<PAGE> 1
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): November 23, 1999
-----------------
CORAM HEALTHCARE CORPORATION
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 1-11343 33-0615337
- --------------- ------------ -------------------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
1125 Seventeenth Street, Suite 2100, Denver, Colorado 80202
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(303) 292-4973
----------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE> 2
Item 5. Other Events.
On November 23, 1999, Coram Healthcare Corporation (the "Company")
announced that it had finalized an agreement with its principal debtholders
pursuant to which its debtholders will forego interest payments, totaling up to
$13 million, on the Company's Series A and Series B Notes that were issued
pursuant to that certain Securities Exchange Agreement (the "Exchange
Agreement") dated as of May 6, 1998, as amended. The Exchange Agreement is among
the Company; Coram, Inc.; and Cerberus Partners, L.P.; Goldman Sachs Credit
Partners L.P.; and Foothill Capital Corporation as note holders. The precise
terms of such agreement are set forth in that certain Amendment No. 3 and
Forbearance (the "Amendment No. 3"), dated November 15, 1999, in respect of the
Exchange Agreement. Pursuant to Amendment No. 3, the Company will not be
required to pay interest on the Series A and Series B Notes for the period from
November 15, 1999 through the earlier of the Company's final resolution of its
litigation with Aetna U.S. Healthcare, Inc. or May 15, 2000. In addition, the
debtholders agreed to waive any non-compliance with certain financial covenants
set forth in the Company's Senior Credit Facility for the period ending December
31, 1999.
The Company also announced on November 23, 1999 that its Executive Vice
President and Chief Financial Officer, Wendy L. Simpson had resigned. Ms.
Simpson has agreed to perform certain services for the Company in connection
with a transition of her responsibilities. The Company has commenced a search
for a new Chief Financial Officer.
Further, the Company announced on November 30, 1999 that, effective as
of such date, the Company named Daniel D. Crowley Chairman of the Board,
President and Chief Executive Officer. The press releases issued by the Company
in connection with the November 23, 1999 and November 30, 1999 announcements
described herein are attached here to as Exhibits 99.1 and 99.2, respectively.
Item 7. Financial Statements and Exhibits.
(a) None.
(b) None.
(c) Exhibits.
10.49 Amendment No. 3 and Forbearance, dated November 15,
1999, in respect of the Securities Exchange Agreement
among Coram, Inc.; Coram Healthcare Corporation; and
Cerberus Partners, L.P.; Goldman Sachs Credit
Partners L.P. and Foothill Capital Corporation as
note holders.
99.1 Press Release, issued November 23, 1999, relating to
the Company's agreement with its principal
debtholders regarding the Series A and Series B
Notes, and the resignation of the Company's Executive
Vice President and Chief Financial Officer.
99.2 Press Release, issued November 30, 1999, relating to
the employment of Daniel D. Crowley as Chairman of
the Board, President and Chief Executive Officer.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CORAM HEALTHCARE CORPORATION
By: /s/ Scott T. Larson
----------------------------------------
Scott T. Larson
Senior Vice President,
General Counsel and
Secretary
Date: December 8, 1999
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<S> <C>
10.49 Amendment No. 3 and Forbearance, dated November 15, 1999, in respect of the Securities
Exchange Agreement among Coram, Inc.; Coram Healthcare Corporation; and Cerberus
Partners, L.P.; Goldman Sachs Credit Partners L.P. and Foothill Capital Corporation as
note holders.
99.1 Press Release, issued November 23, 1999, relating to the Company's agreement with its
principal debtholders regarding the Series A and Series B Notes, and the resignation of the
Company's Executive Vice President and Chief Financial Officer.
99.2 Press Release, issued November 30, 1999, relating to the employment of Daniel D.
Crowley as Chairman of the Board, President and Chief Executive Officer.
