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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 26, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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CORAM HEALTHCARE CORPORATION
(Exact name of Registrant as specified in its charter)
1125 SEVENTEENTH STREET, SUITE 1500
DENVER, COLORADO 80202
(303) 292-4973
(Address, including zip code, telephone number and
area code of Registrant's principal executive offices)
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<S> <C> <C>
STATE OF DELAWARE 33-0615337 8082
(State or other jurisdiction of (I.R.S. Employer (Primary Standard Industrial
incorporation or organization) Identification Number) Classification Code Number)
</TABLE>
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JAMES M. SWEENEY
CHIEF EXECUTIVE OFFICER
CORAM HEALTHCARE CORPORATION
1125 SEVENTEENTH STREET, SUITE 1500
DENVER, COLORADO 80202
(303) 292-4973
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies to:
RICHARD A. FINK, ESQ.
JEREMY W. MAKARECHIAN, ESQ.
BROBECK, PHLEGER & HARRISON
1125 SEVENTEENTH STREET, SUITE 1500
DENVER, COLORADO 80202
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: from time to time after the effective date of this Registration
Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 other than securities offered in connection with dividend or interest
reinvestment plans, check the following box. /X/
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
AMOUNT TO BE OFFERING AGGREGATE REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PRICE(1) OFFERING PRICE FEE(2)
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<S> <C> <C> <C> <C>
Common Stock.................................... 186,047 $18.875 $3,511,637 $1,211
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Common Stock Underlying TPN Warrants............ 500,000(3) $18.00 $9,000,000 $3,103
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Common Stock Underlying Convertible PIK Note.... 2,777,778(3) $27.00 $75,000,006 $25,862
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TOTAL................................. 3,463,825 -- $87,511,637 $30,176
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(g).
(2) The registration fee was calculated based on a fee of 1/29 of 1% of the
proposed maximum aggregate offering price.
(3) Pursuant to Rule 416, includes a presently indeterminate number of
additional shares of Common Stock that may become issuable as a result of
certain anti-dilution provisions contained in the TPN Warrants and
Convertible PIK Note.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY *
* NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH *
* SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO *
* REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH *
* STATE. *
* *
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SUBJECT TO COMPLETION, DATED MAY 26, 1995
PROSPECTUS
CORAM HEALTHCARE CORPORATION
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3,463,825 SHARES OF COMMON STOCK
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Coram Healthcare Corporation (together with its subsidiaries, the
"Company") hereby offers to sell up to 500,000 shares of its common stock, $.001
par value per share (the "Common Stock"), as adjusted, underlying the warrants
(the "TPN Warrants") issued pursuant to that certain Settlement Agreement and
Release (the "TPN Settlement Agreement") by and between the Company and T2
Medical, Inc. ("T2") on the one hand, and certain former shareholders of TPN of
Reno, Inc., TPN of Las Vegas, Inc. and Sierra Nevada Pharmaceutical Consultants,
Inc. (collectively, the "Former TPN Shareholders"), on the other hand. The
Company is also registering up to 2,777,778 shares of Common Stock, as adjusted,
to be issued upon conversion of the Company's $75 million 7% Convertible
Subordinated Pay-in-Kind Note (the "Convertible PIK Note") issued pursuant to
the purchase by the Company of substantially all the assets used in the
alternative site infusion and certain related businesses (collectively, the
"Caremark Business") of Caremark Inc., a California corporation ("Caremark").
See "Description of Securities." In addition, pursuant to this Prospectus,
certain persons (collectively, the "Selling Stockholders") who hold 186,047
shares of Common Stock may resell or further distribute such securities on a
deferred basis. The Common Stock owned by the Selling Stockholders are
collectively referred to herein as the "Offered Securities." The Selling
Stockholders acquired the Offered Securities in connection with a Settlement
Agreement and Mutual General Release (the "ContinueCare Settlement Agreement")
dated as of April 28, 1995 by and among the Selling Stockholders, Curaflex
Health Services, Inc., a wholly-owned subsidiary of the Company ("Curaflex"),
and the Company to resolve certain disputes among the parties thereto. The
Selling Stockholders may sell the Offered Securities from time to time in
transactions on the New York Stock Exchange (the "NYSE"), in privately
negotiated transactions, through the writing of options on the Common Stock, or
by a combination of those methods, at fixed prices that may be changed, at
market prices at the time of sale, at prices related to market prices or at
negotiated prices. The Selling Stockholders may effect those transactions by
selling the Offered Securities to or through broker-dealers, who may receive
compensation in the form of discounts or commissions from the Selling
Stockholders or from the purchasers of the Offered Securities for whom the
broker-dealers may act as agent or to whom they may sell as principal, or both.
See "Selling Stockholders" and "Plan of Distribution."
If all of the TPN Warrants are exercised at their current maximum exercise
price, the Company will receive aggregate proceeds of approximately $8,960,000,
after deducting estimated offering expenses payable by the Company. The Company
will not receive any of the proceeds upon conversion of the convertible PIK Note
or from the sale of the Offered Securities. See "Use of Proceeds" and "Plan of
Distribution."
The Company's Common Stock is presently traded on the NYSE under the symbol
"CRH." On May 24, 1995 the closing bid price of the Common Stock was $18.875.
------------------------
SEE "INVESTMENT CONSIDERATIONS" FOR INFORMATION THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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THE COMPANY HAS UNDERTAKEN TO KEEP A REGISTRATION STATEMENT OF WHICH THIS
PROSPECTUS CONSTITUTES A PART EFFECTIVE UNTIL THE EARLIER TO OCCUR OF SEPTEMBER
30, 1999 OR THE EARLIER DISPOSITION OF THE SECURITIES OFFERED HEREBY. AFTER SUCH
PERIOD, IF THE COMPANY CHOOSES NOT TO MAINTAIN THE EFFECTIVENESS OF THE
REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS CONSTITUTES A PART, THE
SECURITIES ISSUABLE UPON EXERCISE HEREOF AND OFFERED HEREBY MAY NOT BE SOLD,
PLEDGED, TRANSFERRED OR ASSIGNED, EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER
THE PROVISIONS OF THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT THEREUNDER.
