to the authenticity, completeness
and accuracy of, and attaching copies of their respective Certificates of
Incorporation and Bylaws, together with any amendments thereto, and Resolutions
of the Board of Directors of each Borrower authorizing such Borrower's
execution, delivery and performance of this Amendment and any other Loan
Instruments to which such Borrower is a party, and certifying the names and true
signatures of the officers of such Borrower authorized to execute and deliver
the Loan Instruments to which the Borrower is a party, on behalf of such
Borrower.
(4) An opinion from counsel to the Borrowers, in form
and substance satisfactory to the Banks, giving substantially the same opinions
as were given in connection with the execution and delivery of the Loan
Agreement dated as of June 30, 1998, but to be given with respect to the
execution and delivery of this Amendment and related documents.
(5) Such other documents as the Administrative Bank
may reasonably request.
VII. REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF BORROWER AND
CONSOLIDATED SUBSIDIARIES. To induce the Banks to enter into this Amendment, the
Borrowers represent and warrant to the Banks as follows:
(1) Each Borrower has full power, authority, and
capacity to enter into this Amendment, and this Amendment constitutes the legal,
valid and binding obligations of each Borrower, enforceable against each in
accordance with its terms.
(2) No Event of Default under the Loan Agreement or
any of the other Loan Instruments has occurred which continues unwaived by the
Banks, and no event which with the passage of time, the giving of notice or both
would constitute an Event of Default, exists as of the date hereof.
(3) The person executing this Amendment on behalf of
each Borrower is duly authorized to do so. Each such person has been duly
authorized pursuant to resolutions of
<PAGE> 7
the Borrowers approved by the directors of the Borrowers to execute and deliver
minor amendments to the Loan Instruments of the sort set forth in this Amendment
without the necessity of further action by the respective boards of directors.
(4) The representations and warranties made by each
Borrower in all of the Loan Instruments are hereby remade and restated as of the
date hereof.
(5) There are no material actions, suits, legal,
equitable, arbitration or administrative proceedings pending or threatened
against any Borrower, the adverse determination of which could have a material
adverse effect on the Loan Instruments, the business operations or financial
condition of the Borrowers or the ability of the Borrowers to fulfill their
obligations under the Loan Instruments.
VIII. MISCELLANEOUS. The provisions of Section XV of the Loan Agreement
are hereby incorporated by reference and made applicable to this Amendment as
fully as if set forth herein verbatim.
RES-CARE, INC.
(a "Borrower")
------------------------------
By: Authorized Officer
Name: Ralph G. Gronefeld
Assistant Treasurer
<PAGE> 8
COMMUNITY ALTERNATIVES INDIANA, INC.
COMMUNITY ALTERNATIVES NEBRASKA, INC.
COMMUNITY ADVANTAGE, INC.
TEXAS HOME MANAGEMENT, INC.
CAPITAL TX INVESTMENTS, INC.
THM HOMES, INC.
RES-CARE NEW MEXICO, INC.
RES-CARE OHIO, INC.
CATX PROPERTIES, INC.
RES-CARE CALIFORNIA, INC.
COMMUNITY ALTERNATIVES VIRGINIA, INC.
RSCR CALIFORNIA, INC.
RES-CARE KANSAS, INC.
RES-CARE ILLINOIS, INC.
RES-CARE OKLAHOMA, INC.
RES-CARE TENNESSEE, INC.
RES-CARE TRAINING TECHNOLOGIES, INC.
YOUTHTRACK, INC.
RES-CARE PREMIER, INC.
RES-CARE NEW JERSEY, INC.
COMMUNITY ALTERNATIVES KENTUCKY, INC.
ALTERNATIVE YOUTH SERVICES, INC.
COMMUNITY ALTERNATIVES TEXAS
PARTNERS, INC.
RSCR WEST VIRGINIA, INC.
COMMUNITY ALTERNATIVES MISSOURI, INC.
f/k/a RAIMENT, INC.
RES-CARE AVIATION, INC.
COMMUNICATIONS NETWORK CONSULTANTS, INC.
THE ACADEMY FOR INDIVIDUAL
EXCELLENCE, INC.
RES-CARE OTHER OPTIONS, INC.
SOUTHERN HOME CARE SERVICES, INC.