</TABLE>
<PAGE> 1
EXHIBIT 10.49
Amendment No. 3 and Forbearance (this "Agreement"), dated as of November
15, 1999, in respect of the Securities Exchange Agreement dated as of May 6,
1998, as heretofore amended (said Securities Exchange Agreement, as so amended,
being the "Securities Exchange Agreement", and the terms defined therein being
used herein as therein defined unless otherwise defined herein) among CORAM,
INC., a Delaware corporation (the "Company"), CORAM HEALTHCARE CORPORATION, a
Delaware corporation ("Holdings"), CERBERUS PARTNERS, L.P. ("Cerberus"), GOLDMAN
SACHS CREDIT PARTNERS L.P. ("GSCP") and FOOTHILL CAPITAL CORPORATION
("Foothill") (each a "Noteholder" and, together with any other holders from time
to time of interests in the Series A Notes or Series B Notes, collectively, the
"Noteholders).
W I T N E S S E T H :
WHEREAS, the Original Noteholders, the Company and Holdings entered into
the Securities Exchange Agreement, pursuant to which the Original Noteholders
received, among other things, Series A Notes and Series B Notes, as the case may
be, in exchange for the Original Noteholders' interests in the Subordinated
Rollover Notes and the Warrants; and
WHEREAS, as of the date hereof, the Original Noteholders own in the
aggregate 100% of the outstanding principal amount of the Series A Notes and
Series B Notes; and
WHEREAS, the Company and Holdings have requested and the Noteholders have
agreed (i) to reduce the interest rate applicable to the Series A and the Series
B Notes to zero for a period of six months from November 15, 1999 to the earlier
of (A) May 15, 2000 and (B) the Aetna Settlement Date and (ii) to forbear from
exercising certain rights and remedies available to the Noteholders following a
Specified Event of Default (as hereinafter defined); and
WHEREAS, the Company, Holdings and the Noteholders have agreed to amend the
Securities Exchange Agreement and to enter into this Agreement upon the terms
and subject to the conditions contained herein;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Amendments to the Securities Exchange Agreement. Upon the
satisfaction of the conditions in Section 4 of this Agreement relating to the
effectiveness of Section 1, the Securities Exchange Agreement is hereby amended
as follows:
(a) Section 1 is hereby amended by adding the definitions of "Aetna
Settlement Date", "Applicable Series B Rate", "Interest Restart Date" and "Net
Cash Proceeds" as follows:
<PAGE> 2
"Aetna Settlement Date" shall mean the date of any final settlement of
all claims in the litigation between Aetna U.S. Healthcare Inc. and its
affiliates and Coram Healthcare Corporation and the other Coram parties.
"Applicable Series B Rate" shall mean (i) from the Effective Date to
November 15, 1999, 8.00% per annum, (ii) from November 15, 1999 to the
Interest Restart Date, 0.00% per annum and (iii) thereafter, 8.00% per
annum.
"Interest Restart Date" shall mean the earlier of (i) May 15, 2000 and
(ii) the Aetna Settlement Date.
(b) The definition of "Applicable Series A Rate" set forth in Section 1 of
the Securities Exchange Agreement is hereby deleted in its entirety and replaced
with the following:
"Applicable Series A Rate" shall mean (i) from the Effective Date to
the Amendment Date, 9-7/8% per annum, (ii) from the Amendment Date to
November 15, 1999, 11-1/2% per annum, (iii) from November 15, 1999 to the
Interest Restart Date, 0.00% per annum, and (iv) thereafter, 11-1/2% per
annum.
(c) Section 2.5(b) of the Securities Exchange Agreement is hereby deleted
in its entirety and replaced with the following:
(b) The Company will pay interest, accruing from and after the
Effective Date, on the Series B Notes to each Noteholder quarterly in
arrears on January 15, April 15, July 15 and October 15 of each year,
commencing July 15, 1998 (each an "Interest Payment Date") at the
Applicable Series B Rate.
Section 2. Representations and Warranties of the Company and Holdings. Each
of the Company and Holdings hereby represents and warrants as to itself and the
Coram Parties that (a) the execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action on the part of such
Coram Party and this Agreement and the Securities Exchange Agreement amended
hereby each constitutes a legal, valid and binding obligation of such Coram
Party, enforceable against it in accordance with its terms, (b) no event has
occurred and is continuing on the date hereof that constitutes a Default or
Event of Default or would constitute a Default or Event of Default after giving
effect to this Agreement, and (c) the representations and warranties of Holdings
and the Company contained in Section 4 of the Securities Exchange Agreement are
true and correct both before and after giving effect to this Agreement, except
to the extent such representations and warranties are stated to be true only as
of a particular date, in which case such representations and warranties were
correct on and as of such date.
