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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date
of Report (Date of earliest event reported) August 5, 1999
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Ventas, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-10989 61-1055020
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
4360 Brownsboro Road, Suite 115, Louisville, Kentucky 40207-1642
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (502) 357-9000
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Item 5. Other Events
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On April 12, 1999, Ventas, Inc. ("Ventas" or the "Company") entered into a
Second Standstill Agreement (the "Second Standstill Agreement") with Vencor,
Inc. ("Vencor"), its principal tenant, pursuant to which each of the Company and
Vencor agreed during a specified period of time (the "Standstill Period") not to
pursue any claims against the other or any third party relating to the April
1998 reorganization of the Company or any claims relating to certain defaults
under Vencor's lease agreements with the Company. On April 12, 1999, the Company
and Vencor also entered into an agreement (the "Tolling Agreement") pursuant to
which they agreed that any statutes of limitations or other time constraints in
a bankruptcy proceeding that might be asserted by one party against the other
would be extended or tolled from April 12, 1999 until a specified date or until
the Second Standstill Agreement terminates due to Vencor's failure to make
certain contemplated lease payments.
On August 5, 1999, Ventas announced that it entered into an amendment to
the Second Standstill Agreement which provides for the payment of July rent on a
specified schedule. The schedule is $5 million on August 5, $5 million on August
13, $5.2 million on August 19 and approximately $3.7 million on August 31. These
payments, totaling approximately $18.9 million, represent the full amount of
rent due for July under the lease agreements. If Vencor fails to pay any
installment of July rent in accordance with the specified schedule, the Company
will be entitled to exercise its remedies under its lease agreements with Vencor
with respect to the late payment of July rent, unless Vencor or its bank lenders
pay the full amount of unpaid July rent within five days of such non-payment.
The Amendment to the Second Standstill Agreement extends the Standstill
Period. The Standstill Period will now terminate on the earliest to occur of
September 3, 1999, any date that a voluntary or involuntary bankruptcy case is
commenced by or against Vencor, Vencor's failure to make full lease payments for
July 1999 under the specified schedule described above or certain other
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specified events. As provided in the Amendment to the Second Standstill
Agreement, the Company delivered to Vencor notice of non-payment of August rent.
If Vencor or its bank lenders fail to pay the full amount of August rent on or
prior to September 10, 1999, the Company will be entitled to terminate its lease
agreements with Vencor.
In addition, the Company and Vencor agreed to extend the Tolling Agreement
until the earlier to occur of September 3, 1999 or the termination of the
Standstill Period as a result of Vencor's failure to make the July lease
payments in accordance with the specified schedule described above or certain
other specified events.
This Form 8-K includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All statements regarding the Company's expected future
financial position, results of operations, cash flows, financing plans, business
strategy, expected lease income, plans and objectives of management for future
operations and statements that include words such as "anticipate," "believe,"
"plan," "estimate," "expect," "intend," and other similar expressions are
forward-looking statements. Such forward-looking statements are inherently
uncertain, and stockholders must recognize that actual results may differ from
the Company's expectations.
Factors that may affect the plans or results of the Company include,
without limitation, (i) the ability of Vencor to restructure its obligations so
that it will have the financial strength and liquidity necessary to satisfy
their obligations and duties under leases and other agreements with the Company,
(ii) the Company's success in implementing its business strategy, (iii) the
nature and extend of future competition, (iv) the extent of future healthcare
reform and regulation, including cost containment measures and changes in
reimbursement policies and procedures, (v) increases in cost of borrowing for
the Company, (vi) the ability of the Company's operators to
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deliver high quality care and to attract patients, (vii) the results of the
ongoing investigation of the Company by the U.S. Department of Justice and other
litigation affecting the Company, (viii) the Company's ability to acquire
additional properties, (ix) changes in the general economic conditions and/or in
the markets in which the Company may, from time to time, compete (x), the
ability of the Company to pay down, refinance and/or restructure its
indebtedness as it becomes due and (xi) the ability of the Company and Vencor
and other third parties to replace, modify or upgrade computer systems in ways
that adequately address the year 2000 issue. Many of such factors are beyond the
control of the Company and its management.
