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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: November 25, 1997
(Date of earliest event reported)
CONTOUR MEDICAL, INC.
(Exact name of registrant as specified in its charter)
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NEVADA 0-26288 77-0163521
(State or other jurisdiction of (Commission file number) (I.R.S. Employer Identification No.)
incorporation or organization)
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6025 SHILOH ROAD, SUITE A
ALPHARETTA, GEORGIA 30005
(Address of principal executive offices)
(770) 888-8528
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On November 25, 1997, Contour Medical, Inc. ("Contour") entered into an
amendment (the "Amendment") to the Agreement and Plan of Merger and
Reorganization dated as of February 17, 1997 as amended by Amendment No. 1
thereto dated as of August 21, 1997 (as amended, the "Merger Agreement"), by and
among Contour, Sun Healthcare Group, Inc., a Delaware corporation ("Sun"), and
Nectarine Acquisition Corporation, a Nevada corporation and wholly-owned
subsidiary of Sun ("Merger Sub"), pursuant to which Merger Sub will be merged
(the "Merger") with and into Contour.
The Amendment contains certain technical structuring provisions and
extends the date after which either party may freely terminate the Merger
Agreement from November 30, 1997 (or, under certain circumstances, to December
31, 1997) to March 31, 1998.
On November 25, 1997, Sun also entered into an amendment (the "Option
Amendment") to the Stockholders Stock Option and Proxy Agreement dated as of
February 17, 1997 (the "Option Agreement") by and among Sun and Retirement Care
Associates, Inc. ("RCA"), the majority stockholder of Contour, pursuant to which
the Option Agreement was amended so as to (i) provide certain registration
rights to RCA in the event that Sun pays the exercise price of the option
granted thereunder in shares of Sun common stock, (ii) not allow Sun to exercise
such option in the event that Sun materially breaches the Merger Agreement and
(iii) shorten the period during which Sun may exercise such option from 120 days
to 14 days.
The Merger is subject to approval by the stockholders of both companies
and will be considered at separate meetings now anticipated to occur in the
first quarter of 1998. The Merger remains subject to other customary conditions.
The Merger will be completed promptly following stockholder approval, assuming
satisfaction of the other conditions to the Merger.
The foregoing description is qualified in its entirety by reference to
the full text of the Amendment and the Option Agreement, which are attached
hereto as Exhibits 2.1 and 2.2, respectively, and are incorporated herein by
reference.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) EXHIBITS
2.1 Amendment No. 2 to the Agreement and Plan of Merger and
Reorganization dated as of February 17, 1997 among Sun
Healthcare Group, Inc., Contour Medical, Inc. and Nectarine
Acquisition Corporation.
2.2 Amendment No. 1 to the Stockholders Stock Option and Proxy
Agreement dated as of February 17, 1997 between Sun Healthcare
Group, Inc. and Retirement Care Associates, Inc.
99.1 Press Release
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CONTOUR MEDICAL, INC.
By: /s/ Donald F. Fox
--------------------------------------
Donald F. Fox
Its President
Dated as of December 5, 1997.
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INDEX TO EXHIBITS
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DOCUMENT SEQUENTIALLY
NO. DOCUMENT NUMBERED PAGE
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2.1 Amendment No. 2 to the Agreement and Plan 6
of Merger and Reorganization dated as of
February 17, 1997 among Sun Healthcare
Group, Inc., Contour Medical, Inc.
and Nectarine Acquisition Corporation.
2.2 Amendment No. 1 to the Stockholders Stock 10
Option and Proxy Agreement dated as of
February 17, 1997 between Sun Healthcare Group,
Inc. and Retirement Care Associates, Inc.
99.1 Press Release 17
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EXHIBIT 2.1
EXECUTION COPY
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AMENDMENT NO. 2 TO THE
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AMENDMENT NO. 2 (this "Amendment") to the AGREEMENT AND PLAN OF
MERGER AND REORGANIZATION, dated as of February 17, 1997, as amended by
Amendment No. 1 thereto dated as of August 21, 1997 (as so amended, the "MERGER
AGREEMENT," capitalized terms used but not otherwise defined herein are used
herein as therein defined), among SUN HEALTHCARE GROUP, INC., a corporation
organized and existing under the laws of the State of Delaware ("PARENT"),
NECTARINE ACQUISITION CORPORATION, a corporation organized and existing under
the laws of the State of Nevada ("MERGER SUB") and a direct wholly owned
subsidiary of Parent, and CONTOUR MEDICAL, INC., a corporation organized and
existing under the laws of the State of Nevada (the "COMPANY"), is made this
25th day of November, 1997 by and among Parent, Merger Sub and the Company.