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NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED OR INCORPORATED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO BUY, BY ANY PERSON IN ANY JURISDICTION IN WHICH
IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS AT ANY TIME NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY DATE SUBSEQUENT TO THE DATE HEREOF.
THE DATE OF THIS PROSPECTUS IS , 1995.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, as well as at the following
regional offices: Seven World Trade Center, Room 1300, New York, New York 10048,
and Northwestern Atrium Center, 500 West Madison Street, Room 1500, Chicago,
Illinois 60661-2511. Copies of such material can be obtained from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
The Company has filed with the Commission a registration statement (herein,
together with all amendments thereto, called the "Registration Statement") of
which this Prospectus constitutes a part, under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement and in the exhibits thereto, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, and
reference is made to the Registration Statement and the exhibits thereto for
further information regarding the Company and the securities offered hereby.
Statements contained herein concerning the provisions of documents are
necessarily summaries of such documents, and each such statement is qualified in
its entirety by reference to the copy of the applicable documents filed with the
Commission. The Registration Statement and the exhibits thereto may be inspected
without charge and copies thereof may be obtained upon payment of the prescribed
fees at the public reference facilities of the Commission at its principal
office in Washington, D.C.
The Company's Common Stock is listed on the NYSE. All reports, proxy
statements and other information filed by the Company with the NYSE may be
inspected at the offices of the NYSE at 20 Broad Street, New York, New York
10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are
incorporated by reference into this Registration Statement:
1. Annual Report on Form 10-K for the fiscal year ended December 31,
1994;
2. Amendment No. 1 to Annual Report on Form 10-K/A as filed with the
Commission on May 1, 1995;
3. Amendment No. 2 to Annual Report on Form 10-K/A as filed with the
Commission on May 26, 1995;
4. Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 1995;
5. Current Report on Form 8-K as filed with the Commission on April 6,
1995;
6. Current Report on Form 8-K as filed with the Commission on May 2,
1995;
7. Amendment to Current Report on Form 8-K/A as filed with the
Commission on April 17, 1995; and
8. The Company's Proxy Statement filed with the Commission on May 15,
1995 pursuant to Section 14(a) of the Exchange Act in connection with the
Company's Registration Statement No. 33-59337 on Form S-4.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the Prospectus and prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities hereby then
remaining unsold, shall be deemed to be incorporated by reference to this
Prospectus and to be a part hereof from the
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<PAGE> 4
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein, or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Copies of all documents which are incorporated herein by reference
(excluding exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents) will be provided without charge by
the Company to each person to whom this Prospectus is delivered, upon the
written request of such person directed to Coram Healthcare Corporation,
Attention: Corporate Communications, 1125 Seventeenth Street, Suite 1500,
Denver, Colorado 80202, telephone (303) 292-4973.
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<PAGE> 5
THE COMPANY
The Company is the largest provider of alternate site (outside the
hospital) infusion therapy and related services in the United States, operating
143 branches as of March 31, 1995, covering geographic locations in which over
90% of the population of the United States resides. Infusion therapy involves
the intravenous administration of anti-infective, chemotherapy, pain management,
nutrition, and other therapies. Other services offered by the Company include
the provision of lithotripsy, non-intravenous infusion products and physician
support services. On April 6, 1995, the Company acquired the Caremark Business,
which at that time was the largest provider of alternate site infusion therapies
in the United States based on breadth of services and total revenues (such
acquisition, including certain financings related thereto, are collectively
referred to herein as the "Caremark Transaction").
The Company was formed on July 8, 1994 pursuant to a merger (the "Four-Way
Merger") by and among T2, Curaflex, Medisys, Inc. ("Medisys") and
HealthInfusion, Inc. ("HealthInfusion"), each of which was a publicly-held
national or regional provider of home infusion therapy and related services. The
Four-Way Merger enabled the Company to become a national provider of home
infusion and other alternate site health care services. On September 12, 1994,
the Company further broadened its geographic coverage by acquiring H.M.S.S.,
Inc., a leading regional provider of home infusion therapies based in Houston,
Texas. The Company is in the process of completing a branch and corporate office
consolidation of its five predecessor companies (the "Coram Consolidation Plan")
which is expected to result in significant annual cost savings and operating
efficiencies. The Company expects to implement a similar branch office and
consolidation program (the "Caremark Consolidation Plan") to integrate the
Caremark Business, resulting in additional cost savings and operating
efficiencies. The Company is led by a newly formed management team with
extensive background in the health care industry, including James M. Sweeney,
Chairman and Chief Executive Officer. Mr. Sweeney is widely regarded as having
pioneered the home infusion industry when he founded the predecessor to Caremark
in 1979.
On April 17, 1995, the Company and Lincare Holdings Inc. (together with its
subsidiaries, "Lincare") announced a proposed merger (the "Merger") of CHC
Acquisition Corp., a wholly-owned subsidiary of the Company, with and into
Lincare pursuant to the terms of the Agreement and Plan of Merger dated April
17, 1995 (the "Merger Agreement") pursuant to which Lincare would become a
wholly-owned subsidiary of the Company. Lincare is one of the nation's largest
providers of oxygen and other respiratory therapy services to patients in the
home, currently serving over 70,000 customers in 35 states through 190 operating
centers. In connection with the Merger, all of the outstanding shares of common
stock, $.01 par value per share, of Lincare (the "Lincare Common Stock") will be
exchanged for shares of common stock, $.001 par value per share, of the Company
(the "Common Stock") at the ratio of 1.5354 shares (the "Exchange Ratio") of the
Common Stock for each share of Lincare Common Stock. The obligations of Lincare
and the Company to consummate the Merger are subject to the satisfaction of
certain conditions set forth in the Merger Agreement, including the approval of
the Merger by the stockholders of Lincare and the Company.
The Company's principal executive offices are located at 1125 Seventeenth
Street, Suite 1500, Denver, Colorado 80202, and its telephone number is (303)
292-4973.