A copy of the Amendment to the Second Standstill Agreement and the Tolling
Agreement and the press release issued by the Company on August 5, 1999 are
included as exhibits to this filing and are incorporated herein by reference.
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Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits:
10.1 Amendment Number 6 to the Second Standstill Agreement dated April
12, 1999 and Amendment Number 5 to the Tolling Agreement dated April
12, 1999.
99.1 Press Release dated August 5, 1999.
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SIGNATURE
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.
VENTAS, INC.
(Registrant)
Date: August 12, 1999 By: /s/ T. Richard Riney
------------------------------
Name: T. Richard Riney
Title: Executive Vice President and
General Counsel
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EXHIBIT INDEX
10.1 Amendment Number 6 to the Second Standstill Agreement dated April 12,
1999 and Amendment Number 5 to the Tolling Agreement dated April 12,
1999.
99.1 Press Release dated August 5, 1999.
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AMENDMENT NUMBER 6 TO THE SECOND STANDSTILL AGREEMENT
DATED APRIL 12, 1999 AND
AMENDMENT NUMBER 5 TO THE TOLLING AGREEMENT
DATED APRIL 12, 1999
These Amendments dated as of August 5, 1999 are made and entered into among
Vencor, Inc., a corporation organized under the laws of Delaware, for and on
behalf of itself and its various subsidiaries and affiliates, including, without
limitation, Vencor Operating, Inc., and for and on behalf of any of their
respective successors including, without limitation, any debtor or
debtor-in-possession in a bankruptcy case commenced under Title 11 of the United
States Bankruptcy Code (the "Bankruptcy Code") or any trustee appointed in any
such case (collectively, "Vencor"); and Ventas, Inc., a corporation organized
under the laws of Delaware, for and on behalf of itself and its various
subsidiaries and affiliates, including, without limitation, Ventas Realty,
Limited Partnership, and for and on behalf of any of their respective successors
including, without limitation, any debtor or debtor-in-possession in a
bankruptcy case commenced under the Bankruptcy Code or any trustee appointed in
any such case (collectively, "Ventas").
Morgan Guaranty Trust Company of New York (the "Collateral Agent") is a
signatory hereto for the sole purpose of providing the confirmations and
agreements referred to in paragraph 1 hereof.
WHEREAS, Vencor and Ventas are in the process of attempting to resolve any
and all existing and potential claims that Vencor has asserted or might in the
future assert against Ventas (the "Vencor Claims"), the validity of which Ventas
has disputed, and any and all existing and potential claims that Ventas has
asserted or might in the future assert against Vencor (the "Ventas Claims"), the
validity of which Vencor has disputed (the Vencor Claims and the Ventas Claims
are collectively referred to herein as the "Claims");
WHEREAS, to that end Vencor and Ventas are parties to that certain Second
Standstill Agreement dated April 12, 1999 (as modified and amended to date, the
"Second Standstill Agreement") and that certain Tolling Agreement dated April
12, 1999 (as modified and amended to date, the "Tolling Agreement");
WHEREAS, on Tuesday, July 6, 1999, by agreement of the parties, Ventas was
deemed to have delivered five notices of non-payment of rent (the "July
Non-Payment Notices")
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pursuant to paragraph 16.1(b) of the agreements referenced in the first
paragraph of each of the July Non-Payment Notices, such agreements being
collectively defined in the Second Standstill Agreement as the Five Leases;
WHEREAS, the parties hereto wish to extend the cure period referred to in
Section 16.1 of the Five Leases with respect to the July Non-Payment Notices, to
extend certain other deadlines, to specify the cure period referred to in the
August Non-Payment Notices (as defined below), and to agree to certain other
matters to permit continued discussions concerning a consensual resolution of
their differences, subject to the conditions set forth below;
NOW, THEREFORE, in consideration of the premises and other good cause and
adequate consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Extension of the Second Standstill Period and the Cure Period in the Five Leases
1. The fifth numbered paragraph of the Second Standstill Agreement shall be
deleted and replaced with the following paragraph:
(a) Other than (i) Ventas' delivery on Friday May 7, 1999, after 5:00
p.m., by letters of T. Richard Riney, Vice President and General
Counsel of Ventas, of five notices of non-payment of rent (the "May
Non-Payment Notices") (which are now moot as a result of Vencor's
payment of Rent for the month of May 1999, in the manner agreed to by
the parties); (ii) the deemed delivery by Ventas of notices of
non-payment of rent as a result of Vencor's non-payment or late
payment of rent under the Five Leases for the month of June 1999 (the
"June Non-Payment Notices") (which are now moot as a result of
Vencor's payment of Rent for the month of June 1999, in the manner
agreed to by the parties); (iii) the deemed delivery by Ventas of