GENERAL HEALTH CORPORATION d/b/a Arizona
Youth Associates, Inc.
BALD EAGLE ENTERPRISES, INC.
BRINKLEY GROUP HOMES, INC.
NORMAL LIFE, INC.
NORMAL LIFE OF SOUTHERN INDIANA, INC.
NORMAL LIFE OF CENTRAL INDIANA, INC.
NORMAL LIFE OF LOUISIANA, INC.
NORMAL LIFE OF LAFAYETTE, INC.
NORMAL LIFE OF LAKE CHARLES, INC.
RES-CARE FLORIDA, INC.
<PAGE> 9
NORMAL LIFE OF KENTUCKY, INC.
NORMAL LIFE OF NORTH TEXAS, INC.
NORMAL LIFE OF NEW MEXICO, INC.
NORMAL LIFE OF TENNESSEE, INC.
CAREERS IN PROGRESS, INC.
NORMAL LIFE FAMILY SERVICES, INC.
NORMAL LIFE OF CALIFORNIA, INC.
NORMAL LIFE OF GEORGIA, INC.
NORMAL LIFE MANAGEMENT, INC.
NL DELAWARE, INC.
NORMAL LIFE OF OHIO, INC.
BOLIVAR DEVELOPMENT TRAINING CENTER,
INC.
HYDESBURG ESTATES, INC.
OAK WOOD SUITES OF BOLIVAR, INC.
WILLARD ESTATES, INC.
BOLIVAR ESTATES, INC.
SKYVIEW ESTATES, INC.
RIVER BLUFF ESTATES, INC.
MEADOW LANE ESTATES, INC.
EBENEZER ESTATES, INC.
HILLSIDE ESTATES, INC.
PEBBLE CREEK ESTATES, INC.
FORT MASON ESTATES, INC.
SHA-REE ESTATES, INC.
BAKER MANAGEMENT, INC.
MISSOURI PROGRESSIVE SERVICES, INC.
OAKVIEW ESTATES OF BOLIVAR, INC.
UPWARD BOUND, INC.
INDIVIDUALIZED SUPPORTED LIVING, INC.
RES-CARE WASHINGTON, INC.
RES-CARE ALABAMA, INC.
TANGRAM REHABILITATION NETWORK, INC.
BUMPERSHOOT ENTERPRISES, INC.
RS PALMER CORPORATION d/b/a TEXAS LIVING CENTERS
ALTERNATIVE CHOICES, INC.
ROCKCREEK, INC.
ACCESS, INC.
RESCARE PREMIER CANADA, INC.
OPTIMAL SPACE, INC.
J&J CARE CENTERS, INC.
RAISE GEAUGA, INC.
COMMUNITY ALTERNATIVES ILLINOIS, INC.
GENERAL HEALTH CORPORATION d/b/a ARIZONA YOUTH ASSOCIATES
(each a "Borrower")
<PAGE> 10
- -----------------------------
By: Authorized Officer
Name: Ralph G. Gronefeld
Assistant Treasurer of each Borrower
listed above beginning with Community Alternatives Indiana, Inc. and ending with
General Health Corporation d/b/a Arizona Youth Associates, on behalf of each
such Borrower
CREATIVE NETWORKS, LLC
an Arizona limited liability company
(a "Borrower")
By: Authorized Officer
NORMAL LIFE OF INDIANA
a general partnership
(a "Borrower")
By: NORMAL LIFE OF SOUTHERN INDIANA, INC.
one of its General Partners
By: Authorized Officer
and
By: NORMAL LIFE OF CENTRAL INDIANA, INC.
its other General Partner
By: Authorized Officer
TEXAS COMMUNITY ALTERNATIVES LIMITED PARTNERSHIP
(a Borrower)
By: COMMUNITY ALTERNATIVES TEXAS PARTNER, INC.
its General Partner
<PAGE> 11
By: Authorized Officer
<PAGE> 12
PEOPLESERVE, INC.
P.S.I. HOLDINGS, INC.
VOCA CORP. VOCA CORPORATION OF AMERICA VOCA CORPORATION OF FLORIDA VOCA
CORPORATION OF INDIANA VOCA OF INDIANA LLC VOCA CORPORATION OF MARYLAND
VOCA CORPORATION OF NEW JERSEY VOCA CORPORATION OF NORTH CAROLINA VOCA
CORPORATION OF OHIO VOCA CORPORATION OF WASHINGTON D.C.