4
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INVESTMENT CONSIDERATIONS
In addition to the other information contained in this Prospectus and the
information incorporated herein by reference, prospective investors should
carefully consider, among others, the following risk factors prior to investing:
IMPLEMENTATION OF BUSINESS STRATEGY
The Company is seeking to implement an aggressive business strategy focused
on (i) completing the Coram Consolidation Plan; (ii) implementing and completing
the Caremark Consolidation Plan; and (iii) pursuing possible acquisitions of
other alternate site health care companies such as Lincare. Pronounced changes
are expected to occur in the markets which the Company serves, which may require
adjustments to the Company's strategy. Execution of this strategy has placed and
will continue to place significant demands on the Company's financial and
management resources and there can be no assurance that such demands will not
adversely affect the Company's future financial performance or that the Company
will be successful in fully implementing its estimated cost savings, responding
to ongoing changes in its markets which may require adjustments to its strategy,
or in identifying, acquiring, managing or integrating additional operations.
Implementation of the Company's strategy could also be affected by a number of
factors beyond the Company's control, such as loss of personnel, the response of
competitors and regulatory developments. While the Company generally intends to
operate Lincare as a stand-alone business unit following the Merger, the Merger
will involve some degree of integration between two companies that have
previously operated independently, particularly with respect to the integration
of certain marketing and other corporate functions. No assurance can be given
that the benefits expected from such integration will be realized.
DEPENDENCE ON PAYORS AND REIMBURSEMENT RELATED RISKS
The profitability of the Company and Lincare depends in large part on
reimbursement provided by third party payors. Since alternate site care is
generally less costly to third party payors than hospital-based care, alternate
site providers have historically benefitted from cost containment initiatives
aimed at reducing the costs of hospitalization. However, competition for
patients, efforts by traditional third party payors to contain or reduce health
care costs and the increasing influence of managed care payors such as health
maintenance organizations in recent years have resulted in reduced rates of
reimbursement for services provided by alternate site providers such as the
Company. During 1993 and early 1994, the alternate site infusion industry,
including the Company, experienced severe reductions in the pricing of its
products and services as a result of these trends.
A significant portion of Lincare's revenues are attributable to payments
received from the Medicare and Medicaid programs. The levels of revenues and
profitability of Lincare are affected by the continuing efforts of these
programs to contain or reduce the costs of health care. A number of changes to
the Medicare and Medicaid programs are being considered in connection with
recent efforts to reduce budget deficits at the federal and state levels. Among
the changes under consideration are proposals that would reduce Medicare and
Medicaid expenditures by lowering reimbursement rates, increasing case
management review of services, negotiating reduced contract pricing and
expanding Medicaid risk contracting. A significant change in coverage or a
reduction in payment rates by Medicare or Medicaid could have a material adverse
effect upon Lincare's business and financial condition. See "-- Health Care
Reform Legislation."
Additionally, managed care payors and even traditional indemnity insurers
increasingly are demanding fee structures and other arrangements providing for
the assumption by health care providers of all or a portion of the financial
risk of providing care (e.g., capitation). While the Company believes that
short-term pricing pressures are stabilizing and that the Company's business
strategy to become the high quality, low cost provider of choice in the markets
it serves is responsive to these trends, no assurance can be given that pricing
pressures will not continue or that the Company's financial results will not be
adversely affected by such trends. A rapid increase in the percentage of revenue
derived from managed care payors without a corresponding decrease in the
Company's operating costs could have an adverse impact on the Company's profit
margins.
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In addition to infusion therapy and related services, the Company also
provides lithotripsy services. Lithotripsy is a non-invasive technique that uses
shock waves to disintegrate kidney stones. The Company's lithotripsy operations
have contributed an increasing amount to the Company's operating income. A
material change in the operating performance of the lithotripsy business could
have a material adverse effect on the consolidated operating results of the
Company. In 1993, the Health Care Financing Administration ("HCFA") released a
proposed rule reducing the rate at which ambulatory surgery centers and certain
hospitals would be reimbursed for the technical component of a lithotripsy
procedure. Although the HCFA has not taken any further action, the adoption of
this proposed rule could have a material adverse effect on the Company's
lithotripsy revenues.
LIMITED OPERATING HISTORY OF THE COMPANY; RECENT LOSSES
The Company is subject to the uncertainties and risks associated with a
newly formed and expanding business. The Company has only been operating as a
combined entity since July 8, 1994, and has incurred cumulative net losses of
approximately $117.7 million (including $164.5 million of special pre-tax
charges) from such date through March 31, 1995. In addition, 1994 net revenues
of the Caremark Business experienced a material decline from 1993 net revenues,
in each case calculated on a pro forma basis giving effect to the March 1, 1994
acquisition of Critical Care of America, Inc. The future operating results of
the Company will depend on many factors, including stabilization of operating
revenues and pricing pressures, the ability of the Company to implement its
strategy, the level of competition, the ability to integrate other complementary
businesses into its current organization, general economic conditions, the
ability to attract and retain qualified personnel at competitive rates, and
government regulation and reimbursement policies. See "-- Dependence on Payors
and Reimbursement Related Risks."
FINANCIAL LEVERAGE
The Company incurred a significant amount of long-term debt in connection
with the Caremark Transaction. As of March 31, 1995, the Company's pro forma
consolidated long-term indebtedness after giving effect to the Caremark
Transaction would have been $430.2 million and its pro forma consolidated
stockholders' equity would have been $331 million. The Company's pro forma
interest coverage ratio (earnings before interest, taxes, depreciation and
amortization divided by interest expense) for the three months ended March 31,
1995, pro forma for the acquisition of the Caremark Business, would have been 2
to 1. The degree to which the Company is leveraged could (i) impair the
Company's ability to finance, through its own cash flow or from additional
financing, its future operations or pursue its business strategy; and (ii) make
the Company more vulnerable to economic downturns, competitive and payor pricing
pressures and adverse changes in government regulation. The Company believes
that the Merger will strengthen the Company's balance sheet, reduce its
financial leverage and increase its cash flow. The Company's pro forma interest
coverage ratio for the three months ended March 31, 1995, after giving effect to
the consummation of the Merger, would have been 4.3 to 1.
The terms of the Company's outstanding indebtedness contain a number of
covenants that, among other things, restrict the ability of the Company and its
subsidiaries to dispose of assets, incur debt, pay dividends, create liens, make
capital expenditures and make certain investments or acquisitions and otherwise
restrict corporate activities. The ability of the Company to comply with such
provisions may be affected by events beyond its control. The breach of any of
these covenants could result in a default under the terms of such indebtedness.
DEPENDENCE ON KEY PERSONNEL
The Company's operations and ability to successfully implement its business
strategy are dependent on the efforts, ability and experience of James M.