W I T N E S S E T H:
WHEREAS, Parent, Merger Sub, and the Company desire to amend the Merger
Agreement as provided herein.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
Section 1. AMENDMENTS TO MERGER AGREEMENT. The Merger Agreement is
hereby amended as follows:
(a) Section 3.01 of the Agreement shall be amended (i) by deleting the
first parenthetical phrase of Section 3.01(a) and adding the following
parenthetical phrase in place thereof: "other than any shares of Company Common
Stock to be cancelled pursuant to Section 3.01(c), any shares of Company Common
Stock to be treated in accordance with Section 3.01(e) and any Dissenting
Shares)"; and (ii) by adding the following new Section 3.01(e) thereto: "(e)
Each share of Company Common Stock issued and outstanding immediately prior to
the Effective Time and owned by Principal Stockholder shall remain issued and
outstanding; PROVIDED, HOWEVER, that if at the time the Articles of Merger are
filed with the Secretary of State of Nevada either (i) articles of merger with
respect to the RCA Merger have not been filed so as to cause the RCA Merger to
occur immediately after the Merger or (ii) Parent has not undertaken to
contribute to Principal Stockholder all shares of Company Capital Stock obtained
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by Parent pursuant to the Merger, then the Principal Stockholder Shares shall
not be treated in accordance with this Section 3.01(e) but instead shall be
treated in accordance with Section 3.01(a)."
(b) Section 9.01(b) of the Merger Agreement is hereby amended and
restated in its entirety to read as follows:
"(b) by either Parent or the Company, if the
Effective Time shall not have occurred on or before March 31,
1998; PROVIDED, HOWEVER, that the right to terminate this
Agreement under this Section 9.01(b) shall not be available to
any party whose failure to fulfill any obligation under this
Agreement shall have caused, or resulted in, the failure of
the Effective Time to occur on or before such date."
SECTION 2. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Parent and Merger Sub that: The Company has all
necessary corporate power and authority to execute and deliver this Amendment,
to perform its obligations under the Merger Agreement as amended hereby and to
consummate the transactions contemplated hereby. The execution and delivery of
this Amendment by the Company and the consummation by the Company of the
transactions contemplated by the Merger Agreement as amended hereby have been
duly and validly authorized by all necessary corporate action (other than
stockholder approval as described in the Merger Agreement). This Amendment has
been duly executed and delivered by the Company and, assuming the due
authorization, execution and delivery by Parent and Merger Sub, constitutes the
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms.
(b) REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. Parent
and Merger Sub hereby jointly and severally represent and warrant to the
Company that: Parent and Merger Sub have all necessary corporate power and
authority to execute and deliver this Amendment, to perform their respective
obligations under the Merger Agreement as amended hereby and to consummate the
transactions contemplated hereby. The execution and delivery of this Amendment
by Parent and Merger Sub and the consummation by Parent and Merger Sub of the
transactions contemplated by the Merger Agreement as amended hereby have been
duly and validly authorized by all necessary corporate action (other than
stockholder approval as described in the Merger Agreement). This Amendment has
been duly executed and delivered by Parent and Merger Sub and, assuming the due
authorization, execution and delivery by the Company, constitutes the legal,
valid and binding obligation of Parent and Merger Sub, enforceable against
Parent and Merger Sub in accordance with its terms.
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SECTION 3. EFFECT ON MERGER AGREEMENT. Except as otherwise specifically
provided herein, the Merger Agreement shall not be amended but shall remain in
full force and effect.
SECTION 4. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REFERENCE TO CONTRACT OF LAW PRINCIPLES OTHER THAN THOSE DIRECTING NEW
YORK LAW) EXCEPT TO THE EXTENT MANDATORILY GOVERNED BY THE LAWS OF THE STATE OF
NEVADA.
SECTION 5. COUNTERPARTS. This Amendment may be signed in one or more
counterparts, each of which shall be an original but all of which, taken
together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
SUN HEALTHCARE GROUP, INC.
By: /s/ Robert D. Woltil
---------------------------------------------
Name: Robert D. Woltil
Title: Senior Vice President for Financial
Services and Chief Financial Officer
NECTARINE ACQUISITION CORPORATION
By: /s/ Robert D. Woltil
---------------------------------------------
Name: Robert D. Woltil
Title: Vice President
CONTOUR MEDICAL, INC.