VOCA CORPORATION OF WEST VIRGINIA, INC.
VOCA RESIDENTIAL SERVICES, INC.
EDUCARE COMMUNITY LIVING CORPORATION - AMERICA
EDUCARE COMMUNITY LIVING CORPORATION - GULF COAST
EDUCARE COMMUNITY LIVING CORPORATION - MISSOURI
EDUCARE COMMUNITY LIVING CORPORATION - TEXAS
EDUCARE COMMUNITY LIVING CORPORATION - NEW MEXICO
EDUCARE COMMUNITY LIVING CORPORATION - NORTH CAROLINA
EDUCARE COMMUNITY LIVING CORPORATION - NEVADA
THE CITADEL GROUP, INC.
B.W.J. OPPORTUNITY CENTERS, INC.
(each a "Borrower")
- -------------------------------------------
By: Authorized Officer
Name:
Title:
listed above beginning with PeopleServe, Inc. and ending with B.W.J. Opportunity
Centers, Inc., on behalf of each such Borrower
<PAGE> 13
PNC BANK, NATIONAL ASSOCIATION
as Administrative Bank
By: Benjamin A. Willingham
Vice President
PNC BANK, NATIONAL ASSOCIATION
as a Bank
By: Benjamin A. Willingham
Vice President
<PAGE> 14
AMSOUTH BANK
("AmSouth")
- -------------------------------------------
By: Cathy Wind
Its: Vice President
<PAGE> 15
BANQUE PARIBAS
("Paribas")
- --------------------------------------------
David Canavan
Its:
---------------------------------------
<PAGE> 16
BANK ONE, KENTUCKY, NA
("Bank One")
- -------------------------------------------
By: Todd D. Munson
Senior Vice President
<PAGE> 17
FIRST AMERICAN NATIONAL BANK
("First American")
- -------------------------------------------
By: Kent Wood
Vice President
<PAGE> 18
FIRST UNION NATIONAL BANK
("First Union")
- -------------------------------------------
By: Valerie Cline
Director
<PAGE> 19
FIRSTAR BANK, N.A.
("Firstar")
- ------------------------------------------
By: Toby Rau
Assistant Vice President
<PAGE> 20
FLEET NATIONAL BANK
("Fleet")
- -------------------------------------------
By: Ginger Stolzenthaler
Senior Vice President
<PAGE> 21
KEY CORPORATE CAPITAL, INC.
("Key")
- -------------------------------------------
By: Mark Mullen
Vice President
<PAGE> 22
NATIONAL CITY BANK OF KENTUCKY
("National City")
- ------------------------------------------
By: Deroy Scott
Vice President
<PAGE> 23
SUNTRUST BANK, NASHVILLE, N.A.
("SunTrust")
- -------------------------------------------
By: W. Brooks Hubbard
Its:
<PAGE> 24
WACHOVIA BANK, N.A.
("Wachovia")
- ------------------------------------------
By: John Tibe
Assistant Vice President
<PAGE> 25
UNION BANK OF CALIFORNIA
("Union Bank")
- -------------------------------------------
By: Virginia Hart
Vice President
<PAGE> 26
SCHEDULE I
ADMINISTRATIVE BANK
PNC BANK, NATIONAL ASSOCIATION ("PNC")
500 West Jefferson Street
Louisville, KY 40202
Attn: Benjamin A. Willingham, Vice President
LIST OF BANKS
AMSOUTH BANK ("AmSouth")
333 Union Street
2nd Floor
Nashville, TN 37021
Attn: Cathy Wind, Vice President
BANK ONE, KENTUCKY, NA ("Bank One")
416 West Jefferson
Louisville, Kentucky 40202
Attn: Todd D. Munson, Senior Vice President
BANQUE PARIBAS ("Paribas")
787 Seventh Avenue
New York, NY 10019
Attn: David Canavan
FIRST AMERICAN NATIONAL BANK ("First American")
First American Center
Nashville, TN 37237
Attn: Kent Wood, Vice President
FIRSTAR BANK, N.A. ("Firstar")
One Financial Square
Louisville, KY 40202
Attn: Toby Rau, Assistant Vice President
FIRST UNION NATIONAL BANK ("First Union")
One 1st Union Center
301 S. College Street
Charlotte, NC 28288-0735
Attn: Valerie Cline, Director
FLEET NATIONAL BANK ("Fleet")
<PAGE> 27
1 Federal Street
Boston, MA 02110
Attn: Ginger Stolzenthaler, Vice President
KEY CORPORATE CAPITAL, INC. ("Key")
525 Vine Street
Cincinnati, OH 40202