Sweeney, its Chairman and Chief Executive Officer, Patrick J. Fortune, its
President and Chief Operating Officer, Olav B. Bergheim, its Executive Vice
President, and other executive officers. The loss of some or all of these key
executive officers could have a material adverse impact on the Company. Lincare
is also dependent upon the ability and experience of its senior managers, and
there can be no assurance that Lincare will be able to retain all of such
officers subsequent to the Merger. If, for any
6
<PAGE> 8
reason, such executives do not remain active in Lincare's management, Lincare's
operations could be adversely affected. The Company has entered into employment
agreements with three of such executives which will become effective upon the
effective time of the Merger.
GOVERNMENTAL REGULATION
Each of the Company and Lincare is subject to federal and state laws that
prohibit certain direct and indirect payments between health care providers that
are intended, among other things, to induce or encourage the referral of
patients to, or the recommendation of, a particular provider of items or
services ("anti-kickback" laws). In addition, certain federal and state laws
have been enacted to prohibit physicians from referring patients for certain
"designated health services" to providers with which the referring physician has
an ownership or compensation arrangement ("self-referral laws"). In particular,
Section 1128B(b) of the Social Security Act (the "Anti-Kickback Statute")
prohibits certain business practices and relationships that might affect the
provision and cost of health care services reimbursable under Medicare and
Medicaid. Sanctions for violating the Anti-Kickback Statute include criminal
penalties and civil sanctions, including fines and possible exclusion from the
Medicare and Medicaid programs. The Department of Health and Human Services
("HHS") has issued regulations that describe some of the conduct and business
relationships permissible under the Anti-Kickback Statute ("Safe Harbors"). The
fact that a given business arrangement does not fall within a Safe Harbor does
not render the arrangement per se illegal. Business arrangements of health care
service providers and suppliers that fail to satisfy the applicable Safe Harbor
criteria, however, risk increased scrutiny by enforcement authorities. The
Anti-Kickback Statute applies to relationships with physicians as well as with
other entities such as hospitals.
In addition, Section 1877 of the Social Security Act as amended effective
January 1, 1995, prohibits physicians from referring a number of "designated
health services" referrals under the Medicare and Medicaid programs to providers
with which such physicians have ownership interests or other financial
arrangements, including referrals for "durable medical equipment," "parenteral
and enteral nutrition," "outpatient prescription drugs" and "home health
services". Many states have adopted or are considering similar legislative
proposals, some of which extend beyond the Medicaid program to all health care
services. The Company's participation in and development of business
relationships which in any way involve financial arrangements with physicians
could be adversely affected by these amendments and similar state enactments as
well as future regulatory developments in this area, while the Company's
business relationships with non-physicians could be adversely affected by the
Antifraud Amendments or amendments thereto, as well as by similar state
enactments.
As part of its compliance program, the Company is reviewing all of its
business arrangements with physicians that may be questionable in the current
regulatory environment to determine whether such arrangements need to be
restructured or terminated. Because the Company may be less willing than some of
its competitors to enter into business arrangements that may be questionable
under existing law, it could be at a competitive disadvantage in entering into
certain transactions and arrangements with physicians and other health care
providers. While the Company believes that it is in material compliance with
applicable law, there can be no assurance that such laws will ultimately be
interpreted in a manner consistent with the practices of the Company.
The businesses of the Company and Lincare are also subject to other
substantial governmental regulation including state laws governing the
dispensing, distribution and compounding of prescription products; state laws
regulating pharmacies and the provision of home health services; and federal
laws regulating the repackaging and dispensing of drugs. Failure to comply with
these laws could adversely affect the Company's or Lincare's ability to continue
to provide or receive reimbursement for its therapies and services. Changes in
these laws and the interpretation of existing laws could have a material adverse
effect on the activities of the Company or Lincare, the relative costs
associated with doing business and the amount of reimbursement by government and
other third party payors.
7
<PAGE> 9
HEALTH CARE REFORM LEGISLATION
In recent years, an increasing number of legislative initiatives have been
introduced or proposed in Congress and in state legislatures that would effect
major changes in the health care system, either nationally or at the state
level. Among the proposals under consideration are various insurance market
reforms, forms of price control, expanded fraud and abuse and anti-referral
legislation and further reductions in Medicare and Medicaid reimbursement. The
Company cannot predict whether any of the above proposals or any other proposals
will be adopted, and if adopted, no assurance can be given that the
implementation of such reforms will not have a material adverse effect on the
business of the Company or Lincare.
CERTAIN LITIGATION AND GOVERNMENTAL INVESTIGATIONS
The Company has entered into a Stipulation of Settlement (the
"Stipulation") dated as of January 27, 1995 which sets forth the principal terms
of a proposed settlement of class action shareholder litigation which was
initiated against T2 in 1992. The Stipulation provides for the Company to pay
the shareholder class $25 million in cash (of which approximately $7.8 million
will be contributed by one of the Company's insurance carriers), and to issue
warrants to acquire an aggregate of 2.52 million shares of Common Stock at an
exercise price of $20.25, subject to adjustment. The Stipulation was approved by
the court and a judgment was entered dismissing the litigation with prejudice on
May 19, 1995.
In September 1994, T2 entered into a settlement of an investigation by the
HHS Office of Inspector General ("OIG") into T2's financial arrangements with
physicians (the "T2 OIG Settlement"). T2, in expressly denying liability, agreed
to a civil order which enjoins it from violating federal anti-kickback and false
claims laws related to Medicare/Medicaid reimbursement. The order further
requires T2 to comply with certain standards when providing management or other
services to physicians. The Company is implementing programs to ensure that it
is in compliance with the terms and conditions of the T2 OIG Settlement and has
engaged Richard P. Kusserow, the former Inspector General of HHS, as a
consultant to assist the Company in developing its compliance program. However,
in the event that T2 violates the T2 OIG Settlement or the Company engages in
conduct that violates federal or state laws, rules or regulations, the Company
may be subject to a risk of increased sanctions or penalties; including, but not
limited to, partial or complete exclusion from the Medicare/Medicaid program.