By: /s/ Christopher F. Brogdon
---------------------------------------------
Name: Christopher F. Brogdon
Title: Chairman of the Board
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EXHIBIT 2.2
EXECUTION COPY
AMENDMENT NO. 1 TO THE
STOCKHOLDERS STOCK OPTION AND PROXY AGREEMENT
THIS AMENDMENT NO. 1 to the STOCKHOLDERS STOCK OPTION AND PROXY
AGREEMENT, dated as of February 17, 1997 (the "AGREEMENT," capitalized terms
used but not otherwise defined herein are used herein as therein defined), among
SUN HEALTHCARE GROUP, INC., a Delaware corporation ("PARENT"), and RETIREMENT
CARE ASSOCIATES, INC., a Colorado corporation, ("STOCKHOLDER"), is made as of
this 25th day of November, 1997 by and among Parent and each Stockholder.
W I T N E S S E T H:
WHEREAS, Parent, Merger Sub, and the Company desire to amend the Merger
Agreement as provided in Amendment No. 2 thereto dated of even date herewith;
and
WHEREAS, in connection therewith Parent and Stockholder desire to amend
the Agreement as provided herein.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
SECTION 1: AMENDMENT TO AGREEMENT. The Agreement is hereby amended
as follows:
(a) Section 1.01 of the Agreement is hereby amended by (i) replacing
the phrase "120th" with the phrase "14th" therein and (ii) adding the following
phrase at the end thereof: "or terminated or terminable pursuant to Section
9.01(h) thereof."
(b) The following is hereby inserted as a new Article V thereto and the
succeeding Articles and Section are hereby appropriately renumbered:
ARTICLE V
REGISTRATION RIGHTS
SECTION 5.01. SHELF REGISTRATION. (a) In the event
that Parent pays for the Shares being purchased by delivery of
shares of Parent Common Stock, Parent shall, within three
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months following the Closing, file with the Securities and
Exchange Commission (the "COMMISSION") a shelf registration
statement on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the
Commission (a "SHELF REGISTRATION STATEMENT"), relating to the
resale of the Parent Shares by the Stockholder from time to
time in accordance with the methods of distribution set forth
in such Shelf Registration Statement and shall use its best
efforts to cause such Shelf Registration Statement to be
declared effective under the Securities Act as soon as
practicable thereafter; PROVIDED, HOWEVER, that Stockholder
shall not be entitled to have the Parent Shares held by it
covered by such Shelf Registration Statement unless
Stockholder is in compliance with Section 5.02(f) hereof.
(b) Parent shall use its best efforts to keep the
Shelf Registration Statement continuously effective in order
to permit the prospectus forming part thereof to be usable by
the Stockholders until the earliest to occur of the following:
(A) the two year anniversary of the Closing; (B) the earliest
time at which all the Parent Shares covered by the Shelf
Registration Statement have been sold pursuant to the Shelf
Registration Statement; and (C) the earliest time at which, in
the written opinion of independent counsel to Parent, all
outstanding Parent Shares held by persons that are not
affiliates of Parent may be resold without registration under
the Securities Act pursuant to Rule 144(k) under the
Securities Act or any successor provision thereto (in any such
case, such period being called the "EFFECTIVENESS PERIOD").
Parent shall be deemed not to have used its best efforts to
keep the Shelf Registration Statement effective during the
requisite period if Parent voluntarily takes any action that
would result in Stockholders of Parent Shares covered thereby
not being able to offer and sell any such Parent Shares during
that period, unless (i) such action is required by applicable
law, (ii) the continued effectiveness of the Shelf
Registration Statement would require Parent to disclose a
material financing, acquisition or other corporate
transaction, and the Board of Directors shall have determined
in good faith that such disclosure is not in the best
interests of Parent and its stockholders, or (iii) the Board
of Directors shall have determined in good faith that there is
a valid business purpose for such suspension.
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SECTION 5.02. REGISTRATION PROCEDURES. In connection
with any Shelf Registration Statement, the following
provisions shall apply:
(a) Parent shall take such action as may be necessary
so that (i) any Shelf Registration Statement and any amendment
thereto and any prospectus forming part thereof and any
amendment or supplement thereto (and each report or other
document incorporated therein by reference in each case)
complies in all material respects with the Securities Act and
the Exchange Act, and the respective rules and regulations
thereunder, (ii) any Shelf Registration Statement and any
amendment thereto does not, when it becomes effective, contain
an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading and (iii) any
prospectus forming part of any Shelf Registration Statement,
and any amendment or supplement to such prospectus, does not
include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements, in the light of the circumstances under which they
were made, not misleading.