Attn: Mark Mullen, Vice President
NATIONAL CITY BANK OF KENTUCKY ("National City")
101 South Fifth Street
Louisville, KY 40202
PNC BANK, NATIONAL ASSOCIATION ("PNC")
500 West Jefferson Street
Louisville, KY 40202
Attn: Benjamin A. Willingham, Vice President
SUNTRUST BANK, NASHVILLE, N.A. ("SunTrust")
P.O. Box 305110
Nashville, TN 37230-5110
Attn: W. Brooks Hubbard
UNION BANK OF CALIFORNIA, NATIONAL ASSOCIATION ("Union Bank")
445 S. Figueroa
16th Floor
Los Angeles, CA 90071
Attn: Virginia Hart, Vice President
WACHOVIA BANK, N. A. ("Wachovia")
191 Peachtree Street, 29th Floor
Atlanta, Georgia 30303-1757
Attn: John Tibe
<PAGE> 28
SCHEDULE II
LIST OF BORROWERS OTHER THAN RES-CARE, INC.
1. COMMUNITY ALTERNATIVES INDIANA, INC., a Delaware corporation with
principal office and place of business in Louisville, Kentucky ("CAI").
2. COMMUNITY ALTERNATIVES NEBRASKA, INC., a Delaware corporation, with
principal office and place of business in Louisville, Kentucky ("CAN").
3. COMMUNITY ADVANTAGE, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("CA").
4. TEXAS HOME MANAGEMENT, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("THM").
5. CAPITAL TX INVESTMENTS, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("CTXI").
6. THM HOMES, INC., a Delaware corporation with principal office and
place of business in Louisville, Kentucky ("THMH").
7. RES-CARE NEW MEXICO, INC., a Delaware corporation with principal
office and place of business of Louisville, Kentucky ("RCNM").
8. RES-CARE OHIO, INC., a Delaware corporation with principal office
and place of business in Louisville, Kentucky ("RCO").
9. CATX PROPERTIES, INC., a Delaware corporation with principal office
and place of business in Louisville, Kentucky ("CATXP").
10. RES-CARE CALIFORNIA, INC., d/b/a RCCA Services, a Delaware
corporation with principal office and place of business in Louisville, Kentucky
("RCC").
11. COMMUNITY ALTERNATIVES VIRGINIA, INC. f/k/a RES-CARE FLORIDA, INC.,
a Delaware corporation with principal office and place of business in
Louisville, Kentucky ("CAV").
12. RSCR CALIFORNIA, INC., a Delaware corporation with principal office
and place of business in Louisville, Kentucky ("RSCRC").
13. RES-CARE KANSAS, INC., a Delaware corporation with principal office
and place of business in Louisville, Kentucky ("RCK").
14. RES-CARE ILLINOIS, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RCI").
<PAGE> 29
15. RES-CARE OKLAHOMA, INC. a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RCOK").
16. RES-CARE TENNESSEE, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RCT").
17. RES-CARE TRAINING TECHNOLOGIES, INC., a Delaware corporation with
principal office and place of business in Louisville, Kentucky ("RCTT").
18. YOUTHTRACK, INC., a Delaware corporation with principal office and
place of business in Louisville, Kentucky ("YT").
19. RES-CARE PREMIER, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RCP").
20 RES-CARE NEW JERSEY, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RCNJ").
21 COMMUNITY ALTERNATIVES KENTUCKY, INC., a Delaware corporation with
principal office and place of business in Louisville, Kentucky ("CAK").
22 ALTERNATIVE YOUTH SERVICES, INC., a Delaware corporation with
principal office and place of business in Louisville, Kentucky ("AYS")
23 COMMUNITY ALTERNATIVES TEXAS PARTNER, INC. (f/k/a Community
Alternatives Virginia, Inc.), a Delaware corporation with principal office and
place of business in Louisville, Kentucky ("CATP").