similar notices of non-payment of rent as a result of Vencor's
non-payment or late payment of rent under the Five Leases for the
month of July 1999 (the "July Non-Payment Notices"); and (iv) the
deemed delivery by Ventas of similar notices of non-payment of rent as
a result of Vencor's non-payment or late payment of rent under the
Five Leases for the month of August 1999 (the "August Non-Payment
Notices"), during the period from the date of the Second Standstill
Agreement, April 12, 1999, through and including the earlier of (A)
the commencement by or against Vencor, as debtor, of a voluntary or
involuntary bankruptcy case under Title 11 of the United States Code,
or (B) 5:00 p.m. Eastern Daylight Savings Time on September 3, 1999
(such period being referred to herein as the "Second Standstill
Period"), neither Vencor nor Ventas will file,
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commence, serve, or otherwise initiate any civil action, arbitration
proceeding, or other similar action, litigation, case, or proceeding
of any kind, character, or nature whatsoever (an "Action") against the
other or any third party, including, without limitation, any of
Vencor's or Ventas' current or former officers, directors, or
employees, arising from or relating to the Reorganization Agreement,
any Ancillary Agreement, or any of the Five Leases, or with respect to
the various disputes identified in Vencor's March 18, 1999 letter; nor
shall Ventas exercise any rights or remedies it may have against
Vencor under any of the Five Leases (including the giving of notices
of termination pursuant to Section 16.1 of the Five Leases or any of
them) based on Vencor's late payment of the Rent (as that term is
defined in the Five Leases) due under the Five Leases, or based on any
default arising from or related to the disclosures made by Vencor to
Ventas commencing on or about March 30 and March 31, 1999 and
continuing to the date hereof.
(b) Notwithstanding the foregoing, the Second Standstill Period shall
immediately terminate, and Vencor and Ventas may proceed to file such
Actions as either may choose, and Ventas may proceed to exercise such
rights or remedies as it may choose under any of the Five Leases
(including the giving of notices of termination pursuant to Section
16.1 of the Five Leases or any of them) in the event that:
(i) prior to 5:00 p.m. Eastern Daylight Savings Time on each
date set forth on Schedule I hereto, Vencor has not paid
to Ventas, in immediately available funds, the amount set
forth on Schedule I, representing a portion of the Rent
due to Ventas under the Five Leases for the month of July
1999; or
(ii) prior to 5:00 p.m. Eastern Daylight Savings Time on August
26, 1999 and on each Business Day thereafter to and
including August 31, 1999, Vencor has not paid to Ventas
the amount, if any, by which the sum of (x) Vencor's
"total cash on hand and availability" as set forth on
Vencor's receipts and disbursement reports determined in
good faith and in accordance with Vencor's past reporting
practices to Ventas and (y) to the extent not included in
(x), Vencor's available revolving credit borrowings,
exceeds $12 million as of the end of the immediately
preceding Business Day; provided, however, that this
subparagraph (ii) shall be of no further force and effect
at such time as the total payments made by Vencor pursuant
to this subparagraph (ii) equals $3,682,525.77 (the "Final
Payment Amount"); for purposes of this agreement,
"Business Day" means a day, other than a Saturday or a
Sunday, on which commercial banks are not required or
authorized to close in the City of New York; Ventas and
Vencor acknowledge that Vencor has asserted certain claims
in excess of $1 million related to the Final Payment
Amount against Ventas, and that the parties will use their
commercially reasonable efforts to resolve such claims,
and that if, but only if, such claims are resolved, any
adjustment to the
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Final Payment Amount in favor of Vencor shall reduce the
amount of the Final Payment Amount; provided, however,
that such adjustment shall not exceed $1 million; and
provided further, that if such claims are not so resolved
or if the adjustment exceeds $1 million, the parties shall
reserve their rights with respect to such claims; or
(iii) prior to 5:00 p.m. Eastern Daylight Savings Time on August
31, 1999, Vencor has not paid to Ventas, in immediately
available funds, an amount equal to the Final Payment
Amount (as adjusted pursuant to subparagraph (ii) above)
less all payments made pursuant to subparagraph (ii)
above; or
(iv) prior to 5:00 p.m. Eastern Daylight Savings Time on each
Business Day of the Second Standstill Period occurring
after August 5, 1999, Vencor has not provided to Ventas a
daily cash flow statement for the month of August 1999
reflecting Vencor's daily and cumulative cash receipts,
daily and cumulative cash disbursements and cash position
and outstanding aggregate borrowings and availability
under Vencor's Revolving Credit Facility, all as of the
prior Business Day, and such failure continues for more
than one Business Day after written demand therefor by
Ventas, unless such required delivery is expressly waived
in writing by Ventas within one Business Day of the time
the report was otherwise due.