In January 1994, Lincare was advised by the United States Attorney for the
Middle District of Florida that a grand jury has been investigating certain
services provided by Lincare to a pharmacy that supplied medications to home
respiratory patients. Under its contracts with the pharmacy, Lincare was
responsible for providing various marketing, field administration and patient
services to the pharmacy. The contracts were in effect from February 1989 to
April 1992, and accounted for less than one percent of Lincare's revenues during
such period. Lincare is cooperating with the investigation and believes that it
will be able to demonstrate that its services for the pharmacy were provided in
accordance with all applicable federal laws. However, no assurance can be given
that the matter will be resolved promptly or that the United States Attorney
will not seek penalties against Lincare or its officers.
COMPETITION
The alternate site health care market is highly competitive and is
experiencing both horizontal and vertical consolidation. Some of the Company's
current and potential competitors include hospital chains and providers of
multiple products and services for the alternate site health care market. On
March 3, 1995, two of the largest companies in the alternate site health care
industry, Abbey Healthcare Group Incorporated and Homedco Group, Inc. announced
an agreement to merge. The size, purchasing power, ability to assemble products
and services, and relationships with physicians and payors which certain
providers enjoy make them formidable competitors to the Company and Lincare.
Moreover, there are relatively few barriers to entry in the local markets which
the Company and Lincare serve. Local or regional companies have entered the home
health care market in the past and others may do so in the future. There can be
no assurance that the Company and Lincare will not encounter increased
competition in the future that could limit their ability to
8
<PAGE> 10
maintain or increase their market share. Such increased competition could have a
material adverse effect on the business and results of operations of the Company
and Lincare.
POTENTIAL PROFESSIONAL LIABILITY
The services of each of the Company and Lincare involve an inherent risk of
professional liability and, with respect to such services, while the Company and
Lincare have not had any material claims for professional liability asserted
against them, no assurance can be given that such claims will not be asserted in
the future. While each of the Company and Lincare maintain insurance consistent
with industry practice, there can be no assurance that the amount of insurance
currently maintained by them will satisfy all claims made against them or that
the Company will be able to obtain insurance in the future at satisfactory rates
or in adequate amounts. The Company cannot predict the effect that any such
claims, regardless of their ultimate outcome, might have on its business or
reputation or on its ability to attract and retain patients.
CHANGES IN TECHNOLOGY
The alternate site infusion business of the Company is dependent on
physicians continuing to prescribe the administration of drugs and nutrients
through intravenous and other infusion methods. Intravenous administration is
often the most appropriate method for treating critically ill patients and is
often the only way to administer proteins and biotechnology drugs. Nonetheless,
technological advances in drug delivery systems, the development of therapies
that can be administered orally and the development of new medical treatments
that cure certain complex diseases or reduce the need for infusion therapy could
adversely impact the business of the Company.
USE OF PROCEEDS
The proceeds to be received by the Company from the issuance of Common
Stock upon exercise of all of the TPN Warrants will be an aggregate of
approximately $8,930,000, after deducting estimated offering expenses of
approximately $70,000. The amount of such proceeds will vary significantly
depending on the number of TPN Warrants, if any, which are exercised. The net
proceeds are expected to be used by the Company for general corporate purposes.
The Company will not receive proceeds upon conversion of the Convertible PIK
Note. The net proceeds from the sale of the Offered Securities will be received
directly by each Selling Stockholders.
DETERMINATION OF OFFERING PRICE
The exercise price of the TPN Warrants was established by negotiations
between the Company and the Former TPN Shareholders, and the conversion price of
the Convertible PIK Note was established by negotiations between the Company and
Caremark. This Prospectus may be used from time to time by the Selling
Stockholders who offer the Offered Securities registered hereby for sale, and
the offering price of such Offered Securities will be determined by the Selling
Stockholders and may be based on market prices prevailing at the time of sale,
at prices relating to such prevailing market prices, or at negotiated prices.
SELLING STOCKHOLDERS
The following tables set forth certain information with respect to the
Common Stock beneficially owned by each Selling Stockholder as of May 24, 1995
and as adjusted to give effect to the sale of such securities. The securities
offered in this Prospectus by the Selling Stockholders are the Offered
Securities. The Offered Securities are being registered to permit public
secondary trading of such securities, and the Selling Stockholders may offer
such securities for resale from time to time. See "Plan of Distribution."
The Selling Stockholders acquired the Offered Securities in connection with
the ContinueCare Settlement Agreement. Under the ContinueCare Settlement
Agreement the Company and the other parties thereto resolved certain disputes as
to their respective rights and obligations under (i) the Agreement and Plan of
9
<PAGE> 11
Merger dated June 29, 1993 by and among Curaflex, Curaflex Acquisition, Inc. and
ContinueCare Health Systems, Inc. and (ii) the respective Employment Agreements
dated as of June 29, 1993 between the Selling Stockholders on the one hand, and
Curaflex on the other.
None of such Selling Stockholders has had a material relationship with the
Company within the past three years other than as a result of ownership of the
securities of the Company. The Offered Securities may be offered from time to
time by the Selling Stockholders named below or their nominees, and this
Prospectus may be required to be delivered by persons who may be deemed to be
underwriters in connection with the offer or sale of such securities. See "Plan
of Distribution."
<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK
BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING (1) COMMON OFFERING(1)(2)
NAME AND ADDRESS OF ------------------- STOCK -------------------
SELLING STOCKHOLDERS AMOUNT PERCENT OFFERED(3) AMOUNT PERCENT
- ------------------------------------------- ------- ------- ---------- ------- -------
<S> <C> <C> <C> <C> <C>
Michael K. Lester.......................... 204,868 * 83,721 121,147 *
9429 Whitehurst
Dallas, TX 75243
Terry P. McCord............................ 204,868 * 83,721 121,147 *
9614 Moss Farm
Dallas, TX 75243
Jeri L. Evans.............................. 47,089 * 18,605 28,484 *
5212 Lincolnshire Ct.
Dallas, TX 75287
All Selling Stockholders as a Group........ 456,825 1.1 186,047 270,778 *
======= === ======= ======= ====
</TABLE>
- ---------------
(1) Shares of Common Stock subject to options or warrants which are currently
exercisable or exercisable within 60 days are deemed outstanding for
purposes of computing the percentage of the person holding such options or
warrants but are not deemed to be outstanding for computing the percentage
of any other person.