24 RSCR WEST VIRGINIA, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RSCRWV").
25 COMMUNITY ALTERNATIVES MISSOURI, INC. f/k/a RAIMENT, INC., a
Missouri corporation with principal office and place of business in Louisville,
Kentucky ("R").
26 RES-CARE AVIATION, INC., a Kentucky corporation with principal
office and place of business in Louisville, Kentucky ("RCA").
27 COMMUNICATIONS NETWORK CONSULTANTS, INC., a Rhode Island corporation
with principal office and place of business in Louisville, Kentucky ("CNC").
28 THE ACADEMY FOR INDIVIDUAL EXCELLENCE, INC., a Delaware corporation
with principal office and place of business in Louisville, Kentucky ("AIE").
<PAGE> 30
29 RES-CARE OTHER OPTIONS, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("ROO").
30 SOUTHERN HOME CARE SERVICES, INC. d/b/a Eldercare, a Georgia
corporation with principal office and place of business in Louisville, Kentucky
("SHCS").
31. GENERAL HEALTH CORPORATION d/b/a Arizona Youth Associates, Inc., an
Arizona corporation with principal office and place of business in Louisville,
Kentucky ("AYA")
32. BALD EAGLE ENTERPRISES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("BEE").
.
33. BRINKLEY GROUP HOMES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("BGH") .
34. CREATIVE NETWORKS, LLC, an Arizona limited liability company with
principal office and place of business in Louisville, Kentucky ("CN").
35. NORMAL LIFE, INC., a Kentucky corporation with principal office and
place of business in Louisville, Kentucky ("NL").
36. NORMAL LIFE OF SOUTHERN INDIANA, INC., an Indiana corporation with
principal office and place of business in Louisville, Kentucky ("NLSI").
37. NORMAL LIFE OF CENTRAL INDIANA, INC., successor by merger of Normal
Life of Terre Haute, Inc. and Normal Life of Sheridan, Inc., an Indiana
corporation with principal office and place of business in Louisville, Kentucky
("NLCI").
38. NORMAL LIFE OF LOUISIANA, INC., a Louisiana corporation with
principal office and place of business in Louisville, Kentucky ("NLL").
39. NORMAL LIFE OF LAFAYETTE, INC., a Louisiana corporation with
principal office and place of business in Louisville, Kentucky ("NLLAF").
40. NORMAL LIFE OF LAKE CHARLES, INC., a Louisiana corporation with
principal office and place of business in Louisville, Kentucky ("NLLC").
41. RES-CARE FLORIDA, INC., f/k/a NORMAL LIFE OF FLORIDA, INC., a
Florida corporation with principal office and place of business in Louisville,
Kentucky ("NLF").
42. NORMAL LIFE OF KENTUCKY, INC., a Kentucky corporation with
principal office and place of business in Louisville, Kentucky ("NLK").
43 NORMAL LIFE OF NORTH TEXAS, INC., a Texas corporation with principal
office and place of business in Louisville, Kentucky ("NLNT").
<PAGE> 31
44. NORMAL LIFE OF NEW MEXICO, INC., a New Mexico corporation with
principal office and place of business in Louisville, Kentucky ("NLNM").
45. NORMAL LIFE OF TENNESSEE, INC., a Tennessee corporation with
principal office and place of business in Louisville, Kentucky ("NLT").
46. CAREERS IN PROGRESS, INC., a Louisiana corporation with principal
office and place of business in Louisville, Kentucky ("CP").
47. NORMAL LIFE FAMILY SERVICES, INC. a Louisiana corporation with
principal office and place of business in Louisville, Kentucky ("NLFS").
48. NORMAL LIFE OF INDIANA, a general partnership a corporation duly
organized and existing under the laws of the state of Indiana, with principal
office and place of business in Louisville, Kentucky ("NLIND").
49. NORMAL LIFE OF CALIFORNIA, INC., a California corporation with
principal office and place of business in Louisville, Kentucky ("NLC").
50. NORMAL LIFE OF GEORGIA, INC., a Georgia corporation with principal
office and place of business in Louisville, Kentucky ("NLG").
51. NORMAL LIFE MANAGEMENT, INC., a Kentucky corporation with principal
office and place of business in Louisville, Kentucky ("NLM").