(c) Ventas further agrees that, subject to the acceleration provisions
provided for hereinbelow, if Vencor or the Leasehold Mortgagee (as
defined in the Five Leases) pays the Rent for the month of July 1999
in the installment amounts and within five (5) days of the installment
dates provided for herein, then such payment shall be deemed to be a
timely cure, within the meaning of Section 16.1 of the Five Leases and
the July Non-Payment Notices, and that, in such event, no Event of
Default (as that term is used in the July Non-Payment Notices and
defined in the Five Leases) shall have occurred with respect to the
late payment or non-payment of Rent for the month of July 1999.
Notwithstanding anything to the contrary contained herein, Ventas
shall not send a notice of termination pursuant to paragraph 16.1 of
the Five Leases, or any of them, based upon Vencor's non-payment or
late payment of Rent for the month of July 1999 so long as Vencor or
the Leasehold Mortgagee has a right to cure or has cured such
non-payment or late payment of Rent for the month of July 1999. In
addition, and notwithstanding anything to the contrary contained
herein, in the event Vencor shall fail to pay any installment amount
hereunder on the original installment date specified herein, then that
installment amount together with the balance of the unpaid Rent for
July 1999 shall become immediately due and payable on and as of such
date, without need for any further notice or demand, and Vencor's and
the Leasehold Mortgagee's right to cure the non-payment or late
payment of Rent for July 1999 is and shall be limited solely to the
right during the five days after such installment date to pay the full
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amount of the total unpaid Rent for July 1999. This subparagraph 5(c)
shall only apply to the July Non-Payment Notices and to the
non-payment or late payment of the July 1999 Rent under the Five
Leases.
(d) The Collateral Agent hereby confirms to Ventas and Vencor that it is
the collateral agent for the Leasehold Mortgagee and that it is
authorized to make the confirmations and agreements contained herein.
Ventas, Vencor, and the Collateral Agent (for and on behalf of the
Leasehold Mortgagee) confirm and agree that the period of time within
which Vencor or the Leasehold Mortgagee is entitled to cure the
failure of Vencor to pay Rent for the month of July 1999 under this
agreement and the Five Leases in order to prevent a termination of the
Five Leases will expire at 5:00 p.m. Eastern Daylight Savings Time on
the fifth day after the first to occur, if any, of the installment
dates set forth above on which the prescribed installment amount of
Rent is not timely paid.
(e) Ventas, Vencor and the Collateral Agent hereby agree that (i) the June
Non-Payment Notices, copies of which are attached hereto as Exhibits A
through E, are hereby deemed for all purposes to have been given by
Ventas and received by Vencor and the Collateral Agent as of June 6,
1999 without need for any further act or delivery by Ventas, (ii) the
July Non-Payment Notices, copies of which are attached hereto as
Exhibits F through J, are hereby deemed for all purposes to have been
given by Ventas and received by Vencor and the Collateral Agent on and
as of July 6, 1999, and (iii) the August Non-Payment Notices, which
will be provided by Ventas and be substantially in the form of the
July Non-Payment Notices, are to be attached hereto as Exhibits K
through O, are hereby deemed for all purposes to have been given by
Ventas and received by Vencor and the Collateral Agent on and as of
August 5, 1999, without need for any further act or delivery by Ventas
(except for delivery of Exhibits K through O).