(2) No percent of class is shown for holders of less than 1%. Percentage
computations are based on 39,682,277 shares of Common Stock outstanding as
of May 8, 1995.
(3) Assumes sale of all Common Stock offered hereby.
PLAN OF DISTRIBUTION
THE COMPANY
The Company is offering pursuant to this Prospectus to sell up to 500,000
shares of the Common Stock underlying the TPN Warrants pursuant to the exercise
of the TPN Warrants at an exercise price of $18 per share, subject to
adjustment. The Company is also registering 2,777,778 shares of Common Stock
issuable upon conversion of the Convertible PIK Note at $27.00 per share,
subject to adjustment. This Prospectus will be used in connection with the offer
and sale of the Common Stock issuable upon exercise of the TPN Warrants and upon
conversion of the Convertible PIK Note. See "Description of Securities."
THE SELLING STOCKHOLDERS
The Company has been advised by the Selling Stockholders that the Offered
Securities may be sold from time to time in transactions on the NYSE in
privately negotiated transactions, through the writing of options on the Common
Stock, or by a combination of these methods, at fixed prices that may be
changed, at market prices at the time of sale, at prices related to market
prices or at negotiated prices. The Selling Stockholders will act independently
of the Company in making decisions with respect to the timing, manner and size
of each sale. The Selling Stockholders may effect these transactions by selling
the Offered Securities to or through broker-dealers and/or purchasers of the
Offered Securities for whom they may act as agent.
10
<PAGE> 12
Each Selling Stockholder has represented that it was acquiring the Offered
Securities without any present intention of effecting a distribution of such
securities except in the manner contemplated in the ContinueCare Settlement
Agreement and in compliance with applicable securities laws. In recognition of
the fact that investors, even though having acquired the Offered Securities
without a view to distribution, may wish to be legally permitted to sell such
securities when they deem appropriate, the Company has filed with the Commission
under the Securities Act, a Registration Statement of which this Prospectus
forms a part, with respect to the resale of the Offered Securities from time to
time as described herein and has agreed to prepare and file such amendments and
supplements to the Registration Statement as may be necessary to keep the
Registration Statement effective for a period not to exceed nine months from the
effective date of such Registration Statement.
The Selling Stockholders and broker-dealers who act in connection with the
sale of the Offered Securities may be deemed to be "underwriters" within the
meaning of the Securities Act, and any commissions received by such
broker-dealers and profits on the resale of the Offered Securities as a
principal may be deemed to be underwriting discounts and commissions under the
Securities Act.
DESCRIPTION OF SECURITIES
GENERAL
The authorized capital stock of the Company consists of an aggregate of
75,000,000 shares of Common Stock, par value $.001 per share, and 10,000,000
shares of Preferred Stock, par value $.001 per share ("the Preferred Stock"). As
of May 8, 1995, 39,682,277 shares of Common Stock and no shares of Preferred
Stock were outstanding.
COMMON STOCK
All shares of Common Stock have equal voting rights and, when validly
issued and outstanding, have one vote per share in all matters to be voted upon
by shareholders. The shares of Common Stock have no preemptive, conversion or
redemption rights and may only be issued as fully paid and nonassessable shares.
Cumulative voting in the election of directors is not allowed. The holders of a
majority of the issued and outstanding shares of Common Stock are able to elect
all directors of the Company. Each holder of Common Stock, upon liquidation of
the Company, is entitled to receive a pro rata share of the Company's assets
available for distribution to common stockholders.
TPN WARRANTS
Pursuant to this Prospectus the Company is offering to sell up to 500,000
shares of Common Stock underlying the TPN Warrants. The Company issued the TPN
Warrants pursuant to that certain TPN Settlement Agreement and Release dated as
of September 30, 1994 by and between the Company and T2 on the one hand, and the
Former TPN Shareholders on the other hand. Each TPN Warrant currently entitles
the registered holder to purchase one share of Common Stock at an exercise price
of $18 during the period commencing September 30, 1994 and ending September 30,
1999. The exercise price of the TPN Warrants was determined by negotiation
between the Company and the Former TPN Shareholders and should not be construed
to be predictive of, or to imply that, any price increases will occur in the
Company's securities. The exercise price of the TPN Warrants and the number and
kind of shares of Common Stock or other securities and property to be obtained
upon exercise of the TPN Warrants are subject to adjustment in certain
circumstances, including a stock split or upon the sale of all or substantially
all of the assets of the Company, a merger or other unusual events so as to
enable warrantholders to purchase the kind and number of shares or other
securities or property receivable in such event by a holder of the kind and
number of shares of Common Stock that might otherwise have been purchased upon
exercise of such TPN Warrant. The TPN Warrants may be exercised upon surrender
of the TPN Warrant certificate on or prior to the expiration date of such TPN
Warrants at the principal offices of the Company, or at the offices of its stock
transfer agent,
11
<PAGE> 13
accompanied by payment of the full exercise price (by certified check payable to
the Company) for the number of TPN Warrants being exercised. Shares of Common
Stock issuable upon exercise of the TPN Warrants upon payment in accordance with
their terms will be fully paid and non-assessable. The TPN Warrants do not
confer upon the TPN Warrantholders any voting or other rights of a stockholder
of the Company.
CONVERTIBLE PIK NOTE
The Company is registering up to 2,777,778 shares of Common Stock issuable
upon conversion of the $75 million Convertible PIK Note. The Convertible PIK
Note was issued effective as of April 1, 1995 pursuant to the terms of the Asset
Sale and Note Purchase Agreement dated as of January 29, 1995, as amended as of
April 1, 1995, between the Company and Caremark. The Convertible PIK Note is
convertible at any time subsequent to April 1, 1996, in whole or in part, into
shares of the Company's Common Stock determined by dividing the aggregate
principal amount thereof by $27 per share, subject to adjustment for stock
splits and subdivisions, reverse stock splits, certain other distributions to
holders of its Common Stock, the issuance of options or rights not below market
prices and lender or exchange offers. The conversion price of the Convertible
PIK Note was determined by negotiations between the Company and Caremark and
should not be construed to be predictive of, or to imply that, any price
increases will occur in the Company's securities. The Company is required to
maintain the effectiveness of such registration statement for a three-year
period following the original effective date of the registration statement. The
Convertible PIK Note matures upon the earlier of an event of default or October
1, 2005. Also, prior to April 1, 1997, interest on the Convertible PIK Note is
payable in additional subordinated PIK notes, at the election of the Company.