52. NL DELAWARE, INC., a Delaware corporation with principal office and
place of business in Louisville, Kentucky ("NLD").
53. NORMAL LIFE OF OHIO, INC., an Ohio corporation with principal
office and place of business in Louisville, Kentucky ("NLO").
54. BOLIVAR DEVELOPMENT TRAINING CENTER, INC., a Missouri corporation
with principal office and place of business in Louisville, Kentucky ("BSTC").
55. HYDESBURG ESTATES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("HE").
56. OAK WOOD SUITES OF BOLIVAR, INC., a Missouri corporation with
principal office and place of business in Louisville, Kentucky ("OWSB").
57. WILLARD ESTATES, INC., a Missouri corporation with principal office
and place of business in Louisville, Kentucky ("WE").
<PAGE> 32
58. BOLIVAR ESTATES, INC., a Missouri corporation with principal office
and place of business in Louisville, Kentucky ("BE").
59. SKYVIEW ESTATES, INC., a Missouri corporation with principal office
and place of business in Louisville, Kentucky ("SE").
60. RIVER BLUFF ESTATES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("RBE").
61. MEADOW LANE ESTATES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("MLE").
62. EBENEZER ESTATES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("EE").
63. HILLSIDE ESTATES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("HE").
64. PEBBLE CREEK ESTATES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("PCE").
65. FORT MASON ESTATES, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("FME").
66. SHA-REE ESTATES, INC., a Missouri corporation with principal office
and place of business in Louisville, Kentucky ("SRE").
67. BAKER MANAGEMENT, INC., a Missouri corporation with principal
office and place of business in Louisville, Kentucky ("BM").
68. MISSOURI PROGRESSIVE SERVICES, INC., a Missouri corporation with
principal office and place of business in Louisville, Kentucky ("MPS").
69. OAKVIEW ESTATES OF BOLIVAR, INC., a Missouri corporation with
principal office and place of business in Louisville, Kentucky ("OEB").
70. UPWARD BOUND, INC., a Missouri corporation with principal office
and place of business in Louisville, Kentucky ("UB").
71. INDIVIDUALIZED SUPPORTED LIVING, INC., a Missouri corporation with
principal office and place of business in Louisville, Kentucky ("ISL").
72. RES-CARE WASHINGTON, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RCWASH").
73. RES-CARE ALABAMA, INC., a Delaware corporation with principal
office and place of business in Louisville, Kentucky ("RCALA").
<PAGE> 33
SCHEDULE II.A
LIST OF NEW BORROWERS
as of June __, 1999
74. TANGRAM REHABILITATION NETWORK, INC., a Texas corporation with
principal office and place of business in Louisville, Kentucky.
75. TEXAS COMMUNITY ALTERNATIVES LIMITED PARTNERSHIP, a Kentucky
limited partnership with principal office and place of business in Louisville,
Kentucky.
76. BUMPERSHOOT ENTERPRISES, INC., a California corporation with
principal office and place of business in Louisville, Kentucky.
77. RS PALMER CORPORATION d/b/a TEXAS LIVING CENTERS, a Texas
corporation with principal office and place of business in Louisville, Kentucky.
78. ALTERNATIVE CHOICES, INC., a California corporation with principal
office and place of business in Louisville, Kentucky.
79. ROCKCREEK, INC., a California corporation with principal office and
place of business in Louisville, Kentucky.
80. ACCESS, INC., a North Carolina corporation with principal office
and place of business in Louisville, Kentucky.
81. RESCARE PREMIER CANADA, INC., an Ontario (Canada) corporation with
principal office and place of business in Louisville, Kentucky.
82. OPTIMAL SPACE, INC., an Ontario (Canada) corporation with principal
office and place of business in Ontario, Canada.
83. J&J CARE CENTERS, INC., a California corporation with principal
office and place of business in Louisville, Kentucky.
84. RAISE GEAUGA, INC., an Ohio corporation with principal office and
place of business in Louisville, Kentucky.
85. COMMUNITY ALTERNATIVES ILLINOIS, INC., a Delaware corporation with
principal office and place of business in Louisville, Kentucky.
86. PEOPLESERVE, INC., a Delaware corporation with principal office and
place of business in Louisville, Kentucky.
87. P.S.I. HOLDINGS, INC., an Ohio corporation with principal office
and place of business in Louisville, Kentucky.