(f) Ventas further agrees that if Vencor or the Leasehold Mortgagee pays
the Rent for the month of August 1999 on or before September 10, 1999,
at 5:00 p.m. Eastern Daylight Savings Time, then such payment shall be
deemed to be a timely cure, within the meaning of Section 16.1 of the
Five Leases and the August Non-Payment Notices, and that, in such
event, no Event of Default (as that term is used in the August
Non-Payment Notices and defined in the Five Leases) shall have
occurred with respect to the late payment or non-payment of Rent for
the month of August 1999. Notwithstanding anything to the contrary
contained herein, Ventas shall not send a notice of termination
pursuant to paragraph 16.1 of the Five Leases, or any of them, based
upon Vencor's non-payment or late payment of Rent for the month of
August 1999 so long as Vencor or the Leasehold Mortgagee has a right
to cure or has cured such non-payment or late payment of Rent for the
month of August 1999. This subparagraph 5(f) shall only apply to the
August Non-Payment Notices and to the non-payment or late payment of
the August 1999 Rent under the Five Leases.
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(g) Ventas, Vencor, and the Collateral Agent (for and on behalf of the
Leasehold Mortgagee) confirm and agree that the period of time by
which Vencor or the Leasehold Mortgagee is entitled to cure the
failure of Vencor to pay Rent for the month of August 1999 under this
Amendment and the Five Leases in order to prevent a termination of the
Five Leases will expire at 5:00 p.m. Eastern Daylight Savings Time on
September 10, 1999.
Amendment to Tolling Agreement
2. The first numbered paragraph of the Tolling Agreement shall be deleted
and replaced with the following paragraph:
Any Vencor Claim, including, without limitation, those arising or
available under the Bankruptcy Avoidance Provisions (defined below)
that Vencor could otherwise assert against Ventas if Vencor were a
debtor in a case under the Bankruptcy Code commenced on April 12,
1999, and whether arising under the Bankruptcy Code or under other
applicable federal or state law, shall not be prejudiced, impaired, or
waived by Vencor's failure to commence such a bankruptcy case, and any
and all statutes of limitations, repose, or other legal or equitable
constraints on the time by which such a bankruptcy case or pleading
initiating any Vencor Claim (including, without limitation, a cause of
action under ss. 548 of the Bankruptcy Code) shall be tolled during
the period of time from April 12, 1999 to and including the earlier of
(i) 5:00 p.m. Eastern Daylight Savings Time on September 3, 1999, or
(ii) the earlier time and date on which the Second Standstill Period
(as defined in the Second Standstill Agreement) shall automatically
terminate as a result of Vencor's nonpayment or late payment of rent
or failure to deliver certain reports (as provided for in paragraph 5
of the Second Standstill Agreement, the provisions of which are hereby
incorporated by reference) (the "Tolling Period"). For all purposes
herein, both the first and last day of the Tolling Period shall be
deemed to be contained in the Tolling Period.
[Remainder of Page Intentionally left blank].
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Counterparts
3. These Amendments may be executed in one or more counterparts and by
facsimile, each of which counterparts shall be deemed an original hereof, but
all of which together shall constitute one agreement.
Choice of Law
4. These Amendments adopt the ninth numbered paragraph of the Second
Standstill Agreement as the choice of law provision for these Amendments.
CONFIRMED AND AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN BY:
VENCOR, INC. VENTAS, INC.
By: /s/ Richard A. Schweinhart By: /s/ T. Richard Riney
------------------------------- -------------------------------
Name: Richard A. Schweinhart Name: T. Richard Riney
Title: Senior Vice President and Title: Executive Vice President
Chief Financial Officer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Collateral Agent for the
Leasehold Mortgagee
By: /s/ Houston Stebbins
-------------------------------
Name: Houston Stebbins
Title: Vice President
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Schedule I
Schedule of Payments
Date Amount of Payment
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August 5, 1999 $5,000,000
August 13, 1999 $5,000,000
August 19, 1999 $5,200,000
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Contact: Steven T. Downey
Executive Vice President and Chief Financial Officer
(502) 357-9030
FOR IMMEDIATE RELEASE
- ---------------------
VENTAS AND VENCOR AGREE TO RENTAL PAYMENT SCHEDULE AND AMEND
STANDSTILL AND TOLLING AGREEMENTS
LOUISVILLE, KY. (August 5, 1999) -- Ventas, Inc. (NYSE:VTR) (the "Company")
announced today that it has entered into an agreement with Vencor, Inc.