(b) Parent shall advise the Stockholder:
(i) when a Shelf Registration Statement and
any amendment thereto has been filed with the
Commission and when the Shelf Registration Statement
or any post-effective amendment thereto has become
effective;
(ii) upon the issuance by the Commission of
any stop order suspending effectiveness of the Shelf
Registration Statement or the initiation of any
proceedings for that purpose;
(iii) upon the receipt by Parent of any
notification with respect to the suspension of the
qualification of the securities included therein for
sale in any jurisdiction or the initiation of any
proceeding for such purpose; and
(iv) upon the happening of any event that
requires the making of any changes in the Shelf
Registration Statement or the prospectus so that, as
of such date, the Shelf Registration Statement and
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the prospectus do not contain an untrue statement of
a material fact and do not omit to state a material
fact required to be stated therein or necessary to
make the statements therein (in the case of the
prospectus, in light of the circumstances under which
they were made) not misleading (which advice shall be
accompanied by an instruction to suspend the use of
the prospectus until the requisite changes have been
made).
(c) Parent shall, during the Effectiveness Period,
deliver to Stockholder with respect to a Shelf Registration
Statement, without charge, as many copies of the prospectus
(including each preliminary prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto
as Stockholder may reasonably request; and Parent consents
(except during the continuance of any event described in
Section 5.02(b)(iv)) to the use of the prospectus or any
amendment or supplement thereto by Stockholder in connection
with the offering and sale of the Parent Shares covered by the
prospectus or any amendment or supplement thereto during the
Effectiveness Period.
(d) Prior to any offering of Parent Shares pursuant
to any Shelf Registration Statement, Parent shall register or
qualify or cooperate with the Stockholder and its counsel in
connection with the registration or qualification of such
Parent Shares for offer and sale under the securities or blue
sky laws of such jurisdictions as any such Stockholders
reasonably request in writing and do any and all other acts or
things necessary or advisable to enable the offer and sale in
such jurisdictions of the Parent Shares covered by such Shelf
Registration Statement; PROVIDED, HOWEVER, that in no event
shall Parent be obligated to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction
where it would not otherwise be required to so qualify but for
this Section 5.02(d), (ii) file any general consent to service
of process in any jurisdiction where it is not as of the date
hereof then so subject or (iii) subject itself to taxation in
any jurisdiction if it is not so subject.
(e) Upon the occurrence of any event contemplated by
Section 5.02(b)(iv) above, Parent shall promptly prepare a
post-effective amendment to any Shelf Registration Statement
or an amendment or supplement to the related prospectus or
file any other required document so that, as thereafter
delivered to
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purchasers of the Parent Shares included therein, the
prospectus will not include an untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. If Parent notifies the
Stockholder of the occurrence of any event contemplated by
Section 5.02(b)(iv) above, the Stockholder shall suspend the
use of the prospectus until the requisite changes to the
prospectus have been made.
(f) Parent may require Stockholder with respect to a
Shelf Registration Statement to furnish to Parent such
information regarding the Stockholder and the distribution of
Parent Shares held by the Stockholder as may be required by
applicable law or regulation for inclusion in such Shelf
Registration Statement and Parent may exclude from such
registration the Parent Shares of any Stockholder that fails
to furnish such information within a reasonable time after
receiving such request.
(g) Parent will use its best efforts to cause the
Parent Shares to be listed on the New York Stock Exchange or
other stock exchange or trading system on which the Parent
Common Stock primarily trades on or prior to the effective
date of any Shelf Registration Statement hereunder."
SECTION 2. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder hereby
represents and warrants to Parent that: Stockholder has all necessary power and
authority (corporate or otherwise) to execute and deliver this Amendment, to
perform its obligations under the Agreement as amended hereby and to consummate
the transactions contemplated hereby. The execution and delivery of this
Amendment by Stockholder and the consummation by Stockholder of the transactions
contemplated by the Agreement as amended hereby have been duly and validly
authorized by all necessary action (corporate or otherwise) on the part of
Stockholder. This Amendment has been duly executed and delivered by Stockholder
and, assuming the due authorization, execution and delivery by Parent,
constitutes the legal, valid and binding obligation of Stockholder, enforceable
against Stockholder in accordance with its terms.