<PAGE> 3
Representations and Warranties of the Noteholders. Each of the Noteholders
hereby represents and warrants as to itself that the execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate or partnership action on the part of such Noteholder.
Section 3. Forbearance. Each of the Noteholders hereby agrees that, with
effect from the date hereof until May 15, 2000 (the "Forbearance Termination
Date") (such period being the "Forbearance Period"), it will not exercise any of
the rights or remedies available to it (whether now existing or hereafter
arising) following the occurrence and during the continuance of a Specified
Event of Default (as hereinafter defined). For the purposes of this Section 4,
"Specified Event of Default" shall mean an Event of Default under Section
8.1(f)(ii) of the Securities Exchange Agreement which results solely from the
failure by Holdings and its Consolidated Subsidiaries to comply with the
financial covenants set forth in Section 7.12 of the Senior Loan Agreement for
the periods ended September 30, 1999 and December 31, 1999. Subject to this
Section 4, the Noteholders may exercise any right or remedy available to them
pursuant to the Note Documents or by applicable law or in equity during the
Forbearance Period, including, without limitation, as a result of a Default or
Event of Default other than the Specified Event of Default, and nothing herein
shall restrict, inhibit or prohibit the Noteholders from exercising any such
right or remedy or from the prosecution or continued prosecution of any action
or proceeding in furtherance of the foregoing.
Section 4. Conditions to Effectiveness. The amendments in Section 1 of this
Agreement and the forbearance in Section 4 of this Agreement shall become
effective on the date when (a) counterparts hereof shall have been executed by
each of the Noteholders, Holdings and the Company and (b) Holdings and each
Subsidiary Guarantor listed on Annex A shall have executed a consent and
confirmation of guaranty in the form attached hereto as Exhibit A.
Section 5. Effect on the Securities Exchange Agreement. Except as amended
hereby, the Securities Exchange Agreement and the other Note Documents shall
remain in full force and effect. Except as set forth herein, nothing in this
Agreement shall be deemed to (i) constitute a forbearance or waiver of
compliance by any of the Coram Parties of any term, provision or condition of
the Securities Exchange Agreement or any other instrument or agreement referred
to therein or under the Note Documents or (ii) prejudice any right or remedy
that any Noteholder may now have or may have in the future under or in
connection with the Securities Exchange Agreement or any other Note Document.
Section 6. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together constitute one and the same agreement.
Section 7. Governing Law. The validity, interpretation and enforcement of
this Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York, without regard to the conflict of laws principles
thereof.
Section 8. Headings. Section headings in this Agreement are included herein
for the convenience of reference only and shall not constitute part of this
Agreement for any other purpose.
<PAGE> 4
Section 9. References. References herein and in the other Note Documents to
the "Securities Exchange Agreement", "this Agreement", "hereunder", "hereof", or
words of like import referring to the Securities Exchange Agreement, shall mean
and be a reference to the Securities Exchange Agreement as amended hereby.
[Signatures on following page]
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their proper and duly authorized officers as of the
date set forth above.
CORAM, INC.
By: /s/ Donald J. Amaral
----------------------------------------
Name: Donald J. Amaral
Title: Chairman and Chief
Executive Officer
CORAM HEALTHCARE CORPORATION
By: /s/ Donald J. Amaral
----------------------------------------
Name: Donald J. Amaral
Title: Chairman and Chief
Executive Officer
CERBERUS PARTNERS, L.P.
By: /s/ Stephen Feinberg
----------------------------------------
Name: Stephen Feinberg
Title: Managing Member Cerberus
Associates L.L.C. General
Partners
GOLDMAN SACHS CREDIT PARTNERS L.P.