<PAGE> 34
88. VOCA CORP., an Ohio corporation with principal office and place of
business in Louisville, Kentucky.
89. VOCA CORPORATION OF AMERICA., an Ohio corporation with principal
office and place of business in Louisville, Kentucky.
90. VOCA CORPORATION OF FLORIDA, a Florida corporation with principal
office and place of business in Louisville, Kentucky.
91. VOCA CORPORATION OF INDIANA, an Indiana corporation with principal
office and place of business in Louisville, Kentucky.
92. VOCA OF INDIANA, LLC, an Indiana limited liability company with
principal office and place of business in Louisville, Kentucky.
93. VOCA CORPORATION OF MARYLAND, a Maryland corporation with principal
office and place of business in Louisville, Kentucky.
94. VOCA CORPORATION OF NEW JERSEY, a New Jersey corporation with
principal office and place of business in Louisville, Kentucky.
95. VOCA CORPORATION OF NORTH CAROLINA, a North Carolina corporation
with principal office and place of business in Louisville, Kentucky.
96. VOCA CORPORATION OF OHIO, an Ohio corporation with principal office
and place of business in Louisville, Kentucky.
97. VOCA CORPORATION OF WASHINGTON D.C., a District of Columbia
corporation with principal office and place of business in Louisville, Kentucky.
98. VOCA CORPORATION OF WEST VIRGINIA, INC., a West Virginia
corporation with principal office and place of business in Louisville, Kentucky.
99. VOCA RESIDENTIAL SERVICES, INC., an Ohio corporation with principal
office and place of business in Louisville, Kentucky.
100. EDUCARE COMMUNITY LIVING CORPORATION - AMERICA, a Delaware
corporation with principal office and place of business in Louisville, Kentucky.
101. EDUCARE COMMUNITY LIVING CORPORATION - GULF COAST, a Texas
corporation with principal office and place of business in Louisville, Kentucky.
102. EDUCARE COMMUNITY LIVING CORPORATION - MISSOURI, a Missouri
corporation with principal office and place of business in Louisville, Kentucky.
<PAGE> 35
103. EDUCARE COMMUNITY LIVING CORPORATION - TEXAS, a Texas corporation
with principal office and place of business in Louisville, Kentucky.
104. EDUCARE COMMUNITY LIVING CORPORATION - NEW MEXICO, a New Mexico
corporation with principal office and place of business in Louisville, Kentucky.
105. EDUCARE COMMUNITY LIVING CORPORATION - NORTH CAROLINA, a North
Carolina corporation with principal office and place of business in Louisville,
Kentucky.
106. EDUCARE COMMUNITY LIVING CORPORATION - NEVADA, a Nevada
corporation with principal office and place of business in Louisville, Kentucky.
107. THE CITADEL GROUP, INC., a Texas corporation with principal office
and place of business in Louisville, Kentucky.
108. B.W.J. OPPORTUNITY CENTERS, INC., a Texas corporation with
principal office and place of business in Louisville, Kentucky.
<PAGE> 36
SCHEDULE II.B
Certain Entities which Currently are not Included in
Definition of "Existing Borrowers" or "New Borrowers"
(1) Employ - Ability Unlimited, Inc., a New Jersey non-profit
corporation.
Refraining from including those entities within the definition of "New
Borrowers", "Existing Borrowers" or "Borrowers" does not prevent the Banks from
later exercising any rights under the Loan Instruments to require them to become
Borrowers.
<PAGE> 37
SCHEDULE 2.1
SCHEDULE OF REVOLVING LOAN COMMITMENTS AND
REVOLVING CREDIT FACILITY PRO RATA SHARES
The maximum amount of the Revolving Credit Facility A Loan Commitments
is $175,000,000. The maximum amount of the Revolving Credit Facility B Loan
Commitments is $25,000,000; provided, however that the Revolving Credit Facility
B Loan Commitments shall be reduced to $24,062,500 as of the 1999B Amendment to
Loan Instruments Closing Date and shall remain at such level unless and until an
existing or a new Bank agrees to assume an additional Revolving Credit Facility
B Loan Commitment in the amount of $937,500, in which case the total Revolving
Credit Facility B Loan Commitments shall be restored to $25,000,000.