Thereafter, interest is payable in cash, subject to the satisfaction of certain
lender tests.
LEGAL MATTERS
Certain legal matters have been passed upon for the Company by Brobeck,
Phleger & Harrison, Denver, Colorado. As of May 24, 1995, a member of Brobeck,
Phleger & Harrison held options to purchase up to 75,000 shares of Common Stock.
EXPERTS
The consolidated financial statements of the Company as of December 31,
1994 and for the year then ended included in this Registration Statement have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon incorporated by reference hereto. The consolidated financial
statements of the Company as of December 31, 1993 and for each of the two years
in the period ended December 31, 1993 have been audited as to combination only
and, with respect to T(2) for the two years in the period ended December 31,
1993, as to the adjustments applied to present the statements of operations,
stockholders' equity, and cash flows on a December 31 rather than a September 30
year end by Ernst & Young LLP, independent auditors. The financial statements of
those entities were audited by Deloitte & Touche LLP as it relates to T(2) as of
September 30, 1993, and for the two years in the period ended September 30, 1993
(whose report expresses an unqualified opinion and includes an explanatory
paragraph relating to Material Uncertainties (as defined therein) concerning
certain pending claims against T(2)), and as of December 31, 1993 and for the
two years in the period then ended by KPMG Peat Marwick LLP, as it relates to
Curaflex, Arthur Andersen LLP, as it relates to HealthInfusion, and Coopers &
Lybrand, Independent Accountants, as it relates to Medisys. The financial
statements referred to above are incorporated by reference in reliance upon such
reports given upon the authority of such firms as experts in accounting and
auditing. The report of KPMG Peat Marwick LLP as it relates to Curaflex and the
report of Coopers & Lybrand, Independent Accountants, as it relates to Medisys,
each covering the December 31, 1993, financial statements refer to a change in
method of accounting for income taxes to adopt the provisions of the Financial
Accounting Standards Boards' Statement of Financial Accounting Standards No. 109
(Accounting for Income Taxes).
12
<PAGE> 14
The financial statements of the Caremark Business at December 31, 1994 and
for the year then ended incorporated by reference in this Prospectus have been
audited by Price Waterhouse LLP, independent accountants, as set forth in their
report thereon, and are incorporated by reference in reliance upon such report
and given on the authority of said firm as experts in accounting and auditing.
The consolidated financial statements and schedules of Lincare as of
December 31, 1993 and 1994, and for each of the years in the three-year period
ended December 31, 1994 are incorporated by reference in reliance upon the
report of KPMG Peat Marwick LLP, independent certified public accountants, and
upon the authority of said firm as experts in accounting and auditing. The
report of KPMG Peat Marwick LLP covering the December 31, 1993, consolidated
financial statements refers to a change in the method of accounting for income
taxes.
13
<PAGE> 15
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION IN CONNECTION WITH THE OFFERING BEING MADE HEREBY NOT CONTAINED
IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Company........................... 4
Material Changes...................... 4
Investment Considerations............. 5
Use of Proceeds....................... 9
Determination of Offering Price....... 9
Selling Stockholders.................. 9
Plan of Distribution.................. 10
Description of Securities............. 11
Legal Matters......................... 12
Experts............................... 12
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORAM HEALTHCARE CORPORATION
3,463,825 SHARES
OF COMMON STOCK
-----------------
PROSPECTUS
-----------------
, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses payable by the Registrant in
connection with the sale of the securities being registered hereby. All of the
amounts shown are estimates, except for the SEC registration fee.
<TABLE>
<CAPTION>
ITEM AMOUNT
------------------------------------------------------------------- -------
<S> <C>
SEC Registration Fee............................................... $30,176
Blue Sky fees and expenses......................................... 5,000
Printing and engraving expenses.................................... 1,500
Legal fees and expenses............................................ 20,000
Accounting fees and expenses....................................... 10,000
Miscellaneous fees and expenses.................................... 3,324
-------
Total.................................................... $70,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
contains provisions permitting corporations organized thereunder to indemnify
directors, officers and other representatives from liabilities in connection
with any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that
such person was or is a director, officer, employee or agent of the corporation,
against liabilities arising in any such action, suit or proceeding, expenses
incurred in connection therewith, and against certain other liabilities. Article
Eight of the Registrant's Certificate of Incorporation provides that the
personal liability of the directors of the Registrant to the Registrant or its
stockholders for monetary damages for a breach of fiduciary duty as a director
is eliminated to the maximum extent permitted by Delaware law. Article Nine of
the Registrant's By-laws provides for indemnification of the Registrant's
directors and officers in a variety of circumstances, which may include
liabilities under the Securities Act of 1933.
ITEM 16. EXHIBITS
(a) Exhibits:
<TABLE>
<S> <C> <C>
4.1 -- See the Merger Agreement, the Certificate of Incorporation of Registrant,
as amended and the Bylaws of Registrant (Incorporated by Reference to
Exhibits 2.1, 3.1, and 3.2 of Registration No. 33-53957 on Form S-4).
5.1 -- Opinion of Brobeck, Phleger & Harrison.**
23.1 -- Consent of Ernst & Young LLP.*
23.2 -- Consent of KPMG Peat Marwick LLP (St. Petersburg).*
23.3 -- Consent of Deloitte & Touche LLP.*
23.4 -- Consent of KPMG Peat Marwick LLP (Ontario).*
23.5 -- Consent of Arthur Andersen LLP.*
23.6 -- Consent of Coopers & Lybrand LLP.*
23.7 -- Consent of Price Waterhouse LLP.*
23.8 -- Consent of Brobeck, Phleger & Harrison (included in Exhibit 5.1).**
24.1 -- Power of Attorney (reference is made to page II-4 of this Registration
Statement).
</TABLE>
- ---------------
* Filed herewith.
** To be filed by amendment.
II-1
<PAGE> 17
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement, relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and where applicable such filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall not be deemed to
be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be provided by
Article 3 of Regulation S-X is not set forth in the Prospectus, to deliver, or
cause to be delivered to each person to whom the Prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the Prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrants pursuant to provisions described in this Registration Statement or
otherwise, the Registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrants of expenses incurred or paid by a director, officer or
controlling person of the Registrants in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrants will, unless
in the opinion of their respective counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-2
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Denver, State of
Colorado, on the 26th day of May, 1995.