By: /s/ John Urban
----------------------------------------
Name: John Urban
Title: Managing Director
FOOTHILL CAPITAL CORPORATION
By: /s/ M.E. Stearns
----------------------------------------
Name: M.E. Stearns
Title: Senior Vice President
<PAGE> 6
EXHIBIT A
CONSENT
Dated as of November 15,1999
Each of the undersigned, in its capacity as a Guarantor under the
Securities Exchange Agreement referred to in the foregoing Agreement, hereby
consents to the said Agreement and hereby confirms and agrees that its guaranty
of the Guaranteed Obligations (as such term is defined in the Guarantee
Agreements) is, and shall continue to be, in full force and effect and is hereby
ratified and confirmed in all respects except that, upon the effectiveness of,
and on and after the date of, the said Agreement, each reference in each
Guarantee Agreement to "this Agreement", "hereunder", "thereunder", "thereof" or
words of like import shall mean and be a reference to the Securities Exchange
Agreement as amended by said Agreement.
This Consent may be executed in any number of counterparts each of which,
when executed and delivered, shall constitute an original, but all executed
counterparts together shall constitute one and the same instrument. Delivery of
an executed counterpart of a signature page to this Consent by telecopier shall
be effective as delivery of a manually executed counterpart of this Consent.
CORAM HEALTHCARE CORPORATION
By: /s/ Donald J. Amaral
----------------------------------------
Name: Donald J. Amaral
Title: Chairman and Chief Executive
Officer
FOR EACH OF THE SUBSIDIARY
GUARANTORS LISTED ON ANNEX A
HERETO
By: /s/ Wendy Simpson
----------------------------------------
Name: Wendy Simpson
Title: Chief Financial Officer
c/o Coram Healthcare Corporation
1125 Seventeenth Street, Suite 1500
Denver, CO 80202
<PAGE> 7
ANNEX A
Subsidiaries
Coram International Holdings Ltd.
Coram Healthcare Limited
Coram Physician Services, Inc.
Fairfax Hematology Oncology Associates, Inc.
Healthinfusion, Inc.
H.M.S.S., Inc.
Coram Homecare of Texas, Inc.
Infusion Affiliates of Dallas, Inc.
Medisys, Inc.
Coram Homecare of Illinois, Inc.
T2 Medical, Inc.
Columbia Home Therapeutics, Inc.
Coram Healthcare Corporation of Alabama
Coram Healthcare Corporation of Colorado
Coram Healthcare Corporation of Connecticut
Coram Healthcare Corporation of Delaware
Coram Healthcare Corporation of Florida
Coram Healthcare Corporation of Greater D.C.
Coram Healthcare Corporation of Greater New York
Coram Healthcare Corporation of Illinois
Coram Healthcare Corporation of Indiana
Coram Healthcare Corporation of Iowa
Coram Healthcare Corporation of Kansas
Coram Healthcare Corporation of Kentucky
Coram Healthcare Corporation of Louisiana
Coram Healthcare Corporation of Michigan
Coram Healthcare Corporation of Minnesota
Coram Healthcare Corporation of Missouri
Coram Healthcare Corporation of Mississippi
Coram Healthcare Corporation of Nebraska
Coram Healthcare Corporation of Nevada
Coram Healthcare Corporation of New Hampshire
Coram Healthcare Corporation of New Jersey
Coram Healthcare Corporation of New Mexico
Coram Healthcare Corporation of North Carolina
Coram Healthcare Corporation of Northern California
Coram Healthcare Corporation of Ohio
Coram Healthcare Corporation of Oklahoma
<PAGE> 8
Coram Healthcare Corporation of Oregon
Coram Healthcare Corporation of Pennsylvania
Coram Healthcare Corporation of Rhode Island
Coram Healthcare Corporation of South Carolina
Coram Healthcare Corporation of Southern California
Coram Healthcare Corporation of Southern Florida
Coram Healthcare Corporation of Tennessee
Coram Healthcare Corporation of Texas
Coram Healthcare Corporation of Virginia
Coram Healthcare Corporation of Washington
Coram Healthcare Corporation of West Virginia
Coram Healthcare Corporation of Wisconsin
Coram Homecare of Arizona, Inc.
Coram Homecare of Kansas, Inc.
Coram Homecare of Michigan, Inc.
Coram Homecare of Minnesota, Inc.
Coram Homecare of Nebraska, Inc.
Coram Homecare of Northern California, Inc.
Coram Homecare of Ohio, Inc.