<TABLE>
<CAPTION>
NAME OF BANK REVOLVING REVOLVING REVOLVING REVOLVING REVOLVING TOTAL
CREDIT FACILITY CREDIT CREDIT CREDIT CREDIT LOAN
A LOAN FACILITY A FACILITY B FACILITY B FACILITY B COMMITMENTS*
COMMITMENTS PRO RATA LOAN PRO RATA PRO RATA
SHARE COMMITMENTS* SHARE** SHARE***
<S> <C> <C> <C> <C> <C> <C>
PNC 26,250,000 15.00% 3,750,000 15.59% 15.00% 30,000,000
Bank One 21,875,000 12.50% 3,125,000 12.99% 12.50% 25,000,000
National City 21,875,500 12.50% 3,125,000 12.99% 12.50% 25,000,000
SunTrust 17,500,000 10.00% 2,500,000 10.39% 10.00% 20,000,000
First Union 15,312,500 8.75% 2,187,500 9.10% 8.75% 17,500,000
Wachovia 13,125,000 7.50% 1,875,000 7.80% 7.50% 15,000,000
AmSouth 10,937,500 6.25% 1,562,500 6.49% 6.25% 12,500,000
Key 10,937,500 6.25% 1,562,500 6.49% 6.25% 12,500,000
Firstar 10,937,500 6.25% 1,562,500 6.49% 6.25% 12,500,000
Banque Paribas 6,562,500 3.75% 0 .0% .0% 6,562,500
First American 6,562,500 3.75% 937,500 3.89% 3.75% 7,500,000
Fleet 6,562,500 3.75% 937,500 3.89% 3.75% 7,500,000
Union Bank 6,562,500 3.75% 937,500 3.89% 3.75% 7,500,000
--------- ---- ------- ---- ---- ---------
TOTAL $175,000.000 100.00% $ 24,062,500 100.00% 100.00% $199,062,500
============ ====== ============ ====== ====== ============
</TABLE>
<PAGE> 38
* Total Revolving Credit Facility B Loan Commitments may be increased
to $25,000,000 and total Loan Commitments may be increased to $200,000,000 if an
existing or a new Bank agrees to assume an additional Revolving Credit Facility
B Loan Commitment in the amount of $937,500.
**Revolving Credit Facility B Pro Rata Shares as of 1999B Amendment to
Loam Instruments Closing Date.
***Revolving Credit Facility B Pro Rata Shares if an existing or a new
Bank agrees to assume an additional Revolving Credit Facility B Loan Commitment
in the amount of $937,500.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 19,659
<SECURITIES> 0
<RECEIVABLES> 147,308
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 191,266
<PP&E> 128,960
<DEPRECIATION> 34,750
<TOTAL-ASSETS> 534,241
<CURRENT-LIABILITIES> 91,745
<BONDS> 0
0
0
<COMMON> 50,866
<OTHER-SE> 101,631
<TOTAL-LIABILITY-AND-EQUITY> 534,241
<SALES> 0
<TOTAL-REVENUES> 408,673
<CGS> 0
<TOTAL-COSTS> 350,533
<OTHER-EXPENSES> 20,498
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,834
<INCOME-PRETAX> 2,366
<INCOME-TAX> 2,717
<INCOME-CONTINUING> (351)
<DISCONTINUED> 0
<EXTRAORDINARY> 534
<CHANGES> (3,932)
<NET-INCOME> (3,749)
<EPS-BASIC> (0.15)
<EPS-DILUTED> (0.15)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<RESTATED>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 28,175
<SECURITIES> 0
<RECEIVABLES> 109,330
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 153,358
<PP&E> 92,502
<DEPRECIATION> 21,383
<TOTAL-ASSETS> 444,618
<CURRENT-LIABILITIES> 83,227
<BONDS> 0
0
0
<COMMON> 50,866
<OTHER-SE> 87,857
<TOTAL-LIABILITY-AND-EQUITY> 444,618
<SALES> 0
<TOTAL-REVENUES> 323,932
<CGS> 0
<TOTAL-COSTS> 280,822
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,655
<INCOME-PRETAX> 15,966
<INCOME-TAX> 6,311
<INCOME-CONTINUING> 9,655
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,655
<EPS-BASIC> 0.40
<EPS-DILUTED> 0.39
</TABLE>