(b) REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. Parent
and Merger Sub hereby jointly and severally represent and warrant to
Stockholder that: Parent and Merger Sub have all necessary corporate power and
authority to execute and deliver this Amendment, to perform their respective
obligations under the Agreement as amended hereby and to consummate the
transactions contemplated hereby. The execution and delivery of this Amendment
by Parent and Merger Sub and the consummation by Parent and Merger Sub of the
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transactions contemplated by the Merger Agreement as amended hereby have been
duly and validly authorized by all necessary corporate action (other than
stockholder approval as described in the Merger Agreement). This Amendment has
been duly executed and delivered by Parent and Merger Sub and, assuming the due
authorization, execution and delivery by the Company, constitutes the legal,
valid and binding obligation of Parent and Merger Sub, enforceable against
Parent and Merger Sub in accordance with its terms.
SECTION 3. EFFECT ON AGREEMENT. Except as otherwise specifically
provided herein, the Agreement shall not be amended but shall remain in full
force and effect.
SECTION 4. COUNTERPARTS. This Amendment may be signed in one or more
counterparts, each of which shall be an original but all of which, taken
together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.
SUN HEALTHCARE GROUP, INC.
By: /s/ Robert D. Woltil
-------------------------------------------
Name: Robert D. Woltil
Title: Senior Vice President for Financial
Services and Chief Financial Officer
RETIREMENT CARE ASSOCIATES, INC.
By: /s/ Christopher F. Brogdon
-------------------------------------------
Name: Christopher F. Brogdon
Title: President and Chief Executive Officer
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EXHIBIT 99.1
CONTACT: Phyllis Goodman (media)
Majorie Goldstein (investors)
505-821-3355
SUN HEALTHCARE GROUP AND RETIREMENT CARE ASSOCIATES
AMEND MERGER AGREEMENT
Albuquerque, N.M., and Atlanta, Ga., Nov. 26, 1997 - Sun Healthcare Group, Inc.
(NYSE:SHG) and Retirement Care Associates, Inc. (NYSE:RCA) announced today that
they have amended the terms of their merger agreement. The principal effect of
the amendment is to adjust the exchange ratio. The ratio will now be calculated
based on a fixed value of $10 for each outstanding share of RCA common stock,
subject to a 10 percent collar, centered on a $22 share price for Sun common
stock. Accordingly, the number of shares of Sun common stock that will be issued
for each share of RCA common stock is changed from O.520 to between 0.413 and
0.505, depending upon the average closing price of Sun's common stock during the
period specified in the agreement. The amendment also modifies some of the
conditions to provide greater certainty of closing of the transaction. The
boards of directors of Sun and of RCA have each approved the merger agreement
amendment.
Sun also announced that it has reached an agreement in principle to
settle the pending class actions against RCA and its management for $9.0
million. The settlement is contingent on closing of the merger transaction.
Sun originally entered into separate merger agreements with RCA and
Contour Medical, Inc. (Nasdaq SmallCap: CTMI) on Feb. 17, 1997. The parties
amended the terms of the RCA agreement on May 27, 1997, and both the RCA and the
Contour agreements on Aug. 21, 1997.
RCA owns approximately 65 percent of the outstanding shares of Contour.
There have been no changes in the financial terms of the Contour merger
agreement, which provides for the payment of cash and/or stock consideration
with a value of $8.50 for each share of Contour common stock. Sun's merger
agreement with Contour has been amended primarily to match the RCA amendment in
extending the date after which either party may freely terminate the agreement
from Nov. 30, 1997 (or, under certain circumstances, Dec. 31, 1997) to March 31,
1998. The parties contemplate closing both transactions in the first quarter of
1998.
Closing of the transactions is subject to the satisfaction of customary
conditions. The RCA acquisition is intended to be accounted for as a pooling of
interests. The Contour acquisition is intended to be accounted for as a
purchase.
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Headquartered in Albuquerque, N.M., Sun Healthcare Group, Inc., is a
diversified international long-term care provider. Sun companies operate
long-term care facilities and pharmacy services across the United States, and in
the United Kingdom, Australia and Spain. Sun subsidiaries also provide therapy
services in the United States, fulfill the medical supply needs of nursing
homes, and offer a comprehensive array of ancillary services for the healthcare
industry.
Atlanta, Ga.-based Retirement Care Associates, Inc. operates long-term
care, independent and assisted living facilities located primarily in the
southeastern United States. Contour Medical, Inc. is a national provider of
medical supplies for the long-term care industry.
Except for historical information, all other matters in this press
release are forward-looking statements that involve risks and uncertainties as
detailed from time to time in the company's SEC filings, including Sun's annual
report on form 10-K for the fiscal year ended Dec. 31, 1996.
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