Coram Homecare of South Carolina, Inc.
Coram Homecare of South Carolina, L.L.C.
Coram Homecare of Virginia, Inc.
Coram Homecare of Wisconsin, Inc.
Coram Management of Hawaii, Inc.
Coram Service Corporation
Curaflex Health Services, Inc.
Caremark Pharmacy Services, Inc.
Comprehensive Pharmacy Home IV Services, Inc.
Coram Alternative Site Services, Inc.
Coram Healthcare Corporation of Massachusetts
Clinical Homecare Corporation Coram
Healthcare Corporation of New York Coram Healthcare
Corporation of North Texas Coram Healthcare
Corporation of Utah Coram Healthcare of Wyoming,
L.L.C. Stratogen of Rhode Island, Inc.
Dallas Home Therapeutics, Inc.
Extendacare Health Systems, Inc.
Intracare Holdings Corporation
<PAGE> 1
EXHIBIT 99.1
CORAM HEALTHCARE OBTAINS DEBT COVENANT WAIVERS AND
DEBT INTEREST FORBEARANCE THROUGH APRIL 2000
DENVER, Nov. 23, 1999 ....Coram Healthcare Corporation (NYSE:CRH) today
announced that it has finalized an agreement with it principal debtholders
pursuant to which its debtholders will forego interest payments, totaling up to
$13 million, on the company's Series A and Series B Notes. Specifically, the
company will not be required to pay interest on such notes for the period from
November 15, 1999 through the earlier of the company's final resolution of its
litigation with Aetna U.S. Healthcare, Inc. or May 15, 2000. In addition, the
debtholders have waived any non-compliance with certain financial covenants set
forth in the company's Senior Credit Facility for the period ending December 31,
1999.
"The grant of these waivers demonstrates an extraordinary commitment,
on the part of the company's debtholders, to management's plan for restoring
this company to profitability. These concessions from our debtholders and
continuing improvements in the company's core business operations have increased
our confidence that we can overcome the short term financial challenges now
confronting this industry and our business," said Donald J. Amaral, chairman and
interim chief executive officer of Coram Healthcare Corporation.
The company also announced today that its executive vice president and
chief financial officer, Wendy L. Simpson, has resigned her positions with the
company and its subsidiaries, effective Friday, November 26, 1999. The company
has commenced a search for a new chief financial officer.-
"Wendy Simpson has played an integral role in both formulating and
implementing our plans for improving the financial performance of the company
and she has been instrumental in managing our relationship with our debtholders
throughout her tenure with us. The concessions we announced today would not have
been possible without her. We are grateful for her contributions and wish her
well," said Mr. Amaral.
<PAGE> 2
USA-based Coram is a leading provider of high quality home infusion
therapy operating from 88 locations in 43 states and Ontario, Canada. Coram's
Prescription Services Division provides pharmacy benefit management services as
well as mail order prescription drugs for chronically ill patients. The Clinical
Trials and Medical Informatics Division provides home care and product
development services to pharmaceutical, biotechnology and medical device
companies sponsoring clinical trials.
Note: Except for historical information, all other statements provided in this
press release are "forward-looking" within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company's actual results may vary materially
from the forward-looking statements made above due to important factors such as
the Company's history of operating losses and uncertainties associated with
future operating results; significant outstanding indebtedness; equity
conversion rights held by existing debt holders; limited liquidity;
reimbursement-related risks; shifts in the mix of parties that pay for the
Company's services; dependence upon relationships with third parties; uncertain
future liabilities under capitation arrangements; concentration of large payors;
the intensely competitive industry; the timing of or ability to complete
acquisitions; government regulation of the home health care industry; certain
legal proceedings; dependence on key personnel; recruitment and retention of
trained personnel; potential volatility of stock price; New York Stock Exchange
listing status; and unanticipated impacts from the Year 2000 issue. These and
other risk factors that could affect Coram's financial results are further
described in the Company's Form 10-K Annual Report, as amended, Form 10-Q
Quarterly Reports, and Form 8-K Current Reports on file with the Securities and
Exchange Commission.