(OTC:VCRI), its principal tenant, which provides for the payment of July rent on
a specified schedule. The schedule calls for $5 million due August 5, $5 million
due August 13, $5.2 million due August 19 and approximately $3.7 million due
August 31. These payments, totaling approximately $18.9 million, represent the
full amount of rent due for July under the lease agreements. If Vencor fails to
pay any installment of July rent in accordance with the specified schedule, the
Company will be entitled to exercise its remedies under its lease agreements
with Vencor with respect to the late payment of July rent, unless Vencor or its
bank lenders pay the full amount of unpaid July rent within five days of such
non-payment.
So that the Company, Vencor and Vencor's bank lenders can continue their
discussions regarding a global restructuring of Vencor's financial obligations,
the Company and Vencor have agreed to amend the standstill agreement which the
parties entered into on April 12, 1999. The amended standstill agreement will
extend, until September 3, 1999, the obligations of each of the Company and
Vencor to refrain from pursuing any claims against the other or any third party
relating to the April 1998 reorganization or the Company's agreement not to
exercise its remedies under its lease agreements with Vencor, other than its
delivery of notice of non-payment of August rent. The standstill period will
terminate on the earliest to occur of September 3, 1999, any date that a
voluntary or involuntary bankruptcy case is commenced by or against Vencor,
Vencor's failure to make full lease payments for July 1999 under the specified
schedule described above or certain other specified events. As provided in the
amended standstill agreement, the Company has given Vencor notice of non-payment
of August rent. If Vencor or its bank lenders fails to pay the full amount of
August rent on or prior to September 10, 1999, the Company will be entitled to
terminate its lease agreements with Vencor.
The Company and Vencor entered into similar agreements with respect to
rental payments previously owed by Vencor for the months of May and June.
The Company and Vencor also agreed to renew an agreement between the
parties that any statutes of limitations or other time constraints in a
bankruptcy proceeding that might be asserted by one party against the other
would be extended or tolled from April 12, 1999, until the earlier to occur of
September 3, 1999 or the termination of the standstill period as a result of
Vencor's failure to make the July lease
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Ventas and Vencor Agree to Rental Payment Schedule and Amend Standstill and
Tolling Agreements
Page 2
August 5, 1999
payments in accordance with the specified schedule described above or certain
other specified events.
The Company is a real estate company whose properties include 219 nursing
centers, 45 hospitals, and eight personal care facilities operated in 36 states.
This press release includes forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All statements regarding the Company's expected future
financial position, results of operations, cash flows, financing plans, business
strategy, expected lease income, plans and objectives of management for future
operations and statements that include words such as "anticipate," "believe,"
"plan," "estimate," "expect," "intend," and other similar expressions are
forward-looking statements. Such forward-looking statements are inherently
uncertain, and stockholders must recognize that actual results may differ from
the Company's expectations.
Factors that may affect the plans or results of the Company include,
without limitation, (i) the ability of the Company's operators, primarily
Vencor, Inc., to maintain the financial strength and liquidity necessary to
satisfy their obligations and duties under leases and other agreements with the
Company and their existing credit agreements, (ii) the extent of future
healthcare reform and regulation, including cost containment measures and
changes in reimbursement policies and procedures, (iii) increases in the cost of
borrowing for the Company, (iv) the ability of the Company's operators to
deliver high quality care and to attract patients, (v) the ability of the
Company to pay and/or refinance its indebtedness as it becomes due, (vi) the
results of the ongoing investigation of the Company by the U.S. Department of
Justice and other litigation affecting the Company, and (vii) the success of the
Company in implementing its business strategy and the nature and extent of
future competition. Many of such factors are beyond the control of the Company
and its management.
-END-