CORAM HEALTHCARE CORPORATION
By: /s/ JAMES M. SWEENEY
------------------------------------
James M. Sweeney
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated, each of whom also constitutes and
appoints James M. Sweeney, Patrick J. Fortune and Sam R. Leno, acting singly or
together, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution for him in any and all capacities, to sign any
and all amendments and post-effective amendments to this Registration Statement,
and to file the same, with exhibits thereto and any other documents in
connection therewith with the Securities and Exchange Commission, granting unto
each attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary in connection with such matters,
and hereby ratifying and confirming all that each attorney-in-fact and agent or
his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------- ---------------------------------- -------------
<C> <S> <C>
/s/ JAMES M. SWEENEY Chairman and Chief Executive May 26, 1995
- ----------------------------------- Officer (Principal Executive
James M. Sweeney Officer)
/s/ PATRICK J. FORTUNE President, Chief Operating Officer May 26, 1995
- ----------------------------------- and Director
Patrick J. Fortune
/s/ SAM R. LENO Vice President, Secretary and May 26, 1995
- ----------------------------------- Chief Financial Officer (Principal
Sam R. Leno Financial Officer and Principal
Accounting Officer)
/s/ TOMMY H. CARTER Vice Chairman of the Board May 26, 1995
- ----------------------------------- of Directors
Tommy H. Carter
/s/ RICHARD A. FINK Director May 26, 1995
- -----------------------------------
Richard A. Fink
/s/ STEPHEN G. PAGLIUCA Director May 26, 1995
- -----------------------------------
Stephen G. Pagliuca
/s/ L. PETER SMITH Director May 26, 1995
- -----------------------------------
L. Peter Smith
/s/ DR. GAIL R. WILENSKY Director May 26, 1995
- -----------------------------------
Dr. Gail R. Wilensky
</TABLE>
II-3
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGES
- ------- ------------------------------------------------------------- ------------
<C> <C> <S> <C>
4.1 -- See the Merger Agreement, the Certificate of Incorporation of
Registrant, as amended and the Bylaws of Registrant
(Incorporated by Reference to Exhibits 2.1, 3.1, and 3.2 of
Registration No. 33-53957 on Form S-4).
5.1 -- Opinion of Brobeck, Phleger & Harrison.**
23.1 -- Consent of Ernst & Young LLP.*
23.2 -- Consent of KPMG Peat Marwick LLP (St. Petersburg).*
23.3 -- Consent of Deloitte & Touche LLP.*
23.4 -- Consent of KPMG Peat Marwick LLP (Orange County).*
23.5 -- Consent of Arthur Andersen LLP.*
23.6 -- Consent of Coopers & Lybrand LLP.*
23.7 -- Consent of Price Waterhouse LLP.*
23.8 -- Consent of Brobeck, Phleger & Harrison (included in Exhibit
5.1).**
24.1 -- Power of Attorney (reference is made to page II-4 of this
Registration Statement).
</TABLE>
- ---------------
* Filed herewith.
** To be filed by amendment.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and
to the use of our report dated February 17, 1995, incorporated by reference in
the Registration Statement of Coram Healthcare Corporation (Form S-3 No.
33-00000) for the registration of 3,463,825 shares of its common stock.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Orange County, California
May 26, 1995
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EXHIBIT 23.2
CONSENT OF KPMG PEAT MARWICK LLP INDEPENDENT AUDITORS
Board of Directors
Lincare Holdings Inc.:
We consent to the use of our report incorporated by reference herein and to the
references to our firm under the heading "Experts" in the Registration
Statement.
Our report refers to a change in the method of accounting for income taxes.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Petersburg, Florida
May 26, 1995
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EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement of Coram Healthcare
Corporation on Form S-3 of our report dated November 17, 1993 (December 23,
1993 as to Note 17) (which expresses an unqualified opinion and includes an
explanatory paragraph relating to material uncertainties concerning certain
pending claims against T2 Medical, Inc.) (relating to the financial statements
of T2 Medical, Inc. not presented separately herein) appearing in the
Prospectus, which is part of this Registration Statement.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Atlanta, Georgia
May 23, 1995
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EXHIBIT 23.4
INDEPENDENT AUDITORS' CONSENT
The Board od Directors
Curaflex Health Services, Inc.:
We consent to the use of our report dated February 28, 1994, relating to the
consolidated balance sheet of Curaflex Health Services, Inc. and subsidiaries
as of December 31, 1993, and the related consolidated statements of operations,
common stockholders' equity (deficit) and cash flows for each of the years in
the two-year period ended December 31, 1993, incorporated herein by reference
and to the reference to our firm under the heading ""Experts'' in the
prospectus.
Our report contains an explanatory paragraph that states the Company changed
its method of accounting for income taxes in 1993.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Orange County, California
May 23, 1995
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EXHIBIT 23.5
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference of our report dated March 18, 1994 covering the
consolidated financial statements of HealthInfusion, Inc. and subsidiaries for
the years ended December 31, 1993 and 1992 and to all references to our Firm
included in this Form S-3 registration statement of Coram Healthcare
Corporation.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Miami, Florida,
May 25, 1995.
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EXHIBIT 23.6
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated February 11, 1994, on our audits of the
consolidated financial statements of Medisys, Inc. and Subsidiaries as of
December 31, 1993 and for each of the years in the two-year period then ended
which report is included in Coram Healthcare Corporation's Annual Report on
Form 10-K for its fiscal year ended December 31, 1994 and in its Proxy
Statement filed with the Commission on May 15, 1995. We also consent to the
reference to our Firm under the caption "Experts".
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Minneapolis, Minnesota
May 26, 1995
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EXHIBIT 23.7
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated March 15, 1995, which appears on page F-34 of Coram Healthcare
Corporation's Registration Statement on Form S-4 (No. 33-59337) relating to the
combined financial statements of Caremark International Inc. Home Infusion
Business. We also consent to the reference to us under the heading "Experts" in
such Prospectus.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Chicago, Illinois
May 26, 1995