<PAGE> 1
EXHIBIT 99.2
DANIEL D. CROWLEY NAMED CHAIRMAN, PRESIDENT AND CEO OF CORAM HEALTHCARE:
NEW LEADER HAS REPUTATION FOR FOCUS, INTENSITY AND SUCCESSFUL TURNAROUNDS
DENVER - NOV. 30, 1999 - Coram Healthcare Corporation (NYSE: CRH) announced
that, effective today, Daniel D. Crowley has been named Chairman of the Board,
President and Chief Executive Officer. Former Coram Chairman and interim Chief
Executive Officer Donald J.
Amaral will remain a member of the Board of Directors.
"I am pleased to announce Dan Crowley's arrival at Coram today," said Mr.
Amaral. "I have known Dan for a number of years and believe his focus, intensity
and turnaround experience will strengthen the company to better compete and
better serve our customers, healthcare providers, employees and shareholders."
Mr. Crowley, 52, is Chairman, President and CEO of Sacramento-based Dynamic
Healthcare Solutions, a management consulting and investment firm he established
in 1997. He also serves as Chairman of the Board of Winterland, a leading
privately held affinity merchandise company in the music and entertainment
industry. He is also founder of the Crowley Children's Fund, a charitable
organization supporting programs for at-risk children.
"My initial focus will be to assess Coram's strengths and opportunities and to
provide the leadership catalyst that will create the possibility for a solid
turnaround," said Mr. Crowley. "By initiating a disciplined business planning
process and a performance-driven incentive program targeted to achieve very
specific goals, the Coram team will be able to refocus the energy of the
organization toward those areas holding the greatest potential to create
profitable growth, positive cash flow and shareholder value.
"With the proposed sale of Coram's prescription services unit and the wind-down
of the R-Net subsidiaries, we have a unique opportunity to refocus Coram on its
core home infusion business and to build on this with Coram's synergistic
clinical trials and medical informatics business. After an initial assessment,
we will be prepared to communicate our turnaround plans in more detail.
"Clearly Coram faces a number of very real challenges. However, one positive is
that the company's lenders have indicated their support for the company and its
leadership by granting the recently announced 6-month moratorium on certain
covenants and principal and interest payments."
Before founding Dynamic Healthcare Solutions, Mr. Crowley was Chairman,
President and CEO of Foundation Health Corporation. He joined Foundation in 1989
to turn around the diffused, unprofitable company heavily indebted from a
leveraged buyout. Under his leadership the company rapidly became profitable,
established itself as a national leader in
<PAGE> 2
managed care and joined the ranks of the Fortune 500. It grew from less than
$300 million in revenues in 1988 to more than $5 billion in 1997, when Mr.
Crowley completed a strategic merger with another company.
Prior to his role at Foundation Health, he served as the Executive Vice
President of Blue Cross and Blue Shield of Ohio where he led the turnarounds of
several business units, including the Western Division, where he reestablished
the viability of that operation.
More recently, he brought management focus, stronger profitability and
operational improvements to Winterland during a turnaround and a period of rapid
growth. The result has been financial performance ahead of plan and the
successful refinancing of a portion of Winterland's debt.
Denver-based Coram Healthcare Corporation, through its subsidiaries, is a
national leader in providing quality home infusion therapy, support for clinical
trials, medical product development and medical informatics, and pharmacy
benefit management and mail order services.
Note: Except for historical information, all other statements in this press
release are "forward-looking" within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company's actual results may vary materially
from these forward-looking statements due to important risk factors including
the Company's history of operating losses and uncertainties associated with
future operating results; significant outstanding indebtedness; equity
conversion rights held by existing debt holders; limited liquidity;
reimbursement-related risks; shifts in the mix of parties that pay for the
Company's services; dependence upon relationships with third parties; uncertain
future liabilities under capitation arrangements; timing of or ability to
complete acquisitions; government regulation of the home health care industry;
certain legal proceedings; dependence on key personnel; potential volatility of
the stock price; New York Stock Exchange listing status; and unanticipated
impacts from the Year 2000 issue. These and other risk factors are described in
the Company's form 10-K Annual Report, as amended, Form 10-Q Quarterly Reports,
and Form 8-K Current Reports on file with the Securities and Exchange
Commission.
